Identification (SI) of Fringe Benefits - General Information

Updated with 7/1/2009 information

In an effort to allocate the cost of fringe benefits more realistically, a new system went into effect on July 1, 2004. Under this system, costs are specifically identified into four categories and accounts will be charged only to the extent that an employee receives, or in the case of health care is eligible to receive, those benefits. The categories are:

1. MSU retirement (10% of base salary) if the employee is eligible  AND participates.  If they don't participate, they won't be charged.
2. FICA at 7.65 with a salary cap: 6.2% up to blended salary cap of $109,300 (a blend of the 2009 actual cap at $106,800 and projected 2010 at $111,800 ) + 1.45% of all salary.
3. Other/miscellaneous category (2.0%) for small items like life insurance, workers compensation, unemployment compensation, long term disability, etc. 
4. Health, dental & prescriptions using a flat dollar amount if employee is eligible for health benefits.  Since federal HIPAA regulations prevent employment discrimination based on health care costs, we are prevented from charging different amounts depending on if one is signed up for single, family or waived coverage.  This amount for FY 2009 -2010 is $12,000 for regular employees and includes the costs of retirees, i.e. retiree health, dental and prescription costs account is ~$2,600 , and $5,900 for Research Associates. 

All of the costs identified above will be distributed to the employee's base salary.  All other payroll types, summer school, overtime, medical service plan monthly and quarterly (although there are conversations underway that would change the monthly MSP into base salary - this would allow monthy MSP to be charged to grants and contracts and receive full benefits), will only be charged FICA as appropriate.

MSU adopted the SI fringe method to allocate costs to all MSU accounts effective July 1, 2004. However, General Fund fringes (11-xxxx and 91-xxxx) will continue to be budgeted centrally. While this new system is more accurate, it is more difficult to budget with. In an effort to help you budget with SI, the following tools are available: 

• A web-based multi-year salary and fringe budget builder can be found at: Salary Budget Builder
• An excel spreadsheet with SI formulas that can be copied and pasted into your spreadsheets can be found at: SI Excel Worksheet
• A rate chart showing the maximum SI rate based on salary: SI Fringe Chart
• A chart of SI fringe costs for graduate assistants: Grad summary chart

Graduate assistant fringes also adopted the SI method in September 2004. Rather than assessing a loading rate against stipends, a flat dollar amount will be charged for these benefits based upon the cost of health care and the average number of credits waived.  The flat amount for health care will continue to be applied to the ledgers using object class code 015 (fringe benefits) and be subject to the Facilities & Administration (F&A or overhead) charge.  However, due to a change in the way the new F&A rate was calculated, the tuition and fees portion will be reflected on the ledgers under a object class code 018.   Projects awarded on a Modified Total Direct Costs (MTDC) basis with the F&A rates established on or after 7/1/04 will not be charged overhead on object class code 018.  Under this new system the summer grad fringe amount will only include the tuition and fees, i.e. no health care because the preponderance of graduate assistants appointed for this period have previously earned summer health care coverage through an academic year appointment (just like AY faculty with summer school appointments).

Graduate Tuition and Health Graduate Tuition and Health benefits will be charged on a bi-weekly basis except for the month of January. The amounts will be applied to all Grads regardless of percent employment (1/4, 1/2 or 3/4).

Special groups within SI:

• Research Associates will be charged a reduced cost for health dental, and prescriptions which reflects the lower utilization due to this group's aggregate younger age. The Research Associate/PostDoc's SI fringe rate is approximately 25% assuming a salary at the minumim NIH NRSA zero years of experience of $37,368 and the Research Associate fringe history can be found at: Research Associates at MSU.
• Lecturer, assistant instructors, instructor resident, instructor intern, resident and intern will be exempted from the retiree portion of health dental, and prescriptions during the first three FTE years of MSU employment.

For FAQs:  SI frequently asked questions (FAQ's)

For a history of SI:  SI History

For the Controller's notice of SI rates:  Controller Fringe Notice (pdf alternate)

If you have other questions, please email them to Dan Evon ( evon@cga.msu.edu) or Craig ONeill(oneill@cga.msu.edu) and we will try to add them to this list.

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