Methods for issuing, distributing, managing and redeeming investment instruments providing securitized annuity options

• US 7,249,077 B2
• Filed: 03/10/2004
• Issued: 07/24/2007
• Est. Priority Date: 10/19/2002
• Status: Expired due to Fees

• Current Assignee: Francois G. Gadenne, James Benjamin Williams
• Original Assignee: Retirement Engineering Incorporated
• Inventors: Williams, James Benjamin, Gadenne, Francois G.
• Primary Examiner(s): Kazimi; Hani M.
• Assistant Examiner(s): Akintola; Olabode
• Application Number:
  US10/797,889
• Publication Number:
  US 20040177022A1
• Time in Patent Office: 1,231 Days
• Field of Search: 705/36, 705/37, 705/35, 705/4
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• 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

Abstract

A method of issuing and managing investment instruments called “Pension Shares” which preferably take the form of securities that represents a claim against and is secured by an investment fund. A Pension Share entitles its holder to receive, at a specified maturity date, either a lump sum payment amount or, at the option of said holder, to receive a sequence of annuity payments. The Pension Share issuer creates and manages the investment fund such that its net asset value at the maturity date will be adequate to make the lump sum payment or provide the holder with the annuity. A preferred form of Pension Share provides an annuity option of one dollar per for the life of the holder, or his or her survivor, both of whom are at a predetermined age at the maturity date. A Pension Share may be redeemed on demand in advance of the maturity date so that it may be exchanged for a Pension Share having a different maturity date if the holder'"'"'s plans change.

Claims

1. A method for issuing and redeeming an investment instrument that entitles its current holder to elect to receive at a maturity date specified in said instrument as first issued either a minimum lump sum cash payment specified by said instrument or to instead receive a specified minimum annuity income after said maturity date, said method comprising, in combination, the steps of:

issuing said instrument denominated as a number of units or shares each of which as issued entitles said current holder of said instrument to receive a specified monetary unit of a specified currency payable at periodic calendar intervals after said maturity date, and

paying to said current holder of said instrument at said maturity date either said minimum lump sum cash payment specified by said instrument as issued or,

in the alternative and at the option the said current holder, transferring to said current holder at said maturity date an annuity which entitles said holder to receive for each of said units or shares at least said specified monetary unit of said specified currency payable at said periodic calendar intervals as specified in said instrument as issued.

2. A method for issuing and redeeming an investment instrument as set forth in claim 1 wherein said specified monetary unit in a specified currency payable at said periodic calendar intervals is one dollar per month for each of said units or shares.

3. The method of issuing and redeeming an investment instrument as set forth in claim 1 wherein said instrument further entitles its holder to redeem upon request made prior to said maturity date some or all of said units or shares for a stated current monetary value per unit or share periodically published, reported or revealed by the issuer of said instrument, and wherein said units or shares are issued to said current holder in exchange for a purchase price payment equal to said stated current monetary value at the time said units or shares are issued.

4. The method of issuing and redeeming an investment instrument as set forth in claim 2 wherein said instrument further entitles its holder to redeem upon request made prior to said maturity date some or all of said units or shares for a stated current monetary value per unit or share periodically published, reported or revealed by the issuer of said instrument, and wherein said units or shares are issued to said current holder in exchange for a purchase price payment equal to said stated current monetary value at the time said units or shares are issued.

5. The method of issuing and managing an investment instrument denominated as a number of units or shares each of which as first issued entitles a holder to receive a specified monetary unit of a specified currency at periodic calendar intervals specified in said instrument as issued or, in the alternative, said method comprising the steps of:

issuing said investment instrument to a holder in exchange for an initial investment,

after issuing said investment instrument, periodically publishing, reporting or otherwise revealing to the current holder of said investment instrument the stated current monetary value of said units or shares,

on or about at a future maturity date specified in said instrument as issued, paying a lump sum monetary payment to the current holder of said investment instrument at said maturity date which will provide a guaranteeable minimum rate of return on said initial investment during the accumulation period preceding said maturity date as specified in said instrument as issued, and

at the option of said holder exercised on or about said maturity date, converting all or part of said investment instrument or said lump sum monetary payment into the right to receive a guaranteeable annuity income consisting of at least said specified monetary unit of said specified currency for each of said units or shares payable at each of said periodic calendar intervals as specified in said instrument as issued.

6. The method of issuing and managing an investment instrument as set forth in claim 5 further comprising the steps of redeeming said investment instrument at the request of the current holder of said investment instrument during said accumulation period by purchasing from said holder all or part of said units or shares prior to said maturity date for an amount substantially equal to said stated current monetary value of said units or shares, and issuing additional equivalent units or shares to said holder in exchange for an additional purchase price payment equal to said stated current monetary value of said additional units or shares.

7. The method of issuing and managing investment an instrument as set forth in claim 5 wherein said single monetary unit of a specified currency payable for each of said units or shares at periodic calendar intervals is a specified integral number of dollars payable monthly, quarterly or annually for each of said units or shares.

8. The method of issuing and managing an instruments as set forth in claim 5 wherein said single monetary unit of specified currency payable for each of said units or shares at periodic calendar intervals is one dollar per month for each of said units or shares.

9. The method of issuing and managing an investment instrument that allows its holder to own a liquid investment asset and to know with reasonable certainty both the asset'"'"'s minimum value at a future maturity date specified by said instrument as first issued as a minimum guaranteeable lump sum payment amount and to know the minimum annuity income that the asset can provide after said maturity date as specified in said instrument as first issued, said method including the steps of:

denominating said investment instrument as a number of units or shares each of which provide a minimum annuity income that said holder will have the right to receive each month after said maturity date, said minimum annuity income being expressed in said instrument as first issued as a single monetary unit of a specified currency,

periodically publishing, reporting or otherwise revealing to said holder the stated current monetary value of said units or shares,

transferring said number of units or shares to said holder in exchange for a purchase price payment equal to said stated monetary value of said units or shares at the time said units or shares are transferred,

upon demand made by said holder made prior to said maturity date, exchanging all or part of said units or shares for a redemption value substantially equal to said stated current monetary value at the time of said demand,

paying to said holder at said maturity date at least said minimum guaranteeable lump sum payment amount specified in said instrument as first issued, and

converting, upon demand by said holder on or about said maturity date, all or part of said specified lump sum payment amount into an annuity which entitles the holder to receive said minimum annuity income for each of said units or shares as specified in said instrument as first issued.

10. The method of issuing and managing an investment instrument as set forth in claim 9 wherein annuity provides said annuity income during the life said holder or the lives of said holder and a survivor, said product further specifies adjustments to the amount to be paid monthly based on the age of the holder or the age of the holder'"'"'s survivor at the time all or part of said specified lump sum payment is converted to said annuity.

11. The method of issuing and managing an investment instrument as set forth in claim 9 wherein said single monetary unit of a specified currency payable for each of said units or shares at periodic calendar intervals is a specified integral number of dollars payable monthly, quarterly or annually for each of said units or shares.

12. The method of issuing and managing an investment instrument as set forth in claim 11 wherein said single monetary unit of specified currency payable for each of said units or shares at periodic calendar intervals is one dollar per month for each of said units or shares.