What Is A Group Annuity?
Insurance companies offer annuities, a type of tax-sheltered pension plans, as an option for retirement savings. Participants contribute to annuities in exchange for future payments -- called annuities -- to the retiree or, if applicable, to survivors. Although individuals may enter into annuity contracts with insurers, group annuity contracts are between insurers and employers that limit participation to their eligible employees. The group annuity, called a "structured pension plan" by the Committee of Annuity Insurers, began in the 1920s -- before Social Security -- to provide income for retired workers.