From: Georg Jahn [gjahn@csun.edu]
Sent: Monday, June 25, 2007 10:47 AM
To: 'Sponsoredprog-l@csun.edu'
Subject: Implementation of Benefit Rates

Importance: High




To: 		All Principal Investigators & Research Administrators

This email is to notify you of important changes to the way The University Corporation is charging benefit costs for employees to sponsored programs. 


OLD METHOD:
Until June 30, 2007, the actual benefit costs incurred by each employee were charged to sponsored programs. As a result benefits were budgeted in account 602000 Benefits, and actual expenditures were charged to the accounts 602110 Payroll Taxes, 602210 Workers Compensation, and 602220 Unemployment. 


NEW METHOD:
Beginning with the July 1, 2007 payroll, The University Corporation will charge benefits cost as a percentage of salaries and wages to sponsored programs. We have implemented 3 benefit rates:  

* BENEFIT RATE 1: 12.3%
This rate will be applied to: 
- Student Assistants
- Graduate Research Assistants
- Casual Appointments
- Temporary Appointments
- Direct Payments to Faculty from TUC Payroll
- Salaried Employees with an expected appointment of less than 6 months
- Salaried Employees with an appointment of less than 20 hours/week
- Hourly Employees with an expected appointment of less than 2 years
- Hourly Employees with an appointment of less than 2 years and less than 1,000 hours/year

* BENEFIT RATE 2: 18.1%
This rate will be applied to:
- Hourly Employees with an actual or expected appointment of more than 2 years and more than 1,000 hours/year
- Casual Appointments with an actual or expected appointment of more than 2 years and more than 1,000 hours

* BENEFIT RATE 3: 41%
This rate will be applied to:
- Hourly Employees receiving full benefits
- Salaried Employees with an expected appointment of more than 6 months and more than 20 hours/week.


CLASSIFICATION OF EMPLOYEES:
The TUC-Human Resources Department will assign all current and future employees with the appropriate benefit rate, based on their appointment and actual work history.

ACCOUNTING IMPLICATIONS: 
Beginning with the next payroll, benefits will be charged only to account '602000 Benefits'. 

TRANSITION DURING PROJECT PERIOD:
Benefit costs will be charged according to the new method as of July 1, 2007. There will be no retroactive adjustments for previous periods in open projects. 
As a result, projects with start dates before June 30, 2007 and an end date after June 30 2007, will be charged benefits under two different methods. For payroll periods before June 30, 2007 benefits will be charged according to the old 'Actual Benefit Cost' method. For payroll periods after June 30, 2007 benefits will be charged according to the new 'Benefit Rate' method. 

ADVANTAGES OF THE NEW METHOD:
This new, more common allocation method significantly simplifies revisions and corrections of personnel costs and the tracking of benefits costs for Principal Investigators and Research Administrators. As well, it allows the budgeting a more precise expense for benefits.
 
PREPARATION OF FUTURE PROJECT BUDGETS:
The Office of Research and Sponsored Programs (ORSP) will assist you in using the new benefit rates in preparing any future budgets for grant applications.

ANNUAL REVIEW OF BENEFIT RATES
Benefit rates will be reviewed annually and adjusted to compensate for increases in actual benefit costs. At that time, you will be notified of any rate changes. 

IS THERE ANY ACTION REQUIRED BY PRINCIPAL INVESTIGATORS AND RESEARCH ADMINITRATORS?
No. TUC will implement the new method. At this time, there is no additional action required by Principal Investigators and Research Administrators. However, when reallocating personnel expenditures to and from projects, it is important to determine in which period the expenditures were recorded and which benefit method was used, since the same method must be used for reallocating expenditures. 

Should you have any questions, please contact me at x 2698 or email me at gjahn@csun.edu



Best Regards, 


Georg Jahn 


________________________________________________________________________
Georg Jahn
(Director, Sponsored Programs)

THE UNIVERSITY CORPORATION
Research, Investments and Commercial Services California State University, Northridge

18111 Nordhoff St.
Northridge, CA 91330-8309

Direct: (818) 677-2698
Fax: (818) 677-2671
E-Mail: gjahn@csun.edu

www.csun.edu/sponsoredprograms/
www.csun.edu/universitycoporation/
________________________________________________________________________