UC Davis posts employee benefit costs using a Composite Fringe Benefit rate instead of using actual employee benefit costs.
- How are rates calculated?
- Benefit types
- Which Composite Benefit rate will I be charged?
- Employee Leave Accrual and Usage
- Salary Cap/FX employees now in rate Group C
- Composite rate change for Postdoctoral Fellows
UC Davis (except Hospital Chart H accounts*) 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 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: 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.
2. How rates are calculated
UC Davis uses 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 UC Davis' 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.
- The composite benefit rate will be applicable for all salary expenses for employees paid from Chart 3, S and L.
- Composite benefit rates went into effect on 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.
- Provide consistent accumulation and allocation of fringe benefits expenses to all functional activities as required by Cost Accounting Standards.
- Improve the budgeting process for all university funds and standardize benefit costs across employee groups.
- Simplify the accounting for fringe benefits expenses (Fixed rate with carry-forward).
4. Benefit Types
Comprised of the allowable fringe benefits that are allocated to employees and will be allocated on a single object code based on the employee rate.
- UCRS (employer matching portion)
- Medical (employer contribution portion)
- Dental (employer contribution)
- Vision (employer contribution)
- OASDI (employer matching portion)
- Medicare (employer matching portion)
- OPEB (Other Post Employee Benefits)
- Unemployment Insurance
- Workers’ Comp Insurance
- Employee Support Program
- UC Paid Disability
- UC Paid Life
- The assessed leave rate for individuals that accrue vacation
- Allocated on leave assessment object codes for salaries and benefits
Tuition and Fee Remission
- Actual cost of tuition, fee and Graduate Student Health Insurance Plan (GSHIP) remission based on eligibility.
The Kuali Financial System (KFS) will determine and assess the appropriate composite benefit rate based on certain attributes in the Payroll Personnel System (PPS).
5. Which composite benefit rate will I be charged?
UC Davis has developed a set of Fringe Benefit rates for the campus (Chart 3 and S) and a set of rates for ANR (Chart L). The fringe benefit rate applicable to the employee group will be assessed to the gross salaries charged to each account after each pay cycle.
Note: These rates do not apply to Hospital (Chart H) employees.
The employee groups are determined by the following factors:
- Eligibility for the University Of California Retirement System
- Personnel Appointment Type (Academic, SPP, MSP)
- Title Unit Code (TUC)
- Title Code
- Salary Level
Visit the Rate Index page to search for rates by Appointment Type and Title Unit Code.
You can also view the Rates by Title Code.
As indicated earlier, the leave assessment is not included as part of the composite fringe benefit rate. There is a separate leave assessment charge based on the leave accrual code for the eligible employee. In addition to a separate rate for leave, the leave assessment is split apart to accrue separately for salaries and benefits.
Review the Employee Leave Accrual and Usage section below for specific leave rates.
At this time, the graduate tuition, fee and GSHIP (Graduate Student Health Insurance Plan) remission will not be on a rate base, but will be actual costs based on the student employee.
See also the Costing Policy & Analysis web page for additional rate links.
6. Employee leave accrual and usage
Leave assessment is not included in the Composite Fringe Benefit Rate and is not fully assessed as a SUB6 Fringe Benefit. Leave assessment charges are split between a salary accrual and fringe benefit accrual on separate object codes.
Leave Assessment Eligibility
Leave assessment is charged to the same departmental accounts/Full Accounting Unit (FAU) where an employee’s gross pay is charged, if the employee is eligible to earn leave. Leave is assessed against gross pay if the associated DOS (Description of Service) code(s) are eligible to earn leave. Leave is assessed to eligible monthly employees with appointments greater than or equal to 50 percent. For Bi-weekly employees, leave is assessed if the time worked is greater than or equal to 50 percent of the eligible hours in a four-week cycle. Leave is not assessed if an individual is at the maximum leave accrual amount.
- Salary Leave Assessment (SB28):
When an employee is eligible to accrue leave, the leave eligible DOS code(s) will be assessed a leave accrual rate, based on the employees’ leave accrual code. The costs associated by applying the leave rate against the gross pay will post to SB28 – Leave Assessment & Usage under object code 8550 – Salary Leave Assessment.
- Fringe Benefit Leave Assessment (SUB6):
The employee’s composite fringe benefit rate will be assessed against the leave assessment salary amount to charge for leave benefits. This amount will post to SUB6 – Employee Benefits under object code 8551 – Benefit Leave Assessment.
For monthly employees, leave will be assessed when the gross pay is posted to the labor ledger, directly after each pay compute. For bi-weekly employees, the leave will be assessed every other pay cycle since the eligibility is based on a four-week cycle.
The salary leave accrual rates are based on the total number of vacation or PTO (Paid Time Off) days an employee is eligible to accrue per year. Visit the Leave Assessment Lookup in KFS to see the current rates.
Credits to the departmental account post to SB28 Object Consolidation under Object Code 8931 for Salaries and to SUB6 Object Consolidation under Object Code 8932 for Benefits. The credit for salaries is based on the employee’s actual hourly rate multiplied by the vacation hours used. The credit to fringe benefits is at the employee’s composite fringe benefit rate.
7. Salary cap/FX employees now in rate Group C
- A cap was been added to the salaries that will be charged the Composite Benefit Rates. This means that the benefit rates will only be assessed against the gross pay up to the cap level.
- The identified cap for Group A–Healthcomp Faculty over $200K is set at $300,000.
- All other employee groups will have a cap set at $180,000.
- All the FX–Research Allied Professionals will be included in employee Rate Group C (Academic Senate, MSP, Other Academic, Research Allied Professionals, Fire & Police) instead of being split into two separate groups.
8. Composite rate change for postdoctoral fellows
The Composite Rate Groups have been updated with the following change: Postdoctoral Fellows (Title Code 3253) have been changed from the Postdoctoral Employee (Group F) to the Student (Group G) Composite Rate category.