Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-03-12
2003-09-23
Millin, V. (Department: 3624)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S039000
Reexamination Certificate
active
06625582
ABSTRACT:
BACKGROUND OF THE INVENTION
The present invention relates generally to a system and method which provide a mechanism for a recipient of Social Security payments, or of other retirement payments, to access present value of a designated portion of its future retirement benefits. More particularly, the inventive system and method enable a beneficiary of Social Security or other retirement benefits to obtain capital from a funding source, acquire an asset directly from an asset provider, or obtain a service from a service provider, in exchange for the regular and convenient payment to the funding source, asset provider, or service provider of a predetermined portion of the beneficiary's retirement benefits, without encumbering the beneficiary's rights to its future retirement benefits.
The fast growing ranks of retirement age individuals are, for various reasons, finding Social Security benefits or other retirement benefits, or the anticipated timing of receipts therefrom, to be somewhat inadequate to meet their present and future financial needs, expectations, and objectives, given the many opportunities, financial and otherwise, currently available in today's dynamic environment. These seniors are increasingly coming to realize that perhaps, if given access to sufficient current resources, they could do more to advance their personal well-being than can the monolithic retirement plans created to cover large groups of individuals.
However, considering the current legislated proscriptions in the United States against assigning or otherwise alienating future retirement benefits (e.g., as set forth in the Social Security Act, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the United States tax laws), Social Security benefits or other retirement benefits have not generally been seen as an adequate source of current capital, particularly to support financing based upon future receipts. Thus, a need exists for a financial program that allows a beneficiary of Social Security benefits or other retirement benefits to access, in a convenient manner, present value of future retirement benefits to meet current financial objectives while complying with the United States laws and regulations governing the assignment of future Social Security or other retirement benefits.
SUMMARY OF THE INVENTION
Generally speaking, a financial program in accordance with the present invention provides a system and method for enabling recipients of Social Security payments, or of other retirement payments, to convert a designated portion of future payments into current available financial resources that may be applied, for example, to acquire an asset, such as an investment in mutual funds, or obtain a service, such as provided in a supplemental health insurance policy.
To participate in the inventive financial program, each recipient or “beneficiary” of retirement payments agrees to the designation of a specified financial institution to serve as (1) the direct depository of the beneficiary's retirement payments, and (2) the disbursement agent of a predetermined portion of such payments from the beneficiary's individual deposit account over the designated term of the program. In exchange for an advance of capital from a funding source, or in exchange for an asset acquired or a service obtained directly from an asset or service provider, in an amount or having a value at least in part based on present value of a designated portion of the beneficiary's future retirement payments, the beneficiary is required to direct the deposit account to disburse to the funding source or asset or service provider a portion of the beneficiary's retirement payments (as they are received over the program term) predetermined to satisfy the terms of the advance.
Should the beneficiary opt to revoke its participation in the financial program, or should the beneficiary's participation in the program otherwise terminate before the end of the designated program term, the funding source or asset or service provider would no longer receive any payments from the beneficiary's deposit account. However, the beneficiary may be obligated to reimburse the funding source or asset or service provider in a specified amount relating to the capital, assets, or services advanced, using resources other than future retirement benefits (e.g., using funds obtained from the liquidation of an acquired asset).
Should the beneficiary die during the term of the program, the funding source or asset or service provider would not be able to seek reimbursement from a surviving spouse's share of remaining retirement payments, or from the beneficiary's estate. In the preferred embodiment of the present invention, the funding source or asset or service provider would, however, insure against this risk by purchasing group term life insurance for its benefit covering all beneficiaries participating in the program.
The system according to the present invention utilizes known computer capabilities and electronic communications links to effect the automated implementation of various aspects of the inventive financial program, for example, to carry out the electronic transfer of funds into and out of the individual deposit account of a program participant.
It is accordingly an object of the present invention to provide a system and method which offer a mechanism for beneficiaries of Social Security benefits, or of other retirement benefits, to access present value of a designated portion of their future retirement benefits to meet current objectives such as, for example, acquiring assets, funding investments, restructuring debt, estate planning, or purchasing a service such as supplemental health insurance or prepaid funeral expenses.
It is a further object of the present invention to provide a system and method which link various providers of capital and other assets or services to Social Security beneficiaries or other recipients of retirement benefits.
It is also an object of the present invention to provide a system and method that complies with current United States laws and regulations regarding the assignment or alienation of future Social Security payments or other retirement payments.
The invention accordingly comprises the several steps and the relation of one or more of such steps with respect to each of the others, and the system embodies features of construction, combinations of elements, and arrangement of parts which are adapted to effect such steps, all as exemplified in the following detailed disclosure, and the scope of the invention will be indicated in the claims.
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Mirer, Thad W. Th Optimal time to File for Social Securit Benefits, Public Finance Review v26n6, Nov. 1998, pp. 611-636.*
Reimers, C. Honig, M. Responses to Social Security by Men and Women: Myopic and Far-Sighted, Journal of Human Resources, v31n2, Spring 1996, p. 359(24).*
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Richman Richard Paul
Singer Craig
Kramer Levin Naftalis & Frankel LLP
Kyle Charles R.
Millin V.
Richman/Singer Venture
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