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• Each pay period the two components will display as two separate “BEN” lines: one for the per person component in account 710010 and the pay-based component in account 710025.
  • The per person component amount will be the sum of the annual rate divided by the number of pay periods for each group:
    • Monthly – 12.
    • Bi-weekly – 26.
    • Nine-month faculty – 9 months.
  • The pay-based component will be equal to the product of "PEN" wages and the pay-based component percentage.
• Exception: Grant funds (2100-2299) will see the two components above hit the chartfield, be reversed out the same day and then charge the federally negotiated benefit rate for all benefits in account 710015.

Note: Match programs and cost share will still be charged the two benefit components, but an allocation will run to allocate the grant benefit rate to the appropriate program or project. The originally charged benefit components will not be reversed out.

Pension eligible wage is compensation for services regularly rendered which include, but are not limited to: regular pay, shift differential, contract pay, sick, personal and vacation days, and summer session pay. Non-eligible wages include, but are not limited to: over time, incentive payments, prizes/awards, allowances, moving expenses, transition assistance, tips, and commissions. For more information, please see the University’s retirement plan documents, section 530.010.D.1.

Two components were developed to allow for the proper allocation of costs based on what drives those costs. Some benefits are the same regardless of salary, while others, such as retirement, are a function of salary. The costs included in the rate have different behaviors. In order to charge costs to more accurately reflect where the costs are actually being incurred, two components were developed depending on the type of benefit offered.

The first component is the per-person charge, which charges medical and dental costs based on the number of benefit eligible employees for a department. The second component is the percentage of pay charge, which charges retirement and the remaining benefit charges based on the salaries of the employees who are benefit eligible.

Prior to current benefit rate structure, the University charged each department for the actual premiums by employee. In some cases, departments could not afford to hire employees with families versus employees who only needed single coverage. Under the current methodology, the same rate per person is used for medical and dental benefits, eliminating this consideration for departments.

The benefit rate is calculated by summing the total actual cost of the benefit plans and dividing by the driver of those costs (benefit eligible employees for per person benefits, benefit eligible salaries for salary based benefits). The benefit rate reflects the actual cost of delivering the University’s benefit program.

High growth in benefit costs is a national problem. The University’s aggregate benefit costs continue to outpace growth in revenues, and the University maintains $1.2 billion in unfunded benefit liabilities. Cost increases require the University to contribute more funds toward sustaining benefits programs for the employees and retirees who receive them.

The University’s leadership team in concert with the Total Rewards Advisory Committee continues to evaluate the overall cost and structure of benefit programs to continue delivering a competitive total benefits package.

The leave rate includes the costs of qualifying leaves, as well as payouts of unused leave at separation, including

• Short-term disability, including leave used for top off (i.e. sick, vacation or PTO) 
• Parental leave
• Caregiver leave
• Unused vacation or PTO paid at separation for campuses only (does not include the vacation transition payout)

Grants cannot be charged for indirect costs until there is actual experience to estimate the charge. Since there are no payments for the new leave program until Fiscal Year 2024, grants cannot be charged for these costs until Fiscal Year 2026 due to a two-year look back on federal rate setting.

The payouts scheduled to occur in 2024, 2025 and 2026 for employees with accrued vacation balances at the time of transition to the new leave program are not included in the leave rate. Each campus/unit has a plan to cover the costs of the vacation transition payout. Please contact your campus finance office to learn more on how it will be handled at your campus.

No, grants cannot be charged for this expense directly. The grant leave rate, beginning in Fiscal Year 2026, will include the costs of the vacation transition payments to allow for grant costs to be recouped.

There is no change to how the department is charged. Regular PTO usage is charged to departments when it is used by the employee. The use of PTO as top-off for short-term disability is included in the leave rate and will follow the same method as the qualifying leave.

No, leave that an employee uses during the elimination period is not included in the leave rate. Meeting the elimination period is required before the employee qualifies for payment through short-term disability. As such, leave taken during this period is treated as incidental usage of leave, which is charged to the department at the time of usage.

When an employee goes out on a qualifying leave, such as short-term disability, parental or caregiver leave, their pay during the leave is paid by a central pool. Department budgets will not pay for the employee's pay for the duration of the qualifying leave period approved (up to 20 weeks for short-term disability, up to 4 week for parental leave or up to 2 week for caregiver leave). Once the employee’s approved leave period is over or the employee returns to work, the department begins to pay the employee again. Processes in the HR and Finance systems will automatically charge qualifying leaves to the central pool. No JED changes or PCEs are necessary.

The central pool funds qualifying leaves (short-term disability, parental leave and caregiver leave) for the duration of the approved qualified leave (up to 20 weeks for short-term disability, up to 4 week for parental leave or up to 2 week for caregiver leave). Any time an employee takes off beyond the qualified leave period, it is paid for by the department, provided the employee has available accrued time off. For example, if an employee is approved for two weeks of caregiver leave, the central pool will pay for their leave during that time. However, if the employee takes paid time off beyond the two weeks covered under the caregiver leave policy and uses PTO, vacation, banked sick or personal days, the department pays for that usage of hours.

The new leave rate will be charged with the first payroll cycle in Jan. 2024 that contains time worked in Jan. This will occur with the Jan 17, 2024, biweekly pay date.

Payout of leave upon separation is included in the leave rate and is paid by the central pool at separation. Any unused and unpaid hours of PTO over the 80 hours maximum payout at separation results in a reduction of the liability recorded.

The leave rate is charged as a percentage of salary similar to the pay-based component. Employees who are eligible for leave (HR Elig Field 1 value of EXVAC, FLSAG, NEVAC, NURSES, EXPTO, FLSPTO, NEPTO, NRSPTO, EVCSRS or EVFERS) and have pension-eligible earnings (PEN) will be charged the leave rate. Consult the (Excel, 206KB) for more information as to which earn codes are marked "Y" for "PEN".

No, the rates are separate because of the different types of employee on which the two rates are assessed. The pay-based component is charged on all benefit-eligible employees (eligible for retirement, life insurance, etc.), while the leave rate is charged on leave-eligible employees. Many benefit-eligible positions are also elgible for leave, however some, such as faculty positions, are not eligible for the leave program. Therefore, there are two separate rates for benefits that are charged as a percent of pay.