University of Oregon

Blended OPE Overview

Effective July 1, 2017 University of Oregon established Blended OPE rates for each of the major employee groups at the campus based on prior year actual expenses. These Blended OPE rates are reviewed and approved annually by the Department of Health and Human Services. OPE expenses (health plan expenses, retirement plan expenses, taxes and workman's compensation expenses, among others) are determined by applying the appropriate percentage based on employee category to actual salary expense. The OPE rate will be charged against salaries less an Average Leave Adjustable rate, and excluding some pay types (Excluded Earn Codes). The University moved “leave” from being paid by the unit, to being charged to a central pool. 

Benefits Included in the Blended OPE Rates

  • Athletics rate includes: Medical, Dental, Vision, Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement, Unemployment Insurance, Workers Compensation, all leave.
  • 12mth Faculty/All OA's (Faculty/Staff A) rate includes: Medical, Dental, Vision, Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement, Unemployment Insurance, Workers Compensation, all leave.
  • 9mth Faculty/Exec (Faculty/Staff B) rate includes: Medical, Dental, Vision, Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement, Unemployment Insurance, Workers Compensation, 9 month faculty sick leave only, Executive skill code 10 all leave.
  • Summer (Faculty/Staff C) rate includes: Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement, Unemployment Insurance, Workers Compensation.
  • Classified Service rate includes: Medical, Dental, Vision, Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement, Unemployment Insurance, Workers Compensation, all leave.
  • Classified Skilled/Clerical rate includes: Medical, Dental, Vision, Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement, Unemployment Insurance, Workers Compensation, all leave.
  • Classified Technical rate includes: Medical, Dental, Vision, Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement, Unemployment Insurance, Workers Compensation, all leave.
  • Retirees-Temps rate includes: Medical, Dental, Vision, Life, LTD Bus Pass, Mass Transit Tax, FICA, Retirement (Temp Staff only based upon hours worked. Many Temps don't receive benefits until a certain number of hours have been worked, that being said, units are still charged Blended OPE for the duration the Temp is employed), Unemployment Insurance, Workers Compensation, Sick Leave
  • Students (Hourly and Graduate Employees, formerly GTFs) rate includes: Mass Transit Tax, FICA, Unemployment Insurance, Workers Compensation, and Sick Leave.

 

How were the Blended OPE rates developed?

The University of Oregon (UO) uses multiple blended OPE rates developed under the requirements of the Department of Health & Human Services, Cost Allocation Services. Starting July 1, 2017, UO began using nine separate blended OPE rates for different categories of employees based on prior year actual costs. To arrive at these employee categories, a review was done of the OPE eligibility for each class of UO employees. Employees are grouped into nine categories of blended OPE eligibility, which are Athletics, 12mth Faculty/All OA's (Faculty/Staff A), 9mth Faculty/Execs (Faculty/Staff B), Summer (Faculty/Staff C), Classified Service, Classified Skilled/Clerical, Classified Technical, Retirees-Temps, Students.

A Blended OPE rate for each employee category is calculated by the development of a pool of OPE actual costs (the numerator) and of a salary and wage actual base (denominator). The pool consists of costs for the OPE provided to a particular category of employees. When the pool is divided by the base applicable to that category of employees, a rate results; this rate represents the percentage that must be added to employees’ salary and wage dollars. It is important to note that beginning in the Fiscal Year 2018 all Employee Leave was reduced from the salary and wage base (denominator) and included into the cost of OPE (the numerator). Going forward Leave will be included in the applicable OPE rate based upon historical actuals within each pool.

 


 

How are Blended OPE Costs calculated?

 

The total cost of OPE is calculated using the following steps;

1. Reduce the Gross Salary by the relevant Average Leave Adjustable rate and any compensation from Excluded Earn Codes to calculate the Adjustable Base Salary.

          Adjusted Base Salary = Gross Salary - Average Leave Adjustable rate - Excluded Earn Codes

2. Multiply the Adjustable Base Salary by the applicable Blended OPE rate. This returns the OPE Cost of the employee.

          OPE Cost = Adjusted Base Salary * Blended OPE rate

3. Add the Adjusted Base Salary to the OPE Cost to arrive at the Total Cost of the Employee, Salary and OPE.

          Total Cost of Employee = Adjusted Base Salary + OPE Cost

 

For questions regarding calculating OPE Cost, or for more detail regarding this method, see Calculations Guidance under the "Related Items" menu at the top of this page.

For guidance regarding the budgeting of OPE on sponsored project (grant) proposals, please refer to the Quick Reference Card or contact your Pre-Award Sponsored Project Administrator.

For any questions regarding terminology please see the Glossary under the "Related Items" menu at the top of this page

 

What is the Average Leave Adjustable rate?

The Average Leave Adjustable rate is not to be confused with the Blended OPE rate; it is simply the percentage that an employee's Gross Salary is reduced (not including Excluded Earn Codes) in order to calculate the Adjusted Base Salary of the employee.

 


 

FUTURE CONSIDERATIONS FOR BLENDED OPE

 

Will OPE rates change?

Yes, we will have new Blended OPE rates each fiscal year. Blended OPE rates for each employee group will be reviewed annually to ensure an accurate allocation and increased benefit costs. Any over or under recovery of actual OPE costs will be adjusted for each rate in the next rate calculation plus any additional cost increases.

 

Why change OPE rates?

Overall, this methodology for calculating and charging OPE is considered a best practice at leading research institutions. Several large research universities have already adopted this practice including, University of New York, Emory University, University of Florida, Arizona State University, University of California Davis, Auburn University, Vanderbilt University, and Clemson University.

This new Blended OPE methodology will facilitate planning, budgeting, and other tasks in the ongoing operations of the campus. It will simplify and improve the preparation, administration, and monitoring of budgets and accounting for OPE expenditures; provide for consistent accumulation and allocation of OPE expenses to all functional activities as required by Cost Accounting Standards 501 and 502, and OMB Uniform Guidance; allow the university the opportunity to recover OPE costs from all funding sources.

 

Estimated Projections For Future Years

The FY19 Blended OPE rates were formulated based upon a combination of FY17 actual data and a combination of both projected and known increases in salary and OPE expenses. This includes but is not limited to: Collective Bargaining Agreements, projected Oregon CPI, PERS announcements, and other historical data.

Blended OPE rates are calculated as the cost of OPE divided by the applicable salary base. The year over year change in projections for future blended OPE rates can fluctuate depending on the fiscal year and coinciding increase in either salary or OPE expense. Rate projections tend to fluctuate upward in even years as a result of increases in the PEBB and PERS expense portion of OPE. Rate projections can fluctuate downward in odd years as a result of increases in the salary base and the anticipation of minimal increases in the PERS portion of OPE.

Disclaimer: The rates for all fiscal years ocurring after FY19 are only projections at this time. It is likely that these rates will adjust as more up to date information is available. If you have any questions regarding these projections, please contact your BRP Analyst or email BRP at budget@uoregon.edu.

Employee Group

Fiscal Year 2021

Fiscal Year 2022

Fiscal Year 2023

Fiscal Year 2024

 

 

Athletics*

TBD %

TBD %

TBD %

TBD %

 

 

12mth Faculty/All OA's (Faculty/Staff A)

80.2%

84.3%

84.8%

89.4%

 

 

9 mth Faculty/Exec (Faculty/Staff B)

53.0%

56.0%

56.1%

59.4%

 

 

Summer (Faculty Staff C)

33.6%

36.3%

36.3%

39.4%

 

 

Classified Service

118.2%

124.7%

124.4%

129.6%

 

 

Classified Skilled/Clerical

100.7%

106.7%

106.4%

111.6%

 

 

Classified Technical

85.4%

91.0%

91.0%

96.4%

 

 

Retirees-Temps

30.9%

32.1%

32.6%

34.0%

 

 

Student

2.6%

2.6%

2.6%

2.6%

 

 

*Athletics will be calculated on an annual basis due to fluctuations in salaries.


Last update: Jul 9th, 2019 @ 13:08:03 PDT