Equity based incentive compensation plan computer system

• US 7,613,642 B2
• Filed: 04/01/2004
• Issued: 11/03/2009
• Est. Priority Date: 04/01/2003
• Status: Expired due to Fees

• Current Assignee: Equity Based Incentive Compensation LLC
• Original Assignee: Equity Based Incentive Compensation LLC
• Inventors: Ryan, Raymond B.
• Primary Examiner(s): Cheung; Mary D.
• Assistant Examiner(s): Merchant; Shahid R
• Application Number:
  US10/816,014
• Publication Number:
  US 20050137967A1
• Time in Patent Office: 2,042 Days
• Field of Search: 705/35, 705/36.R, 705/38, 705/1
• 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 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

A system and process linking an external computer with a system of a lending institution, a market information vendor or brokerage company, to provide for simultaneous tracking of one or more investments by a Plan to ensure each Plan'"'"'s investment provides adequate collateral for the lender. Further, the system provides access to Plan component values via electronic means to the various parties of interest; the Plan participant, the Plan administrator, the Plan lender, and the Plan sponsor. Finally, the system creates forecasts of a Plan using assumptions to enable a reader of the illustration to understand the employee participant and employer sponsor benefits and costs of the program.

Claims

1. A method of using an apparatus to monitor sufficiency of collateral for a loan to a non-tax qualified benefit plan, the method comprising:

providing a computer system including a processor connected to an input device so as to receive input data and to an output device so as to communicate output data, the processor programmed to monitor sufficiency of collateral in a transaction in which a loan to a non-tax-qualified benefit plan at least partially funds acquisition of the collateral held by the benefit plan, the collateral including at least one security issued by a sponsor of the benefit plan;

receiving, as some of the input data, a value of the collateral for the loan to the non-tax qualified benefit plan;

receiving, as some of the input data, a balance of the loan to the value of the collateral; and

producing, with the processor, a report comparing the balance of the loan to the value of the collateral to monitor sufficiency of the collateral for compliance with a Regulation U loan requirement in effect on Apr. 1, 2004, in producing a report; and

outputting the report at the output device.

2. The method of claim 1, further including signaling an incidence of noncompliance with the loan requirement.

3. The method of claim 2, further including the step of computing an amount of the collateral to be sold to retire debt to comply with the loan requirement.

4. The method of claim 2, further including the step of computing an amount of additional collateral required to comply with the loan requirement.

5. The method of claim 1, wherein the step of comparing includes:

computing an actual ratio of the loan amount divided by the value of the collateral; and

comparing the actual ratio to a test ratio to determine whether to signal noncompliance with the loan requirement.

6. The method of any one of claims 1-5, wherein the receiving a value of the collateral is carried out with said at least one security including at least one equity security, a put contract for an equity security, or a call contract for an equity security.

7. The method of claim 6, wherein a put contract, held by a lender that provides the loan, accounts for a portion of the collateral held by the benefit plan or a reduction of the loan due to the lender from the benefit plan.

8. The method of claim 6, wherein the receiving a value of the collateral is carried out with said at least one security including at least one of said equity security or said put contract for the equity security.

9. The method of claim 8, wherein the receiving a value of the collateral is carried out with said at least one security including at least one said equity security.

10. The method of any one of claims 1-5, wherein comparing the balance of the loan to the value of the collateral to monitor sufficiency of the collateral is carried out with the benefit plan being subject to ERISA rules in effect on Apr. 1, 2004.

11. The method of claim 10, wherein a put contract, held by a lender that provides the loan, accounts for a portion of the collateral held by the benefit plan or a reduction of the loan due to the lender from the benefit plan.

12. The method of claim 6, wherein the comparing the balance of the loan to the value of the collateral to monitor sufficiency of the collateral is carried out with the benefit plan being subject to ERISA rules in effect on Apr. 1, 2004.

13. The method of claim 8, wherein the comparing the balance of the loan to the value of the collateral to monitor sufficiency of the collateral is carried out with the benefit plan being subject to ERISA rules in effect on Apr. 1, 2004.

14. The method of claim 9, wherein the comparing the balance of the loan to the value of the collateral to monitor sufficiency of the collateral is carried out with the benefit plan being subject to ERISA rules in effect on Apr. 1, 2004.

15. The method of any one of claims 1-5, wherein the comparing the balance of the loan to the value of the collateral to monitor sufficiency of the collateral is carried out with the benefit plan not being subject to ERISA rules in effect on Apr. 1, 2004.

25. The method of any one of claims 1-5, 16-21, 23, 24, wherein a put contract, held by a lender that provides the loan, accounts for a portion of the collateral held by the benefit plan or a reduction of the loan due to the lender from the benefit plan.

16. A method of using an apparatus to illustrate a non-tax-qualified benefit plan'"'"'s financial performance, the method including:

providing a computer system including a processor connected to an input device so as to receive input data and to an output device so as to communicate output data, the processor programmed to monitor sufficiency of collateral in a transaction in which a loan to a non-tax-qualified benefit plan at least partially funds acquisition of the collateral held by the benefit plan, the collateral including at least one security issued by a sponsor of the benefit plan;

receiving, as some of the input data, non-tax-qualified benefit plan data, the data including a value of the collateral for the loan to the non-tax-qualified benefit plan, the loan having a balance sufficient for compliance with a Regulation U loan requirement in effect on Apr. 1, 2004;

receiving plan sponsor, benefit plan, beneficiary cash flow, and accounting estimated data, as additional input data;

generating, with the processor from the additional input data, an illustration of said benefit plan'"'"'s financial performance; and

outputting the illustration as the output data.

17. The method of claim 16, wherein the generating an illustration includes at least one of the following steps:

computing a simple accounting rate of return of the benefit plan;

computing the benefit plan'"'"'s internal rate of return;

computing the benefit plan'"'"'s present value gain or loss;

computing the benefit plan sponsor'"'"'s GAAP cost;

computing the benefit plan sponsor'"'"'s present value cost;

computing a simple accounting rate of return of at least one participant'"'"'s interest in the benefit plan;

computing an internal rate of return of at least one participant'"'"'s interest in the benefit plan; and

computing a present value gain or loss of at least one participant'"'"'s interest in the benefit plan.

18. The method of claim 17, wherein the generating an illustration includes at least one additional said step.

19. The method of claim 18, wherein the generating an illustration includes at least one additional said step.

20. The method of claim 19, wherein the generating an illustration includes at least one additional said step.

21. The method of claim 20, wherein the generating an illustration includes at least one additional said step.

22. The method of any one of claims 16-21, further including electronically communicating the illustration to another computer.

26. The method of any one of claims 16-24, wherein the benefit plan is subject to ERISA rules in effect on Apr. 1, 2004.

23. A method of using an apparatus to compare a stock option plan to a non-tax qualified benefit plan, the method including:

providing a computer system including a processor connected to an input device so as to receive input data and to an output device so as to communicate output data, the processor programmed to monitor sufficiency of collateral in a transaction in which a loan to a non-tax-qualified benefit plan at least partially funds acquisition of the collateral held by the benefit plan, the collateral including at least one security issued by a sponsor of the benefit plan;

receiving, as some of the input data, financial performance data for the non-tax qualified benefit plan;

receiving, as some of the input data, the financial performance data for a stock option plan;

generating, with the processor, a comparison of the stock option plan and the benefit plan data;

computing, with the processor, at least one difference between the stock option plan and the benefit plan; and

producing the at least one difference as the output.

24. The method of claim 23, further including:

electronically communicating the difference to another computer.

27. An apparatus comprising:

a digital computer processor connected to an input device for receiving input information and to an output device, the computer processor programmed to carry out;

receiving, as some of the input information, a value of the collateral for the loan to the non-tax qualified benefit plan, the loan at least partially funding acquisition of the collateral held by the benefit plan, the collateral including at least one security of a sponsor of the benefit plan;

comparing, with the processor, the balance of the loan to the value of the collateral to monitor sufficiency of the collateral for compliance with a Regulation U loan requirement in effect on Apr. 1, 2004 in producing an analysis, and

facilitating communication of the analysis to the output device.

28. The apparatus of claim 27, wherein the computer processor is programmed to carry out signaling an incidence of noncompliance with the loan requirement.

29. The apparatus of claim 28, wherein the computer processor is programmed to carry out the computing an amount of the collateral to be sold to retire debt to comply with the loan requirement.

30. The apparatus of claim 28, wherein the computer processor is programmed to carry out the computing an amount of additional collateral required to comply with the loan requirement.

31. The apparatus of claim 27, wherein the computer processor is programmed to carry out the comparing by:

computing an actual ratio of the loan amount divided by the value of the collateral; and

comparing the actual ratio to a test ratio to determine whether to signal noncompliance with the loan requirement.

32. The apparatus of any one of claims 27-31, wherein the at least one security includes at least one equity security, a put contract for an equity security, or a call contract for an equity security.

33. The apparatus of claim 32, further including a put contract, held by a lender of the loan, that accounts for a portion of the collateral held by the benefit plan or a reduction of the loan due to the lender from the benefit plan.

34. The apparatus of claim 32, further including a put contract, held by a lender of the loan, that accounts for a portion of the collateral held by the benefit plan or a reduction of the loan due to the lender from the benefit plan.

35. The apparatus of claim 32, wherein the at least one security includes at least one of said equity security or said put contract for the equity security.

36. The apparatus of claim 35, wherein the at least one security includes at least one said equity security.

37. The apparatus of any one of claims 27-31, wherein the benefit plan is subject to ERISA rules in effect on Apr. 1, 2004.

38. The apparatus of claim 32, wherein the benefit plan is subject to ERISA rules in effect on Apr. 1, 2004.

39. The apparatus of claim 35, wherein the benefit plan is subject to ERISA rules in effect on Apr. 1, 2004.

40. The apparatus of claim 36, wherein the benefit plan is subject to ERISA rules in effect on Apr. 1, 2004.

50. The apparatus of any one of claims 27-31, 41-46, 48, 49, further including a put contract, held by a lender of the loan, that accounts for a portion of the collateral held by the benefit plan or a reduction of the loan due to the lender from the benefit plan.

41. An apparatus including:

a digital computer processor connected to an input device for receiving input information and to an output device, the computer processor programmed to carry out;

receiving, as some of the input information, benefit plan data of a non-tax qualified benefit plan, the data including a valuation of collateral for a loan to the benefit plan, the loan related to the benefit plan by said loan at least partially funding acquisition of the collateral held by the benefit plan, the collateral including at least one security of a sponsor of the benefit plan, the loan having a balance sufficient for compliance with a Regulation U loan requirement in effect on Apr. 1, 2004,

receiving plan sponsor, benefit plan, beneficiary cash flow, and accounting estimated data, as additional input data;

generating, from the additional input data, an illustration of the benefit plan'"'"'s financial performance, and

facilitating communicating the illustration to the output device.

42. The apparatus of claim 41, wherein generating an illustration includes at least one of the following steps:

computing a simple accounting rate of return of the benefit plan;

computing the benefit plan'"'"'s internal rate of return;

computing the benefit plan'"'"'s present value gain or loss;

computing the benefit plan sponsor'"'"'s GAAP cost;

computing the benefit plan sponsor'"'"'s present value cost;

computing a simple accounting rate of return of at least one participant'"'"'s interest in the benefit plan;

computing an internal rate of return of at least one participant'"'"'s interest in the benefit plan; and

computing a present value gain or loss of at least one participant'"'"'s interest in the benefit plan.

43. The apparatus of claim 42, wherein the generating an illustration includes at least one additional said step.

44. The apparatus of claim 43, wherein the generating an illustration includes at least one additional said step.

45. The apparatus of claim 44, wherein generating an illustration includes at least one additional said step.

46. The apparatus of claim 45, wherein the generating an illustration includes at least one additional said step.

47. The apparatus of any one of claims 41-46, further including an other computer system receiving the illustration.

48. An apparatus including:

a digital computer processor connected to an input device for receiving input information and to an output device, the computer processor programmed to carry out;

receiving, as some of the input information, financial performance data for a benefit plan, the benefit plan having collateral for a loan to the benefit plan, the loan at least partially funding acquisition of the collateral held by the benefit plan, the collateral including at least one security of a sponsor of the benefit plan;

receiving, as some of the input information, the financial performance data for a stock option plan;

generating, with the processor, a comparison of the stock option plan and the benefit plan data;

computing, with the processor, at least one difference between the stock option plan and the benefit plan; and

facilitating communication of the at least one difference to the output device.

49. The apparatus of claim 48, further including an other computer apparatus receiving the at least one difference.

51. The apparatus of any one of claims 48-49, wherein said computer is programmed to carry out with the benefit plan being subject to ERISA rules in effect on Apr. 1, 2004.