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

• US 20040177022A1
• Filed: 03/10/2004
• Published: 09/09/2004
• Est. Priority Date: 10/19/2002
• Status: Active Grant

• Current Assignee: Francois G. Gadenne, James Benjamin Williams
• Original Assignee: Retirement Engineering Incorporated
• Inventors: Williams, James Benjamin, Gadenne, Francois G.
• Granted Patent: US 7,249,077 B2
• Time in Patent Office: Days
• US Class Current: 705/36
• 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. The method of issuing and managing investment instruments which comprises, in combination, the steps of:

establishing an investment fund,

creating a security which represents a claim against and is secured by said investment fund, said security entitling its holder to receive, at one or more future maturity dates specified by said security, either a lump sum payment amount or, at the option of said holder, to receive a sequence of annuity payments, the amount and payment date of each of said annuity payments being specified by said security,

transferring said security to a purchaser in exchange for a purchase price amount,

depositing at least a substantial portion of said purchase price amount into said fund,

investing the assets of said fund so that the net asset value of said fund at said maturity date should be adequate to pay to said holder either said lump sum payment amount or an amount adequate to purchase said annuity, and

on or after said maturity date, transferring either said lump sum payment amount or said annuity to said holder as elected by said holder.

2. A method for producing and distributing investment securities comprising, in combination, the steps of:

creating a security which comprises a contract in which the issuer of the security promises to pay to the holder of the security a predetermined guaranteed lump sum cash payment at a predetermined maturity date or to pay, in the alternative and at the option of the holder, a sequence of predetermined annuity payments at defined times, and

issuing said security to a holder in advance of said maturity date in return for a purchase price payment.