Method for hedging one or more liabilities associated with a deferred compensation plan
OwnerDavid J. Marshallinventor
Life of this patent
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Abstract
The present invention relates to a method for hedging a deferred compensation liability. In one embodiment, the invention may provide a mechanism to hedge the compensation expense liabilities of an employer providing deferred compensation to one or more employees.
Claims26
A method for hedging a deferred compensation liability associated with a deferred compensation plan, comprising:
- arranging a total return swap between a party sponsoring the deferred compensation plan and a counterparty;
- and using the total return swap to hedge the deferred compensation liability.
A method for hedging a deferred compensation liability associated with a deferred compensation plan, which deferred compensation plan permits a participant in the deferred compensation plan to select a notional investment allocation of deferred compensation attributable to the participant, comprising:
- obligating a counterparty to pay to a party sponsoring the deferred compensation plan a hedge payment, wherein the hedge payment results from a total return swap and equals at least the value of the deferred compensation if it were invested as notionally selected by the plan participant.
A method for hedging a deferred compensation liability associated with a deferred compensation plan, comprising:
- arranging a first total return swap between a party sponsoring the deferred compensation plan and a counterparty;
- using the first total return swap to hedge the deferred compensation liability;
- and arranging a hedge between the counterparty and a second counterparty, wherein the hedge at least partially hedges the counterparty's liability under the first total return swap.
A method for hedging a deferred compensation liability associated with a deferred compensation plan, which deferred compensation plan permits a participant in the deferred compensation plan to select a notional investment allocation of deferred compensation attributable to the participant, comprising:
- obligating a counterparty to pay to a party sponsoring the deferred compensation plan a hedge payment, wherein the hedge payment results from a first total return swap and equals at least the value of the deferred compensation if it were invested as notionally selected by the plan participant;
- and arranging a hedge between the counterparty and a second counterparty, wherein the hedge at least partially hedges the counterparty's liability under the first total return swap.
A method for hedging a deferred compensation liability associated with a deferred compensation plan, comprising:
- arranging a forward contract including a put and a call between a party sponsoring the deferred compensation plan and a counterparty;
- and using the forward contract to hedge the deferred compensation liability.
Dependencies are inferred from the claim text.