Attracting & Retaining Key Employees: Annuities

Related Information

• Key Employee Retention Option Grid (PDF)

What is an annuity?

An annuity is a contract between an insurance company and an annuity owner. In exchange for a purchase payment, or series of payments, the insurance company guarantees to pay a stream of income in the future.

How is an annuity used?

Deferred annuities are long-term financial vehicles that can be used to help fund individual retirement arrangements for key employees. Deferred annuities are designed to pay a guaranteed stream of income at a later date.¹

What are the benefits of deferred annuities?

The benefits of deferred annuities include a guaranteed stream of lifetime income, potential to accumulate savings on a tax-deferred basis and a death benefit.

What are the different types of arrangements that can be funded by annuities to help attract and retain key employees?

• Savings Incentive Match Plan (SIMPLE IRA)
  A written salary reduction arrangement that allows eligible employees to contribute to an Individual Retirement Account (IRA) in their name. Employers are required to make annual contributions for each eligible participant.

• Simplified Employee Pension Plan (SEP-IRA)
  A written arrangement that allows an employer to make contributions to IRAs for all eligible employees.

Prefer to speak to someone about annuities?

• Talk to a Financial Professional

¹ Guarantees are based on the claims-paying ability of the issuing company.

Annuities are not appropriate for everyone. There are fees and charges associated with owning an annuity. Annuities do not provide any additional tax advantage when used to fund a qualified plan such as an IRA. Investors should consider buying an annuity to fund a qualified plan for the annuity's additional features, such as lifetime income payments and death benefit protection.

Principal Underwriters:
MML Investors Services, Inc.
MML Distributors, LLC

Subsidiaries of
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111-0001

This information is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.