Pension Fund Systems

a pension fund and system technology, applied in the field of pension fund systems, can solve the problems of limiting the potential for equity gains, reducing the risk of equity loss, and imposing a risk capital requirement for long-term trend

Inactive Publication Date: 2014-01-16
LYONS TIMOTHY +3
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  • Summary
  • Abstract
  • Description
  • Claims
  • Application Information

AI Technical Summary

Benefits of technology

The invention is about a method to reduce the risk in financial instruments tied to pension schemes. The method involves accurately projecting the expected longevity of pension scheme members, taking into account factors like age and health. By doing this, the method aims to minimize the "trend" and "level" risks associated with the transaction. The method can be applied to create a longevity financial instrument that allows pension scheme members to receive payments based on their future healthcare needs. The instrument securitizes the risks associated with the pension scheme, providing a way for investors to protect themselves from these risks. The method also takes advantage of the fact that the different risks associated with the instrument combine to create a diversification benefit, reducing the amount of capital needed to support the instrument.

Problems solved by technology

The following is the UK Pension Regulator's list of known methods available to manage pension scheme risk, published December, 2006 and available on their website.Buy out of all or some scheme liabilities with a regulated insurerBuying out liabilities with a regulated insurance company may appear to be an expensive immediate exit cost relative to the cost to the employer of running the scheme on.
The cost of these is usually also to limit the potential for equity gains.

Method used

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Examples

Experimental program
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Embodiment Construction

[0163]As shown in FIG. 1, the pensions defeasance products will be issued in both securities (1) and derivatives (2) form. For this purpose, both may be issued from a single entity, or two distinct issuing entities may exist. The defeasance products will be issued as cash securities (S) under the at Pensions Defeasance Master Trust, a cell company or a master issuing company and silo structure (PDMT) and in derivative form (P) from the PDMT, or a separate Pension Derivative Products Company (pDPC).

[0164]A Master Trust, cell company or master company and silo (MT) are structures often used in the asset backed securities market e.g. credit card issuers. The PDMT may comprise known capital markets structures.

[0165]At least one Pensions Sub-Trust, cell or silo (PST) is provided beneath the PDMT. The capital structure of the PST's combines threads of technology of known capital markets structures.

[0166]Similarly, the PDPC uses technology found in Derivative Products Companies (DPC).

[0167...

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PUM

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Abstract

Computer systems, software, and methods of estimating a capital reserve requirement to cover the longevity risk exposure of a financial instrument in the case of a future longevity shock, the financial instrument undertaking to pay to an investor sums according to a payment schedule of amounts arranged to match with the future cash flow obligations of a pension scheme to at least a portion of its members.

Description

CROSS REFERENCE TO RELATED APPLICATIONS[0001]The present patent application is a continuation of U.S. patent application Ser. No. 12 / 612,274, filed on Nov. 4, 2009, which is a continuation in part of U.S. patent application Ser. No. 12 / 212,133, filed on Sep. 17, 2008, which is a continuation of U.S. patent application Ser. No. 12 / 117 / 306, filed on May 8, 2008.[0002]The present patent application also claims priority under 35 U.S.C. §119(a)-(d) to United Kingdom patent application serial nos. 0709036.8, filed on May 10, 2007; 0716979.0, filed on Aug. 31, 2007; and 0721690.6, filed on Nov. 5, 2007.[0003]The entire contents of each of the above-referenced United States and United Kingdom patent application are incorporated herein by reference.FIELD OF THE INVENTION[0004]The present invention relates to the development of a methodology and system for securitizing pension liabilities, enabling the introduction of debt capital to achieve risk transfer from the pensions and insurance indus...

Claims

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Application Information

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Patent Type & Authority Applications(United States)
IPC IPC(8): G06Q40/06
CPCG06Q40/06G06Q40/04
Inventor LYONS, TIMOTHYSTOLERMAN, JONATHANCHEN, WAYNEBEST, DARREN
Owner LYONS TIMOTHY
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