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2016/2017 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.
  2. FICA at 7.65 with a salary cap: 6.2% up to salary cap of $118,500 (FY 2016/2017) + 1.45% of all salary.
  3. Other/miscellaneous category (1.4%) 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 2016 -2017 is $13,125 for regular employees and includes ~$3,019 for the costs of retirees (i.e. retiree health, dental and prescription costs), and $6,510 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.
  • The Affordable Care Act (ACA) should also be considered when budgeting qualifying part-time employees (e.g. qualifying retirees, student employees, temporary or fixed term positions, etc.).  For employees that meet the Affordable Care Act eligibility, the Office of Sponsored Programs recommends budgeting an additional $5,000 annually to allow for mandated health care coverage.  Please review ACA information on the HR website to determine eligibility requirements.

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.  If a student falls below a minimum number of credits set by the IRS, e.g., undergrads enrolled for less than 6 credits; master's level students enrolled for less than 5; and hourly Graduate Assistant students enrolled for less than 3 credits, then the account will be charged FICA and Medicare @ 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 $1,504 per semester (Fall 2016 and Spring 2017) and $0 for Summer 2017.  Total health benefits will be $3,008 for the 16/17 year.
    • The health amount should be increased by 8% in each succeeding year.
  • Tuition will be $4,700 per semester for Fall 2016 and Spring 2017, and $2,331 for Summer* 2017.  Total tuition will be $11,731 for the 16/17 year.
    • These amounts should be increased by 4% in each succeeding year.
    • *MSU-HR offers Summer-only stipend-only no-tuition Research Graduate Assistantships for qualifying individuals.  For additional information on the required conditions for this type of assistantship please visit the dedicated link on the HR website.

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. A person in a research associate position is eligible for the University’s 10% retirement match after completing 3 years of university employment (after 36 FTE service months MSU retirement match becomes an available benefit).

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 2016-2017 Fiscal Year

Base Salary Retirement TIAA-CREF Social Security Health, Rx, Dental 1.4% Other Total Fringes Fringe Rate
$ 35,000 3,500 2,678 13,125 490 19,793 56.55%
$ 45,000 4,500 3,443 13,125 630 21,698 48.22%
$ 55,000 5,500 4,208 13,125 770 23,603  42.91%
$ 65,000 6,500 4,973 13,125 910 25,508 39.24%
$ 75,000  7,500  5,738 13,125  1,050  27,413  36.55%
$ 85,000  8,500  6,503 13,125  1,190  29,318 34.49%
$ 95,000  9,500  7,268 13,125  1,330 31,223 32.87%
$105,000  10,500  8,033 13,125  1,470 33,128  31.55%
$115,000  11,500  8,798 13,125  1,610  35,033 30.46%
$125,000  12,500  9,160 13,125  1,750  36,535 29.23%
$135,000  13,500  9,305 13,125 1,890  37,820 28.01%
$145,000  14,500  9,450 13,125  2,030  39,105 26.97%
$155,000  15,500  9,595 13,125  2,170  40,390 26.06%
$165,000 16,500  9,740 13,125  2,310 41,675 25.26%
$175,000  17,500  9,885 13,125  2,450 42,960  24.55%
$185,000  18,500  10,030 13,125  2,590  44,245  23.92%
  • Retirement - 10% if enrolled.  If not enrolled no costs will be assessed.
  • Social Security/FICA - 6.2% of the first $118,500 cap + 1.45% of all salary.
  • Health, Rx, and Dental - University average amount regardless of actual enrollment or enrollment options (Includes $3,019 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: Proposal Development    Subcategories: Accounting, Budget, CGA, Faculty, Federal, Graduates, Indirect Cost, MSU, OSP, Policy, Research, Salary

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