Trust income commission
Section 42 of the University of Melbourne Act 2009 (Vic) provides that the Council of the University may, out of the annual income of a trust fund in an investment pool, periodically deduct an amount not exceeding 5% (currently set at 2.5%) of the annual income of that trust fund as commission for the administration of that trust fund.
This means that the University charges significantly less than a trustee company, which, under Chapter 5D (Part 5D.3 - Division 4) of the Corporations Act 2001 (Commonwealth), is allowed to charge either an annual management fee of up to 1.056% of the capital value of a trust, or a one-off commission (GST-inclusive) of 5.5% of the capital value of a trust, and an annual income commission (GST-inclusive) of 6.6% of the income of a trust. A trustee company may also be entitled to charge additional annual common fund administration fees (GST-inclusive) of 1.1% of the value of the assets in a common fund.
For example, for a trust with a trust capital of $100,000 the University will, based on total income of approximately 5% from the common funds, currently charge an annual administration commission of approximately $125, whereas a trustee company would be able to charge either an annual management fee of up to $1,056, or a one-off capital commission of $5,500 and an annual income commission of up to $310. In addition, a trustee company may charge an annual common fund administration fee of up to $1,040.