System for combined pool portfolio

• US 5,806,047 A
• Filed: 09/25/1995
• Issued: 09/08/1998
• Est. Priority Date: 09/25/1995
• Status: Expired due to Term

• Current Assignee: Metlife Life Insurance Company (MetLife Incorporated)
• Original Assignee: Metlife Life Insurance Company (MetLife Incorporated)
• Inventors: Livnat, Joshua, Hackel, Kenneth S.
• Primary Examiner(s): Hayes, Gail O.
• Assistant Examiner(s): GROUTT, PHILLIP J
• Application Number:
  US08/533,132
• Time in Patent Office: 1,079 Days
• Field of Search: 395/201, 395/207, 395/230, 395/235, 395/236, 705/35, 705/36
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A data processing system is disclosed for contributed employer securities in pension accounts which is directed specifically to the control, tracing of transactions and allocation of available assets among participants. This system allows pension plans and individuals'"'"' pension accounts which own employer securities to transfer the employer securities into a combined pool. The pool manages the combined portfolio, selling portions of the contributed stocks and purchasing other financial instruments to increase diversification. The system checks prospective participants for pre-specified admission requirements and traces the flow of securities and cash between the combined pool and the participants.

Claims

1. A system for managing, diversifying, and optimizing a portfolio of pension plans comprising employer-contributed securities of different employers, for a group of participants, comprising:

means for storing in accessible memory data representing a market value of employer-contributed securities in a particular pension plan for each pension plan in said portfolio, data representing select characteristics of said employer-contributed securities; and

data representing select criteria of each participant, wherein the participants are selected from the group consisting of;

individual employees in a pension plan having employer-contributed shares, pension plans having employer-contributed shares, and combinations thereof;

means for determining a diversified allocation of portfolio assets among the employer-contributed securities based on said select characteristics, subject to said select criteria and predetermined constraints, wherein the means for determining said diversified allocation of portfolio assets further comprises an optimizer for minimizing the deviation in returns between the portfolio and a preselected objective function; and

means for transferring assets from and to said portfolio to achieve said diversified allocation.

2. The system of claim 1, further comprising:

means for storing in accessible memory data representing admission requirements and means for selecting participants according to said admission requirements.

3. The system of claim 1, wherein said select criteria comprises a schedule of required payments to one or more of said participants.

4. The system of claim 1, further comprising means for allocating portfolio assets to the purchase of financial instruments other than employer contributed securities.

5. The system of claim 1, further comprising means for limiting the amount of the original employer-contributed securities which may be sold to achieve diversification, said limit selected by said employer, thereby allowing the employer to specify the amount of employer-contributed securities which remains in said employer'"'"'s control.

6. The system of claim 1, further comprising means for accruing in an account for each participant a participant-selected proportion of future returns on each said participant'"'"'s own employer'"'"'s stock, thereby allowing each participant to choose the portion of any increase in said participant'"'"'s own employer'"'"'s stock which is allocated to said participant.

7. A method for managing, diversifying, and optimizing a portfolio of pension plans comprising employer-contributed securities of different employers, for a group of participants, comprising the steps of:

determining a diversified allocation of portfolio assets among said employer-contributed securities based on select characteristics subject to select criteria and predetermined constraints, wherein the participants are selected from the group consisting of;

individual employees in a pension plan having employer-contributed shares, pension plans having employer-contributed shares, and combinations thereof, and wherein the step of determining said diversified allocation further comprises optimization of said allocation by minimizing the deviation in returns between the portfolio and a preselected objective function; and

transferring assets to and from said portfolio to achieve said diversified allocation.

8. The method of claim 7, further comprising the step of allocating portfolio assets to the purchase of financial instruments other than employer contributed securities.

9. The method of claim 7, further comprising the steps of limiting the amount of original employer-contributed securities which may be sold to achieve diversification, said limit selected by said employer, thereby allowing the employer to specify the amount of employer-contributed securities which remains in said employer'"'"'s control.

10. The method of claim 7, further comprising the steps of accruing in an account for each participant a participant-selected proportion of future returns on each said participant'"'"'s own employer'"'"'s stock, thereby allowing each participant to choose the portion of any increase in said participant'"'"'s employer'"'"'s security which is allocated to said participant.