MassMutual Releases Deferred Income Annuity

RetireEase Choice, a flexible premium deferred income annuity from MassMutual, was designed to guarantee a future income stream for financial security.

The company claims RetireEase differs from traditional deferred annuities because of the guarantee of a specific amount of future income at the time a purchase payment is made, since assets within the contract are dedicated to meeting long-term retirement income needs. RetireEase Choice provides no contract value or withdrawal provisions; the only distributions made from the contract are in the form of annuity payments or a death benefit.

Features of RetireEase Choice include:

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  • Flexible purchase payments. Customers can make a single initial purchase payment with a minimum of $10,000. They can make subsequent purchase payment(s) of at least $500. Each purchases a specific amount of guaranteed lifetime income, based on annuity rates in effect at the time of each payment. Multiple purchase payments are combined into a single guaranteed income stream that begins on the selected annuity date.
  • Payout options. Annuity options can provide guaranteed income for one life or two, and may provide beneficiary protection.
  • Annuity date adjustment. The contract permits a one-time change to the annuity date for many options (in instances of job loss, serious health issues, etc.), and may be limited or unavailable due to required minimum distribution (RMD) rules.
  • Return of purchase payment(s). If death occurs before the annuity date, any purchase payment(s) made will be paid to the beneficiary (except for the Single Life—No Death Benefit annuity option).
  • Annuity payment acceleration. Owners of nonqualified contracts with a monthly annuity payment frequency can opt to receive three or six monthly annuity payments in a lump sum through a temporary change in annuity payment frequency. This option may be exercised up to five times over the life of the contract.
  • Protection against inflation. This optional benefit can help offset the effects of inflation on annuity payment purchasing power.

 

For more information about RetireEase Choice, visit www.massmutual.com.

Lack of Records Shifts Burden of Proof to Plan Sponsor

A federal appellate court ruled that an employer’s failure to keep adequate records shifts the burden of proof to the employer that it does not owe contributions to a multi-employer pension plan.

The 1st U.S. Circuit Court of Appeals vacated a district court’s judgment that Ray Haluch Gravel Co. only owed contributions for one employee because that was the only employee for which the Central Pension Fund of the International Union of Operating Engineers and Participating Employers could show records that he was covered under the collective bargaining agreement (CBA).  

The court decided the only reasonable interpretation of the CBA is that an employer must remit benefit payments for each hour of work covered by the CBA. The pension fund claimed payments were missing for unidentified employees.   

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The court noted that under the Employee Retirement Income Security Act (ERISA), “every employer shall .. maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees.” The statute further provides that “[t]he employer shall furnish to the plan administrator the information necessary for the administrator to make the [required] reports.”

According to the court opinion, the evidence presented indicates clearly that some covered work was done by unidentified employees, since the district court determined that the employer’s records showed 75% of the work performed by the one employee, for which it ruled payments were due, was covered by the CBA.

The court said it can be presumed that one or more employees performed that employee’s work after he left, that those employees worked each year the same total number of hours as the former employee, and that 75% of that work was covered by the CBA. Accordingly, Ray Haluch Gravel is presumptively liable for the same number of hours of covered work for each successive year through the last date encompassed by the pension fund’s claim.  

“In a case like this one, in which ERISA-protected benefit plans seek to enforce remittance requirements, burden-shifting occurs only when a fiduciary seeking remittance of unpaid benefit contributions shows both that some employees performed covered work that was not reported to the benefit plan and that the employer neglected to maintain adequate records,” the court said. The employer, despite its recordkeeping lapses, may offer evidence in an effort either to overcome the presumption of its liability or to limit its effect. In the absence of such evidence, however, the presumption controls.  

The 1st Circuit’s opinion is here.

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