Investment System Settings
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Contents
Overview of IL01IN
The Investment System Settings screen establishes certain default settings that are used throughout the Investment application. There are multiple tabs on this screen.
Base Settings Tab
On the base settings tab, you have the following options:
| Field | Description |
|---|---|
| Notice Method | Indicates what rules to follow in determining the maturity notice to send out as an investment approaches maturity. This notice is typically issued 60 days prior to maturity, but the number of days is controlled by how the job to produce notices is set up. Click the drop down arrow to select from a list of active notice methods in the system |
| Variable Rate Note Basis | The weighted average interest rate on all active loans currently in the system. This rate becomes the basis for flex note types (notes where the interest rate is a certain percentage below the variable rate basis) |
| IRA Fee Method | Indicates whether or not the system should assess a fee for IRA deposits. Click the drop down arrow to select from a list of active IRA Fee Methods configured in the system |
| Investment number format | 
|
| Note Amount Format | Format by which the principal balance is printed on the investment note. Particularly used to indicate whether a “$” should be printed or not (if pre-printed) |
| Note Rate Format | Format by which the interest rate is printed on the investment note |
| Pay interest in Purchase Month | Indicates whether investment interest should be paid in the purchase month. If interest payments are quarterly, for example, and an investment is purchased in June, should interest be paid at the end of June? The alternative would be deferring interest payment until the following quarter. Note: This selection only applies in cases where the interest payment method is based on the current and purchase month |
| Allow maturity dates to fall on Saturday or Sunday | Indicates if a maturity date can fall on a Saturday or Sunday. If this is not checked, it will default to the previous business day. |
| Enable renewal logic and redemption method | Indicates whether renewal logic selected under Redemption Method should be activated. If you opt to use renewal logic, you will want to configure code set 0517 - Investment Redemption Method Codes. This is only used in IL228 and IL250, this box should usually be left UNCHECKED. Once you have established the codes, you can then select the redemption method in Investment Maintenance |
| Accrue interest after maturity date (through end of month) | Indicates whether to allow interest to accrue after the investment has reached its current maturity date. Checking this box activates this feature when month-end investment interest accrual runs |
| Enable detailed status for closed investments | Selecting this option displays additional detail about the status of an investment. Converts a simple numeric code to additional descriptive information such as how an investment has acquired its present status (transferred, redeemed, re-registered, canceled, etc.) |
| Allow time of transaction checks and receipts (DEMAND only) | |
| Update purchase date at renewal |
Investment Defaults Tab
On the investment defaults tab, you have the following options:
| Field | Description |
|---|---|
| Interest Payment Method | Indicates whether interest should be paid relative to the purchase date of the investment. Click the drop down arrow to select from a list of active interest payment methods in the system Note: The interest-payment period is set up for each individual investment type |
| Redemption Method | Indicates the action to be taken with principal and interest when an investment note matures. This is the default in the event that the investor chooses no alternative action. Click the drop down arrow to select from a list of active redemption methods configured in the system |
| Issuance Method | Indicates whether or not an actual investment note will be issued to the investor. When an investor wants to receive an investment note, he/she must file it away with important papers somewhere that will be remembered in the future. This is because the investor must return the note at maturity if he/she wants to redeem it or transfer it to a new investment. If the investor chooses to let the note extend, he/she does not need to return it. Click the drop down arrow to select from a list of active issuance methods within the system. Your options are:
|
Check Wording Tab
On this tab, you have two fields to configure:
| Field | Description |
|---|---|
| Normal Check Wording | Wording that will appear on the stub of a check derived from an investment, provided the investment type has been set up to make payments to the investor |
| Alternate Payee Wording | Wording that will appear on the stub of a check derived from an investment, provided the investment type has been set up to make payments to an alternate payee |
General Ledger Tab
The General Ledger tab establishes base accounts to be used for investment transactions throughout the system. For each field, you can type in the applicable GL account or click the list icon to select from a list of active GL accounts in the system. You have the following fields available to you:
| Field | Description |
|---|---|
| Interest Expense | Account debited when interest on an investment is incurred |
| Interest Reserve | Account credited when interest on an investment is incurred. Debited when interest is paid either via check/electronic fund transfer or via compounding |
| Interest Withheld Reserve | Account credited when a portion of interest needs to be withheld for various purposes (i.e., the investor has not provided a valid social security number, the IRS has asked to withhold a certain percentage of interest because of a legal ruling). This account is then debited once monies are transferred to the IRS |
| Cash Suspense | Used as an offsetting account when making a financial adjustment to penalty amounts. Must eventually be cleared via a manual journal entry |
| Penalty Income | Account credited when a portion of an investment withdrawal is deemed a penalty amount. Typically done when an investment is redeemed prior to the maturity date agreed upon when the investor purchased the investment |
| Misc Adjustment Expense | Typically used as an offsetting account for various financial adjustment transactions. This account needs to be cleared via manual journal entry on a case-by-case basis |
| EOM Interest Payable | Account used to pay interest at the end of a month. Debited when the actual interest check is printed |
| Daily Payable | Account used when making an investment withdrawal. Debited when the actual withdrawal check is printed |
| Premium Principal | Expense account debited when an investment is redeemed early by your organization. Essentially the opposite of Penalty Income. In this case your organization needs to redeem the note early because the interest rate on the note is too high for the extension fund to pay. The fund pays the investor an amount in order to redeem the note earlier. The expense amount is attributable to the principal balance being redeemed early |
| Premium Interest | Same as premium principal, but the amount is attributable to the interest balance at the time the investment is redeemed early |
| Premium Payable | Account credited when the premium amount (both principal and interest) is to be redeemed. Debited once the premium payment check is printed |
Journal Tab
You have the following options available to you on the Journal tab:
| Field | Description |
|---|---|
| Adjustments | Rolls up general-ledger transactions in the following categories into a single journal entry: financial adjustments, maintenance adjustments |
| Daily | Rolls up general-ledger transactions in the following categories into a single journal entry: re-registrations, transfers, premium expense, pay premiums, withdrawals, deposits, re-deposits, daily accruals |
| Extension | Rolls up general-ledger transactions in the following category into a single journal entry: automatic extensions |
| Pay interest via check | Rolls up general-ledger transactions in the following categories into a single journal entry: interest payments, associated withheld amounts |
| Pay interest via compound | Rolls up general-ledger transactions in the following categories into a single journal entry: interest payments, associated withheld amounts |
| Pay interest via EFT | Rolls up general-ledger transactions in the following categories into a single journal entry: interest payments, associated withheld amounts |
| Accrue EOM interest | Rolls up general-ledger transactions in the following category into a single journal entry: monthly accruals |
Penalty/Withhold Tab
| Field | Description |
|---|---|
| Default Withholding Rate | Amount of investment withdrawal and/or interest payment withheld when required. Associated with investments other than IRAs. Can be used in combination with the Withhold when blank taxid field in this window. If the IRS notifies your organization to withhold from a certain individual, attach the code “TAXN” to the name/address record of the investor |
| Withhold When Blank Taxid | Indicates whether or not to withhold interest when investor’s tax ID number is blank within their Account. If selected, the system will withhold even if investor's tax ID number is blank |
| IRA Withholding Rate | Amount of investment withdrawal and/or interest payment withheld when required. Associated with IRA investments |
| Penalty Rate | Percentage penalty assessed in the event a term investment is redeemed prior to maturity |
| Penalty Method | How the penalty amount is assessed in the event a term investment is redeemed prior to maturity. Click the drop down arrow to select from a list of active penalty methods configured in the system. For information on how penalty methods are calculated, please reference this document: Early Redemption Penalty Options |
| Penalty Source | Used to identify the rules followed when determining the appropriate penalty rate on each investment. Click the drop down arrow to select from a list of active penalty source codes configured within the system |
| Investment Penalty Fixed | Indicates whether the penalty rate for an investment remains fixed or fluctuates. Used in tandem with the Penalty Method and Penalty Rate fields. If selected, the investment penalty is fixed |
| Waive Penalty Days | This allows clients to initiate an investment withdrawal within a certain number of days of the purchase date without applying penalty. Sometimes the investor does not send in instruction on what to do when an investment matures until after the maturity date. In this case a new investment may have already been created with a new purchase date. This setting controls whether the system tries to collect penalty on an investment that is being redeemed prior to maturity |
| Allow edit of calculated penalty amount | If this option is selected, users with the appropriate security will be able to override the system calculated penalty amount on the Investment Payout and Investment Transfer and Payout screens |
When you have finished modifying the settings as desired by your organization, click Save.
Approvals Tab
Under the Approvals tab, select the Investment transactions/adjustments that require approval. When you have finished modifying the settings as desired by your organization, click Save.
