Linked CFA System for Fund Access During Transfers

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Solution Overview

Problem

Contribution funded accounts (CFAs) face challenges in providing immediate access to funds, especially at the beginning of the plan year when balances are low, and synchronization latencies across multiple entities lead to disruptions in access, while blackout periods during account transfers further limit employee access to funds.

Innovation Solution

The implementation of a linked CFA system that includes a CFA On Demand (CFAOD) and Asset Transfer On Demand (ATOD) processes, allowing accelerated access to future contributions and bridging the gap during account transfers, ensuring uninterrupted access to funds through networked systems and reconciliation processes.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of operation

If employees wait for contributions to accumulate in the CFA before accessing funds, then the account maintains financial stability and proper funding, but employees cannot access funds for large qualified expenses at the beginning of the plan year

Engineering Contradiction:

ImproveAccess to fundsVSAvoidFunds available in CFA

Core Design Contradiction:

Ease of operationVSQuantity of substance

Solution Approach 1:

The CFAOD account is pre-funded with the total annual contribution amount at the beginning of the plan year, allowing employees to access funds immediately without waiting for monthly contributions to accumulate. This preliminary funding action resolves the contradiction by making funds available before the actual contribution accumulation process completes.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The funding mechanism is segmented into two separate accounts: the traditional CFA that receives monthly contributions and the CFAOD that provides immediate access to pre-funded amounts. This segmentation allows the system to simultaneously maintain proper funding discipline while providing immediate access to employees.

Inventive Principle:

Principle #1Segmentation

2Measurement precision

If the system implements reconciliation processes across multiple entities (employer, bank, card vendor, plan manager), then account accuracy is improved, but synchronization latencies increase causing disruptions in access

Engineering Contradiction:

ImproveAccount reconciliation accuracyVSAvoidSynchronization latency

Core Design Contradiction:

Measurement precisionVSLoss of time

Solution Approach 1:

The CFAOD account serves as an intermediary buffer between the multiple entities in the reconciliation chain. By pre-funding this account, the system decouples the timing of fund availability from the timing of reconciliation operations, allowing reconciliation to occur without causing access disruptions.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

Funding of the CFAOD account occurs in advance of any reconciliation activities, ensuring that funds are already available when reconciliation processes begin. This preliminary action eliminates the latency problem by ensuring funds are ready before the reconciliation chain completes its verification cycles.

Inventive Principle:

Principle #10Preliminary action

3Ease of operation

If the system allows accelerated access to future contributions through CFAOD, then employee access to funds is improved, but new reconciliation processes are required across multiple entities

Engineering Contradiction:

ImproveAccelerated fund accessVSAvoidReconciliation process complexity

Core Design Contradiction:

Ease of operationVSDevice complexity

Solution Approach 1:

The system segments the funding and access functions into separate accounts (CFA and CFAOD), each with its own reconciliation process. This segmentation isolates the complexity of accelerated access reconciliation from the traditional CFA reconciliation, making the overall system more manageable despite the added complexity.

Inventive Principle:

Principle #1Segmentation

4Adaptability or versatility

If the system implements account transfer between entities, then employee mobility and account flexibility are improved, but blackout periods occur during transfer causing loss of access

Engineering Contradiction:

ImproveAccount transfer flexibilityVSAvoidBlackout period duration

Core Design Contradiction:

Adaptability or versatilityVSLoss of time

Solution Approach 1:

The CFAOD account is pre-funded with the full annual contribution amount before any transfer occurs. This preliminary funding ensures that when an account transfer is initiated, the employee immediately has access to funds in the new account, eliminating the traditional blackout period that occurs during transfer transitions.

Inventive Principle:

Principle #10Preliminary action

Data Source

PatentUS11348096B2Reconciliation for enabling access to transferring contribution funded accounts

Publication Date: 2022.05.31 CONNECTYOURCARE LLC

AI summary

Disclosed herein are system, method, and computer program product embodiments for reconciliation needed to enable access to accelerated contribution funded accounts (CFAs). An embodiment operates by configuring a management database to store a linked CFA associated with a CFA and an asset-transfer on demand account (ATODA). A transfer processing system of a provider may receive a transfer file from an employer. The transfer processing system may delay transfer reconciliation of the linked CFA until a transferred amount is received. During transfer reconciliation, the transfer processing system may resolve the ATODA using the received transferred amount. Upon resolution of the ATODA, the contribution processing system may concurrently send information to a bank server and a card server to reconcile the respective bank and card accounts with the linked CFA at the provider.