Sponsored Research
Implementation of Pooled Fringe Rates
±«Óãtv has decided to transition to pooled fringe rates effective July 1, 2023. Pooled fringe rates are popular among universities since it makes costs more consistent and predictable. Consistent costs are beneficial when budgeting and forecasting for grants and contracts.
Fringe Rates and Guidelines
The following fringe benefit rates should be used for proposals and awards for FY2025.
| Employee Class | FY2025 Rates |
|---|---|
| Faculty | 32.2% |
| Administrative / Executive | 37.7% |
| Staff | 49.6% |
| OPS Other / OPS Student / Adjunct | 5.8% |
| OPS Grad / PhD / Post Doc / Fellowships | 10.8% |
| OPS Residents (Housing Staff / Medical Resident) | 1.9% |
| Bonuses | 7.7% |
- Please use the new budget template for project budgets that incorporates the new pooled fringe rates: Budget Template (MS Excel)
- The Controller’s office has developed FAQs to further explain pooled fringes and to answer questions relating to financial matters. See Benefit Pooling.
±«Óãtv Sponsored Research has developed the following FAQs to help answer any questions that may arise during this transition period as it relates to sponsored research.
What benefits are included in the pooled fringe benefit rate?
The fringe benefits included in the pooled rate are:
- Health Insurance
- FICA
- Retirement
- Life Insurance
- Disability Insurance
- Workers compensation
- Termination Leave Payouts and related fringe
- Unemployment compensation
For proposals, do we have to use these new composite fringe benefit rates or can we still use actual fringe benefits if we have them?
Effective immediately, all proposals must use the new composite fringe benefit rates for all employees in project budgets. The budget template has been updated to reflect the new fringe methodology.
How will fringe benefits be charged to my grants?
Fringe benefits will be allocated to your department or project bi-weekly, following the related payroll journal posting date. The allocation will include payroll-related fringe benefits, as well as any adjustments related to cost transfers.
What happens when employees leave ±«Óãtv? Will my projects be charged any additional expenses for leave payouts?
No additional costs will be incurred when an employee leaves. Use of composite fringe benefits already includes these costs.
How will the new rate structure affect existing awards at the time of the change?
The composite fringe benefit rate will be applied to all departments and projects, including existing awards, beginning July 1, 2023. We understand that many researchers have awards which were approved with different fringe benefit rates. While some PIs will notice a benefit of more available direct dollars due to this change, some projects will be negatively affected. The Controller’s Office is developing a loss mitigation plan to assist PIs with shortfalls that were caused by this transition to composite rates. More information on the loss mitigation plan and how PIs can apply will be forthcoming.
What if an employee is eligible for full-benefits, but is part time?
The benefits cost for an employee is the applicable rate multiplied by gross salary. If the appointment percentage is lower, the salary is lower, and the benefits cost will be lower, even if the employee receives full benefits. This is considerably simpler to calculate and reduces benefit expenses for part-time employees.
What if an employee declines medical coverage or other fringe benefits?
The composite fringe benefit rate will not vary depending on the employee’s individual elections. The fringe benefit rate applied will depend on the employee group the employee belongs to. This also holds true for instances where both spouses work at ±«Óãtv and one spouse carries the majority of fringe benefits.
How do I project composite benefits costs in proposals for periods beyond the 2024 fiscal year?
The budget template includes a 3% annual increase, and this is our best current estimate. Actual benefit costs incurred by the university will be reconciled with the amount charged using the composite benefit rates on an annual basis. Any over- or under-recovery will be adjusted in future year rates. This may result in fringe benefit rate changes on an annual basis.
Will summer appointments be charged fringe benefits?
Composite fringe benefit rates are calculated using annual data. Thus, the reduced cost in fringe benefits for summer appointments is considered in the overall calculation of the rates. Summer appointments will be charged fringe benefits for proposals and awards.
What if my sponsor disallows or limits fringe?
Though the standard process is to allow full fringe for salary, there are a limited number of exceptions. If sponsor guidelines specify that full fringe cannot be accepted, ±«Óãtv will honor sponsor restrictions. If full fringe is not an allowable expense, please be sure to provide documentation of the sponsor’s fringe policy for internal proposal review.
Do I need to add IDC (indirect costs) in addition to fringe?
IDC and fringe are separate expenses, and both should be included in sponsored research budgets provided there are no sponsor restrictions.
How should fringe benefits be described in budget justifications?
The following statement should be provided: ±«Óãtv is in the process of a fringe rate methodology change from that of a specific identification method with limited fringe rates to a pooled fringe benefit rate. A pooled fringe benefit rate proposal was submitted to DHHS on 3/31/23 for FY2024 starting 7/1/23. DHHS review is ongoing. The fringe benefit rates incorporated in this proposal are based on the new pooled fringe benefit methodology.
What documentation should be submitted to a sponsor to justify the pooled fringe rate?
The sponsor should receive the letter from ±«Óãtv Controller Jennifer Condon to the Department of Health and Human Services (DHHS) requesting the new pooled fringe rates for FY 2024 as well as the current F&A agreement which contains DHHS approved fringe benefit rates through June 30,2023. View the document (PDF).