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University of Colorado Boulder
Fringe Benefit Summary FY12
November 2012

Summary Total fringe benefit expenses in FY12 increased $6.4m, a 5.2% increase from FY11. In FY10, total fringe benefit expenses were 24.3% of total salary expenses, in FY11 24.6% and in FY12 24.9%. Total salary for FY12 increased $19.9m, a 4.0% increase from the previous fiscal year. The overall fringe benefit increase can be attributed to multiple factors including higher employer contributions, increased enrollment, and salary dependent Retirement expenses such as PERA, which experienced an increase of 10.8% over the prior year.

Total fringe benefit expenses
The amount of total costs provided by the employer contribution has been greater in the past fiscal years causing benefit expenses to grow at a higher rate than salaries. Chart 1 - Total fringe benefit expenses, shows total actual fringe benefit expenses from FY04 – FY12.

Total salary expenses
Total salary for FY12 was $521,807,878 a 4.0% or approximately $19.8m increase from the previous fiscal year. Chart 2 - Total salary expenses below compares actual salary expenses from FY04 – FY12.

Chart 2 -- Total salary expenses ($ in millions)

Below, Table 1 -- Actual $ changes in Fringe Benefit expenses from FY11 to FY12 identifies significant dollar changes for benefit categories by employment class. Some benefit categories are tied directly to salary, which results in commensurate increases when salary increases.

Health, Dental, and Life Insurance (HLD) - The overall HLD category increased from FY11 (see HLD Charts at http://www.colorado.edu/pba/budget/misctopics/HLD.html). Health and Dental Insurance are both elective driven; basic Life Insurance is automatic.  For Health Insurance, the employer contribution amount grew slightly (see table 2 below), as did the health premium total, which increased between 1.22% and 9.02% (depending on plan and level of coverage). Dental Insurance premiums remained the same for Faculty and Professional employees, and increased slightly for Classified employees; overall dental insurance costs increased 3.3%. Life Insurance premiums remained the same for all employees, and overall life insurance expenditures increased slightly.

Retirement (FICA, ORP & PERA) – All retirement categories are salary driven, and FICA, ORP and PERA increased due to higher salary expense.  The 2.5% shift in contribution from employer to employee in effect since July 2010 remained in effect for PERA participants in FY12.  FICA costs are salary driven up to a dollar limit of $110,100 per employee for CY12; this amount increased from $106,800 the previous calendar year. Costs for Other Retirement Plans (ORP), covering faculty and professional employees, went up 5.1%. PERA expenses increased 10.8% from the FY11 amount.

Starting in January 2006, SB04-257 required an increase in the employer contribution for PERA for Classified employees. The Amortization Equalization Disbursement (AED) was put in place to reduce PERA's unfunded liability, caused by previous State decisions to reduce the employer contribution, as well as the downturn in the economy. In FY06, the 10.15% statutory employer contribution, plus the AED of 0.5%, made the total PERA employer-paid contribution 10.65% of salary. In January 2007, the total employer contribution increased to 11.15%.  In January 2008, the total employer contribution increased to 12.05% due to a 0.4% increase in AED and a new Supplemental AED (SAED) component increase of 0.5%.  In January 2009, the AED increased 0.4% and the SAED increased 0.5%, making the total employer contribution 12.95%.  In January 2010 the AED increased 0.4% and the SAED increased 0.5%, making the total employer contribution 13.85%.  The 2.5% shift went into effect in July 2010, making the total employer contribution 11.35%; in January 2011 the AED increased 0.4% and the SAED increased 0.5%, raising the total contribution to 12.25%.  January 2012 saw the AED increase another 0.4% and the SAED increased 0.5%, raising the total contribution to 13.15% for the remainder of FY12.

Annuitants, Term Leave, Medicare - This category increased 4.3%, spread among the three components.  Annuitants includes health, life, and dental insurance for retired faculty and staff. It is elective driven and saw an increase of 3.5% or $217,695. Term Leave includes expenses associated with leave payouts for employees who separate from the University. The amounts can vary from year to year based on retirements and other separations. Term Leave increased 6.7% from the previous fiscal year by an amount of $171,554. Medicare is salary driven with no limits and was a 4.1% increase or $247,224.

Disability Insurance - Overall disability insurance costs increased 1.3%, representing a cost increase of $13,900.

Unemployment Compensation Claims - This cost is driven by claims and decreased $90,775 (-13.3%) from the previous fiscal year.

Workers' Compensation Insurance - This cost is the annual total for the premium paid by Risk Management for all Boulder campus employees  This premium increased 21.1% from the previous fiscal year.

Graduate Student Health Insurance - This is health insurance for graduate students on academic appointment and the cost is elective driven; 70% of the premium cost is covered by the campus. This expense item accounts for nearly all of the Student Faculty fringe benefit costs. In FY12, the premium increased by $110/semester from $1,105/semester to $1,215/semester. Overall, graduate student faculty insurance increased 5.9%, or $171,002, from the previous year.

Table 2 - % Increase from previous fiscal years for health insurance and specifically identifies fiscal year comparison amounts by employee category and elective coverage.

Last revision 11/08/12