Employee Benefits Rate Components

The EB rate is composed of the following cost pools or cost components:

 

Component allocated to the following S&W base:

Cost Component

Research- On

Research- Off

General & Funds

Part-Time & Non-Registered Students

Basic Retirement Plan

 

Supplemental 401(k) Plan

 

Retiree Medical Plan

 ●

 

Health Plans (including Dental, Vision, and COBRA)

 

Benefits Servicing

 

Long-Term Disability

 

Tuition Assistance

 

Unemployment Compensation

 

Group Life Insurance

 ●

 

FICA

Workers’ Compensation

Other Benefits (including athletic facilities, child care, and the Rewards & Recognition program)

 

Sabbaticals

 

 

Parking & Transportation

 

Description of Employee Benefits Cost Pools

Basic Retirement Plan – This is a “defined benefit” plan that provides employees with a benefit payable as lifetime, monthly income at retirement. This cost is computed on an actuarially defined basis according to the rules set forth in the Accounting Standards Codification (ASC) 715-30, "Compensation - Retirement Benefits - Pensions" and is assigned to the cost accounting period on a cash basis.

Supplemental 401(k) Retirement Plan – This is a “defined contribution” plan that provides an opportunity for employees to invest for the future through pre-tax contributions. MIT follows guidelines set forth in ASC 715-70, when determining the MIT portion of cost. The cost is based on a matching formula whereby employees can elect to contribute an amount from one to five percent of their respective salaries. This contribution is matched on a dollar-for-dollar basis by the Institute through a cash transfer to the fund.

Retiree Medical Plan – This plan provides for continued health plan benefits for MIT retirees. The cost is computed based on an actuarial valuation, as required by ASC 715-60, "Compensation - Defined Benefit Plan - Other Postretirement" Fund.

Health Insurance – This cost consists of various health plans offered at the Institute. It includes an indemnity plan, several HMOs, a dental plan, a vision plan, and other employee health-related costs. One HMO is run by the Institute under the titles: (1) Massachusetts Institute of Technology (MIT) Traditional Health Plan and (2) Massachusetts Institute of Technology (MIT) Choice Health Plan. The costs relating to the MIT Health Plans are recovered, at cost, on an actual usage basis through the Employee Benefits rate.

Benefits Servicing – Benefits servicing consists of various support costs in administering the pension plans, health plans, and insurance plans that comprise the bulk of the Fringe Benefits cost pool. It is assigned to the cost accounting period primarily on a cash basis.

Long-Term Disability – MIT’s Long-Term Disability Plan provides eligible employees with disability income benefits. The full cost is paid by MIT and is computed based on an actuarial valuation as required by ASC 712-10, "Compensation - Nonretirement - Postemployment Benefits" on an accrual basis of accounting.

Tuition Assistance for Employees – This represents reimbursement to employees for courses taken that enhance an employee’s expertise and/or relate to the field in which a person is employed. It is assigned to the cost accounting period primarily on a cash basis.

Unemployment Compensation – This is a self-insurance cost that is assigned to the cost accounting period on a cash basis.

Group Life Insurance – MIT provides employees with basic life insurance coverage and pays for the full cost.

Social Security – Cash payments are made for both FICA and Medicare as required by law.

Workers’ Compensation – MIT is required to provide Workers’ Compensation insurance, which pays for reasonable and necessary medical treatment and partial wage replacement, if an employee is out of work and/or has incurred medical expenses as a result of a work-related injury or illness. This cost is computed based on an actuarial valuation as required by ASC 712-10, "Compensation - Nonretirement - Postemployment Benefits" and is assigned on an accrual basis of accounting.

Other Benefits

Child Care – This is the space-related cost of operating child care facilities at both on- and off-campus locations.

Use of Athletic Facilities – This is the net cost of Employees’ usage of the athletic facilities as determined through an analysis of MIT Athletic Card sales. 

Rewards & Recognition – Only the costs of the cash awards made under this program are included in the EB rate.

Adoption Assistance – This is the cost for the reimbursement of qualified adoption expenses up to $5,000.

Sick Pay at Retirement for Non-research Personnel – This represents unused sick leave provided to support and service staff at retirement. The cost is expensed as paid for all non-research personnel. (Sick pay at retirement for eligible research personnel is accrued and charged through the vacation rates.) 

The Other Benefits pool includes other miscellaneous EB costs.

Sabbaticals – This is the cost of providing sabbatical leave for faculty to pursue scholarly research and study after meeting the necessary years-of-service requirements.

Parking & Transportation – This is the net cost of providing parking and transportation benefits to employees. Typical costs include maintenance and repairs to garages and open-air parking lots, revenue/expense associated with parking facility operations and the sale of parking stickers, and the subsidy for Massachusetts Bay Transportation Authority (MBTA) monthly passes. Costs are assigned to the cost accounting period on a cash basis.

For further details about Employee Benefits, please visit the MIT Benefits website.