Why are changes in fringe benefit policies and underlying costs critical to the Universitys future vitality?
Fringe benefits and energy are the fastest growing major elements in the UI’s overall budget. Both must be managed or there will be serious consequences in the capacity to recruit new faculty and staff as well as to provide competitive salary increases. To place this into perspective, the fastest growing portion of fringe benefits was UI contributions to faculty and staff health care flex spending accounts, which grew by 350% since 2000. Benefits are a greater and greater portion of overall faculty and staff compensation. In FY2009, just the year to year growth of fringe benefit rates required a special General Education fund expense increase of $4.2 million. This equates to having an average of 35 additional tenure/tenure track faculty, or 51 additional professional staff, or a 1.35% salary increase for all faculty and staff. The same economic issues also govern UIHC, the student housing system and all other University units.