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In May 2006, we published fringe benefit rates to be used when budgeting for future years in proposals. The estimated rates were based on the approved rates for the current year and the best information we had available at the time.
Several forces acting on the rates are now causing us to revise upward the estimated rates for 2007-08 and beyond:
· The change from a five-year to a three-year vesting schedule, as required by the Pension Protection Act of 2006, will add about half a point to the rate. The vesting change was an unexpected add-on to the legislation which was signed into law in August, and therefore not anticipated in the fringe benefit cost projections that we provided in May.
· Projected costs for the regular pool in fiscal year 2006-07 are 36%, although the rate being charged is only 34.5%. This is because the Department of Health and Human Services (DHHS) required the RF to lower the rate to reduce a $5.8 million surplus in the fringe benefit pool. By charging grants at 34.5% and incurring costs at 36% during this fiscal year we estimate that the surplus as of June 30, 2007 will be reduced to about $700,000.
· Health insurance costs are projected to be 10% higher in fiscal year 2007-08, whereas the salary base to support the costs is expected to grow less than 5%.
We have updated the “Budgeting with the Rates” section of the Fringe Benefit Rates on the RF Web site. The RF board of directors’ human resources committee and the full board reviewed and discussed these changes at their meetings on October 3 and November 8, respectively. The new estimates are as follows:
|
Regular Employees |
Graduate Students |
Undergraduate Students |
Summer Employees |
FY2007-08 |
37% |
11.5% |
4.5% |
14.5% |
FY2008-09 |
38.5% |
12.5% |
4.5% |
16% |
FY2009-10 |
40% |
13.5% |
4.5% |
16% |
FY2010-11 |
40.5% |
14.5% |
4.5% |
16% |
The RF will submit the rate proposal to DHHS by November 30 and we expect that DHHS will be able to review and approve the proposal by early January 2007. Pending DHHS approval, our goal is to provide approved 2007-08 rates to campus staff by mid-January so that they may be included in NIH proposals due on February 1.
The RF rate continues to be lower than the NYS rate (currently 43.34%) for a comparable benefit package, and is in line with other institutions based on a recent comparative survey. The RF provides a comprehensive and competitive benefits package in order to help us attract and retain talented employees. We continue to look for ways to control costs without detracting from the package. The RF continues to involve key campus staff in these efforts.
We will keep you informed as we work with DHHS on approved rates for next fiscal year. If you have questions, please contact Bobbi Teliska by e-mail at bobbi.teliska@rfsuny.org or by phone at (518) 434-7110.