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Terminal Funding Annuity Contracts

If you are terminating your defined benefit plan or, for another reason, wish to purchase annuities earned under your defined benefit plan, we can provide a single premium, non-participating, annuity contract that constitutes our irrevocable commitment to provide the benefits purchased. Annuitants will receive a certificate from Massachusetts Mutual Life Insurance Company (MassMutual).


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What is a Terminal Funding Annuity Contract?

The purpose of a terminal funding contract is to provide benefits earned under a qualified pension plan through the purchase of annuities. Purchases of annuities may also be made when, for accounting purposes, business entities wish to close out the pension liability of certain participant groups.

How are Terminal Funding Annuity Contracts used?

When a plan is closed out in a standard termination, any benefit that is payable as an annuity under the provisions of the plan must be provided in annuity form through the purchase, from an insurer, of a single premium, non-participating, non-surrenderable annuity contract that constitutes an irrevocable commitment by the insurer to provide the benefits purchased. Contracts for Internal Revenue Code (IRC) section 401(a) qualified defined benefit plans are available at this time.

What are the benefits of Terminal Funding Annuity Contracts?

The selection of an annuity provider for purposes of a pension benefit distribution is a fiduciary decision governed by the Employee Retirement Income Security Act (ERISA). In discharging obligations to act solely in the interest of participants and beneficiaries, fiduciaries choosing an annuity provider must take steps to obtain the safest annuity available, unless under the circumstances it would be in the interests of participants and beneficiaries to do otherwise. Massachusetts Mutual Life Insurance Company (MassMutual) has a long track record of exceptional financial strength and is well capitalized and highly liquid. MassMutual's investment portfolio, which consists primarily of investment grade bonds, commercial mortgage loans and policy loans, is well diversified. In addition, MassMutual carefully manages the relationship of assets and liabilities.

Prefer to speak to someone about terminal funding annuity contracts?

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.


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