Annual Minimum Based Administrative Fees

Annual Minimum Based Administrative Fees

Note: You can use an Annual Minimum fee in conjunction with either a straight percentage or stepped administrative fee. The annual minimum is charged upfront and then the system uses your Asset Based fee configuration to determine the ongoing fees. Once the fees exceed the annual minimum, additional fees will be charged based on the rates you set up.

Complete the steps for configuring the Main Options and Asset Based Administrative Fees and then do the following:

1. Click the Annual Minimum radio button.

Edit Administrative Fees Window (Annual Minimum)

2. If you want to charge a yearly minimum upfront charge, select the Yearly Minimum Upfront Fee checkbox.

Note: IMPORTANT: You must select this checkbox in order to configure an annual minimum fee.

Note: The upfront minimum fee cannot be applied to Master and Sub Funds. You can assign a standard minimum fee to Master and Sub Funds, which will be allocated to each Sub Fund according to its value (just as the admin fee is allocated to each Sub Fund).

Note: If a Fund is assigned more than one fee with an upfront minimum, you will need to use different minimum accumulation accounts for each fee. 

3. In the Minimum Dollar Amount field, enter the amount of the annual minimum fee.

4. Click the arrow in the Yearly Minimum Proration Period drop-down and select one of the following:

• No Proration: Indicates that the full fee will be applied, regardless of when the Fund is established.
• Monthly Proration: Indicates that the fee will be prorated on a monthly basis. For example, if the Fund was established during the second month/period of the fiscal year, it would be charged 11/12 of the yearly minimum, the third would be charged 10/12, the fourth would be charged 9/12, and so on.
• Quarterly Proration: Indicates that the fee will be prorated on a quarterly basis. For example, if the Fund was established during the second quarter of the fiscal year, it would be charged 3/4 of the yearly minimum amount, the third quarter would be charged 1/2 and the fourth quarter would be charged 1/4.

5. In the Minimum Accumulation Clearing G/L Account field, enter the account number for the account that you want to debit when the fee is assessed.

6. In the Minimum Accumulation G/L Account field, enter the account number for the account that you want to credit when the fee is assessed.

Note: These accounts are used to track how much of the annual minimum fee has been used. When these two accounts are added together, they should net to zero. Therefore, they do not need to be included on financial reports. Assign high account numbers for these two accounts so that you can easily distinguish them from your other G/L Accounts (e.g., use 99998 for the debit account and 99999 for the credit account).

7. Click the Save button on the toolbar.

8. Configure any other codes, as desired. When you are completely finished, click the Close button.