System and method for providing secure retirement benefits via a conversion process

• US 7,860,773 B1
• Filed: 04/03/2000
• Issued: 12/28/2010
• Est. Priority Date: 04/03/2000
• Status: Expired due to Fees

• Current Assignee: Massachusetts Mutual Life Insurance Company
• Original Assignee: Massachusetts Mutual Life Insurance Company
• Inventors: Golden, Jerome S.
• Primary Examiner(s): Kyle; Charles R.
• Assistant Examiner(s): Chencinski; Siegfried E.
• Application Number:
  US09/541,197
• Time in Patent Office: 3,921 Days
• Field of Search: 705/36, 705/37, 705/38, 705/39, 705/35, 705/40, 705/4, 395/235
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method for providing a person with a secure retirement program employs a computerized system to allocate assets owned by a person towards purchase of retirement benefits. The system selects at least one desired retirement benefit from a group of available retirement benefits. A user may specify a conversion period for allocating the assets to the selected benefits during this conversion period. The system allocates portions of the assets towards purchasing a fraction of the selected benefits at selected intervals within the conversion period. Thereafter, the system calculates benefit payments corresponding to the selected retirement benefits to the person during and after the conversion period, wherein the benefit payments during the conversion period are from contributions made from the assets and the purchased benefits, and the benefit payments after the conversion period are provided by the purchased benefits.

Claims

1. An integrated computer system for planning for implementing and administering a retirement benefit program including at least one guaranteed life-dependent retirement benefit to provide a guaranteed lifetime income to at least one person using at least one or more personal financial assets owned by the person, the integrated computer system comprising:

(a) at least one server operatively coupled to a network to establish a data communications link with at least one remote client computer operatively connected to the network, the server being adapted to store information received from at least the remote client computer necessary to plan for, implement and administer the retirement benefit program and being further adapted to provide information related to the person'"'"'s retirement benefit program to at least the remote client computer;

(b) the server including at least one controller adapted for performing operations of the integrated computer system, the controller being operatively coupled to storage means for storing financial and statistical information and retirement benefit program information necessary to at least calculate current and future values of (i) asset vehicles, including one or more personal financial assets owned by the person, (ii) one or more guaranteed life-dependent retirement benefits selected by the person, and (iii) benefit payments to the person, the controller being operatively coupled to an allocation component to provide at least allocation instructions to the allocation component;

(c) the allocation component being adapted to execute at selected intervals of an allocation period in accordance with at least a first set of instructions an allocation of a portion of funds corresponding to at least one asset vehicle containing one or more personal financial assets owned by the person towards purchasing one or more fractions of at least a first guaranteed life-dependent retirement benefit that provides one or more income benefit payments to the person to thereby gradually purchase the first retirement benefit during the allocation period while allowing a remainder of the funds corresponding to the asset vehicle to generate investment returns, the first set of allocation instructions including at least information specified by the person;

(d) the controller being adapted to calculate as of a current date;

(i) a total current value representative of a sum of a current value of the first retirement benefit purchased to date based on an individual, personal actuarial valuation of the benefit and a market value of the asset vehicle, and (ii) a target benefit payment value representative of a benefit payment available to the person if the allocation component immediately accelerates the allocation period by executing an allocation of funds corresponding to the total current value towards purchasing a remainder of at least the first guaranteed life-dependent retirement benefit,

(e) and to calculate for each future interval of the allocation period;

(i) a total current value and (ii) a target benefit payment, employing at least relevant portions of the stored financial and statistical information related to future market performance, inflation and interest rates, the server providing the total current value and the target benefit payment value as of the current date, and the total current values and the target benefit payment values of future intervals of the allocation period to at least the remote client computer for consideration by the person;

(f) the controller being further adapted to recalculate for each future interval of the allocation period a recalculated total current value and a recalculated target benefit payment value based on at least change information received from at least the remote client computer including at least one change to the retirement benefit program specified by the person, the server providing the recalculated total current values and the recalculated target benefit payment values of future intervals of the allocation period to at least the remote client computer for consideration by the person; and

(g) the allocation component being further adapted to alter the allocation of funds towards achieving the recalculated total current values and the recalculated target benefit payment values in accordance with at least a second set of instructions including at least information specified by the person based on the at least one change to the retirement benefit program.

2. The integrated computer system of claim 1, wherein the at least one change to the retirement benefit program specified by the person includes at least one of:

(i) a change in a length of the allocation period, and (ii) one or more changes in the at least first guaranteed life-dependent retirement benefit.

3. The integrated computer system of claim 1, wherein the server is further adapted to calculate a plurality of benefit payments to the person during and after the allocation period and to execute payment of each of the plurality of benefit payments to the person, each benefit payment being made to the person during the allocation period comprising a sum of a portion of funds from the at least one asset vehicle and one or more payments from the at least one guaranteed life-dependent retirement benefit purchased, and each benefit payment being made to the person after expiration of the allocation period comprising payments from the at least one retirement benefit purchased.

4. The integrated computer system of claim 1, wherein the relevant portions of the stored financial and statistical information include at least one of:

(i) historical market returns, (ii) simulated market returns, (iii) current interest rates, (iv) simulated interest rates, (v) current cost of living indices, and (vi) simulated cost of living indices, respectively, and wherein the server is further adapted to employ additional information including at least one or more person-specified personal choices related to the retirement benefit program to calculate the future total current values and the future target benefit payments.

5. The integrated computer system of claim 1, wherein the at least one change to the retirement benefit program specified by the person includes at least one of:

(i) one or more modifications of the allocation period, (ii) one or more modifications of the allocation of funds corresponding to the at least one asset vehicle, (iii) one or more modifications of the at least first guaranteed life-dependent retirement benefit, and (iv) one or more personal choices specified by the person related to the retirement benefit program.

6. The integrated computer system of claim 1, wherein the server is further adapted to process information received from at least the remote client computer related to acceleration of the allocation period to instruct the allocation component to execute an allocation of at least a portion of funds corresponding to the total current value towards purchasing a remainder of the at least first guaranteed life-dependent retirement benefit.

7. The integrated computer system of claim 1, wherein the server further includes at least one simulation component adapted to generate a plurality of sample retirement benefit programs in accordance with at least one of:

(i) one or more choices specified by the person and (ii) one or more modifications to a sample retirement benefit program specified by the person, each sample retirement benefit program including simulated results of allocations of portions of funds corresponding to the at least one asset vehicle towards gradually purchasing one or more fractions of at least one of a plurality of available guaranteed life-dependent retirement benefits at one or more selected intervals of the at least one of a plurality of available allocation periods, and wherein the server is further adapted to provide to at least the remote client computer the simulated results.

8. The integrated computer system of claim 7, wherein the simulated results include simulated total current values and simulated target benefit payment values for the one or more selected intervals of the at least one available allocation period.

9. The integrated computer system of claim 7, wherein the simulation component generates the simulated results as a function of at least one of:

(i) simulated market performance information, (ii) simulated interest rates, and (iii) simulated inflation rates.

10. The integrated computer system of claim 7, wherein the simulation component is further adapted to statistically calculate simulated purchase prices of the one or more fractions of the at least one available guaranteed, life-dependent retirement benefit, and wherein the server is adapted to provide the simulated purchase prices to at least the remote client computer.

11. The integrated computer system of claim 10, wherein the simulation component is further adapted to statistically calculate the simulated purchase prices by employing information related to simulated interest rates and at least one of:

(i) information related to projected morbidity of the person; and

(ii) information related to projected longevity of the person.

12. The integrated computer system of claim 7, wherein the simulation component is further adapted to statistically determine at least one probability of achieving or exceeding the at least one available guaranteed life-dependent retirement benefit at an expiration of the at least one available allocation period, and wherein the server is adapted to provide the at least one probability to at least the remote client computer.

13. The integrated computer system of claim 7 wherein the server is adapted to receive person-specified information from at least the remote client computer including at least one of:

(i) information related to acceptance by the person of the one or more modifications;

(ii) information related to rejection by the person of the one or more modifications, and (iii) information related to one or more modifications to the sample benefit program specified by the person, and wherein the simulation component is further adapted to recalculate the simulated results in accordance with the one or more modifications.

14. The integrated computer system of claim 1, wherein the server further includes at least one actuarial valuation component adapted to perform for each of selected intervals of the allocation period an actuarial valuation of the at least first guaranteed life-dependent retirement benefit purchased to date.

15. The integrated computer system of claim 1, wherein the controller is further adapted to calculate for selected intervals of the allocation period a market value of a remainder of the asset vehicle.

16. The integrated computer system of claim 1, wherein the server is further adapted to provide to at least the remote client computer information to query the person with respect to at least one of:

(i) one or more of a plurality of available guaranteed life-dependent retirement benefits the person desires, (ii) one or more of a plurality of available allocation periods the person desires, (iii) a risk tolerance of the person, (iv) one or more personal financial assets owned by the person, (iv) age of the person, and age of the person'"'"'s spouse, if any, (v) health status of the person, and (vi) one or more personal choices of the person related to the retirement benefit program, and to process information including at least one response the person provides in response to the query information toward implementing the retirement benefit program.

17. The integrated computer system of claim 1, wherein the server is adapted to receive from at least the remote client computer information related to a person-specified benefit index desired for the at least first guaranteed life-dependent retirement benefit, the person-specified benefit index being selected from the group consisting of:

(i) a level index, (ii) a COLA (CPI-linked) index, and (iii) a market-linked index, and to process the benefit index information towards implementing the retirement benefit program.

18. The integrated computer system of claim 1, wherein the server is adapted to receive from at least the remote client computer information related to a person-specified benefit payment collar, the person-specified benefit collar corresponding to a percentage range below and above a benefit payment in order to dampen the volatility in income payments received, and to process the benefit collar information towards implementing the retirement benefit program.

19. The integrated computer system of claim 1, wherein the server is adapted to receive from at least the remote client computer information related to a person-specified stop/loss indication, the person-specified stop/loss indication corresponding to a person-defined threshold level the server employs to indicate to the person during the allocation period the asset vehicle has reached at least one of:

(i) a desired high market value, (ii) a desired low market value, and to process the stop/loss indication information toward implementing the retirement benefit program.

20. The integrated computer system of claim 14, wherein the current value of the at least first guaranteed life-dependent retirement benefit as of the current date and for each of future intervals of the allocation period includes actuarial valuations of the at least first guaranteed life-dependent benefit purchased.

21. The integrated computer system of claim 1, wherein the at least one asset vehicle includes one or more investment vehicles configured to generate investment returns during the allocation period to at least one of:

(i) fund purchases of the at least first guaranteed life-dependent retirement benefit; and

(ii) fund at least a portion of the plurality of benefit payments to the person.

22. The integrated computer system of claim 1, wherein the remote client computer includes a remote computer operated by at least one of:

(i) the person, (ii) a representative of the person, (iii) an advisor of the person.

23. The integrated computer system of claim 1, wherein the remote client computer is operatively connected through the network to at least one computing device operated by the person.

24. An integrated computer system for planning for, implementing and administering a retirement benefit program including at least one guaranteed life-dependent retirement benefits to provide a guaranteed lifetime income to at least one person using at least one or more personal financial assets owned by the person, the integrated computer system comprising:

(a) at least one server operatively coupled to a network to establish a data communications link with at least one remote client computer operatively connected to the network, the server being adapted to store information received from at least the remote client computer necessary to plan for, implement and administer the retirement benefit program and being further adapted to provide information related to the person'"'"'s retirement benefit program to at least the remote client computer;

(b) the server including at least one controller adapted for performing operations of the integrated computer system, the controller being operatively coupled to storage means for storing financial and statistical information and retirement benefit program information necessary to at least calculate current and future values of (i) asset vehicles, including one or more personal financial assets owned by the person, (ii) one or more guaranteed life-dependent retirement benefits selected by the person, and (iii) benefit payments to the person, the controller being operatively coupled to at least one simulation component to provide instructions to the simulation component;

(c) the simulation component being adapted to generate a plurality of sample retirement benefit programs in accordance with one or more retirement benefit program choices specified by the person, each sample retirement benefit program including simulated results of allocations of portions of funds corresponding to at least one asset vehicle containing one or more personal financial assets owned by the person towards purchasing one or more fractions of at least one of a plurality of available guaranteed life-dependent retirement benefits at selected intervals of at least one of a plurality of available allocation periods, the server providing to at least the remote client computer the simulated results for consideration by the person;

(d) the simulated results including for each of selected intervals of the available allocation period;

(i) a simulated total current value representative of a sum of a current value of the available guaranteed life-dependent retirement benefit purchased to date based on an individual, personal actuarial valuation of the benefit and a market value of the asset vehicle, and (ii) a simulated target benefit payment value representative of a benefit payment available to the person if the controller immediately accelerates the allocation period by executing an allocation of funds corresponding to the simulated total current value towards purchasing a remainder of the available guaranteed life-dependent retirement benefit, the server providing the simulated results to at least the remote client computer for consideration by the person;

(e) the simulation component being further adapted to recalculate the simulated total current value and the simulated target benefit payment value for each of selected intervals of the available allocation period based on at least change information received from at least the remote client computer including at least one change to the sample retirement benefit program specified by the person, the server providing to at least the remote client computer the recalculated simulated results for consideration by the person; and

(f) the controller being adapted to implement at least one actual retirement benefit program based on selection information received from at least the remote client computer including information identifying at least one sample retirement benefit program selected by the person for implementation.

25. The integrated computer system of claim 24, wherein the simulation component is further adapted to statistically calculate simulated purchase prices of the one or more fractions of the available guaranteed life-dependent retirement benefit employing at least relevant portions of the stored financial and statistical information and the retirement benefit program information.

26. A method for planning for, implementing and administering a retirement benefit program including at least one guaranteed, life-dependent retirement benefit to provide a guaranteed lifetime income to at least one person using at least one or more personal financial assets owned by the person, the method comprising:

(a) allocating by use of a computing device and at selected intervals of an allocation period in accordance with at least a first set of instructions an allocation of a portion of funds corresponding to at least one asset vehicle, containing one or more personal financial assets owned by the person, towards purchasing one or more fractions of at least a first guaranteed life-dependent retirement benefit that provides one or more income benefit payments to the person to gradually purchase the at least first retirement benefit during the allocation period while allowing a remainder of the funds corresponding to the asset vehicle to generate investment returns, the first set of allocation instructions including at least information specified by the person;

(b) calculating by use of said computing device and as of a current date;

(i) a total current value representative of a sum of a current value of the first retirement benefit purchased to date based on an individual, personal actuarial valuation of the benefit and a market value of the asset vehicle, and (ii) a target benefit payment value representative of a benefit payment available to the person if the programmed computer immediately accelerates the allocation period by executing an allocation of funds corresponding to the total current value towards purchasing a remainder of at least the first guaranteed life-dependent retirement benefit,

(c) calculating by use of said computing device and for each future interval of the allocation period;

(i) a total current value and (ii) a target benefit payment, employing at least relevant portions of financial and statistical information related to future market performance, inflation and interest rates, and providing the total current value and the target benefit payment value as of the current date, and the total current values and the target benefit payments of future intervals of the allocation period to at least one remote client computer for consideration by the person;

(d) recalculating by use of said computing device and for each future interval of the allocation period a recalculated total current value and a recalculated target benefit payment value based on at least change information received from at least the remote client computer including at least one change to the retirement benefit program specified by the person, and providing the recalculated total current values and the recalculated target benefit payment values of future intervals of the allocation period to at least the remote client computer for consideration by the person; and

(e) altering, by use of said computing device, the allocation of funds towards achieving the recalculated total current values and the recalculated target benefit payment values in accordance with at least a second set of instructions including at least information specified by the person based on the at least one change to the retirement benefit program.

27. The method of claim 26, wherein the at least one change to the retirement benefit program specified by the person includes at least one of:

(i) a change in a length of the allocation period, (ii) one or more changes in the at least first guaranteed life-dependent retirement benefit, (iii) one or more modifications of the allocation period, (iv) one or more modifications of the allocation of funds corresponding to the at least one asset vehicle, (v) one or more modifications of the at least first guaranteed life-dependent retirement benefit, and (vi) one or more personal choices specified by the person related to the retirement benefit program.

28. The method of claim 26, further comprising calculating a plurality of benefit payments to the person during and after the allocation period and executing payment of each of the plurality of benefit payments to the person, each benefit payment being made to the person during the allocation period comprising a sum of a portion of funds from the at least one asset vehicle and one or more payments from the at least one guaranteed life-dependent retirement benefit purchased, and each benefit payment being made to the person after expiration of the allocation period comprising payments from the at least one retirement benefit purchased.

29. The method of claim 26, wherein the at least relevant portions of financial and statistical information related to future market performance, inflation and interest rates include at least one of:

(i) historical market returns, (ii) simulated market returns, (iii) current interest rates, (iv) simulated interest rates, (v) current cost of living indices, and (vi) simulated cost of living indices, respectively, and wherein the server is further adapted to employ additional information including at least one or more person-specified personal choices related to the retirement benefit program to calculate the future total current values and the future target benefit payments.

30. The method of claim 26, further comprising processing information received from the least one remote client computer related to acceleration of the allocation period and accelerating the allocation period by allocating at least a portion of funds corresponding to the total current value towards purchasing a remainder of the at least first guaranteed life-dependent retirement benefit.

31. The method of claim 26, further comprising simulating a plurality of sample retirement benefit programs in accordance with at least one of:

(i) one or more choices specified by the person and (ii) one or more modifications to a sample retirement benefit program specified by the person, each sample retirement benefit program including simulated results of allocations of portions of funds corresponding to the at least one asset vehicle towards gradually purchasing one or more fractions of at least one of a plurality of available guaranteed life-dependent retirement benefits at one or more selected intervals of the at least one of a plurality of available allocation periods, and providing the simulated results to at least the remote client computer.

32. The method of claim 31, wherein the simulated results include simulated total current values and simulated target benefit payment values for the one or more selected intervals of the at least one available allocation period, and further comprising calculating statistically simulated purchase prices by employing information related to simulated interest rates and at least one of:

(i) information related to projected morbidity of the person; and

(ii) information related to projected longevity of the person.

33. The method of claim 31, wherein calculating the simulated results includes calculating the simulated results as a function of at least one of:

(i) simulated market performance information, (ii) simulated interest rates, and (iii) simulated inflation rates, and further comprising statistically calculating at least one probability of achieving the at least one available guaranteed life-dependent retirement benefit at an expiration of the at least one available allocation period.

34. The method of claim 31, further comprising querying at least the remote client computer to provide information related to at least one of:

(i) information related to acceptance by the person of the one or more modifications;

(ii) information related to rejection by the person of the one or more modifications, and (iii) information related to one or more modifications to the sample benefit program specified by the person, and further comprising recalculating the simulated results in accordance with the one or more modifications.

35. The method of claim 31, further comprising altering the allocation of funds in accordance with the simulated results in response to receiving information related to acceptance by the person of the one or more modifications.

36. The method of claim 26, further comprising querying at least the remote client computer to provide information of at least one of:

(i) one or more of a plurality of available guaranteed life-dependent retirement benefits the person desires, (ii) one or more of a plurality of available allocation periods the person desires, (iii) a risk tolerance of the person, (iv) one or more personal financial assets owned by the person, (iv) age of the person, and age of the person'"'"'s spouse, if any, (v) health status of the person, and (vi) one or more personal choices of the person related to the retirement benefit program, and processing at least one response the person provides to querying towards implementing the retirement benefit program.

37. The method of claim 26, wherein calculating the current value of the at least first guaranteed life-dependent retirement benefit as of a current date and for each of future intervals of the allocation period includes performing actuarial valuations of the at least first guaranteed life-dependent retirement benefit purchased.

38. The method of claim 26, wherein the remote client computer includes a remote computer operated by at least one of:

(i) the person, (ii) a representative of the person, and (iii) an advisor of the person.

39. The method of claim 26, wherein the remote client computer is operatively connected to at least one computing device operated by the person.