From the LGIP Administrator
ADMINISTRATIVE FEE REBATE
The State Treasurer’s Office has made a rebate of administrative fees to your account in the Local Government Investment Pool (LGIP). The LGIP charged a monthly fee of 3.5 basis points (bp), or 0.035%, to cover the costs of operating the Investment Pool from July 1, 2012 through February 28, 2013. We have determined the actual Pool expenses and are rebating to the participants those collected administrative fees that were in excess of operational requirements during that time period. On March 1, 2013 the LGIP began to operate using a daily expense factor that is based on an estimate of our actual expenses. This estimate is adjusted as needed and will result in fees collected equaling expenses, e.g., no rebates in the future. This is significant, especially in this low interest rate environment. In FY 2013 the rebate represents 12% of the LGIP earnings. LGIP participants will now have the use of those earnings monthly, as opposed to an annual rebate.
From July 1, 2012 to February 28, 2013 the LGIP reported an average balance of $9.055 billion. The expenses during the time period were $546,050.81 resulting in a rebate of $1,564,033.89, which reflects a net administrative charge of less than 1 basis point (actual calculation = 0.906 bp, or 0.00906%). Your proportionate share of the rebate, based upon your average daily balance for the time period, is indicated on your monthly statement.
FY 2013 represents the 7th consecutive year that the net fee has been less than one bp. The LGIP’s investment management, its size, and our determination to contain costs should enable the Pool to continue as a very competitive investment alternative for local governments in the State of Washington. Thank you for participating.
We are committed to providing quality service to local governments.
Please contact me with any questions you may have: