Trust deeds

Standard Trust Deed

The standard NZQA trust deed is one where individual student fees are drawn down in arrears. If Public Trust is the trustee, they have their own NZQA-approved deed. For other trustees, the deed listed below must be used.

Key documents:

• Standard Trust Deed for Chartered Accountant and Solicitor Trustees (PDF, 279KB)
• Guidance Notes for PTE's and Trustees (PDF, 79KB)

Static Trust Deed

A static trust is where an amount equal to the maximum liability the PTE would have in the event of course closure is held in trust. The static trust does not rely on student fees being paid into the trust account and there are no periodic drawdowns. (This arrangement is Option 2 (b) of the Student Fee Protection Policy).

If Public Trust is the trustee, they have their own NZQA-approved deed. For other trustees, the deed listed below must be used.

Key documents:

• Static Trust Deed (PDF, 255KB)
• Guidelines for the Calculation of the Entitled Student Amount (PDF, 44KB)
• Guidance Notes for PTEs and Trustees (PDF, 79KB)

Bank Bond Trust Deed

A bank bond is where the PTE arranges for a bank to cover the maximum liability the PTE would have in the event of a course closure. The bond arrangement must include a trust process for the distribution of funds to students (as per Option 4 of the Student Fee Protection Policy).

If Public Trust is the trustee, they have their own NZQA-approved deed. For other trustees, the deed listed below must be used.

Key documents:

• Bank Bond Trust Deed (PDF, 266KB)
• Guidelines for the Calculation of the Entitled Student Amount (PDF, 44KB)
• Guidance Notes for PTEs and Trustees (PDF, 79KB)

Quarterly student fee protection attestation

PTEs are required to attest quarterly to their student fee protection trustee with regard to their student fee protection arrangements. The trustee then must attest to NZQA about the PTE's attestation and other information they must reasonably have.

The trustee's attestation is to be provided to the New Zealand Qualifications Authority no later than ten business days following the end of each quarter (being the three-month period ending on the last days of February, May, August and November).

Audit of student fee protection arrangements

PTEs are required to submit an annual audit of the operation of standard, static and bank bond trust operations as detailed in the trust deed. For approved NZQA forms for audit opinion/auditor engagement letters, see Trust deed audit opinion - PTE (DOC, 42KB) or Trust deed audit opinion - Trustee (DOC, 41KB).

Cash flow

For tuition and course-related costs, the Student Fee Protection Policy allows for an up-front payment from the trustee to the PTE of $500 or 10 per cent per student, whichever is the lesser amount, on day one of the course. A further 15 per cent of remaining payments is allowable on day nine. PTEs can structure the payment schedule to receive weekly, fortnightly or monthly payments in arrears.

A similar calculation is to be used when calculating the maximum liability amount (MLA) for a static trust or bank bond.

Accommodation monies can be drawn down up to one month in advance, provided the PTE immediately passes this money in its entirety to the accommodation provider, e.g. homestay.

Living expenses can be drawn down and paid to a student as per a schedule agreed and signed by the student or their assigned guardian if under 18 years of age.

GST

Payments from the trustee to the PTE can be treated as successive supplies for GST purposes, if the trust account is set up in a certain way. This enables PTEs to account for GST at the time payments are received from the trustee rather than when students are invoiced.

NZQA has structured the Standard Trust Deed to take advantage of the non-binding ruling made in relation to the Public Trust arrangement. PTEs are advised to seek professional advice if not using Public Trust.

For more information, see Accounting for GST on student fees.