Financial instrument providing a portable guarantee

• US 8,838,493 B2
• Filed: 09/14/2006
• Issued: 09/16/2014
• 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: Carlson, Peter C., Castinetras, George A., Foley, Mark J., Kearse, Nakia A., Mahaney, James I., Picard, Brian, Walder, Brent W., McIntosh, Douglas S. Jr., Phipps, Richard G. Jr.
• Primary Examiner(s): Hammond, III, Thomas M
• Assistant Examiner(s): SCARITO, JOHN D
• Application Number:
  US11/531,872
• Publication Number:
  US 20080071655A1
• Time in Patent Office: 2,924 Days
• Field of Search: 705/35, 705/36.T, 705/4
• US Class Current: 705/36.T
• 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 method for administering a financial instrument, the method comprising:

following an issuance of an employee retirement plan contract to an employee, wherein the employee retirement plan contract includes (i) a growth rate guarantee specifying a minimum positive growth rate and (ii) a portability guarantee including one or more provisions allowing the employee to transfer all or a portion of a balance of an employee retirement plan account associated with the employee retirement plan contract to an individual retirement account and further allowing the employee to transfer all or a portion of a protected value of the employee retirement plan contract to an individual retirement account contract;

updating the balance of the employee retirement plan account based on market performance of one or more variable investments selected by the employee; and

calculating, by one or more processor devices executing one or more processing modules, the protected value of the employee retirement plan contract, wherein the calculated protected value is at least equal to an initial deposit into the employee retirement plan account growing at the specified minimum positive growth rate regardless of the market performance of the one or more variable investments selected by the employee; and

further following an issuance, after an election by the employee to perform a transfer via the portability guarantee, of the individual retirement account contract to the employee, wherein the individual retirement account contract includes a continuation guarantee including one or more provisions allowing the employee to transfer all or a portion of the balance of the employee retirement plan account to the individual retirement account and further allowing the employee to transfer all or a portion of the protected value of the employee retirement plan contract to the individual retirement account contract;

transferring a percentage of the updated balance of the employee retirement plan account to the individual retirement account; and

transferring a percentage of the calculated protected value of the employee retirement plan contract to the individual retirement account contract, the percentage of the calculated protected value transferred being equal to all or a portion of the percentage of the updated balance of the employee retirement plan account transferred to the individual retirement account so that a beneficiary is guaranteed to periodically receive, for the life of the employee, an amount of money from the individual retirement account based on the percentage of the calculated protected value transferred to the individual retirement account contract regardless of market performance of the individual retirement account.

2. The method of claim 1, wherein the initial deposit into the employee retirement plan account comprises a pre-tax deduction from wages paid by an employer to the employee.

3. The method of claim 1, wherein the money received by the beneficiary is either due to withdrawal from the individual retirement account or due to benefit payments made to the beneficiary from the individual retirement account.

4. The method of claim 1, wherein the calculated protected value is at least equal to the initial deposit into the employee retirement plan account growing at the specified minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner.

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

6. The method of claim 1, wherein the specified minimum positive growth rate is based on a consumer price index.

7. A data processing system, comprising:

one or more processing devices; and

one or more memory devices storing software configured, when executed by the one or more processing devices, to;

following an issuance of an employee retirement plan contract to an employee, wherein the employee retirement plan contract includes (i) a growth rate guarantee specifying a minimum positive growth rate and (ii) a portability guarantee including one or more provisions allowing the employee to transfer all or a portion of a balance of an employee retirement plan account associated with the employee retirement plan contract to an individual retirement account and further allowing the employee to transfer all or a portion of a protected value of the employee retirement plan contract to an individual retirement account contract;

update the balance of the employee retirement plan account based on market performance of one or more variable investments selected by the employee; and

calculate the protected value of the employee retirement plan contract, wherein the calculated protected value is at least equal to an initial deposit into the employee retirement plan account growing at the specified minimum positive growth rate regardless of the market performance of the one or more variable investments selected by the employee; and

further following an issuance, after an election by the employee to perform a transfer via the portability guarantee, of the individual retirement account contract to the employee, wherein the individual retirement account contract includes a continuation guarantee including one or more provisions allowing the employee to transfer all or a portion of the balance of the employee retirement plan account to the individual retirement account and further allowing the employee to transfer all or a portion of the protected value of the employee retirement plan contract to the individual retirement account contract;

transfer a percentage of the updated balance of the employee retirement plan account to the individual retirement account; and

transfer a percentage of the calculated protected value of the employee retirement plan contract to the individual retirement account contract, the percentage of the calculated protected value transferred being equal to all or a portion of the percentage of the updated balance of the employee retirement plan account transferred to the individual retirement account so that a beneficiary is guaranteed to periodically receive, for the life of the employee, an amount of money from the individual retirement account based on the percentage of the calculated protected value transferred to the individual retirement account contract regardless of market performance of the individual retirement account.

8. The data processing system of claim 7, wherein the initial deposit into the employee retirement plan account comprises a pre-tax deduction from wages paid by an employer to the employee.

9. The data processing system of claim 7, wherein the money received by the beneficiary is either due to withdrawal from the individual retirement account or due to benefit payments made to the beneficiary from the individual retirement account.

10. The data processing system of claim 7, wherein the calculated protected value is at least equal to the initial deposit into the employee retirement plan account growing at the specified minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner.

11. The data processing system of claim 7, wherein the specified minimum positive growth rate is a fixed rate between four percent and six percent.

12. The data processing system of claim 7, wherein the specified minimum positive growth rate is based on a consumer price index.

13. A non-transitory computer-readable medium encoded with software, the software configured, when executed by one or more processing devices, to:

following an issuance of an employee retirement plan contract to an employee, wherein the employee retirement plan contract includes (i) a growth rate guarantee specifying a minimum positive growth rate and (ii) a portability guarantee including one or more provisions allowing the employee to transfer all or a portion of a balance of an employee retirement plan account associated with the employee retirement plan contract to an individual retirement account and further allowing the employee to transfer all or a portion of a protected value of the employee retirement plan contract to an individual retirement account contract;

update the balance of the employee retirement plan account based on market performance of one or more variable investments selected by the employee; and

calculate the protected value of the employee retirement plan contract, wherein the calculated protected value is at least equal to an initial deposit into the employee retirement plan account growing at the specified minimum positive growth rate regardless of the market performance of the one or more variable investments selected by the employee; and

further following an issuance, after an election by the employee to perform a transfer via the portability guarantee, of the individual retirement account contract to the employee, wherein the individual retirement account contract includes a continuation guarantee including one or more provisions allowing the employee to transfer all or a portion of the balance of the employee retirement plan account to the individual retirement account and further allowing the employee to transfer all or a portion of the protected value of the employee retirement plan contract to the individual retirement account contract;

transfer a percentage of the updated balance of the employee retirement plan account to the individual retirement account; and

transfer a percentage of the calculated protected value of the employee retirement plan contract to the individual retirement account contract, the percentage of the calculated protected value transferred being equal to all or a portion of the percentage of the updated balance of the employee retirement plan account transferred to the individual retirement account so that a beneficiary is guaranteed to periodically receive, for the life of the employee, an amount of money from the individual retirement account based on the percentage of the calculated protected value transferred to the individual retirement account contract regardless of market performance of the individual retirement account.

14. The non-transitory computer-readable medium of claim 13, wherein the initial deposit into the employee retirement plan account comprises a pre-tax deduction from wages paid by an employer to the employee.

15. The non-transitory computer-readable medium of claim 13, wherein the money received by the beneficiary is either due to withdrawal from the individual retirement account or due to benefit payments made to the beneficiary from the individual retirement account.

16. The non-transitory computer-readable medium of claim 13, wherein the calculated protected value is at least equal to the initial deposit into the employee retirement plan account growing at the specified minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner.

17. The non-transitory computer-readable medium of claim 13, wherein the specified minimum positive growth rate is a fixed rate between four percent and six percent.

18. The non-transitory computer-readable medium of claim 13, wherein the specified minimum positive growth rate is based on a consumer price index.

19. A method for administering a financial instrument, the method comprising:

following an issuance of a group annuity plan contract to an individual, wherein the group annuity plan contract includes (i) a growth rate guarantee specifying a minimum positive growth rate and (ii) a portability guarantee including one or more provisions allowing the individual to transfer all or a portion of a balance of a group annuity account associated with the group annuity plan contract to an individual retirement account and further allowing the individual to transfer all or a portion of a protected value of the group annuity plan contract to an individual retirement account contract;

updating the balance of the group annuity account based on market performance of one or more variable investments selected by the individual; and

calculating, by one or more processor devices executing one or more processing modules, the protected value of the group annuity plan contract, wherein the calculated protected value is at least equal to an initial deposit into the group annuity account growing at the specified minimum positive growth rate regardless of the market performance of the one or more variable investments selected by the individual; and

further following an issuance, after an election by the individual to perform a transfer via the portability guarantee, of the individual retirement account contract to the individual, wherein the individual retirement account contract includes a continuation guarantee including one or more provisions allowing the individual to transfer all or a portion of the balance of the group annuity account to the individual retirement account and further allowing the individual to transfer all or a portion of the protected value of the group annuity plan contract to the individual retirement account contract;

transferring a percentage of the updated balance of the group annuity account to the individual retirement account; and

transferring a percentage of the calculated protected value of the group annuity plan contract to the individual retirement account contract, the percentage of the calculated protected value transferred being equal to all or a portion of the percentage of the updated balance of the group annuity account transferred to the individual retirement account so that a beneficiary is guaranteed to periodically receive, for the life of the individual, an amount of money from the individual retirement account based on the percentage of the calculated protected value transferred to the individual retirement account contract regardless of market performance of the individual retirement account.

20. The method of claim 19, wherein the initial deposit into the group annuity account comprises a pre-tax deduction from wages paid by an employer to the individual.

21. The method of claim 19, wherein the money received by the beneficiary is either due to withdrawal from the individual retirement account or due to benefit payments made to the beneficiary from the individual retirement account.

22. The method of claim 19, wherein the calculated protected value is at least equal to the initial deposit into the group annuity account growing at the specified minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner.

23. The method of claim 19, wherein the specified minimum positive growth rate is a fixed rate between four percent and six percent.

24. The method of claim 19, wherein the specified minimum positive growth rate is based on a consumer price index.

25. A data processing system, comprising:

one or more processing devices; and

one or more memory devices storing software configured, when executed by the one or more processing devices, to;

following an issuance of a group annuity plan contract to an individual, wherein the group annuity plan contract includes (i) a growth rate guarantee specifying a minimum positive growth rate and (ii) a portability guarantee including one or more provisions allowing the individual to transfer all or a portion of a balance of a group annuity account associated with the group annuity plan contract to an individual retirement account and further allowing the individual to transfer all or a portion of a protected value of the group annuity plan contract to an individual retirement account contract;

update the balance of the group annuity account based on market performance of one or more variable investments selected by the individual; and

calculate the protected value of the group annuity plan contract, wherein the calculated protected value is at least equal to an initial deposit into the group annuity account growing at the specified minimum positive growth rate regardless of the market performance of the one or more variable investments selected by the individual; and

further following an issuance, after an election by the individual to perform a transfer via the portability guarantee, of the individual retirement account contract to the individual, wherein the individual retirement account contract includes a continuation guarantee including one or more provisions allowing the individual to transfer all or a portion of the balance of the group annuity account to the individual retirement account and further allowing the individual to transfer all or a portion of the protected value of the group annuity plan contract to the individual retirement account contract;

transfer a percentage of the updated balance of the group annuity account to the individual retirement account; and

transfer a percentage of the calculated protected value of the group annuity plan contract to the individual retirement account contract, the percentage of the calculated protected value transferred being equal to all or a portion of the percentage of the updated balance of the group annuity account transferred to the individual retirement account so that a beneficiary is guaranteed to periodically receive, for the life of the individual, an amount of money from the individual retirement account based on the percentage of the calculated protected value transferred to the individual retirement account contract regardless of market performance of the individual retirement account.

26. The data processing system of claim 25, wherein the initial deposit into the group annuity account comprises a pre-tax deduction from wages paid by an employer to the individual.

27. The data processing system of claim 25, wherein the money received by the beneficiary is either due to withdrawal from the individual retirement account or due to benefit payments made to the beneficiary from the individual retirement account.

28. The data processing system of claim 25, wherein the calculated protected value is at least equal to the initial deposit into the group annuity account growing at the specified minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner.

29. The data processing system of claim 25, wherein the specified minimum positive growth rate is a fixed rate between four percent and six percent.

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

31. A non-transitory computer-readable medium encoded with software, the software configured, when executed by one or more processing devices, to:

following an issuance of a group annuity plan contract to an individual, wherein the group annuity plan contract includes (i) a growth rate guarantee specifying a minimum positive growth rate and (ii) a portability guarantee including one or more provisions allowing the individual to transfer all or a portion of a balance of a group annuity account associated with the group annuity plan contract to an individual retirement account and further allowing the individual to transfer all or a portion of a protected value of the group annuity plan contract to an individual retirement account contract;

update the balance of the group annuity account based on market performance of one or more variable investments selected by the individual; and

calculate the protected value of the group annuity plan contract, wherein the calculated protected value is at least equal to an initial deposit into the group annuity account growing at the specified minimum positive growth rate regardless of the market performance of the one or more variable investments selected by the individual; and

further following an issuance, after an election by the individual to perform a transfer via the portability guarantee, of the individual retirement account contract to the individual, wherein the individual retirement account contract includes a continuation guarantee including one or more provisions allowing the individual to transfer all or a portion of the balance of the group annuity account to the individual retirement account and further allowing the individual to transfer all or a portion of the protected value of the group annuity plan contract to the individual retirement account contract;

transfer a percentage of the updated balance of the group annuity account to the individual retirement account; and

transfer a percentage of the calculated protected value of the group annuity plan contract to the individual retirement account contract, the percentage of the calculated protected value transferred being equal to all or a portion of the percentage of the updated balance of the group annuity account transferred to the individual retirement account so that a beneficiary is guaranteed to periodically receive, for the life of the individual, an amount of money from the individual retirement account based on the percentage of the calculated protected value transferred to the individual retirement account contract regardless of market performance of the individual retirement account.

32. The non-transitory computer-readable medium of claim 31, wherein the initial deposit into the group annuity account comprises a pre-tax deduction from wages paid by an employer to the individual.

33. The non-transitory computer-readable medium of claim 31, wherein the money received by the beneficiary is either due to withdrawal from the individual retirement account or due to benefit payments made to the beneficiary from the individual retirement account.

34. The non-transitory computer-readable medium of claim 31, wherein the calculated protected value is at least equal to the initial deposit into the group annuity account growing at the specified minimum positive growth rate for at least a defined period of time or until one or more defined events occur, whichever is sooner.

35. The non-transitory computer-readable medium of claim 31, wherein the specified minimum positive growth rate is a fixed rate between four percent and six percent.

36. The non-transitory computer-readable medium of claim 31, wherein the specified minimum positive growth rate is based on a consumer price index.