RIVE Premium
Strip Strategy

Our Innovative Methodology acts as a Value Catalyst.

RIVE Capital Advisors has developed a patented process that splits a life settlement policy’s “premium” from its ” life settlement payment”. By separating the liability from the asset, RIVE innovative approach fundamentally changes the value and characteristics of each element. It also changes its use and impact. Pension plans and sponsors can recognize the split’s value addressing their funding gap issues.

The Premium Liability Split

(Plan Sponsor)

The “RIVE Lift” (asset appraisal) may increase plan funding ratio which decreases future sponsor contributions.

Other benefits include:

  • Provides a fixed-income alternative that can help close the pension funding gap
  • While taking on an initial liability in year one, you minimize future actuarial contributions
  • You have the ability to customize the amount of your premium liability.

The Benefit Asset Split

(Pension Plan)

The pension fund may benefit from a one-time “RIVE Lift” (asset appraisal) improving the plan funding ratio.

Other benefits include:

  • The plan can benefit from cash flow without the premium obligation
  • Projected cash flow receipts are more favorable to other fixed-income investments
  • As a “low-correlated” asset it decreases your Beta and drives Alpha in your portfolio

Rive's patented process allows a Pension Plan and Sponsors to
fully-customize a fund's cash flow strategy to meet their needs.

Below, are three examples of how Pension Plans and Sponsors can share in the income returns generated by the RIVE Premium Strip Funds to help address their funding gap.

The Rive 100 Plan

Provides a Pension Plan the maximum share of the cash flow, and all the premium liability to the Sponsor.

Sponsor

At 0% cash flow, the sponsor receives full premium liability. 

  • Pays the full premium liability.
  • Over the term of the fund, the sponsor will have a defined premium liability
  • Should experience a declining ARC
  • May have a balance sheet advantage for tax planning

Pension Plan

At 100% cash flow, the pension plan receives the full benefit. 

  • The Plan gets the maximum one-time valuation lift (“Rive Lift”).
  • Will recveive the highest projected net-annual return.
  • Targeted to close the funding gap in a more timely manner.

The Rive 52 Plan

Provides a Pension Plan significant cash flow, and covers the Sponsor’s premium liability over the life of the fund.

Sponsor

At 48% share of cash flow and the following benefits. The sponsor:

  • Will have the full obligation of the premium in the first year
  • In subsequent years, the sponsor’s share of the life settlements will be escrowed and then applied to future premium obligations.
  • Over the life of the strategy, the target premium obligation will be break-even or zero.

Pension Plan

At 52% share of cash flow, the pension plan receives a significant benefit. The plan:

  • May receive a one-time valuation lift (“Rive Lift”).
  • May receive up to a 4x targeted annual return on the fund compared to other fixed-income investments.
  • May close your funding gap.

The Rive 44 Plan

Provides a Pension Plan a meaningful share of the cash flow, and a nominal return while covering a Sponsor’s premium liability.

Sponsor

At 56% share of cash flow, the sponsor receives the following benefits. The sponsor:

  • Will have the full obligation of the premium in the first year
  • In subsequent years, the sponsor’s share of the life settlements will be escrowed and then applied to future premium obligations.
  • Over the life of the strategy, the target premium obligation should have a net positive return

Pension Plan

At 44% share of cash flow, the pension plan receives the partial benefit. The plan:

  • Gets a one-time valuation lift (“Rive Lift).
  • May receive up to 2x targeted annual-return on the fund compared to other fixed-income investments.
  • May close the funding gap over time.