Method and apparatus for modeling and executing deferred award instrument plan

• US 6,609,111 B1
• Filed: 10/18/2000
• Issued: 08/19/2003
• Est. Priority Date: 10/22/1998
• Status: Expired due to Fees

• Current Assignee: Advisors Solution LLC
• Original Assignee: Lawrence L. Bell
• Inventors: Bell, Lawrence L.
• Primary Examiner(s): PWU, JEFFREY C
• Application Number:
  US09/690,891
• Time in Patent Office: 1,035 Days
• Field of Search: 705/36, 705/1, 705/40, 705/30, 705/35, 705/37, 705/38, 707/104.1
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 10/10 Office automation; Time management
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 40/10 Tax strategies
• CPC Class Codes: Y10S 707/99945 Object-oriented database structure processing
• CPC Class Codes: Y10S 707/99948 Application of database or data structure, e.g. distributed, multimedia, or image

Abstract

The present invention is directed to the administration of various deferred compensation programs that can effectively reduce an individual'"'"'s income or estate tax by assisting a company in the identification of appropriate employees, and through the use of a novel modeling method and apparatus to implement a deferred compensation program through a novel Rabbi Trust maintenance plan that permits the employees to benefit from their deferred compensation (such as stock options or life insurance benefits), while having a minimal financial impact on the company.

Claims

1. A method for identifying and administering a deferred award instrument plan through a computer system in order to reduce individual income and estate taxes, said method comprising the steps of:

identifying at least one employee for an employer in said deferred award plan;

retrieving financial data related to a deferred compensation plan and to an employee welfare benefit plan corresponding to said identified employee;

computing a spread associated with said deferred compensation plan;

establishing a rabbi trust with said spread;

determining whether an individual life insurance policy has been purchased by said employee, said life insurance policy combining features of said deferred compensation plan and said employee welfare benefit plan;

enabling under control of said employer said employer to purchase investments through said purchased life insurance policy;

determining whether a spilt dollar agreement has been executed;

monitoring whether said employer has paid at least one premium for said life insurance policy; and

notifying said employee that a payment associated with said life insurance policy has been paid;

allowing said employee to borrow funds accumulated in said life insurance policy up to a limit set forth in said split dollar agreement, said limit reflecting a level of compensation according to said deferred compensation plan; and

reporting to said employee an amount of tax savings;

representing said deferred award instrument plan by;

inputting models factors based on actual performance;

retrieving human resource data;

retrieving deferred compensation data and employee welfare benefit data;

retrieving fair market value information relating to deferred compensation and employee welfare benefit data;

computing company cost and length of program; and

storing said retrieved and computed data.

2. The method as claimed in claim 1 further comprising:

converting said human resource data to a deferred award instrument plan format.

3. The method as claimed in claim 1 further comprising:

converting said deferred compensation data to a deferred award instrument plan format.

4. The method as claimed in claim 1 further comprising:

inputting weighing indicators corresponding to said model factors.

5. The method as claimed in claim 4 further comprising:

displaying at least a predetermined portion of said retrieved and stored data based on said weighing indicators.

10. The method of claim 1, wherein said employee welfare benefit plan is a 419 employee welfare benefit plan.

6. A system for implementing a deferred award instrument plan comprising:

a processor;

memory operationally attached to said processor;

an input device operationally attached to said processor;

a display device operationally attached to said processor;

an identifier for identifying at least one employee for an employer in said deferred award plan;

a retrieving unit for retrieving financial data related to a deferred compensation plan and employee welfare benefit plan;

a processor for computing a spread associated with at least one of said deferred compensation and said employee welfare benefit plans;

trust establishment unit for establishing a rabbi trust with said spread;

determining unit for determining whether an individual life insurance policy has been purchased by said employee;

a trading unit for enabling under control of said employer said employee to purchase stock or other investments through said purchased life insurance policy;

a determining unit for determining whether a split dollar agreement has been executed;

a monitor for monitoring whether said employer has paid at least one premium for said life insurance policy;

a notifier for notifying said employee that a payment associated with said life insurance policy has been paid;

a loan unit allowing said employee to borrow funds accumulated in said life insurance policy up to a limit set forth in said split dollar agreement said limit reflecting said employee'"'"'s deferred compensation; and

reporting unit for reporting to said employee an amount of tax savings;

modeling unit for representing said deferred award instrument plan by;

inputting models factors based on actual performance;

retrieving human resource data;

retrieving employee welfare benefit plan and deferred compensation plan data;

retrieving fair market value information relating to said employee welfare benefit plan and deferred compensation data;

computing company cost and length of program; and

storing said retrieved and computed data.

7. The system of claim 6, further including a converter for converting said deferred compensation data to a deferred award instrument plan format.

8. The system of claim 6, further including a second converter for converting said human resource data to a deferred award instrument plan format.

9. The system of claim 6, wherein said employee welfare benefit plan is a 419 employee welfare benefit plan.