Benefits Funding and Budgeting Guidelines
Updated 5/16/2025
Effective January 1, 2025, UCSC dissolved the central benefits pool and decentralized benefits management responsibilities by allocating core benefits budgets to campus units. Information about the decentralization process can be found here.
With the decentralization now complete, the Budget Office (BAP) is providing this guidance document to communicate updates to the local procedures related to benefits budgeting.
Any questions not answered by the sections below should be sent to ask-bap-group@ucsc.edu. Minor updates or refinements to these guidelines may be made at any time.
Benefits Funding
Benefits for Staff Positions (excluding Faculty)
Campus units are responsible for ensuring they have sufficient budget to cover increased benefits costs associated with making a new staff hire, increasing an employee’s time, and salary increases by unit decision such as equity increases and reclassifications. Units are also responsible for covering benefit costs associated with stipends, STAR awards, and other pay in excess of regular salary and contracted payments. Since there are no longer benefits pool buy-ins for core funded, permanently budgeted FTE, units now have greater freedom and flexibility to deploy their resources to increase/decrease FTE on the staffing list and adjust corresponding benefits budgets as staffing and funding levels change.
For benefits funding augmentations for salary increases mandated by bargaining unit contracts or local or systemwide mandates such as across-the-board increases for non-represented staff, see Wage Implementations in the “Adjustments for Cost Changes” section below.
Benefits for Senate Faculty
All central allocations for Senate faculty FTE and salary as well as budgeted chair/college provost stipends now include corresponding benefits budget adjustments.
Senate faculty benefits allocations will be augmented appropriately in the permanent budget by BAP. Benefits allocations will be treated in the same fashion as Senate faculty salary dollars in the operating budget, with annual true ups to actuals. Senate faculty FTE additions/separations will continue to be managed by BAP.
Benefits for Faculty Start-Up
For all faculty hires made on or after 7/1/23, faculty start-up is treated as a line of credit from central with a 5-year spending limitation. For faculty hires made between 7/1/2023 and 8/30/2024, the line of credit is supplemented for eligible payroll benefits that, prior to the campus’s decentralization of benefits, would have previously been covered by the central benefits pool for the duration of that 5-year period. Eligible benefits include payroll benefits for academic and student appointments but exclude payroll benefits for staff appointments. For faculty start-up agreements signed on or after 8/31/2024, there is no entitlement to additional benefits funding.
For all hires prior to 7/1/23, central campus will default to provide additional funding for eligible payroll benefits charged to faculty start-up for up to 5 years from the start date of the faculty. Any exception to this would be at the explicit direction of the CP/EVC.
Benefits for Course Releases
Allocations for course releases now include benefits funding based on the composite benefits assessment rates in place at the time of the allocation.
Benefits for IS and TA
The IS (20082) and TA (20084) model allocations now include benefits funding.
Benefits for Student Employees
Benefits costs associated with student employees are the responsibility of the unit.
Benefits Budget Management
Units have flexibility to transfer permanent budget into and out of the B06000 benefits budget pool. This pool does not appear on the staffing list and thus does not have the strict balancing requirements that the permanent B00000 and B01000 pools have. However, to ensure campus budgeting is both meaningful and constructive, B06000 budgets should reflect projected benefits costs. At its simplest, this can be accomplished by multiplying the permanently budgeted staff salaries (B01000) in a fund-org combination by the sum of the current CBR (group 5), GAEL, and RPNI rates found on the BAP website to determine an associated amount to have budgeted for benefits in B06000. The same calculation can be done for permanently budgeted academic staff (B00000) using CBR group 1 instead.
As was the case in the previous paragraph, the 8% vacation leave accrual (VLA) assessment for vacation-accruing employees is often omitted from benefits budget calculations. The reason is that the accrual assessment amounts are later financially offset when vacation is taken. Although composite benefit rates make benefit costs largely predictable, the timing of when employees use vacation leads to variability in monthly benefits costs. Units wishing to incorporate costs of vacation accrual versus credits from vacation usage projections into their B06000 budgets may do so, but note the requirement in the Central Adjustments to Benefits Budgets (CABB) section below that permanent benefits budgets be adequate to support benefit costs for filled, permanently budgeted positions.
Adjustments for Cost Changes
Eligibility
To be eligible for the Wage Implementations and Central Adjustments to Benefits Budgets (CABB) described below, positions must:
- Be filled as of the effective date of the cost change.
- Show as filled when the Budget Office takes snapshots of the staffing lists in FMW. The timing of these snapshots is described in the sections below.
- Be permanently budgeted on one of the following funds:
19900 – General State Fund
19917 – ITTP Assessment fund
20000 – Student Services Fee
20095 – Tuition
20360 – Measure 7 Program Fee
66043 – InfoUser Assessment Fund
66051 – Business transformation (BTP assessment)
69750 – Indirect cost recovery from federal contracts and grants
69900 – Interest Income
Note: By default, the Budget Office will manage Wage Implementations for positions on DFM fund 20086 by transferring the necessary funding out of each division’s DFM permanent holding org. Divisions wishing to self-manage these cost changes can contact the Budget Office to opt out of these adjustments. Fund 20086 is not included in the Central Adjustments to Benefits Budgets (CABB) transfers because adjustments related to composite benefits rate changes for fund 20086 are already handled separately through the Divisional Funding Model (DFM).
Wage Implementations
For positions that meet the eligibility criteria described above, recurring funding (including one-time funding prorated for effective dates, as necessary) will be allocated to cover salary increases that are specified in bargaining unit contracts as well as across-the-board salary increases for non-represented staff that have been mandated by the Office of the President. Funding to cover benefits costs associated with the increase in salary will also be provided based on the currently applicable composite benefit rates.
A snapshot of the staffing list will be taken as soon as practicable once the salary increases are reflected. Based on the filled positions in the snapshot, funding will be allocated to units at the Fund-Org-Title Code level with no activity code used. Funding will not be allocated for positions that were filled as of the effective date of the increase, but were then vacated before salary increases were reflected on the staffing list and thus not captured in the snapshot.
As wage implementation transfers are being prepared, the non-salary permanent budget total will be calculated. If this amount is negative for a fund at the org level, department level, or divisional level, staffing has been inappropriately overbudgeted. While wage implementation funding will still be transferred for the eligible positions in that division to assist with staffing list balancing, the offsetting adjustment may post in part or in whole to the division’s salary provision org reflective of the overbudgeting.
Central Adjustments to Benefits Budgets (CABB)
In response to changes (increases or decreases) in composite benefits assessments rates (CBR, GAEL, and RPNI), the budget office will annually adjust benefits budgets for positions that meet the eligibility criteria described above.
Each year, divisions will need to balance their permanent staffing lists in preparation for a snapshot that will be taken on the first Monday in June. A reminder of this balancing deadline will be emailed to divisional financial contacts in May. Concurrently, divisions should ensure benefits budgets are adequate (see item 2 below for operating definition) to cover current benefits costs based on the total of the salaries for filled positions.
For each fund-org combination, the budget office will multiply the net change to the CBR, GAEL, and RPNI rates by the total of the salaries for filled positions. For example, if the snapshot shows that a unit has two filled positions with a combined salary of $200,000 in a fund-org combination and it is known that the CBR rate for the next fiscal year will be increasing by 4 percentage points, the GAEL rate will be increasing by 0.5 percentage points, and the RPNI rate will be decreasing by 0.2 percentage points, then the budget office would adjust the B06000 budget in the fund-org by $200,000 * (4 + 0.5 - 0.2) = +$8,600. The adjustment will be transacted as an incremental adjustment in the permanent budget in FMW since it will be effective 7/1 of the upcoming fiscal year.
Within the CABB process, steps will be taken to ensure that divisional permanently budgeted staffing levels are appropriately supported by recurring resources and therefore deserving of budgetary adjustments.
- The non-payroll permanent budget total for each fund shown above will be calculated. If this amount is negative for a division, an additional composite benefits rates adjustment similar to the calculation shown above will be made based on the overall nonpayroll deficit and this CABB will be applied to the division’s salary provision org.
- Existing permanent benefits budgets within each fund will be analyzed to ensure they are adequate at the divisional level. The B06000 benefits budget for a fund divided by the total of the salaries for the permanently budgeted filled positions must be at least 80% of the sum of the current CBR, GAEL, and RPNI rates. For a fund where the current benefits budget does not meet that minimum threshold, the CABB would be based on the salary amount actually supported by the current benefits budget.
In any year where the upcoming changes to the CBR, GAEL, and RPNI rates result in an overall decrease, neither of the steps described above would be taken.
