Q:What precipitated this change in the employee benefit rate structure?
There are many reasons for this change to be made. The new rate structure will allow a more equitable distribution of benefit costs, will make the process more uniform and more accurate and will address concerns from many indi viduals -- including our federal auditors.
We are making this change now after 18 months of extensive review and analysis as well as discussions with a number of representatives from colleges and business units.
Q:Does this change mean the university will raise additional resources for its Endowed Ithaca benefits pool, which now stands at approximately $85 million?
No. We still plan to recover the same amount. This new structure merely shifts the recovery to reflect better align ment with costs.
Q:Does this change mean that the university is contrib uting more to an individual employee's benefit package, i.e., life insurance, health insurance, retirement?
Not as a result of the structure change. This rate structure change only modifies the way the university recovers the cost of employee benefits from departments and external sponsors, including the federal government. However, our costs for employee benefits continue to rise faster than salaries as evidenced by the overall growth in the employee benefit rate over the past 10 years.
Q:The benefit rate for fully benefits-eligible employees (both academic and non-academic) will be 37 percent
under the new rate structure. That's an increase from the fiscal year '97 planned rate of 34 percent for non-academic departments, but a decrease from the FY'97 planned rate of 38 percent for academic departments. Will those depart ments where costs will increase need to find additional savings in their budgets to offset this increase?
Not necessarily. General purpose budget allocations will be adjusted to reflect the planned impact of this benefit rate structure change for those positions funded from general purpose allocations. The effect on non-general purpose funded departments will depend upon the mix of positions within each department.
Q:Are the new benefit recovery rates likely to change in the near future?
Rates are adjusted every year in accordance with costs, and, therefore, they are likely to change. The university continues to carefully consider options that maintain a competitive compensation package to employees, yet mini mizes the rate of increase of benefit costs. However, we have not often changed the overall structure and the salary pools to which the annual rates apply. We would expect that this new rate structure would be relatively stable as well.
Q:The recovery rate for summer faculty salaries with retirement contributions will increase from 10 percent to 20.75 percent. Why?
In addition to the retirement contribution, mandated benefits also are paid for summer faculty. These costs were not fully recovered at 10 percent.