Employee deferred income system and method
First Claim
1. A method for a deferred income plan for a taxable employer with an employee, said taxable employer being a payee of a non-taxable entity, said method comprising the steps of:
- providing that said employee of said taxable employer elects to defer a portion of said employee'"'"'s salary to form a deferred portion;
providing that said taxable employer has an obligation to pay said employee said deferred portion of said employee'"'"'s salary at a future time;
providing that said taxable employer elects to defer a deferred amount equal to said deferred portion of said employee'"'"'s salary from income payable to said taxable employer from said non-taxable entity;
providing that said non-taxable entity provides an amount equal to said deferred amount for a trust account to thereby indemnify said taxable employer against said obligation of said taxable employer to pay said employee said deferred portion; and
providing that a first payable event triggers a payment of at least a portion of said deferred amount from said indemnification trust account.
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Accused Products
Abstract
The present invention provides a system and method for setting up an employee deferred income plan that may preferably be utilized for various purposes such as to delay taxation of the deferred amounts, to avoid inclusion of the deferred amounts in the income of the employer, to avoid the possibility that the employer'"'"'s creditors can obtain the deferred amount, and to permit any percentage of the employees income to be deferred. The plan provides that a taxable employer has an agreement with a non-taxable entity regarding income due to the taxable employer from the non-taxable entity. Under the agreement, the non-taxable entity or an agent thereof will remit to an indemnification trust fund an amount equal to the employee'"'"'s elected deferred amount in order to indemnify the taxable employer for the deferred amount which the taxable employer has promised to pay the employee upon the occurrence of a payable event. In a preferred embodiment, the entire balance of the undistributed corpus of the deferral account is subject to a risk of forfeiture for the entire payout period, as periodic payable events occur over time, thereby dissipating the account assets to zero.
16 Citations
20 Claims
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1. A method for a deferred income plan for a taxable employer with an employee, said taxable employer being a payee of a non-taxable entity, said method comprising the steps of:
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providing that said employee of said taxable employer elects to defer a portion of said employee'"'"'s salary to form a deferred portion;
providing that said taxable employer has an obligation to pay said employee said deferred portion of said employee'"'"'s salary at a future time;
providing that said taxable employer elects to defer a deferred amount equal to said deferred portion of said employee'"'"'s salary from income payable to said taxable employer from said non-taxable entity;
providing that said non-taxable entity provides an amount equal to said deferred amount for a trust account to thereby indemnify said taxable employer against said obligation of said taxable employer to pay said employee said deferred portion; and
providing that a first payable event triggers a payment of at least a portion of said deferred amount from said indemnification trust account. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13)
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14. A deferred income system for use in paying a deferred income to one or more employees of a taxable employer wherein a non-taxable entity has a first obligation to said taxable employer, said system comprising:
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a second obligation by said taxable employer for future payment of said deferred income to said one or more employees;
an agreement between said taxable employer and said non-taxable entity for payment of a portion of said first obligation such that a deferred amount equal to said deferred income is utilized to fund one or more trust accounts; and
an agreement between said taxable employer and said one or more employees for a payable event related to each of said one or more employees which triggers a payment from a respective of said one or more trust accounts. - View Dependent Claims (15, 16, 17)
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18. A method for setting up a deferred compensation plan, said method comprising:
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providing that as between a taxable employer and an employee of said taxable employer that said employee elects to defer a deferred amount of said employee'"'"'s income payable by said taxable employer to said employee;
providing that as between said taxable employer and a non-taxable entity that said non-taxable entity defers an amount from income to said taxable employer from said non-taxable entity equal to said deferred amount;
providing for a trust account to be funded by an amount equal to said deferred amount; and
providing for a payable event which triggers a payment from said trust account related to said deferred amount. - View Dependent Claims (19, 20)
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Specification