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Composite Benefit Rate

Overview:

• Introduction: What is the Composite Benefit Rate?
• Advantages
• Benefit Types
• Which Composite Benefit Rate will I be Charged?
• Employee Leave Accrual and Usage
• 4/8/11 Updates: Addition of Salary Cap / FX Employees Now in Rate Group C
• 11/7/11 Update: Composite Rate Change for Postdoctoral Fellows

Rate Tables:

• Composite Benefit Rates by Benefit Type
• Rates for Chart L (ANR)
• Rates Summary for Charts 3 & S / Lookup by Title Code (Excel)
• Rates Summary for Chart L (ANR) / Lookup by Title Code (Excel)

Other Information:

• Calculating Benefit Cost
• Federal Approval Letter
• Frequently Asked Questions
• Sponsored Programs Office (SPO) Announcement
• FIS Help Desk E-Mail Announcement
• Accounts Eligible for Benefits Funding

 

As of July 2011, UC Davis (except Hospital Chart H accounts*) will begin to post employee benefit costs using a Composite Fringe Benefit rate instead of using actual employee benefit costs. The Composite Fringe Benefit rate is an average of all eligible benefits applicable to an employee group. Each group is based on individual employee attributes which fall into a certain group. The composite fringe benefit rate is a percentage of the employee’s gross salary based on which employee group he or she falls into.

Composite Benefit Rates will decrease the administrative burden to budget and manage sponsored awards and decrease the risk of under-recovering funds.

Although the composite benefit rates may appear to increase the cost for employee benefits, there are several contributing factors to higher rates:

• Increasing benefits costs as a whole
• Restart of UC Retirement Program (UCRP) contributions

The increase in the rate is not related to the adoption of composite rates, but a reflection of increased actual costs.

NOTE: All cost transfers that occur in the KFS Labor Ledger will apply the Composite Benefit Rate (CBR) as they will post in the FY 2011-12 General Ledger. However, for historical transfers (pre-July 1, 2011) moved after July 1 2011 KFS implementation, KFS will credit/debit actual benefits costs on the ORIGINAL expense line and apply the CBR on the NEW Full Accounting Unit (FAU).

Since the composite rate is an average of the total costs of benefits divided by the total salary amount, and must be reconciled and approved by the government every year, the campus cannot over collect by applying the composite benefit rate compared to the true actual costs incurred by the campus.

How Rates are Calculated

UC Davis will use multiple rates developed under the requirements of OMB Circular A-21. Each rate is calculated by the development of a pool of fringe benefits (numerator) and of a salary base (denominator). The pool consists of UCD’s cost of fringe benefits provided to each employee grouping. Leave accrual and usage and tuition and fee remission are not included in the employee benefit rates and will be charged separately. When the pool is divided by the employees' group salary base, the Composite Fringe Benefit rate is developed. This rate represents the percentage that will be assessed against the employee’s salary, and this amount will post to the same department account to which the individual employee's salary posts.

Key Points

• The composite benefit rate will be applicable for all salary expenses for employees paid from Chart 3, S and L.
• The change is effective July 1, 2011. It is not possible to mix the charging practice of actual costs and using fringe benefit rates.
• The composite fringe benefit rates are applied to all employees who are eligible for benefits regardless of whether or not they accept the benefit and regardless of which benefits options they elect.
• This change in rate calculation does not affect an individual employee's personal deductions (reflected on the employee's earning statement) in any way. It only impacts what is being charged to your department as a whole.

*The UC Davis Medical Center (Chart H) accounts will not be included in the composite fringe benefit rates and will continue to post actual employee benefit costs.