Understanding Expense Participation Calculations
To set up adjustment information on the expense participation record, you must understand how the system uses the information in the expense participation calculation. This example provides setup information and results of an expense participation calculation.
Here is the setup information for this example:
On the E.P. Class Information Revisions form, two account ranges exist for the E.P. Class CAMS:
Account range 6200–6230 with a fee rate of 0.30, a fee basis of 2, an adjustment factor of 0.80, and gross-up percent of 0.91.
Account range 6420–6440 with a fee rate of 0.25, a fee basis of 2, an adjustment factor of 0.95, and gross-up percent of 0.94.
On the E.P. Class Account Override Revisions form, the following account overrides are specified:
Account 6200 has a fee rate of 0.10.
Account 6230 is excluded from administration fees.
Account 6430 is excluded from the range.
On E.P. Class Adjustment Revisions form, the following class adjustments are specified:
Account 6200 has an adjustment amount of –500.00 USD, which is applied before the adjustment factor.
Account 6210 has an adjustment amount of –100.00 USD, which is applied before the administration fee.
Account 6210 has an adjustment amount of –100.00 USD, which is applied after the administration fee.
On the Expense Participation form, account 6440 is excluded from administration fees.
These tables show how the expense participation calculation process affects each account in the class:
Accounts in Class |
Exposure |
Class Adjustment |
Running Total |
Admin Fee (Basis 2) |
Running Total |
|---|---|---|---|---|---|
6200 |
1,000.00 |
(500.00) |
500.00 |
50.00 |
550.00 |
6210 |
1,000.00 |
0 |
1,000.00 |
300.00 |
1,300.00 |
6220 |
1,000.00 |
0 |
1,000.00 |
300.00 |
1,300.00 |
6230 |
1,000.00 |
0 |
1,000.00 |
0 |
1,000.00 |
6420 |
1,000.00 |
0 |
1,000.00 |
0 |
1,000.00 |
6430 |
0 |
0 |
0 |
0 |
0 |
6440 |
1,000.00 |
0 |
1,000.00 |
0 |
1,000.00 |
TOTALS: |
6,000.00 |
(500.00) |
650.00 |
Accounts in Class |
Exclusion Rule Amt |
Running Total |
Adj Factor Amount |
Trans Exclusion |
Account Adjustments |
Account Exclusions |
Running Total |
|---|---|---|---|---|---|---|---|
6200 |
0 |
550.00 |
(110.00) |
0 |
0 |
0 |
440.00 |
6210 |
0 |
1300.00 |
(260.00) |
0 |
0 |
0 |
1,040.00 |
6220 |
0 |
1300.00 |
(260.00) |
0 |
0 |
0 |
1,040.00 |
6230 |
0 |
1,000.00 |
(200.00) |
0 |
0 |
0 |
800.00 |
6420 |
0 |
1,000.00 |
(50.00) |
0 |
0 |
0 |
950.00 |
6430 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
6440 |
0 |
1,000.00 |
(50.00) |
0 |
0 |
0 |
950.00 |
TOTALS |
0 |
(930.00) |
0 |
0 |
0 |
Accounts in Class |
Gross Up Adjustment |
Adj Amount 1 |
Running Total |
Admin Fee (Basis 1) |
Running Total |
Adj Amount 2 |
Adjusted Exposure |
|---|---|---|---|---|---|---|---|
6200 |
(39.60) |
0 |
400.40 |
0 |
400.40 |
0 |
400.40 |
6210 |
(93.60) |
0 |
946.40 |
0 |
946.40 |
0 |
946.40 |
6220 |
(93.60) |
(100.00) |
846.40 |
0 |
846.40 |
(100.00) |
746.40 |
6230 |
(72.00) |
0 |
728.00 |
0 |
728.00 |
0 |
728.00 |
6420 |
(57.00) |
0 |
893.00 |
0 |
1,116.25 |
0 |
1,116.25 |
6430 |
0 |
0 |
0 |
223.25 |
0 |
0 |
0 |
6440 |
(57.00) |
0 |
893.00 |
0 |
893.00 |
0 |
893.00 |
TOTALS |
(412.80) |
(100.00) |
223.25 |
4,830.45 |
Review an example of the calculation from the E.P. Calculation Revisions program (P15382):
class exposure: 6,000.00
common adj. (+): (500.00)
admin fee (+): 650.00
excl. value (-): 0
adj. factor amt. (+): (930.00)
trans. excl. (-): 0
acct. adj. (-): 0
acct. exclusions (-): 0
gross up adj (+): (412.80)
adj. amount 1 (+): (100.00)
admin. fee (+): 223.25
adj. amount 2 (+): (100.00)
adjusted exposure: 4, 830.45