Manage Variable Expense Tier Rules

You must define tier rules before you can create variable expenses, and can optionally define tier rules for use with certain expense waivers. A tier rule has a tier ID, and is comprised of any number of levels. Each tier level includes a percentage, along with a dollar range with a lower bound and an upper bound. The tier rule defines the percentage of total net assets and the dollar range of total net assets to which the system applies the percentage. 

About Variable Expense or Waiver Tier Rules

You can use the Variable Expense or Waiver Tier Rule panels to manage tier rules used by variable expenses, as well as by security level expenses, asset management fees, and retail management fees. After you define the tier ID, you can add one or more tier levels to create a tier rule. The tiers are generic in nature, that is, you do not create tier rules and tiers for a specific entity. Multiple entities or multiple expense accounts within an entity can use the same expense tier.

You use the same set of maintenance panels to manage variable expense tier rules and waiver tier rules. You set the Tier Type to Expense for tier rules that apply to variable expenses. You set the Tier Type to Waiver for tier rules that apply to basic waivers. Waiver tier rules do not apply to special waivers and do not apply to basic waivers for group expenses. For an example where you define a tier for variable expense calculation and you define a separate tier for waiver calculation, see Waiver Tier Rule Example. 

The following example shows the variable expense tier rule named Variable Expense #34. Notice there are four tier levels. You can add any number of levels in a tier rule.

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When you create a variable expense or waiver tier rule, keep the following guidelines in mind:

• The system prevents gaps between tier levels and warns you against creating overlapping tiers. For example, you cannot add a 5th tier if the value in the Lower Bound is less than $5,000,000.00, as this would impact the Upper Bound of tier 3.

• You must define tier levels with no more than a $0.01 difference between the Upper Bound and Lower Bound of two adjoining tiers, such as tier 3 to tier 4. That is, if you set the Upper Bound of a tier level to $999,999.49, you must set the Lower Bound of the next immediate tier level to $999,999.50.

• You can leave the Upper Bound of the final level of a tier rule blank to indicate that the system should apply it to the total net assets above the Lower Bound of the final level with no set ceiling. Additionally, you can define an open ended tier rule to accrue a variable expense at a single rate across all net asset levels.

• Because you define expense tiers generically, and you do not attach them to a specific entity, you can use them in the accrual calculation for any number of expense accounts or entities.

Create a Variable Expense or Waiver Tier Rule

In the Create Variable Expense or Waiver Tier Rule panel, you can define a tier ID, which is necessary to set up a variable expense, as well as an security level expense, asset management fee, retail management fee. A waiver tier rule is optional for a basic waiver. After you define the tier ID, you can add tier levels to create a tier rule.

To create a variable expense or waiver tier rule:

1. In Accounting Center, in the left navigation pane, click Setup > Expense > Variable Expense > Create Variable Expense or Waiver Tier Rule.
   You see the Create Variable Expense or Waiver Tier Rule panel.

2. In the Tier ID box, enter the name of the tier id rule.
   You can use any naming convention up to 100 characters.

3. Click the Tier Type list and select Expense or Waiver to indicate if the tier rule applies to a variable expense or to a waiver.
   Expense is the default value. 

4. In the pane at the bottom of the panel, enter the information for the tier level. You can specify the following values for each level: 
   - Percent Rate. Specifies the percentage of total net assets as a decimal.
   - Lower Bound. Specifies the dollar amount for the lower total net assets bound.
   - Upper Bound. Specifies the dollar amount for the upper total net assets bound. If you specify a value, it must exceed the corresponding lower bound. You can leave this value blank if the tier level applies to total net assets above the dollar amount specified in the lower bound.

5. If you want to define multiple tier levels, use the pane at the bottom of the panel, as follows:
   - Click the lower pane.
   - Right-click and select Add Rows.
   - Enter the number of rows you want to add in the Enter Rows Count dialog box and click OK. You need to add a row for each additional level you want to associate with the tier rule.
   - Complete the fields on each row you added.

6. Click Submit. 

Edit a Variable Expense or Waiver Tier Rule

In the Edit Variable Expense or Waiver Tier Rule panel, you can change the percent rate for a tier in a variable expense or waiver tier rule.

To edit an expense or waiver tier rule:

1. In Accounting Center, in the left navigation pane, click Setup > Expense > Variable Expense > Edit Variable Expense or Waiver Tier Rule.
   You see the Edit Variable Expense or Waiver Tier Rule panel.

2. Select a value in the Tier ID and/or Tier Type fields to display the tier of the tier rule you want to edit.
   You can click the Tier ID lookup to view the Tier ID, tier number, lower bound, and upper bound values for each tier for the selected tier type. Be aware that the first tier of an expense tier is not numbered and the second tier is denoted with the number 1. Therefore, the last tier in a sequence of four is the tier name followed by the number 3, You can select the tier type to restrict the lookup values to expense tiers or waiver tiers. 

3. Change the Percent Rate value for the selected tier rule level.
   You can change the percent rate on any tier level. You can view the Lower Bound and Upper Bound values for the selected tier, but cannot change them.      

4. Click Submit.

List Variable Expense or Waiver Tier Rules

In the List Expense or Waiver Tier Rule panel, you can view a list of expense rule tiers with a tier type of Expense or Waiver.

To list variable expense or waiver tier rules:

1. In Accounting Center, in the left navigation pane, click Setup > Expense > Variable Expense > List Expense or Waiver Tier Rule.
   You see the List Expense or Waiver Tier Rule panel.

2. In the Tier ID field, select the name of the tier ID rule you want to view.

3. In the Tier Type list, select Expense or Waiver to identify the type of tier rule you want to view.

4. Under Result Options, click Grid or Advanced Report for the report view you want.

5. Click Submit.
   The report results appear on your desktop for the view selected. If you selected Grid, you see information for the tiers that met your criteria in the Show All tab.

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