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University of Pittsburgh

January 26, 2012

Impact of new NIH salary cap uncertain

Research universities across the nation are facing increased research salary costs under a reduced National Institutes of Health salary cap for outside researchers.

NIH lowered the salary cap to $179,700 as part of the fiscal year 2012 federal budget signed Dec. 23, 2011, by President Barack Obama. That reduction represents a drop of $20,000 from the FY11 limit of $199,700, which means universities now may have to cover some portions of researchers’ salaries that had been paid for with federal funding. For each 10 percent effort on an NIH grant by a researcher whose institutional base salary exceeds the cap, the change adds $2,000 to the amount the University must pay as its share of the researcher’s salary.

Pitt consistently is among the top research institutions receiving NIH funding, last year ranking among the top five. Of Pitt’s $801.2 million in sponsored research in fiscal year 2011, about 64 percent was funded through NIH, according to the University’s FY11 financial report.

How will Pitt deal with the change? George E. Klinzing, vice provost for Research, deferred University Times questions to the Schools of the Health Sciences, which receive the bulk of Pitt’s NIH support.

Michelle Broido, associate vice chancellor for biomedical research, Health Sciences, said that, in the same way other recent budget cuts have been handled, “Each unit will need to look at it and see what they’re going to do.”

How the change will affect various departments or units depends on the number of NIH-funded investigators and the number whose salaries exceed the new cap, Broido said. While average faculty salaries at Pitt are below the cap, Broido said some individuals — she had no figures for how many — exceed it.

Exactly how much the change will cost the University remains to be seen as administrators try to decipher NIH guidelines on how the change will be implemented.
Although the federal budget was signed last month, the NIH “guidance” on the new salary cap was not released until Jan. 20. Plenty of questions remain, Broido said, calling the document “at best confusing, at worst internally inconsistent.”

Broido said it seems clear that the lower salary cap will apply to new awards made after Dec. 23, 2011. When the cap applies and whether the grants are reduced to reflect the decrease in the cap for earlier awards “is still not clear,” she said. “It’s going to take a while before anybody knows what’s going on,” she told the University Times. “Once we know what it means, units will need to figure how to be compliant.”

The NIH guidance is posted at http://grants.nih.gov/grants/guide/notice-files/NOT-OD-12-035.html.

—Kimberly K. Barlow

Filed under: Feature, Volume 44 Issue 10

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