Patronage Dividend Configuration - Calculation Parameters

Description

This allows you to indicate how the patronage dividend should be calculated, either based on Dividends & interest paid (what you already paid to the member in the form of dividends or what the member already paid to you in interest), or Annual average balances on member accounts (what the member’s savings and/or loan balances were throughout the year.  Based on the choice you make, the fields displayed in the middle section of the screen will change.

Calculate Patronage Dividends Based on Dividends/Interest Paid

This method uses dividends you’ve already paid to the member as the basis for the patronage/ownership dividend.

Enter the percentage(s) to use for calculating the patronage amount, using dividends already paid to the member and/or interest paid by the member.  For example, if you want to pay an ownership dividend that’s the equivalent of 1% of the share dividends the member received, you would set this to 1.000%. 

You can define up to three different percentages according to which account types are used in the calc.  For example, you might want to pay 1% of share dividends the member got, but only 0.5% of loan interest the member paid, or perhaps vary the percentage between closed-end loans (LN) and lines of credit (OC).

This allows you to select which dividends and interest amounts you want to include in the calculation, according to Application Type.

These checkboxes work in connection with the % entered and allow you to calculate a different % for loans than for shares, or for savings and certificates compared to checking accounts. 

You may enter up to three different account types (with different percentages).  All amounts will be totaled and will appear as one transaction line in your member’s statement.   

• If you select to include delinquent loans, written-off loans will not receive the patronage dividend but will appear on the exception report (see posting screen).

Choose whether to calculate this figure based on the current calendar year’s dividends or interest, or the previous calendar year’s interest or dividends.

For example, if you give patronage dividends to your members during January, you would use the previous year selection.

Check the box in front of "Use YTD..." to indicate to use YTD figures.

Or

Check the boxes after "quarterly dividend amount from" to calculate the reward using one or more quarter’s worth of (share) dividend payments. In order to pay dividends by quarter for the previous year, the December end-of-month file will need to be loaded or available.

This allows you to include closed accounts in your calculation.

For example, an account may have been closed halfway through the year, but you still would like to give a patronage dividend to a member for the time that the account was open.

The system will calculate using the closed accounts from the year you have selected to use in the calculation.

Calculate Patronage Dividends Based on Average Balances of Member Accounts

This method uses the member’s actual savings and/or loan balances throughout the prior calendar year as the basis for the patronage/ownership dividend  The tool makes use of average balances calculated and stored in the Member Average Balances statistical file (MBRBAL) which is updated with monthly average daily balances for every member, every month.

• Note:  MBRBAL stores both monthly average daily balances and monthly average of EOM balances.  The patronage dividend calculation uses the prior calendar year average of the monthly average daily balances (YTDADBAVG) in the calculation.

Enter the percentage(s) to use for calculating the patronage amount, using the member’s average balances throughout the previous year.  For example, if you want to pay an ownership dividend that’s the equivalent of 1% of the member’s savings balances, you would set this to 1.000%. 

You can define up to three different percentages according to which account types are used in the calc.  For example, you might want to pay 0.5% of member savings balances and 1% of their total loan balances, or perhaps vary the percentage between closed-end loans (LN) and lines of credit (OC).

This allows you to select which account balances you want to include in the calculation, according to Application Type.

These checkboxes work in connection with the % entered and allow you to calculate a different % for loans than for shares, or for savings and certificates compared to checking accounts. 

You may enter up to three different account types (with different percentages).  All amounts will be totaled and will appear as one transaction line in your member’s statement.

• If you select to include delinquent loans, written-off loans will not receive the patronage dividend but will appear on the exception report (see posting screen).

This allows you to include closed accounts in your calculation.

For example, an account may have been closed halfway through the year, but you still would like to give a patronage dividend to a member for the time that the account was open.

The system will calculate using the closed accounts from the year you have selected to use in the calculation.

This allows you to set a qualifying minimum annual average balance on shares, loans and combined (shares and loans) for different age ranges.  

• The calculation will use data from the Member Average Balances statistical file (MBRBAL).  The average balance that is used by the Patronage Dividend tool is computed by adding the member’s daily balances and dividing by the number of days they were active (meaning the account was open) in the month.  Then these monthly averages are totaled and divided by the number of months that member is active (meaning the months when the account was open) to calculate the member’s year-to-date average balance or annual average daily balance.