Fringe Benefits Pool
What is a Fringe Benefits Pool?
A fringe benefits pool is an allocation concept that clusters fringe benefits paid by the university for its employees. Employee groups are determined based on the fringe benefits offered to the employees within a particular group. A percentage is determined for each group by taking the fringe benefits costs paid by the university and dividing that amount by the total salaries and wages of that group. The impact of employee benefit choices are kept within the pool rather than the employing departments. This simplifies accounting, budgeting, and grant processing. A department can easily calculate the total cost of a new employee at the time of hire rather than after new employees make benefit choices.
What Benefits are inlcuded in the Pool?
Rates include: Employer costs of medical an dental insurance, retirement (IPERS/TIAA/Federal), group basic life and long-term disability insurance, worker's compensation, employee assistance program, FICA, Medicare, unemployment insurance, long-term disability waiver, sick leave payouts (disability and retirement), and employee tuition assistance.
Why is Iowa State going to a Pooled Fringe Rate?
- Spreads fringe costs over total salary base and funding streams
- Simplifies accounting, budget administration, and grant process
- Total cost impact can be calculated at point of salary/hiring decisions
- Relieves departmental burden for long-term sick leave payouts
What does this mean for ISU departments?
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.
What does this mean for ISU employees?
There will be no changes for indivdual 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.
When will the new rates be implemented?
Starting wtih the July 31, 2018 payroll, new fringe benefits rates as approved by the U.S. Department of Health and Human Services, Division of Cost Allocation Services, will be applied.