High U. non-federal fringe rate could hurt U. research

The University's high non-federal fringe benefit rate is hampering research efforts, according to a recent series of Instagram posts by the Rutgers chapter of the American Association of University Professors and American Federation of Teachers (AAUP-AFT).

The current fringe rate for Rutgers faculty and staff sits at 80.59 percent for non-federal grants and 37.61 percent for federal grants, according to charts from University Finance and Administration. Rates jumped up approximately 10 percent from the fiscal year 2024 federal rate and 5 percent from the 2024 non-federal rate.

Fiscal year 2023 data from the University's Office for Research shows that approximately half of grants are from non-federal sources, including state and private sources, with more than 1500 researchers relying on grant funding — though it is unclear whether researchers with multiple projects were counted once or multiple times.

Matthew Buckley, an associate professor in the Department of Physics and Astronomy and chair of the legislative committee of the Rutgers AAUP-AFT, told The Daily Targum that changes in financing fringe benefits also affect the availability of student research opportunities, as tighter funding equates to fewer research positions. Those studying in the medical fields are "disproportionately" affected, he said.

Buckley explained that research grants typically cover lab workers' compensation, health insurance, retirement and other related costs. Fringe benefits refer to these benefits that come along with salaries and wages, which are expressed in the form of a percentage of a worker's salary.

Having higher fringe rates, therefore, makes the University less competitive in attaining research grants because it has the budget for fewer researchers, who are then able to collectively produce less work.

Additionally, Buckley noted that many lab workers are not entitled to the full benefits plan, despite the 37 percent fringe being included in their cost of maintenance.

"So, basically, the money is coming in for science. And then, it goes to paying for a pension that none of these employees have access to," Buckley said.

According to an August 1 statement by Rutgers AAUP-AFT, J. Michael Gower, the University's chief financial officer, and Michael Zwick, senior vice president for research, informed faculty in an email communication that the federal grant rate would rise to 47.07 percent if the University administration lowered the non-federal rate. Gower and Zwick allegedly said that this would be "devastating" for those relying on federal funding, the statement read.

"An 80 percent state rate is even more catastrophic," Buckley, who receives federal research funding, said. "So, if they recognize how bad this is for some of their grant holders here at the University, they should recognize how bad it is for the other grant holders."

In January, the union's bill to separate state higher education health benefits from other state employee health benefits, known as New Jersey Assembly Bill 3118, died in the Assembly, according to a previous Rutgers AAUP-AFT statement. But, in July, Gov. Phil Murphy (D-N.J.) expanded a recent $75 million payout to offset fringe rates associated with federal grants to also include non-federal grants, according to the union's Instagram announcements.

"To ensure stability and future success for New Jersey's institutions of higher education, this budget recommends providing $75 million to address high fringe benefit costs faced by public research universities and to help them become more competitive for federal-, state- and privately-funded research grants," Murphy said of the $75 million fund in his fiscal year 2025 budget brief.

Buckley said the University appears to view this change as optional, counter to Murphy's intent. The reasoning behind the University's insistence on a low federal fringe rate is unclear, according to Buckley.

The Targum inquired about this preference to a University spokesperson but did not receive a response in time for publishing.

"People should be frustrated that some of that money is being sent away to pay for benefits of people who it's supposedly going towards don't get, and (the fringe rate) is preventing us from doing the work as much as we would like to be able to do with the resources that (were) allocated to us," Buckley said.