Through a collaborative process involving stakeholders from across campus, working groups proposed shared solutions for the benefits initiative. Campus leaders and governance groups reviewed the proposals, and campus leaders approved a path forward intended to provide temporary and permanent budgetary supports to units and help units sustain the mission of CU Boulder. The proposals and path forward are summarized in the Benefits Shared Solution document shared with the campus on February 18, 2020.
Update (May 11, 2020): based on feedback from campus budget officers, the Petition Fund Request Process for FY21 will take place in Sept/Oct 2020 (first round) and spring 2021 (second round). For more information on the Petition Fund, please see the Benefits Shared Solution document (link above).
Over the last few years, there have been conversations between Budget and Fiscal Planning (BFP) and campus budget officers about the misalignment of benefits expenses and benefits budgets in General Fund (fund 1X) accounts. Because benefits have historically been budgeted centrally and expenses generated locally, a structural imbalance was created. In addition, General Fund accounts are currently treated differently than any other fund type, where benefits budgets and expenses are in the same location.
In the spring of 2019, the campus, with feedback from campus constituents, decided to focus on better understanding the nuances of how and why surpluses and shortfalls had accumulated. Following this decision, in fall 2019, the campus embarked on a planning process intended to engage campus constituents in collaboratively developing a shared solution to the benefits challenge. The following is a description of the development of this solution.
- August 21 & 22, 2019 – Benefits Lead Working Group and Academic Affairs Budget Advisory Committee (AABAC) discussed plan for engaging campus in shared solution planning.
- September 8 – Call went out to Deans/VCs to appoint faculty and staff to small working groups.
- September 23-October 31 – Small working groups met 3-6 times and submitted their recommendations at the end of October. Lead Group and AABAC received recommendations from small groups during this time. The Lead Group began formulating paths forward, including localization of benefits budgets.
- November 6-January 22, 2020 – Lead Group and campus leadership drew on small group recommendations to formulate a campuswide proposal.
- January 23 – Lead Group, AABAC, and working group members met with campus leadership to discuss path forward.
- Week of February 17 – approved plan communicated to deans at Deans’ Council and all other units via email. Units begin work to ensure that their employees who should be on the merit roster are budgeted correctly for FY20.
- February-June – Lead Group will continue to work with BFP/Campus Controller’s Office (CCO) to prepare for localization of benefits budgets and actuals.
- July 1, 2020 – Benefits actuals will be localized in fund 1X for FY21.
- End of July 2020 – Benefits budgets will be localized (if not sooner).
Previous discussions among campus leaders identified four categories of funds needing special attention during the benefits shared solution planning process:
- Cost Share (7% of the benefits shortfall on campus)
- DAICR (21%)
- Start-up and other research funds (33%)
The development of a shared solution for benefits maintained attention to those categories as well as the other 39% of the campus benefits shortfall.
The Academic Affairs Budget Advisory Committee (AABAC) served as the steering committee for this endeavor. AABAC reviewed recommendations and, together with the Lead Group, recommended a proposal to senior leadership about a campus-wide shared solution for benefits, inclusive of both campus and unit contributions.
A Lead Working Group and five Small Working Groups were convened to navigate the benefits issue, with a specific focus on their group’s assigned topic.
- Rates are developed annually by a group from Budget & Fiscal Planning and Campus Controller's Office
- Rates are submitted for approval to the federal Department of Health and Human Services
- Rates are a cost recovery mechanism:
- Projected expenses/projected salary = fringe benefit rate
- Each employee group has a different rate because different benefits are offered
- Prior year over- or under-recoveries must be built into next year's rate
- Rates include benefits that are traditionally provided to employees in addition to salary, for example health, life and dental insurance (HLD)
- Many expense items are externally mandated
- Employer contributions for medical coverage are negotiated with providers by Employee Services
- Retirement contributions are mandated by state or federal government
- State has been increasing benefit contributions to try to reach market parity
- Medical coverage
- Health insurance - employer contribution is the same regardless of the provider/plan selected
- Dental insurance - employer contribution is flat regardless of level of coverage
- Vision coverage - employees pay the full amount
- Retirement benefits
- Employer contributions to PERA
- Other retirement plans (TIAA, Vanguard, etc.)
- FICA - Social security
- Annuitants insurance - HLD (Health, Life, Dental) for retirees
- Termination pay - separation payouts for accrued sick and vacation leave
- Life insurance - flat contribution for all eligible employees
- Disability insurance - short-term and long-term
- Unemployment compensation - based on actual claims
- Worker's compensation - based on actual claims, managed by University Risk Management
For more detailed information on benefits coverage, visit the Employee Services webpage.
For employees under multiple contracts or holding multiple positions, the fringe rate depends on the employee’s total scope of work. If an employee qualifies as full-time, then the employee’s salary will be charged benefits at the full-time fringe rate for each job class. If the employee qualifies as part-time, the employee’s salary will be charged benefits at the part-time fringe rate for each job class.
As an example, consider a 100% FTE staff member who also holds a 25% lecturer position. This employee qualifies as full-time. Their staff salary will be charged benefits at the full-time staff fringe rate, and their lecturer salary will be charged benefits at the full-time faculty fringe rate.
A note on encumbrances: benefits encumbrances are calculated on a position-only basis. Regardless of how many positions are held by a given employee, each position is encumbered as if no other position exists. For this reason, benefits encumbrances may understate forthcoming benefits actuals for full-time employees holding multiple positions if any of those positions are less than 50% FTE.
To that end, units should align budgets with expected spending. Departments and Programs within the College of Arts and Sciences (CAS) should contact the CAS Budget Office to request salary and benefit-related budget journal entries. Departments and programs within the Institutes should contact the RIO Institutes Liaison for budget journal entries involving TTT faculty.
Any salary savings from FY19 were t-rolled into the operating account code (460000) as temp funds for FY20. The same will happen for FY20 to FY21. If you continue to carry a surplus balance on the salary account code in FY20, only the salary portion (not the benefits) will t-roll into FY21 (into the operating account code).
Once benefits are localized in FY21, both salary and benefits budget savings and shortfalls will t-roll each year at the speedtype level into the operating account code. For the continuing salary budget, you will see the accompanying continuing benefits budget in your speedtypes by the end of July 2020.
In FY20, continuing benefits budgets associated with salary budgets are held in a centralized pool. Beginning in FY21, you will see the accompanying continuing benefits budget in your speedtypes by the end of July 2020.
Salary and Benefits Worksheet
This worksheet is intended to help with the following questions:
- Which fringe rates and account codes should I use when budgeting benefits?
- I would like to hire a new employee; how much are the associated benefits?
- I'd like to convert funds from operating to salary. How much of this can I devote to salary, and how much goes to benefits?
- How can I know the associated benefits amounts for salary currently on my speedtype?
These mockups provide a "current" and "future" look at speedtype-level reports before and after the localization of benefits.
BFP will be offering one-on-one office hours twice weekly, as well as weekly group training sessions on Thursdays. Note: Zoom available for all sessions.
BFP welcomes all members of the CU Boulder community to sign up for office hour time slots as individuals or in groups. Time slots are 30 minutes; feel free to schedule multiple time slots if more time is needed. If none of the available times work, please reach out to firstname.lastname@example.org. We do request that interested parties sign up at least 24 hours in advance, as we cannot guarantee same-day availability for walk-ins. Please visit the sign-up for one-on-one office hours.
Topics for office hours include:
- This time is focused on you: your speedtypes, concerns, and questions regarding the benefits initiatives
- How reports will look after localization
- Calculating continuing benefits budget associated with FY20 continuing salary budgets
- How to budget benefits (account codes, FY21 fringe rates, etc.)
BFP is currently offering two 60-minute training sessions: Benefits Localization and Benefits Shared Solution. One training session is offered every Thursday, with Benefits Localization and Benefits Shared Solution alternating every other week. Session topics are detailed below. Click the box to the right to RSVP for a Group Training Session.
Benefits Localization Training: Topics
- Timeline and overview of the benefits localization
- Available resources
- How speedtype-level financial reports will look after benefits localization in July 2020
- How to calculate the amount of continuing benefits budget to be localized in July 2020
- How to budget benefits (account codes, FY21 fringe rates, etc.)
- Considerations when converting operating funds to salary/benefits (and vice versa)
Benefits Shared Solution Training: Topics
- Background on the Benefits Shared Solution
- Shared Solution process and path forward
- Existing benefits pool distribution (benefits localization--overview)
- How central campus benefits budget supports are determined and distributed
- Schools/colleges/research general deficits
- Start-up and retention packages
- Petition fund