Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-05-17
2002-06-25
Millin, Vincent (Department: 2165)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S001100, C705S004000, C705S007380
Reexamination Certificate
active
06411939
ABSTRACT:
I. BACKGROUND OF THE INVENTION
A. Copyright Notice
This patent document contains material that is subject to copyright protection. The copyright owner has no objection to a statutory fair use of this material, as it appears in the files of the files or records of the U.S. Patent and Trademark Office, but otherwise reserves all copyright rights whatsoever.
B. Technical Field of the Invention
The present invention is in the field of digital electrical machines and methods for making and using the same, data structures, necessary intermediates, and products produced thereby. More particularly, the present invention is directed to a digital electrical apparatus and method for data processing and data management having particular utility in the field of employee benefits, insurance, and compensation, especially in a business or financial transaction data processing system. Still more particularly, the present invention pertains to automated or partially automated (as by machine) activities in financial, business practice, management, or cost/price determination. Even more particularly, the present invention pertains to a machine comprising a digital electrical computer having a processor programmed for electrically processing input data into output data, the computer electrically connected to an input device and to an output device, for illustrating a replacement of a benefit plan.
II. BACKGROUND OF THE INVENTION
The genesis of this invention originates in what the inventor believes is a need to provide fair and equal compensation to the global work force. And given the morass of national laws, it has been a challenge to provide equivalent benefits to employees, executives, and self-employed individuals located anywhere in the world. Typically, U.S. multi-national employers (MNEs) will offer their domestic employees both “qualified” and “non-qualified” benefits. Qualified benefits usually include one or more retirement plans, designed as either defined benefit plans (such as pensions) or defined contribution plans (such as the 401 (k)). Non-qualified plans are generally available only to executives and include both defined benefit plans, such as Supplemental Executive Retirement Plans (SERPs), defined contribution plans, such as Deferred Compensation Plans, incentive plans, such as Incentive Stock Option Grants, and risk-transfer plans, such as Executive Life Insurance Plans (ELIPS).
For those employees outside the U.S., whether they are U.S. citizens on a foreign assignment (expatriates), foreign nationals on assignment in the U.S. (inpatriates), third-country nationals (TCNs), or foreign nationals in their home country (locals), cannot be offered the same benefit plans for economic and tax reasons. Therefore, an inequity in benefits is created between the international employees, both U.S. and foreign, and their U.S.-based peers. Often, the disgruntled international employees openly express their discontent and the MNE's human resource (HR) department is under pressure to provide an equivalent benefit. Prior to this invention, there was no efficient uniform means for providing equivalent benefits, and most MNEs would ignore the demands for equivalent benefits or increase cash compensation as a partial offset.
Many MNEs do not allow their U.S. expatriates to participate in the employer's 401 (k) plan, because the deferral of income is recognized as income in the majority of foreign jurisdictions. This means that the employee is taxed on income not received, and the MNE will usually gross up the employees' compensation to cover the additional foreign income tax, under the MNE's tax equalization program. Those MNEs that do allow their employees to participate in the 401 (k) retirement plan incur added globalization costs.
In addition, when foreign national employees are assigned to work in countries other than their home country (TCNs) the home country pensions are frozen and the employee may or may not be eligible to participate in the pension plans of the host country where assigned. Consequently, the TCN employee may retire with a pension that is less than the pension of a colleague who never left the home country. Prior to this invention, there was not uniform means for providing “pension gap” funding created by these situations.
The cost of maintaining a global workforce is significant. Generally, an employee in the U.S. with an annual salary of $100,000 may cost the MNE over $500,000 annually while on an overseas assignment, because of incentives, allowances and tax gross-ups that are usually paid. Local nationals and TCNs may be somewhat less expensive, based on their negotiated compensation packages. To alleviate the cost of globalization, the international HR departments are continually pressured to find ways to cut cost. At the same time, the international employees are trying to ensure that cost cutting does not affect their pocketbooks. Prior to this invention, there was no uniform means for reducing employee cost without reducing the employee's compensation package.
The time required to administer an international workforce is also excessive. It is estimated through surveys, conducted by Organization Resource Counselors, Inc. in New York, that each international employee demands over 60 hours of administrative time per year. This time is spent administering compensation and benefit issues for the various jurisdictions in which the MNE may be operating. If an MNE is operating in 200 countries globally, there are 200 different sets of labor and tax laws that the international HR department has to consider when making even the smallest change to the compensation and benefits program. The implementation of a global plan, such as an incentive stock option program, presents significant administrative time requirements and expense to sort the tax and legal impact associated with its implementation. Prior to this invention, there was not a single-source, cross-border solution for implementing benefit plans.
Recruitment for foreign assignments is also difficult. Historically, employees have been financially enticed to accept a foreign assignment. In recent history, career development requires international experience, and the HR departments would like to change the employee's motivation for accepting an assignment from a financial incentive to a career incentive. However, due to downsizing and mergers, most employees are not convinced that career enhancement opportunities actually result from overseas assignments. In many cases, the international employee has had no career position to return to upon repatriation. Therefore, it is difficult to gain employee acceptance of any cost cutting program in favor of career enhancement. Today, employees are focused on “what's in it for me.” Prior to this invention, there was no uniform means for keeping the employee “whole,” while reducing the cost to the MNE.
To further complicate the situation, MNEs have to continually deal with changing tax laws in the U.S., as well as the other jurisdictions in which they may do business. Compliance with changing tax laws and host country social programs is extremely challenging. Consequently, many MNEs find themselves out of compliance in one or more jurisdictions. Prior to this invention, there was no uniform means for providing benefits in a stable tax environment that would be applicable across jurisdictional borders.
Currently, only a few MNEs have addressed these issues to any great extent. In doing so, there have been programs designed for each specific type of international employee and each host country in which they work. Consequently, some MNEs may have as many a 100 different benefit plans for their global workforce. The administrative burden is overwhelming. Prior to this invention, there was no uniform means for providing a single-source benefit program that could provide multi-jurisdictional benefits.
The intent of this invention is to provide equivalent benefits. It is important to understand that equivalent benefits means “equitable” benefits, but do
Millin Vincent
Offshore Benefits, LLC
Rosen Nicholas David
Trzyna, Esq. Peter K.
LandOfFree
Computer-aided method, machine, and products produced... does not yet have a rating. At this time, there are no reviews or comments for this patent.
If you have personal experience with Computer-aided method, machine, and products produced..., we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Computer-aided method, machine, and products produced... will most certainly appreciate the feedback.
Profile ID: LFUS-PAI-O-2973231