Electrolysis: processes – compositions used therein – and methods – Electroforming or composition therefor
Reexamination Certificate
1997-09-23
2001-05-22
Cosimano, Edward R. (Department: 2761)
Electrolysis: processes, compositions used therein, and methods
Electroforming or composition therefor
Reexamination Certificate
active
06235176
ABSTRACT:
This application includes a non-printed computer program listing which is disclosed in the form of a microfiche appendix as provided for in 37 CFR 1.96 consisting of 3 microfiches having 224 frames.
FIELD OF THE INVENTION
The present invention is in the field of digital electrical apparatus and method for making and using the same, as well as data structures and necessary intermediates created thereby. More particularly, the present invention is directed to technical effects of such invention in signal processing for administrating disability insurance covering employee and/or employer contributions to defined contribution qualified and non-qualified pension plans and profit sharing plans.
BACKGROUND OF THE INVENTION
Until the early 1980s, the dominant form of retirement income plans sponsored by corporations for their employees within the United States were defined benefit plans. Under defined benefit plans (DB plans), the employee's retirement benefits are amounts guaranteed to the departing employee and are insured by the PBGC. The employer's ongoing contribution to the plan is determined actuarially. Since 1974 and the enactment of ERISA, there have been at least fifteen legislative acts impacting qualified pension and profit sharing plans. Much of this legislation has made defined benefit plans less and less attractive for employers to sponsor and have made defined contribution plans more and more attractive. By far the most popular type of non-defined benefit qualified retirement plan to emerge during the past fifteen years is the 401(k) plan. These plans can be structured several ways and can optionally be either a profit sharing plan or an ESOP (employer stock ownership plan) plan. They allow employees to contribute an allowable percentage of pretax income into the plan, making them a very attractive long-term savings vehicle for retirement. Further enhancing the appeal of 401(k) plans for employees, is the ability for employers to make an optional matching contribution. Most 401(k) plans provide an employer matching contribution of some kind and allow employees to be pro-active in selecting the investment direction of their accounts. Employers are particularly pleased with the heightened awareness employees tend to have about the value of the 401(k) benefit plan. Employees often pay less attention to and appreciate less defined benefit plans—despite the fact that they may cost the employer more and prove more valuable to the employee. In addition to the above, employers have become aware of the costly nature of all employee benefits (i.e., due to the impact of medical inflation on medial benefits and the accounting rule changes impacting retiree medical and life plans—FASB statement 106). Consequently, employers are becoming increasingly cost conscious about all benefit offerings.
One of the effects of the recent trends in employee benefits described above, is that there are currently over 30 million employees participating in 401(k) plans—in 1974 there were none. Additionally, there has been an enormous increase in the number of highly compensated employees participating in non-qualified retirement plans due to benefit restrictions in qualified plans.
A common feature in defined benefit pension plans is a disability completion benefit. If the plan participant becomes disabled prior to retirement, the employer is obligated to continue funding on the employee's behalf until retirement. The employee is entitled to approximately the same level of retirement income as they would have received absent the disability (small differences are possible since salary increases between the date of disability and retirement must be estimated). The point is under defined benefit plans there is an established practice of providing an undiminished level of retirement income to employees who become disabled during active employment years.
In contrast, employers offering defined contribution pension and profit sharing plans have not historically provided an undiminished retirement benefit in the event of disability. Because of the recent shift from a pre-dominate reliance on defined benefit plans to more and more reliance upon defined contribution plans, millions of American employees are at risk of losing a significant portion of their retirement benefits in the event of disability (spouses and dependents are also at risk).
There are many ways to protect employees from this risk. For example, employers may be able to continue making contributions on behalf of a disabled employee. However, there are several legal hurdles that make this difficult to accomplish. IRC Code Section 415(c)(3)(c) includes a definition of disability that prevents employers from providing adequate benefits for the majority of disabled employees. If the employer does provide a disability benefit, they can either self insure the risk or insure it.
There are many different ways that insurance can be structured to cover the risk of losing defined contribution plan retirement benefits. For example: (1) the employer can pay for coverage either within the defined contribution plan or outside of it; (2) the employee can voluntarily purchase coverage either within the defined contribution plan or outside of it; or (3) the employer and employee can share the expense for coverage either within the defined contribution plan or outside of it.
In addition, the policy of coverage can be provided under either a group or individual contract. Coverage can provide either immediate benefit payments (payments made at the time of disability), or deferred benefit payments. If immediate, the benefit payments can be made internal or external to the defined contribution plan in a number of ways. In the final analysis such coverage will be structured according to the particular needs and desires of each sponsoring employer and the specific (legal and other) requirements of their existing benefit plans.
Given that this represents a huge existing marketplace for insurance companies in the disability insurance market, it is interesting to note that none have successfully entered it on a significant scale. There are no serious underwriting risks blocking entry into the market. The concern for “over-insuring” is easily offset by restrictions on the disabled person's ability to access funds prior to retirement. Some carriers have, on a very limited basis, provided coverage to highly compensated employees external to defined contribution plans. While coverage is underwritten with the intent to protect defined contribution plan retirement benefits, the policies used thus far have been policy forms that were originally designed and priced to cover other loss of income risks.
To date, disability policies have not been made available to the entire employee population of a defined contribution plan—either within the defined contribution plan or external to the plan. To date, disability policies have not been made available to participants (either to all plan participants or even a sub-grouping of plan participants) within a defined contribution plan.
Historically, disability policies offered to protect participant contributions (employer and or employee paid) to defined contribution plans, have been made available only on a very limited basis (i.e., never offered to more than ⅓ of a plan's participants). Additionally, they have only been offered external to the defined contribution plan. Less than 100 of these limited, external employer sponsored plans have been underwritten during the past five years. Only two or three carriers have been willing to offer polices to defined contribution participants. This coverage has been offered on a guaranteed issue basis. Other carriers are not prepared to offer individual policies on a guaranteed issue basis.
One major insurance carrier, a leader in offering administrative services for 401(k) plans, attempted to make a disability policy available to 401(k) plan participants. They were forced to withdraw the product from the market shortly after introduction. Their outside legal co
Khodara Jean-Philippe
Schoen Matthew Bernard
Cosimano Edward R.
Kalinowski Alexander
MB Schoen & Associates
Trzyna Peter K.
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