The FY16 fringe benefit rates for sponsored program personnel (see below table) have been approved by the Department of Health and Human Services (DHHS). The rates are calculated by the Office of Cost Analysis using retirement and other benefit information provided by the State and are based on actual costs incurred during FY14 (the base rate year). Rate fluctuations are caused by over or under recoveries in the base rate year which are the result of differences between approved fringe benefit rates for the year and the actual costs incurred. A reconciliation is performed at the end of each fiscal year, and these over and under recoveries are factored into the next rate calculation. There is always a two year lag in applying the over and under recoveries due to the timing of submitting rate proposals and receiving approvals from DHHS. This practice ensures that, over time, the government is only charged for the actual benefits paid by the University.
The FY16 rates for faculty and professionals are considerably higher than was previously anticipated in part due to changes in the State’s employee retirement and health care benefit plans that occurred in FY14. The approved rate for professional employees is increasing from 53.8% in FY15 to 71.0% in FY16. The rate increase of 17.2 percentage points includes 13.3 points for the FY14 under recovery of costs, as well as a 7 point increase in the State’s retirement rates. Similarly, the rate for faculty is increasing from 36.4% to 53.0%, or 16.6 percentage points. Of this increase, 8.8 points is attributable to an FY14 under recovery and 6 points is due to increases in the State’s retirement rates. The fringe rates for graduate students will increase from 17.6% in FY15 to 27.7% in FY16, which is due primarily to changes in health care plans in FY14. Because the fringe rates for FY14 did not account for these additional costs, significant increases in FY16 fringe rates for professionals and faculty are required to recover the difference.
To ensure that our faculty can continue to produce the highest quality research from their limited grant and contract funds, the Office of the Vice President for Research (OVPR) is working to develop a program to help investigators whose existing federal research grants are most impacted. Additional information will be forthcoming from the OVPR.
DHHS approved FY16 rates for use on sponsored programs by classification of employee are as follows:
Faculty | 53.0% |
Professional/ Classified | 71.0% |
Special Payroll with Retirement | 34.2% |
Special Payroll without Retirement | 7.6% |
Post Docs | 27.7% |
Graduate Assistant, Acad. Year | 27.7% |
Foreign Scholar | 27.7% |
Student Labor | 3.1% |
These rates are effective July 1, 2015.
Sincerely,
Lori Hansen-Roy, Manager of Cost Analysis
Charles Eaton, Controller
For more information, contact: Lori Hansen-Roy at 860-486-1366