Research Administration Office

University of California

Memo

Operating Guidance

No. 94-20

December 12, 1994

Subject: Revised Employee Benefits Projections

Summarized below for use in calculating budgets for all contract and grant proposals are the revised composite employee benefit rates applicable beginning January 1, 1995. All rates are expressed as a percent of salaries.

EMPLOYEE BENEFIT RATES

.....................................................................................APPLICABLE

.....................................................................................January 1, 1995

STAFF PERSONNEL--CAREER........................................24%

ACADEMIC PERSONNEL.................................................18%

VISITING ACADEMIC TITLES 50-100%..........................8.4%

SUMMER EMPLOYMENT, 9-MONTH..............................9.1%

ACADEMIC EMPLOYEES FRINGE BENEFITS......(excl. FICA if not coord.)

STAFF PERSONNEL--CASUAL WITH CORE...................4.4%

BENEFITS (WORKING MORE THAN 17.5........................plus 6.2% OASDI

HRS/WK, EXCLUDING: STUDENTS IN CASUAL............when applicable*

RESTRICTED JOBS OR AN ACADEMIC TITLE

DESIGNATED AS STUDENT ASSISTANT; PER

DIEM, BY AGREEMENT, AND STIPEND ONLY

EMPLOYEES; AND INITIAL APPOINTMENT OF

TEMPORARY FOR LESS THAN 3-MONTHS)

STAFF PERSONNEL--CASUAL WITHOUT CORE............2.9%

BENEFITS (WORKING LESS THAN 17.5 HRS/WK...........plus 6.2% OASDI

AND BY AGREEMENT, STIPEND ONLY, PER.................when applicable*

DIEM, AND TEMPORARY EMPLOYEES)

UNDERGRADUATE AND GRADUATE..............................1.3%

STUDENTS, ACADEMIC YEAR..............................plus GSHIP, fee; tuition

(Workers' Comp. only)................................................remission per campus plan**

UNDERGRADUATE AND GRADUATE..............................2.9%

STUDENTS, SUMMER.............................................plus GSHIP, fee; tuition

(Workers' Comp., UI and Medicare)...........................remission per campus plan**

LONG-RANGE FRINGE BENEFIT PROJECTIONS

CALENDAR

YEAR...................STAFF.....................ACADEMIC

1996........................24.5%..........................18.5%

1997........................25.0%..........................19.0%

1998........................25.5%..........................19.5%

1999........................26.0%..........................20.0%

*During the period July 1991 through October, 1992, casual employees were allowed to choose between the Old Age, Survivors, Dependents Insurance (OASDI) program under Social Security and the University Defined Contribution Plan (also called 'Safe Harbor'). Effective October 19, 1992, newly hired or rehired per diem, casual, housestaff, and other temporary employees excluded from membership in the University retirement program are automatically enrolled in the DCP Plan and may no longer elect OASDI. There is no employer contribution to the DCP Plan. Therefore, in forecasting fringe benefits, the OASDI portion of Social Security should be added to the projected fringe benefit rates only for current employees who elected OASDI during the period when it was available. Persons selecting the DCP option and all new hires and rehires after October 19, 1992 are not eligible for OASDI.

**The University fringe benefit program for graduate students includes Graduate Student Health Insurance and partial or full fee remission and/or tuition remission according to plans developed at each campus. Because each campus plan is different, to budget fringe benefits for graduate students, each campus should estimate the Worker's Compensation component and then add on the projected cost of their campus GSHIP/fee/tuition remission program. Student salaries should also be charged for unemployment insurance and the Medicare portion of FICA during the summer.

Revised Schedules of Rates

The Schedules of new rates in Enclosure 1 supersede those previously transmitted August 31, 1993, by C& G Memo 93-15. This only applies to fringe benefit rates. In the future, the long range salary escalation projections contained in Schedule 3 of Memo 93-15 will be issued in separate Contract and Grant Memos. The first such separate Memo is being issued as a companion to this Memo.

Schedule 1 provides a detailed breakdown of the components of the revised employee benefit composite rates. Schedule 2 provides a revised breakdown of rates for students, casual staff personnel working more than 17.5 hours/week, casual staff personnel working less than 17.5 hours/week, academic visiting titles, and academic summer employment.

Basis for Pricing of Fringe Benefits

Enclosure 2 to this Memo sets forth the calculations, documentation, and rationale used in the development of the various fringe benefit components presented in the Enclosure 1 Schedules. Campus Contract and Grant offices may want to inform campus personnel that detailed back-up for the composite rates is available.

Use of Fringe Benefit Rates

The Schedules provided in Enclosure 1 may be used for pricing proposal budgets and are not to be used for billing purposes. Charges to contract and grant awards are based upon the actual fringe benefit payments.

Alternatives to Use of the Composite Fringe Benefit Rates

Under special circumstances, the use of the composite fringe benefit rate will understate actual costs for employee benefits (e.g., the actual average salaries are substantially lower than the University-wide weighted average or the majority belong to family dental and health plans). In those unique situations, or when a more precise measurement of fringe benefit costs is desirable, the costing of actual fringe benefit costs would be warranted in proposal budgets, rather than total reliance on composite rates.

HHS Region IX Notification of Fringe Benefit Changes

A copy of this C& G Memo has been transmitted to the Division of Cost Allocation, HHS Region IX to satisfy the requirement that the University notify its cognizant agency of changes in the University's employee benefit rate projections.

Refer: William Sellers

510-987-9847

william.sellers@ucop.edu

Subject Index: 02, 07, 10

Organization Index: U-115

Cancel: 93-15 (except Schedule 3)

David F. Mears

Director

Research Administration Office

Enclosures [not scanned]

cc:

Vice Chancellors--Research

Accounting Officers

Internal Audit Managers


December 15, 1994

Mr. David Low

Division of Cost Allocation

Department of Health and Human Services

50 United Nations Plaza

San Francisco, CA 94102

Dear Mr. Low:

Enclosed is a copy of Revised Employee Benefits Projections for the University of California.

Please note that the benefit projections are used only for proposal pricing purposes; the University charges the government for the actual fringe benefit costs of the individual. Further, when the proposal budget is prepared for individuals for whom the actual benefit costs are known, budgets may be prepared using the projected actual rather than the composite average rates.

I am also enclosing a copy of the University of California Student Fees and Deposits schedule for 1994-95. The schedule lists the approved fee and tuition costs for each campus. As noted in the Employee Benefits Projections, each campus has their own program of partial or full fee and/or tuition remission. Therefore, the employee benefit projections for graduate students will be different for each campus. However, the enclosed Student Fees and Deposits schedule does provide the maximum cost of these benefits. Specific questions regarding the budgeting of fee and tuition remission costs can be directed to each campus contract and grant office.

Please contact William Sellers of my staff at (510) 987-9847 if you have any questions about the budgeting of employee fringe benefits at the University of California.

Sincerely,

David F. Mears

Director, Research Administration Office

Enclosures

cc: Campus Contract and Grant Officers, w/o encls.


Enclosure 1

Schedule 1: Employee Benefits--Composite Rates (effective 1/1/95)

..............................................................Academic............Staff

(UCRS) Retirement Contribution...............0.00..............0.00

Health Plan Contribution...........................5.46.............10.32

Social Security (FICA)*............................7.65...............7.65

Dental Plan................................................0.75..............1.41

Vision Contribution...................................0.19...............0.36

Workers' Compensation Insurance.............1.32...............1.32

Unemployment Insurance...........................0.14...............0.14

Non-Industrial Disability Insurance (NDI)...0.14..............0.26

Life Insurance (Employer Paid)...................0.10..............0.19

Annuitant Health/Dental Program...............2.07..............2.07

Total.........................................................17.82............23.73

Rounded to:...............................................18..................24

Schedule 2: Employee Benefits--Special Rates

Visiting Academic Titles 50%-100%

Medicare....................................1.45

Health Plan................................5.46

Workers' Comp.........................1.32

Unemployment Insurance..........0.14

CORE Life................................0.04

...................................................8.41..........rounded to:..........8.4

9 Month Academic - Summer Employment (exclude FICA if not coordinated)

Fringe Benefits:

Workers' Comp.........................1.32

Unemployment Insurance..........0.14

FICA.........................................7.65

...................................................9.11..........rounded to:..........9.1

Staff Personnel--Casual with CORE Benefits (add OASDI when applicable)

(Working More Than 17.5 Hrs/Wk, Excluding:

Students in Casual Restricted Jobs or an Academic Title

Designated as Student Assistant; Per Diem, By Agreement,

and Stipend Only Employees; and Initial Appointment of

Temporary for Less Than 3 Months)

Workers' Comp..........................1.32

Unemployment Insurance...........0.14

Medicare portion of FICA..........1.45

CORE Medical...........................1.49

CORE Life Insurance.................0.04

....................................................4.44..........rounded to:..........4.4

Staff Personnel--Casual without CORE Benefits (add OASDI when applicable)

(Working Less Than 17.5 Hrs/Wk and By Agreement,

Stipend Only, Per Diem, and Temporary Employees)

Workers' Comp.........................1.32

Unemployment Insurance..........0.14

Medicare...................................1.45

.................................................2.91.........rounded to:..........2.9

Undergraduate and Graduate Students (add applicable GSHIP, fee, tuition remission)

Workers' Comp (academic year)..........................1.32..........rounded to:..........1.3

Unemployment Insurance....................................0.14

Medicare.............................................................1.45

Workers' Comp, UI & Medicare (summer)..........2.91..........rounded to:..........2.9

Note: Campuses separately budget Graduate Student Health Insurance and partial or full fee remission and tuition remission according to their local campus plans and the cost of these benefits.


Enclosure 2

BASIS FOR PRICING OF COSTS

1. Workers' Compensation - Self-Insured Program (94/95)

As part of the University's self-insurance program this benefit is assessed at varying campus rates applied to each $100 gross payroll. The current base rates maintained at campus locations are as follows:

Berkeley..................................1.65

San Francisco Campus.............0.87

San Francisco Hospital.............0.35

San Francisco NPI...................4.81

Davis Campus..........................0.00

Davis Hospital..........................0.00

Santa Cruz...............................1.66

Santa Barbara...........................0.73

Los Angeles Campus................0.90

Los Angeles Hospital...............0.00

Los Angeles NPI......................2.20

Irvine Campus..........................0.65

Irvine Hospital..........................1.00

Riverside...................................1.16

San Diego Campus....................0.77

San Diego Hospital....................0.00

Composite rate:..............................1.15*

Employee Support (campus avg.)...0.17

Total..............................................1.32

*Note: even though certain campuses show zero dollars being contributed, the composite rate is a weighted average of actuary recommended rates.

2. Unemployment Insurance

.........................................Federal Funds

Berkeley.................................0.27

San Francisco.........................0.10

Davis......................................0.19

Los Angeles............................0.10

Riverside.................................0.17

San Diego...............................0.03

Santa Cruz..............................0.13

Santa Barbara.........................0.16

Irvine......................................0.14

Average - All Campuses..........0.14

3. Employer Contributions to Employee Health, Dental and Vision Plans (1/95) (per month)

The 1995 maximum employer contribution for University health, vision and dental plans are as follows. An individual plan may fall below these maximums; in these instances, the University pays the lesser premium amount.

.............................................One-Party..........Two-Party..........Family

Health (1/95).........................$137.00..............$281.00...........$382.00

Dental Plan (1/95)...................$24.22................$45.03.............$79.31

Vision Contribution (1/95).......$10.01...............$10.01.............$10.01

CORE Health (1/95)................$18.40...............$36.88.............$42.09

The following contribution rates are determined by dividing the 1994 average annual cost per employee by the annual academic and staff weighted average salaries as of 4/94.

a. Basis for Health Plan Calculations

.......................................................................Academic..................Staff

..........Average Cost Per Enrollee/Month..........$287.40..................$287.40

..........Average Cost Per Enrollee/Year...........$3,448.80..............$3,448.80

..........Weighted Average Annual Salary........$63,154.00............$33,404.71

.......................................................................Academic..................Staff

..........Avg. Cost/Avg. Salary.............................5.46%...................10.32%

b. Basis for Dental Plan Calculations

.........................................................................Academic..................Staff

..........Average Cost Per Enrollee/Month...............$39.28.................$39.28

..........Average Cost Per Enrollee/Year................$471.36...............$471.36

..........Weighted Average Annual Salary..........$63,154.00..........$33,404.71

.........................................................................Academic..................Staff

..........Avg. Cost/Avg. Salary................................0.75%...................1.41%

c. Basis for Vision Calculations

.........................................................................Academic..................Staff

..........Average Cost Per Enrollee/Month.............$10.01..................$10.01

..........Average Cost Per Enrollee/Year..............$120.12................$120.12

..........Weighted Average Annual Salary........$63,154.00...........$33,404.71

.........................................................................Academic..................Staff

..........Avg. Cost/Avg. Salary...............................0.19%....................0.36%

d. Basis for CORE Health Calculations

..........CORE Health

..........Average Cost Per Enrollee/Month................$20.11

..........Average Cost Per Enrollee/Year.................$241.32

..........Weighted Average Annual Salary..........$16,222.85

..........CORE Health

..........Avg. Cost/Avg. Salary................................1.49%

4. Non-Industrial Disability Insurance (NDI) (1/95)

.........................................................................Academic..................Staff

..........Average Cost Per Enrollee/Month..............$7.21...................$7.21

..........Average Cost Per Enrollee/Year...............$86.52.................$86.52

..........Weighted Average Annual Salary.......$63,154.00..........$33,404.71

.........................................................................Academic..................Staff

..........Avg. Cost/Avg. Salary...............................0.14%....................0.26%

5. Life Insurance--Career Employees (1/95)

.........................................................................Academic..................Staff

..........Average Cost Per Enrollee/Month..............$5.38....................$5.38

..........Average Cost Per Enrollee/Year...............$64.56..................$64.56

..........Weighted Average Annual Salary........$63,154.00..........$33,404.71

.........................................................................Academic..................Staff

..........Avg. Cost/Avg. Salary...............................0.10%....................0.19%

6. Life Insurance--CORE Benefit (1/95)

..........CORE Life

..........Average Cost Per Enrollee/Month.................$0.52

..........Average Cost Per Enrollee/Year....................$6.24

..........Weighted Average Annual Salary..........$16,222.85

..........CORE Life

..........Avg. Cost/Avg. Salary..................................0.04%

7. Annuitant's Health and Dental Insurance Benefit Fund (11/94)

..........Rate per $100 of covered payroll...................2.07

8. FICA (1/95)

FICA is made up of OASDI and Medicare. The legislated employer FICA tax rates as of 1/95 are as follows:

.......................Rate (%)..............Base ($)............Maximum ($)

Medicare..........1.45......................N/A ....................N/A

OASDI.............6.20....................61,200..............3,794.40

Total FICA.......7.65