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COVID-19: Information from SPA/OSP/CGA

2020/2021 Fringe Benefits for Sponsored Projects

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General Description

In an effort to allocate the cost of fringe benefits more realistically, a new system referred to as Specific Identification (SI), 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 or per labor contract) if the employee is eligible AND participates.  If they don't participate, they won't be charged. Note for FY20/21: Effective July 1, 2020, MSU will reduce its matching contributions from 10% to 5% of employees’ compensation for executive management and non-unionized faculty and academic staff, excluding research associates.  This temporary retirement reduction will be in effect for at least one year and will be re-evaluated as the University reviews its long-term financial circumstances.
  2. FICA at 7.65 with a salary cap: 6.2% up to salary cap of $140,110 (FY 2020/2021) + 1.45% of all salary.
  3. Other/miscellaneous category (2%) for small items like life insurance, workers compensation, unemployment compensation, long term disability, vacation payouts, 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 2020-2021 is $15,480 for regular employees and includes ~$3,544 for the costs of retirees (i.e. retiree health, dental and prescription costs), and $7,677 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 will only be charged FICA as appropriate.

While SI fringe rates are more accurate, they are also difficult to budget. In an effort to help you budget, the following tools are available:

Fringe Benefit Rates by Employee Type

Faculty and Staff fringes should be calculated using the Specific Identification (SI) method.  Under SI, fringe costs are based on average actual costs and individual participation in retirement.

Summer Salary for Academic Year Faculty should be budgeted at 7.65% of salaries.

Part-time employees (<50% appt. or < 9 months) should be budgeted at 7.65% of salaries.

  • Please exercise caution when hiring a current MSU employee into a temporary position. MSU employee contracts differ on what qualifies as part-time and may involve bridging of past time worked that will make the current position/person benefit eligible, which then triggers full SI fringe charges. Also, part-time employees have been known to fill the remainder of their time with other MSU employment opportunities which again might make the employee benefit eligible and therefore full fringe. Questions should be addressed to Human Resources, but when in doubt, budget full SI fringe.

 

Student labor should be budgeted at 0% of salaries paid during the academic year and 7.65% during the summer semester depending on the number of credits they are enrolled in.  If a student falls below a minimum number of credits set by the IRS, i.e., undergrads enrolled for less than 6 credits; master's level students enrolled for less than 5;  and doctoral level students enrolled for less than 3 credits, then the account will be charged FICA and Medicare at 7.65%.

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 the fringe object class code and be subject to the Facilities & Administration (F&A or overhead) charge.  However, the tuition portion will be reflected on the ledgers under a separate object class code and, in most cases, will not be subject to F&A.    Under this system the summer grad fringe amount will only include the tuition, 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 benefits will be charged on a bi-weekly basis. The amounts will be applied to all Graduates regardless of percent employment (1/4, 1/2 or 3/4).
  • Health benefits will be $1,517 per semester (Fall 2020 and Spring 2021) and $0 for Summer 2021.  Total health benefits will be $3,034 for the 20/21 year.
    • The health amount should be increased by 7% in each succeeding year.
  • Graduate Students (excluding Engineering) - Tuition will be $5,223 per semester for Fall 2020 and Spring 2021, and $2,331 for Summer 2021.  Total tuition will be $12,777 for the 20/21 year.
    • These amounts should be increased by 4% in each succeeding year.
  • Engineering Graduate Students - Tuition will be $5,212 per semester for Fall 2020 and Spring 2021, and $2,331 for Summer 2021.  Total Engineering tuition will be $12,755 for the 20/21 year.
    • These amounts should be increased by 4% in each succeeding year

MSU-HRD also offers Summer-only stipend-only no-tuition Research Graduate Assistantships for qualifying individuals (contact MSU-HRD for further details at 517-353-4434).

Research Associates will be charged a reduced SI rate due to the lower utilization of health, dental, and prescription benefits mostly because of this group's aggregate younger age. Typically a person in a research associate position is eligible for the University’s 10% retirement match after completing 36 FTE service months of university employment.  However, if the hired research associate participated in a 403(b), 401(a), 401(k) or other retirement plan at a previous employer that made employer contributions, or if they are age 55 or older upon their employment at MSU, they may immediately be eligible for the retirement match.  Please take this into consideration when putting together your proposal budgets.  For additional information on retirement eligibility, please see the MSU Retirement Guide.

Senior Research Associates are eligible for the same benefits as fixed term faculty, including the University’s 10% retirement matching contribution upon appointment, and will be assessed the normal costs of fringe benefits.

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.
 

Specific Identification Faculty & Staff Fringe Table for the 2020-2021 Fiscal Year

Base Salary Retirement TIAA-CREF Social Security Health, Rx, Dental 2% Other Total Fringes Fringe Rate
$ 35,000 3,500 2,678 15,480 700 22,358 63.88%
$ 45,000 4,500 3,443 15,480 900 24,323 54.05%
$ 55,000 5,500 4,208 15,480 1,100 26,288  47.80%
$ 65,000 6,500 4,973 15,480 1,300 28,253 43.47%
$ 75,000  7,500  5,738 15,480 1,500 30,218   40.29%
$ 85,000  8,500  6,503 15,480 1,700 32,183  37.86%
$ 95,000  9,500  7,268 15,480 1,900 34,148 35.94%
$105,000  10,500  8,033 15,480 2,100 36,113  34.39%
$115,000  11,500  8,798 15,480 2,300 38,078 33.11%
$125,000  12,500  9,563 15,480 2,500 40,043  32.03%
$135,000  13,500  10,328 15,480 2,700 42,008  31.12%
$145,000  14,500  10,790 15,480 2,900 43,670 30.12%
$155,000  15,500  10,935 15,480 3,100 45,015 29.04%
$165,000 16,500  11,080 15,480 3,300 46,360 28.10%
$175,000  17,500  11,225 15,480 3,500  47,705  27.26%
$185,000  18,500  11,370 15,480 3,700  49,050  26.51%
  • Retirement - 10% if enrolled.  If not enrolled no costs will be assessed. Note for FY20/21: MSU will reduce its matching contributions from 10% to 5% of employees’ compensation for executive management and non-unionized faculty and academic staff, excluding research associates.  If you are budgeting fringe for an employee with a reduction in match, please budget accordingly.
  • Social Security/FICA - 6.2% of the first $140,110 cap + 1.45% of all salary.
  • Health, Rx, and Dental - University average amount regardless of actual enrollment or enrollment options (Includes $3,544 for retirees).
  • Other Costs - Long Term Disability, Life Insurance, Unemployment Comp, Vacation Payouts, etc.  University average percent regardless of actual enrollment or enrollment options.
  • Applicable Base - Retirement, Health, Rx, Dental, and Other costs will be allocated to "Base" salary only (earning types SAL, CTS, REG, and TSS).  All other earnings types will be assessed social security as appropriate.
  • Summer Salary for AY faculty - Should be budgeted at 7.65%.
Category:     Subcategories: Accounting, Budget, CGA, Faculty, Federal, Graduates, Indirect Cost, MSU, OSP, Policy, Research, Salary

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