System for managing a stable value protected investment plan

Abstract

Method and system to track, reconcile and administer the values of life insurance policies in separate accounts, including Stable Value Protected funds. Accordingly, targeted returns are translated into unit values on a daily basis for each fund. Additionally the system tracks restrictions (e.g., timing, amount of withdrawal and amount of reallocations) on a premium-by-premium basis, and tracks the book value, market value, duration and targeted return on a client-by-client basis. The system calculates and tracks the payments and credits applicable to a withdrawal or reallocation request, in addition to the liquidation schedules for each fund based on the payment amounts and credits of specific funds. Additionally, daily unit values are calculated given a periodic targeted return (i.e., a quarterly targeted return).

Description

BACKGROUND OF THE INVENTION [0001] 1. Field of the Invention [0002] This invention relates to an automated system for tracking, reconciling and administering the values of life insurance policies in separate account, including stable value protected funds. [0003] 2. Discussion of the Background [0004] For many years the majority of employee benefits have been funded through the purchase of stocks, mutual funds, corporate owned life insurance (COLI) and annuities. The value of these assets was generally provided on a quarterly or monthly basis, and the liabilities of these benefit plans have generally been made available on an annual or perhaps quarterly basis. Therefore, plan sponsors have had to wait six to twelve months for information about the current funded status of a benefit plan. In addition, changes in the tax code in the past few years have reduced benefits to highly compensated employees (HCE), that is, persons earning over $60,000 to $70,000 per year, as defined in the t...

AI Technical Summary

Benefits of technology

[0016] It is another object of the present invention to provide a system capable of tracking and reporting assets and liabilities on a near real-time basis, a system that can project assets and liabilities into the future, and a system that makes the administration of NQDC plans simple, while keeping costs low for plan sponsors.

[0018] It is a further object of the present invention to provide plan participants with timely access to plan information using modem, fax or automated voice response units.

[0019] It is yet another object of the present invention to provide plan sponsors with timely access to liability information by determining plan participants positions in the Defined Contribution and Defined Benefit plans.

[0024] It is a further object of the present invention to provide a means of reconciling charges reported by an asset manager with internally calculated values for what the changes should be based on known transaction and management costs.

[0026] It is a further object of the present invention to provide a system to track, reconcile and administer life insurance policies in Stable Value Protected funds which smooth the return associated with the underlying investments and which amortize the initial fees associated with each premium payment over several years.

Problems solved by technology

In addition, changes in the tax code in the past few years have reduced benefits to highly compensated employees (HCE), that is, persons earning over $60,000 to $70,000 per year, as defined in the tax code.

Furthermore, the regulations that apply to these plans restrict the manner in which these plans can be funded.

The volume and timeliness of information is critical to a successful NQDC plan, and the traditional methods of providing information quarterly or annually have proven to be unacceptable.

Since plan sponsors are receiving information and changes on a daily basis, the chances of a mismatch between the values of plan assets and liabilities have traditionally been high.

Finally, participants were previously largely uninformed as to the value of their deferred money and benefits.

The dearth of information available to sponsors and participants has caused many companies to avoid the use of NQDC plans, thereby denying participants a chance at benefit restoration.

This means that the underlying investments were valued at market each year and therefore were subject to the volatility of the investment.

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