Financial Instrument Providing a Portable Guarantee

• US 20080071655A1
• Filed: 09/14/2006
• Published: 03/20/2008
• Est. Priority Date: 09/14/2006
• Status: Active Grant

• Current Assignee: Empower Annuity Insurance Company of America
• Original Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Inventors: Mahaney, James I., McIntosh, Douglas S., Picard, Brian, Castinetras, George A., Kearse, Nakia A., Phipps, Richard G., Foley, Mark J., Carlson, Peter C., Walder, Brent W.
• Granted Patent: US 8,838,493 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

According to one embodiment of the invention, a financial instrument includes a first tax-deferred account and first, second, and third guarantees. The first tax-deferred account has an account balance based in part on a deduction from wages paid to an employee. The first guarantee is a guarantee of a first protected value based upon a deposit growing at a minimum growth rate The second guarantee is a guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of the employee. The third guarantee is a guarantee that the first protected value may be transferred with the first tax-deferred account to a separate financial instrument including a second tax-deferred account, a fourth guarantee of a second protected value, and a fifth guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of the employee.

Claims

1. A financial instrument management system, comprising:

software stored on a computer-readable medium and operable to calculate a fee for a financial instrument, the financial instrument comprising;

a first tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on an initial deposit into the first tax-deferred account comprising a pre-tax deduction from wages paid by an employer to an employee;

a first guarantee of a first protected value, the first protected value comprising at least an amount based upon the initial deposit growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner;

a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of the employee, wherein the amount comprises a percentage of the first protected value at the time of a first particular event, wherein the percentage of the first protected value is fixed at the time of a second particular event, and wherein the transfer may be due to withdrawal from the first tax-deferred account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the first tax-deferred account in excess of a first particular limit; and

a third guarantee that the first protected value may be transferred with the first tax-deferred account to a separate financial instrument comprising;

a second tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on a transfer from the first tax-deferred account;

a fourth guarantee of a second protected value, the second protected value comprising at least an amount based upon the first protected value; and

a fifth guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of the employee, wherein the amount comprises a percentage of the second protected value at the time of a particular event, and wherein the transfer may be due to withdrawal from the second tax-deferred account or due to benefit payments made to the beneficiary.

2. The system of claim 1, wherein the initial deposit into the first tax-deferred account further comprises a contribution by the employer.

3. The system of claim 1, wherein the beneficiary comprises the employee.

4. The system of claim 1, wherein the minimum positive growth rate is a fixed rate between four percent and six percent.

5. The system of claim 1, wherein the minimum positive growth rate is a variable rate.

6. The system of claim 5, wherein the minimum positive growth rate is based on a consumer price index.

7. The system of claim 1, wherein the first protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial deposit growing at a minimum positive growth rate from the account balance of the first tax-deferred account, at the end of the period of time or at the time of the one or more defined events.

8. The system of claim 1, wherein:

the time of the second particular event is the time when the beneficiary receives a first transfer of money; and

the percentage of the first protected value depends upon the employee'"'"'s age at the time of the second particular event.

9. The system of claim 1, wherein the percentage of the first protected value is independent of the employee'"'"'s age.

10. The system of claim 1, wherein the separate financial instrument is an individual retirement account.

11. A financial instrument comprising:

a first tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on an initial deposit into the first tax-deferred account comprising a pre-tax deduction from wages paid by an employer to an employee;

a first guarantee of a first protected value, the first protected value comprising at least an amount based upon the initial deposit growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner;

a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of the employee, wherein the amount comprises a percentage of the first protected value at the time of a first particular event, wherein the percentage of the first protected value is fixed at the time of a second particular event, and wherein the transfer may be due to withdrawal from the first tax-deferred account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the first tax-deferred account in excess of a first particular limit; and

a third guarantee that the first protected value may be transferred with the first tax-deferred account to a separate financial instrument comprising;

a second tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on a transfer from the first tax-deferred account;

a fourth guarantee of a second protected value, the second protected value comprising at least an amount based upon the first protected value; and

a fifth guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of the employee, wherein the amount comprises a percentage of the second protected value at the time of a particular event, and wherein the transfer may be due to withdrawal from the second tax-deferred account or due to benefit payments made to the beneficiary.

12. The financial instrument of claim 11, wherein the initial deposit into the first tax-deferred account further comprises a contribution by the employer.

13. The financial instrument of claim 11, wherein the beneficiary comprises the employee.

14. The financial instrument of claim 11, wherein the minimum positive growth rate is a fixed rate between four percent and six percent.

15. The financial instrument of claim 11, wherein the minimum positive growth rate is a variable rate.

16. The financial instrument of claim 15, wherein the minimum positive growth rate is based on a consumer price index.

17. The financial instrument of claim 11, wherein the first protected value further comprises at least any positive value calculated by subtracting the amount based upon the initial deposit growing at a minimum positive growth rate from the account balance of the first tax-deferred account, at the end of the period of time or at the time of the one or more defined events.

18. The financial instrument of claim 11, wherein:

the time of the second particular event is the time when the beneficiary receives a first transfer of money; and

the percentage of the first protected value depends upon the employee'"'"'s age at the time of the second particular event.

19. The financial instrument of claim 11, wherein the percentage of the first protected value is independent of the employee'"'"'s age.

20. The financial instrument of claim 11, wherein the separate financial instrument is an individual retirement account.

21. A financial instrument management system, comprising:

software stored on a computer-readable medium and operable to calculate a fee for a financial instrument, the financial instrument comprising;

a first tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on a transfer from a second tax-deferred account associated with a separate financial instrument comprising;

the second tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on a deposit into the second tax-deferred account;

a first guarantee of a first protected value, the first protected value comprising at least an amount based upon the deposit growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner;

a second guarantee of a second protected value, the second protected value comprising at least an amount based upon the first protected value at the time that the transfer from the second tax-deferred account to the first tax-deferred account occurs;

a third guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the second protected value at the time of a particular event, wherein the percentage of the second protected value is fixed at the time of the particular event, and wherein the transfer may be due to withdrawal from the first tax-deferred account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the first tax-deferred account in excess of a first particular limit.

22. The system of claim 21, wherein the deposit into the second tax-deferred account further comprises a contribution by an employer of the designated party.

23. The system of claim 21, wherein the beneficiary comprises the designated party.

24. The system of claim 21, wherein the minimum positive growth rate is a fixed rate between four percent and six percent.

25. The system of claim 21, wherein the minimum positive growth rate is a variable rate.

26. The system of claim 25, wherein the minimum positive growth rate is based on a consumer price index.

27. The system of claim 21, wherein the second protected value further comprises at least any positive value calculated by subtracting the amount based upon the first protected value growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

28. The system of claim 21, wherein the initial deposit is based on an account balance from an existing contract.

29. The system of claim 21, wherein the financial instrument is an individual retirement account.

30. The system of claim 21, wherein the financial instrument is a group variable annuity.

31. The system of claim 21, wherein the separate financial instrument is an employee retirement plan.

32. A financial instrument comprising:

a first tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on a transfer from a second tax-deferred account associated with a separate financial instrument comprising;

the second tax-deferred account with an account balance that changes over time, wherein at least part of the account balance is based on a deposit into the second tax-deferred account;

a first guarantee of a first protected value, the first protected value comprising at least an amount based upon the deposit growing at a minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner;

a second guarantee of a second protected value, the second protected value comprising at least an amount based upon the first protected value at the time that the transfer from the second tax-deferred account to the first tax-deferred account occurs;

a third guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the second protected value at the time of a particular event, wherein the percentage of the second protected value is fixed at the time of the particular event, and wherein the transfer may be due to withdrawal from the first tax-deferred account or due to benefit payments made to the beneficiary, provided that the amount may vary based upon withdrawals from the first tax-deferred account in excess of a first particular limit.

33. The financial instrument of claim 32, wherein the deposit into the second tax-deferred account further comprises a contribution by an employer of the designated party.

34. The financial instrument of claim 32, wherein the beneficiary comprises the designated party.

35. The financial instrument of claim 32, wherein the minimum positive growth rate is a fixed rate between four percent and six percent.

36. The financial instrument of claim 32, wherein the minimum positive growth rate is a variable rate.

37. The financial instrument of claim 36, wherein the minimum positive growth rate is based on a consumer price index.

38. The financial instrument of claim 32, wherein the second protected value further comprises at least any positive value calculated by subtracting the amount based upon the first protected value growing at a minimum positive growth rate from the account balance, at the end of the period of time or at the time of the one or more defined events.

39. The financial instrument of claim 32, wherein the initial deposit is based on an account balance from an existing contract.

40. The financial instrument of claim 32, wherein the financial instrument is an individual retirement account.

41. The financial instrument of claim 32, wherein the financial instrument is a group variable annuity.

42. The financial instrument of claim 32, wherein the separate financial instrument is an employee retirement plan.