THE UNIVERSITY OF NORTH CAROLINA

AT

CHAPEL HILL

 
 

TO:	Deans, Directors, and Department Heads
FROM:	Roger D. Patterson
	Associate Vice Chancellor for Finance
DATE:	September 27, 1999
SUBJECT:	Fringe Benefit Rates for Use in Research and Training Proposals (Revised)

The fringe benefit memo dated August 3, 1999 is being revised to incorporate changes contained in House Bill 168 codified as Session Law 1999-237. These fringe benefit rates are applicable to Research and Training  proposals and should be utilized until further notice.

In preparing cost proposals, there are always uncertainties as to specific project staffing and fringe benefit costs in future years. Accordingly, it is generally more appropriate to apply a combined fringe benefit rate of 19% to cover Social Security, Retirement (State and Optional Retirement Plans), severance pay, and other fringe benefits. The rate, which varies slightly from the sum of the individual components, should be applied to the total estimated salary and wages subject to such contributions without regard to existing taxable salary base limitations.

Experience has shown that use of the combined rate in this manner will reasonably approximate future fringe benefit costs. Please note that this combined rate does not include Hospital-Medical or other Health Insurance contributions. Should for some reason the use of the combined rate be considered inadequate or should a sponsor insist upon precise adherence to current limitations in a given situation, fringe benefits may be costed out by individual elements.

Hospital-Medical
 
 

Comprehensive Major Medical (Object Code 1832)
HMO/Health Plans (Object Code 1833)	October 1, 1999
Employer contribution	$ 177.17 per month
	($2,126.00 per year)
	October 1, 2000
	$ 188.00 per month
	($2,256.00 per year)

Other Health Insurance
 
 

Postdoctoral Research Associates (Object Code 1831)	$ 109.33 per month
	($1,311.96 per year)
Postdoctoral Trainees (Object Code 4518)	$ 109.33 per month
	($1,311.96 per year)

Graduate Student Health Insurance	$ 69.33 per month
(Object Codes 1836 and 6596)	($ 832. per year)

The Hospital-Medical and other Health Insurance contributions should usually be stated separately in a proposal. The combined rate discussed above does not include the Hospital-Medical contribution.

Where specific components of fringe benefits must be addressed in a proposal, the following rates apply:

Social Security (Object Code 1812)
 
 

For the Old Age, Survivors and Disability Income portion (OASDI)
Calendar Year 1998:
Taxable salary base (maximum)	$68,400
Contribution rate	6.2%
Maximum contribution	$ 4,241
Calendar Year 1999:
Taxable salary base (maximum)	$72,600
Contribution rate	6.2%
Maximum contribution	$ 4,501

Social Security (Object Code 1813)
 
 

For the Medicare Portion
Calendar Years 1998 and 1999:
Taxable salary base (maximum)	no limit
Contribution rate	1.45%

State Retirement (Object Code 1822)
 
 

Salary base: Gross wages paid by UNC-CH
Compensation subject to retirement (maximum)
Employed prior to 7/1/96	$260,000
Employed on or after 7/1/96	$160,000
Contribution rate	8.83%

Optional Retirement Programs
 
 

TIAA (Object Code 1872)
Lincoln National (Object Code 1874)
VALIC (Object Code 1875)
Salary base: Gross wages paid by UNC-CH
Compensation subject to retirement (maximum)
Employed prior to 7/1/96	$260,000
Employed on or after 7/1/96	$160,000
Employer Contribution paid to ORP	7.36%
Health and Disability Benefits (Object Code 1873)	2.52%
Overall Contribution rate:	9.88%

Severance Pay (Object Code 1251)
 
 

Salary base: SPA Salaries paid from Non-State Funds	0.2%
(Only object codes 121x)

Composite Benefit Fund (Object Code 1892)
 
 

Covers unemployment, workers compensation, short-term disability pay, and health insurance while on
professional leave.
Salary base: EPA and SPA salaries paid from Non-State Funds
(object codes 11xx, 12xx, 13xx, and 14xx)
Contribution rate through December 31, 1998	0.3%
Contribution rate effective January 1, 1999	0.2%

Fringe benefit rates are also published in the Contracts and Grants section of the Business Manual (Appendix 3), together with indirect cost rates. This information is also available on the Contracts and Grants Home Page on the World Wide Web. The Contracts and Grants Home Page can be accessed through the UNC Home Page in the Campus Sites and Services section under the Academic and Administrative Units heading. The address is: http://www.ais.unc.edu/candg/

If you have any questions please call Kent Walker, Contracts & Grants, at 962-1353.