Fringe Pool Rates

Effective 7/1/19

Fringe Pool vs. Direct Charge

  • Institutions have the option of charging actual fringe costs (direct charge) or using federally approved rates to charge pooled fringe costs. Through June 30, 2019, UNLV has used the direct charge method.
  • Direct charging method allocates each individual’s specific benefits to each salary source.
  • Pooled fringe benefit rates use an average rate (a percentage of salary) for groups of employees.

Fringe Pool Benefits

Increased Efficiency

A fringe benefit rate will simplify the monitoring of fringe benefit charges to accounts and simplify salary re-assignments.

Increased Recovery

With direct charge method, some fringe benefits are paid centrally while pooled rates allow for centrally funded fringes to be included in the fringe rate to more accurately allocate total fringe costs.

Reduced Risk of Non-compliance

Fringe benefit rates are negotiated annually with the institution’s cognizant federal agency.

Easier Budgeting

A fringe benefit rate will result in consistency between budgeting and expense practices; and simplify negotiations with sponsors.

Potential Negative Impacts

Although implementation of pooled fringe rates is beneficial overall, negative impacts can appear at an account level:

  • Because health insurance cost is not percentage based, higher cost salaries often generate higher costs at an account level than direct charge fringe costs.
  • For part-time positions (PTI, for example), pooled fringe rates reflect costs of blended FTEs so all employees within the job family group result in the same fringe cost without regard for health insurance eligibility at the individual level.

Institutions using Fringe Pool Rates

  • Use of pooled fringe rates is very common among high-research universities.
  • Fringe pool rates in effect for majority of UNLV aspirational peer institutions.
  • Fringe pool rates are already in use within NSHE at DRI and UNR.

Basics of Fringe Rate Development

  • Based on actual compensation and benefits for a base year reconciled to audited financial statements
    • For FY20, UNLV base year is FY18 – most recent complete year available during rate development period
  • Employees classified into groups subject to generally the same compensation structure and benefit plans
    • For UNLV, this is ‘job family group’ – faculty/professional, classified, LOA, graduate assistant, medical resident, hourly worker (students, casual labor)
  • Known/anticipated changes in benefit rates or offerings are factored in
    • For FY20 this included increased retirement contribution rate and health insurance assessment increase
  • Above factors taken into consideration – actual salary and fringe costs for base year by pool group + known changes used to calculate fringe benefit rate for employee group
  • At end of year, actual fringe costs vs. fringe recover is analyzed by pool to determine whether over/under recovery occurred, and this is then rolled-into next year’s rate calculation

UNLV Fringe Pool Rates – FY20

Rates that will be in effect for FY20 (pay periods beginning 7/1/19) are as follows:

Fringe Pool Fringe Rate
Faculty/Professional Staff 29.80%
Classified Staff 44.90%
Letter of Appointment 17.00%
Medical Resident 21.10%
Graduate Assistant 8.40%
Student and other Hourly 4.20%
Non-retirement earnings 2.60%

The following components are included in the above fringe rates where applicable:

  • Retirement: Includes employer contributions to Public Employee Retirement System (PERS) and alternative mandatory retirement programs.
  • Industrial Insurance: Includes employer funded worker’s compensation insurance
  • Health Insurance: Includes employer funded health insurance costs
  • Unemployment Insurance: employer funded state unemployment insurance
  • Social Security (FICA): Includes employer portion of FICA tax
  • Medicare: Includes employer portion of Medicare Tax
  • REGIA: Includes employer funded state assessment against current payroll costs, which funds retired employee group health insurance
  • Leave payouts: In addition to the above employer costs, annual and sick leave payouts upon separation will now be funded through these fringe benefit rates and not charged separately in lump-sum to departmental accounts

Non-retirement earnings components

The following earnings components are subject to the non-retirement earnings rate of 2.60% when paid within ALL job family groups:

  • Academic Phase-In
  • Activity Pay - Ineligible for Retirement
  • Additional Pay - Supplemental (Position Based)
  • Athletic Endorsements
  • Award (Position Based)
  • Award - Gross Up (Position Based)
  • Bonus (Position Based)
  • Call Back
  • Car Allowance
  • Cell Phone
  • Clothing Allowance (Position Based)
  • Commission (Position Based)
  • Death Benefit
  • Faculty Initial Expense (Position Based)
  • Graduate Research Not Enrolled
  • Hazard Pay
  • Holiday (No PERS)
  • Housing Allowance
  • Incentive Buyout
  • Medical Faculty Clinical/Practice (Position Based)
  • Mobile Equipment (Position Based)
  • Moving Taxable (for Payments) (Position Based)
  • Overtime Pay - FLSA Premium
  • Overtime Pay - Shift Differential Time Worked
  • Overtime Pay - Time Worked
  • PAP Research Overload - Ineligible for Retirement
  • Settlement
  • Severance
  • Special Pay

For questions or concerns, please contact:

Chris Viton

702-895-5578
chris.viton@unlv.edu

Alexandra Nikolich

702-895-5245
alexandra.nikolich@unlv.edu