UCPath Composite Benefit Rates
UCPath Composite Benefit Rates
UCI will be transitioning to composite benefit rates (CBR) with the implementation of UCPath (currently estimated to be March, 2019). A composite benefit rate is an average cost of benefits for an employee group, where groups are defined by attributes such as benefit eligibility, employee class, exempt and non-exempt status, and job code. Departments will be charged for benefits based on the CBRs for their employee group(s), rather than actual benefit costs for each employee. Employee benefit contribution amounts will not change due to the implementation of CBRs.
- Provost Communication Regarding Composite Benefit Rates
- FY19 & FY20 CBR Rates
- Benefits Included/Excluded from CBR
- CBR Group Determination Guide
- ERN Codes Excluded from CBR
Composite Benefit Rates Advantages
- Decreases the administrative burden to budget and manage sponsored awards and decreases the risk of under-recovering funds
- Provides consistent accumulation and allocation of composite benefit expenses to all functional activities as required by Cost Accounting Standards
- Improves the budgeting process for all University funds and standardizes benefit costs across employee groups; principal investigators and financial managers will be able to use the CBR to budget costs and no longer be concerned with the wide variations of employee benefit costs.
- Simplifies the accounting for composite benefit expenses.
Frequently Asked Questions
Must we use the new composite rates or can we use actual rates if we have them?
Once composite benefit rates are implemented, we cannot mix between charging actual costs and composite benefit rates.
If I am charged a composite benefit rate that is different from my actual costs, who will be responsible for the difference?
The composite benefit rates applied to applicable gross salaries replace the actual benefit costs to your ledgers. The actual costs to the University will still be accumulated, but they will not appear in the ledger. Departments will only be responsible for covering the benefits charge determined by CBR.
How will benefits be charged to my FAU with the composite rates?
The composite benefit rates represent the percentage of benefits that will be applied to the employee salary (Salary x CBR %). This amount will be charged to the account for fringe benefit costs regardless of the actual costs to the University. Some earnings codes are not charged CBR. Refer to CBR Group Determination Guide for more information on determining the proper CBR group.
How are the composite rates calculated?
Following federal regulations and the approved, systemwide CBR model, the rates are calculated by allocating a pool of composite benefit costs on the basis of institution-wide salaries and wages of the employees receiving the benefits. The pool of fringe benefits for a group of employees is divided by the total salaries of that group. The resulting rate is known as the CBR, and is applied against the total institutional base salary of the individuals.
Will the Campus and Medical Center share the same rates?
The general campus and medical center will be viewed as two distinct business units and will have their own composite benefit rates.
How frequently are the composite rates reviewed and updated?
In collaboration with UCOP, actual benefits 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, similar to that of recharge activity. This is only done at the campus and medical center level for each CBR employee group.
Will the composite rates affect an employee’s cost of/eligibility for benefits?
No. The employee’s cost and eligibility for benefits will not be affected when UCI transitions to this new CBR structure. This new structure only changes how fringe benefits are charged within the University.
What rate is used when an employee waives medical benefits?
The composite 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 benefit options they elect.
What if a person is eligible for full benefits, but not appointed at 100% time?
The benefit cost for an employee is the applicable rate multiplied by gross salary. If the appointment percentage is lower, the salary is lower and, thus, the benefit cost will be lower, even if the employee receives full benefits. This is a considerably simpler calculation and also reduces benefit expenses for part-time employees as compared to the old method of calculating benefit costs.
What salaries are included in the base that will be subject to CBR?
CBRs are applied to all components of pay except honorariums, perquisites, allowances, incentive payments, sick leaves, and vacation leaves. Refer to Benefits Included/Excluded from CBR for a more detailed list of earnings codes excluded from CBR.
Does the “Student” CBR apply to both undergraduate and graduate students?
Yes, the “Student” CBR applies to both undergraduate and graduate students. Note this applies to fringe benefits, not fee remission or GSHIP, which is charged separately.
Are graduate student tuition remission, GAEL, paid leave and sabbaticals included in CBR?
The process to charge graduate student tuition remission is unchanged, and will be the actual costs for each student employee. Likewise the process for GAEL, vacation leave assessment, and sabbaticals are unchanged. There will be separate GAEL and vacation leave assessment rates and UCRP supplemental interest assessment.
CBR Identification and Budgeting
What factors determine which CBR group an employee falls under?
Employee will fall into a CBR group based on 1) employee class, 2) Eligibility Configuration (BELI equivalent), 3) the fair labor standards act (FLSA) status and 4) Job Code.
The composite rates seem low. For example, if an employee who had an actual benefits rate of 65% is now being assessed a rate of 51%, there is a shortage in what would be charged for benefits using the composite method versus benefits being charged on an actual basis. How is this handled?
One of the advantages of moving to a composite benefit rates is that a department will no longer need to account or budget for benefit rates that are unique to each employee. This should make budgeting easier to manage because one would only need to manage the costs that will be charged through the fringe benefit rates. Any concerns with the wide variation of benefits for employees doing the same job is essentially eliminated.
Are these benefit rates based on appointment percentage as well as the employment/title category or will the rates hold steady at the given CBR percentages regardless of the appointment? For example, would an employee with a 50% appointment have the same benefit rate as a 100% appointment?
The rate is based on job code and benefit eligibility and is against the amount paid. So while the rate would not change for a 50% or a 100% appointment, the actual charge would be half for the 50% appointment.
If I hire a prospective Assistant Researcher who currently has his own medical insurance, will the composite rate be reduced based on this or will it remain the same?
CBR groups are assigned using Employee Class, Eligibility Configuration (BELI equivalent), FLSA status and Job Code. If someone waives their UCI medical insurance, it will not affect the CBR group or rate they are assigned.
How do I budget for vacation accruals since it will no longer be included in the benefit rate?
Vacation accrual will operate similar to the current process: there will be a monthly assessment and credits will be applied when vacation is taken. The differences are in the methodology (e.g., there are only three rates and accruals persist even when the employee is at their vacation maximum.)
Will we know the monthly assessment for vacation accruals so that we can include these amounts in our budgets?
We are currently in the process of developing the rates. The rates will be communicated when finalized and will also be included here. In general, for budgeting purposes, vacation accrual is expected to be offset by vacation taken or paid. If employees paid on a particular account regularly use less vacation than they earn, vacation accrual charges will exceed vacation usage credits, resulting in a net cost to the account.
If two employees are married, which CBR category would determine the benefit rates? Are they both calculated/charged according to the respective FAU as individual employees or would one be in the “Partial Benefit Eligibility” rate?
The employees would each be assigned to the employee class that is appropriate for the terms of their employment. The marriage would have no impact on the CBR rate.
I have a PI that would like to hire a Professional Researcher (non-senate academic) at 60% time. He resides in, and will collaborate from, Canada and will opt out of health insurance. Should the PI be considered “Other Academic” or “Partial Benefit Eligibility”?
Opting out of health insurance would have no impact on the CBR rate. The rate will depend on the terms of employment.
In the example above, what will impact the partial benefits? Percentage of appointment? Title Codes? Please provide direction as to what defines the CBR groups.
In UCPath, CBR groups are assigned using Employee Class, Eligibility Configuration (BELI equivalent), and Job Code. As positions are assigned an Employee Class, they are also assigned the appropriate CBR for that class. It is possible for the Eligibility Configuration to override this initial mapping and assign an individual into the partial benefit rate groups if the Eligibility Configuration is set to do that. Ultimately, it would not depend on the Title Code of the position, but rather the terms of their employment.
Contracts and Grants
How will the new rate structure affect existing contracts and grants?
We understand that many researchers have multi-year awards and proposals which were approved with different fringe benefit rates than the composite rates. A C&G mitigation strategy committee is being formed to develop the criteria to be used to cover substantial shortfalls created by the transition to composite rates to alleviate the impact to contracts & grants. More information will be available once the criteria are finalized.
What happens when grants are submitted through one School/ORU, but employees’ appointments are not in that School/ORU?
There is no difference in the composite benefit rates for employees regardless of which campus department they work in. Composite fringe benefit rates are applied based on the benefits profile, regardless of where the employee is appointed. The Medical Center has CBR separate from the campus. In no instance should UCIMC CBR be used for federal contracts and grants.
What escalation rate should we budget for 2021 forward?
Please refer to Sponsored Projects website for planning rates.
How do we account for projects that cross fiscal-years and the rates change?
It is expected that CBRs will be built into any new proposal or renewals of existing awards effective immediately. Temporary financial mitigation will be available for proposals submitted prior to November 15, 2018.
Who do I contact if I have questions not answered in the FAQ or on the Composite Benefit website?
If you can’t locate the information you are looking for in this section, please contact Principal Analyst Nancy Im in the Budget Office at (949) 824-1506 or firstname.lastname@example.org.