Fringe Rate FAQs

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

• Retirement: Includes employer contributions to the State Universities Retirement System (SURS).
• Health Insurance: Includes employer funded health insurance costs.
• Social Security (FICA): Includes employer portion of FICA tax.
• Medicare: Includes employer portion of Medicare Tax.

The use of a “fringe benefits pool” simplifies and improves the preparation and administration of budgets, including those associated with the grant proposal budget process.

Departments will see on their payroll vouchers that the employer share of an employee's fringe benefits (i.e. medical insurance, retirement, etc.) will be charged using the federally approved rates instead of actual benefits charges in previous years.

There will be no changes for individual ISU employees. Individual employee share of selected benefits can change due to changes in employee choices during open enrollment or as a result of a qualifying event. Employees' pay detail will still show all of the same information as before.

Beginning in FY23, August 1, 2022, the University will being using pooled fringe rates rather than actual costs to assess fringe benefit costs to all funds not considered ‘exempt’ under 5 ILCS 375/11.  For University purposes, the funds considered non-exempt are restricted and foundation funds.

The pooled fringe rates were negotiated with the US Department of Health and Human Services (DHHS), in consultation with Research and Sponsored Programs, Human Resources, and the Comptroller’s Office, while reviewed by leaders in the Division of Finance and Planning and the Office of the Provost.

Rates were established based upon employee classes grouped by benefit eligibility using FY19 data and financial statements.  The initial fringe rate components include FICA (social security), health insurance, and retirement.

Our fringe rates are negotiated with the US Department of Health and Human Services (DHHS), as they are the cognizant funding agency for the University.

The appropriate fringe rate will be based on the employee classification for which salary/wages were earned.

The current pooled fringe rate agreement allows for three (3) pooled fringe rates.  The pooled fringe rates are defined as follows.

Beginning in FY23, August 1, 2022, the University will being using pooled fringe rates rather than actual costs to assess fringe benefit costs to all funds not considered ‘exempt’ under 5 ILCS 375/11.  For University purposes, the funds considered non-exempt are restricted and foundation funds.

No exceptions to these rules can be made

Budgeting using fringe rates will be actually be simpler. Individual’s circumstances do not drive a change in the cost that is charged to the department, because rates are set by categories of employees, not individuals and not individual circumstances.

No, there is no change to the underlying benefits or cost to the employee.

Changes to title will not affect an employee’s fringe rate. Employee changes that may affect an employee’s fringe rate would be a switch from one employee classification to another.  For example, a switch from faculty to staff (and vice versa). The easiest way to determine the appropriate fringe rate is by referencing the employee classification in the rate table.

Existing awards will be charged using fringe rates, not actuals.   Re-budgeting may be necessary.  

Research and Sponsored Programs will be contacting and working with existing awards to rebudget.

Yes, that is the intent and benefit of this change.

Beginning in FY23, August 1, 2022, the University will being using pooled fringe rates rather than actual costs to assess fringe benefit costs to all funds not considered ‘exempt’ under 5 ILCS 375/11.  For University purposes, the funds considered non-exempt are restricted and foundation funds.

The negotiated fringe benefit rates are applied to all employees who are eligible for benefits regardless of whether they accept the benefit and regardless of which benefits options they elect.

The negotiated pooled fringe rate will be charged automatically to the account and should be used for budgeting proposals as well.

Yes. Student employees receive fringe benefits and will be charged according to the negotiated pooled fringe rate.

Negotiated pooled fringe rates are applied based on the salary amount and rate group the employee falls into regardless of when the employee is costed to fund sources.

The benefit cost for an employee is the applicable rate multiplied by gross salary. If the costing allocation is lower, the salary is lower, and thus the benefit cost will be lower, even if the employee receives full benefits.

Inquiries and questions related to the transition to pooled fringe rates may be direct to Jason Wagoner, Senior Director of Research and Sponsored Programs, if any questions have not been fully addressed here.