EXHIBIT 4.(f)
[PACIFIC LIFE & ANNUITY COMPANY LOGO]
Pacific Life & Annuity Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
SIMPLE INDIVIDUAL RETIREMENT ANNUITY RIDER
This rider is a part of the Contract to which it is attached (the Contract) by
Pacific Life & Annuity Company (PL&A).
The Contract is hereby modified as specified below in order to qualify as a
SIMPLE Individual Retirement Annuity (SIMPLE IRA) under Code Section 408(p).
The provisions of this rider shall control if they are in conflict with those of
the Contract.
A. Definitions
Annuitant - The individual named as a measuring life for periodic annuity
payments under the Contract.
Annuity Start Date - The date shown in the Contract Specifications, or the date
the Owner has most recently elected under the Contract, if any, for the start of
annuity payments if the Annuitant is still living and the Contract is in force;
or if earlier, the date that annuity payments actually begin.
Applicable Designation Date - September 30 of the calendar year next following
the Owner's Year of Death.
Applicable Distribution Period - The period used to determine the amount
required to be distributed as an RMD during a Distribution Year.
Code - The Internal Revenue Code of 1986, as amended.
Contract - This annuity contract issued by PL&A as a SIMPLE IRA.
Contributions - The Purchase Payments, premiums, rollovers or other
contributions received by PL&A under the Contract.
Designated Beneficiary - An individual designated or treated as a beneficiary
under the Contract for RMD purposes in accordance with the Regulations under
Code Section 401(a)(9)(E) and related provisions, e.g., Reg.(ss)1.401(a)(9)-4.
DB Election Date - The date that is 30 days prior to the DB Required Beginning
Date.
DB Required Beginning Date - December 31 of the calendar year next following the
Owner's Year of Death.
Distribution Year - The calendar year for which an RMD is required. The first
Distribution Year is the calendar year in which the Owner attains age 70 1/2
(or, where applicable under Reg. (ss) 1.401(a)(9)-5, Q&A-1(b), the calendar year
next following the Owner's Year of Death). Each subsequent calendar year is also
a Distribution Year.
IRA - An individual retirement account or individual retirement annuity under
Code Section 408.
IRS - Internal Revenue Service.
Life Expectancy - The life expectancy of one or more individuals as determined
by using the appropriate table in Reg. (ss) 1.401(a)(9)-9.
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Measuring Designated Beneficiary - The Designated Beneficiary as of the DB
Required Beginning Date whose Life Expectancy is used under Regs. (ss)
1.401(a)(9)-4 and (ss) 1.401(a)(9)-5, Q&A-7 to determine any Applicable
Distribution Period as of such date. If as of the Applicable Designation Date
any trust, estate or other entity is treated under Reg. (ss) 1.401(a)(9)-4,
Q&A-3 as a beneficiary under the Contract (taking into account any Separate
Shares), the Contract shall be deemed to have no Measuring Designated
Beneficiary. If as of the Applicable Designation Date the Contract (taking into
account any Separate Shares) has more than one Designated Beneficiary (and no
entity beneficiary), the Measuring Designated Beneficiary is the Designated
Beneficiary with the shortest Life Expectancy as of such date.
Non Xxxx XXX - An IRA that is not a Xxxx XXX.
Notice Date - The day on which PL&A receives, in a form satisfactory to PL&A,
proof of death and instructions satisfactory to PL&A regarding payment of death
benefit proceeds.
Owner or You - The Owner of the Contract.
Owner's Election Date - December 1 of the calendar year in which the Owner
attains age 70 1/2.
Owner's Year of Death - The calendar year in which the Owner dies.
PL&A - Pacific Life & Annuity Company.
Plan - A tax-qualified retirement plan or arrangement, including an IRA or a
SIMPLE IRA plan.
QDRO - A qualified domestic relations order under Code Section 414(p).
Regulation or Reg. - A regulation issued or proposed pursuant to the Code.
Required Beginning Date - April 1 of the calendar year next following the
calendar year in which the Owner reaches age 70 1/2.
RMD - Required minimum distribution under Code Section 401(a)(9) or related Code
provision.
Xxxx XXX - An IRA under Code Section 408A.
Separate Share - A separate portion or segregated share of the benefits under
the Contract that is determined by an acceptable separate accounting under Reg.
(ss) 1.401(a)(9)-8, Q&A-3, or that qualifies as a segregated share for an
alternate payee under a QDRO under Reg. (ss) 1.401(a)(9)-8, Q&A-6(b)(1). A
Separate Share shall be treated as a separate Contract for RMD purposes and
Sections 8 and 9 below.
SIMPLE IRA - A SIMPLE IRA under Code Section 408(p).
Spouse - The Owner's spouse, including a former spouse covered by a QDRO who is
treated as the Owner's spouse pursuant to Reg. (ss) 1.401(a)(9)-8, Q&A-6.
Spouse's Continuation Election Date - The date that is 30 days prior to the
earlier of the Spouse's Required Beginning Date or December 31 of the fifth
calendar year after the Owner's Year of Death, in accordance with Reg. (ss)
1.401(a)(9)-3, Q&A-4(c).
Xxxxxx's Required Beginning Date - The later of December 31 of the calendar year
next following the Owner's Year of Death or December 31 of the calendar year in
which the deceased Owner would have attained age 70 1/2.
Xxxxxx's Year of Death - The calendar year in which the Surviving Spouse dies.
Surviving Spouse - The surviving Spouse of a deceased Owner.
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B. SIMPLE IRA Provisions
1. The Annuitant shall at all times be the Owner of the Contract (or its
beneficial Owner where a fiduciary is its legal Owner). Such individual
Owner's rights under the Contract shall be nonforfeitable, and the Contract
shall be for the exclusive benefit of such Owner and his or her
beneficiaries.
2. No benefits under the Contract may be transferred, sold, assigned, or
pledged as collateral for a loan, or as security for the performance of an
obligation, or for any other purpose, to any person; except that the
Contract may be transferred to a former or separated spouse of the Owner
under a divorce or separation instrument described in Code Section
408(d)(6). In the event of such a transfer, the transferee shall be treated
for all purposes as the Owner under the Contract.
3. No Contribution shall be allowed into the Contract unless it is (a) a cash
Contribution made on the Owner's behalf under a SIMPLE IRA Plan described
in Code Section 408(p) or (b) a rollover Contribution or transfer of assets
from another SIMPLE IRA of the Owner. Annual Contribution amounts shall not
exceed the following dollar limits (as increased by the required employer
contribution amount under Code Section 408(p)(2)(A)(iii) or (B)(i),
whichever is applicable):
Year Limit
---- -----
2002 7,000
2003 8,000
2004 9,000
2005 & later 10,000
In addition, for years after 2005 the $10,000 limit will be indexed for
cost-of-living adjustments under Code Section 408(p)(2)(E)(ii) at $500
increments.
For an Owner age 50 or older the above dollar limits are increased as
follows:
Year Limit
---- -----
2002 500
2003 1,000
2004 1,500
2005 2,000
2006 & later 2,500
For years after 2006 this $2500 limit also will be indexed for
cost-of-living adjustments under Code Section 414(v)(2)(C) at $500
increments.
4. Prior to the expiration of the 2-year period beginning on the date that the
Owner first participated in any SIMPLE IRA Plan maintained by the Owner's
employer, any rollover, transfer or distribution from this SIMPLE IRA that
is not made timely to another SIMPLE IRA of the Owner may be subject to a
25% penalty tax, as well as to ordinary income tax. Any rollover or
transfer made after such 2-year period to any IRA of the Owner or other
eligible retirement plan under Code Section 408(d)(3)(A) can be tax-free if
such transaction is made in a timely and appropriate manner.
5. Where the Contract has been set up under a SIMPLE IRA Plan of an employer
who made all contributions to the SIMPLE IRAs of a designated trustee or
issuer, within the meaning of Code Section 408(p)(7), the Owner's balance
under the Contract may be transferred without cost or penalty, within the
meaning of Code Section 408(p)(7), to another IRA of the Owner or to
another eligible retirement plan in accordance with Code Section
408(d)(3)(A) and (G).
6 Any Purchase Payment (or premium payment) under the Contract is not fixed,
but may not be less than any minimum account stated in the Purchase Payment
(or Premiums) provisions of the Contract.
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7. Any Purchase Payment (or premium) refund declared by PL&A under the
Contract, other than a refund attributable to an excess Contribution, shall
be applied toward the purchase of additional benefits before the close of
the calendar year following the calendar year of the refund.
8. The Contract and all distributions made under it shall comply with the RMD
and incidental death benefit rules of Code Sections 401(a)(9), 408(a)(6)
and 408(b)(3) and the Regulations thereunder, and such rules shall override
any distribution options in the Contract that are inconsistent with those
Code Sections. Accordingly:
(a) The entire interest under the Contract shall be distributed:
(i) No later than the Required Beginning Date, or
(ii) By periodic distributions, starting no later than the Required
Beginning Date, over the Owner's life or the lives of the Owner
and a Designated Beneficiary (or over a period not extending
beyond the Owner's Life Expectancy or the joint and last survivor
Life Expectancy of the Owner and a Designated Beneficiary).
(b) RMDs shall be made in accordance with the Regulations under Code
Section 401(a)(9) and related Code provisions. Accordingly:
(i) Unless the Owner elects otherwise in writing to PL&A by the
Owner's Election Date to have the Owner's entire interest
distributed under another method offered by PL&A that qualifies
under Code Section 401(a)(9), the RMD amount that must be
distributed each Distribution Year with respect to the Contract
shall be equal to the quotient obtained by dividing the account
balance for the Contract (as determined under Reg. (ss) 1.408-8,
Q&A-6) by the Applicable Distribution Period. For these purposes--
(1) The Applicable Distribution Period is determined by using
the Uniform Lifetime Table in Reg.(ss)1.401(a)(9)-9, Q&A-2 in
accordance with Reg.(ss)1.401(a)(9)-5, Q&A-4(a), or
(2) If the Owner's spouse is treated as the sole Designated
Beneficiary for the Contract (taking Separate Shares into
account) for the Distribution Year under Reg. (ss)
1.401(a)(9)-5, Q&A-4(b), the Applicable Distribution Period
is the longer of the distribution period under subparagraph
(1) immediately above or the joint Life Expectancy of the
Owner and such spouse, recalculated annually and based on
their attained ages as of their birthdays in such
Distribution Year, as reflected in the Joint and Last
Survivor Table in Reg. (ss) 1.401(a)(9)-9, Q&A-3.
Such RMD must be distributed no later than the Required Beginning
Date for the first Distribution Year, and for each subsequent
Distribution Year by December 31 thereof. However, the Owner may
arrange to have any portion (or all) of such RMD distributed from
another Non Xxxx XXX owned by such Owner (rather than from the
Contract) in accordance with Reg. (ss) 1.408-8, Q&A-9. If the
Owner dies on or after the Required Beginning Date, an RMD is
required for the Owner's Year of Death, determined as if the Owner
had lived throughout that year.
(ii) As of the Owner's Election Date or at any time thereafter (on 30
days notice to PL&A), the Owner may elect in writing to have any
portion or all of the undistributed interest under the Contract
applied to an annuity option offered by PL&A that qualifies under
Code Section 401(a)(9). Such an annuity option must make annuity
or other periodic payments at intervals no longer than one year,
and must satisfy the other requirements of Reg. (ss)
1.401(a)(9)-6T, including:
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(1) Period certain annuity without a life contingency. The
period certain may not exceed the maximum period specified
in Reg. (ss) 1.401(a)(9)-6T, Q&A-3.
(2) Life annuity or a joint and survivor annuity. A life annuity
must be on the Owner's life. Any periodic annuity payment to
any survivor under a joint and survivor annuity may not
exceed the applicable percentage of the annuity payment to
the Owner and other limits, as provided in Reg. (ss)
1.401(a)(9)-6T, Q&A-2.
(3) Life (or joint and survivor) annuity with period certain.
The amounts of the annuity payments must satisfy the
requirements in Reg. (ss) 1.401(a)(9)-6T, Q&A-1(b) and
Q&A-2(d).
(4) Annuity payments may not be in increasing amounts, except as
allowed by Reg. (ss) 1.401(a)(9)-6T, Q&A-1(a) or Q&A-4(b).
9. Upon the Owner's death, RMDs shall be made under the Contract in accordance
with this Section 9 and the Regulations under Code Section 401(a)(9) and
related Code provisions. Accordingly, selection of any annuity or other
distribution option described in the Contract that does not satisfy the
requirements of this Section 9 shall not be permitted.
(a) If the Owner dies before distribution of his or her interest in the
Contract has begun in accordance with paragraph 8(a) above, the entire
interest shall be distributed by December 31 of the fifth calendar
year that follows the Owner's Year of Death, except to the extent that
paragraph 9(c) or (d) below applies.
(b) If the Owner dies after distribution of the Owner's interest in the
Contract has begun in accordance with paragraph 8(a) above but before
the Owner's entire interest has been distributed, the remaining
interest shall be distributed at least as rapidly as under the method
of distribution being used immediately prior to the Owner's death,
except to the extent that paragraph 9(c) or (d) below applies. To the
extent that the Contract has no annuity payout option in effect and no
Measuring Designated Beneficiary as of the Applicable Designation Date
(and paragraph (9)(c) and (d) do not apply), then the Applicable
Distribution Period shall be determined by the Owner's remaining Life
Expectancy, using the Owner's age as of the Owner's birthday in the
Owner's Year of Death. For Distribution Years after the Owner's Year
of Death such Applicable Distribution Period is reduced by one year
for each calendar year that has elapsed since the Owner's Year of
Death.
(c) If the Surviving Spouse is the sole Designated Beneficiary under the
Contract (taking Separate Shares into account) as of the Applicable
Designation Date, then -
(i) If no irrevocable written election to the contrary has been filed
with PL&A by the deceased Owner or the Surviving Spouse prior to
the Spouse's Continuation Election Date, the Contract shall
continue in the name of the deceased Owner, and RMDs must begin
by the Spouse's Required Beginning Date and be made in accordance
with Section 8 above. For these purposes, the Applicable
Distribution Period for each Distribution Year after the Owner's
Year of Death -
(1) Is measured by the Surviving Spouse's remaining Life
Expectancy, recalculated annually through the Spouse's Year
of Death, and
(2) For a Distribution Year after the Spouse's Year of Death, is
measured by the Surviving Spouse's remaining Life Expectancy
as of the Surviving Spouse's birthday in the Spouse's Year
of Death, reduced by one year for each calendar year that
has elapsed since the calendar year next following the
Spouse's Year of Death.
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However, if the Owner dies on or after the Required
Beginning Date, such Applicable Distribution Period shall
not be shorter than the Applicable Distribution Period
measured by using the Owner's remaining Life Expectancy in
accordance with paragraph 9(b) above and Reg. (ss)
1.401(a)(9)-5, Q&A-5(a)(1). If the Surviving Spouse dies
before the Spouse's Required Beginning Date for such a
continued Contract, then the Surviving Spouse shall be
treated as the deceased Owner for purposes of this Section 9
(except that any surviving spouse of such a deceased
Surviving Spouse cannot continue the Contract further under
this subparagraph (i) as a Surviving Spouse). Any Surviving
Spouse may arrange to have any portion (or all) of any RMD
that is distributable with respect to such spouse's interest
in the Contract distributed from another Non Xxxx XXX
formerly owned by the deceased Owner for which such spouse
is also a designated beneficiary (rather than from the
Contract) in accordance with Reg. (ss) 1.408-8, Q&A-9.
(ii) The Surviving Spouse may elect at any time to treat the entire
remaining interest in the Contract as an IRA of such Surviving
Spouse, if such Surviving Spouse has an unlimited right to
withdraw amounts from the Contract and is the sole beneficiary of
the Contract, within the meaning of Reg. (ss) 1.408-8, Q&A-5(a).
Such an eligible Surviving Spouse shall make such an election by
a written request to PL&A to redesignate such Surviving Spouse as
the Owner and Annuitant of the Contract. Such an eligible
Surviving Spouse shall be deemed to have made such an election if
either -
(1) Such Surviving Spouse makes any transfer, rollover or other
contribution of any amount for the benefit of such Surviving
Spouse into the Contract, or
(2) Such Surviving Spouse directs PL&A in writing to transfer or
rollover any part or all of the assets to which such
Surviving Spouse is entitled under the Contract to another
IRA owned by such Surviving Spouse or to another Plan for
the benefit of such Surviving Spouse, or
(3) Any RMD that is required to be distributed from the Contract
under this Section 9 or under Code Section 401(a)(9) (e.g.,
in the case of any amount rolled over or transferred into
the Contract from a Plan) is not distributed within the
appropriate time.
(iii) The Surviving Spouse may make an irrevocable election in writing
with PL&A by the Spouse's Continuation Election Date to have
such Surviving Spouse's entire interest under the Contract
distributed under another method offered by PL&A that qualifies
under Code Section 401(a)(9). In addition to any optional method
that qualifies under the 5-year rule in paragraph 9(a) above,
such optional methods include the following:
(1) Any annuity option that satisfies Reg. (ss) 1.401(a)(9)-5,
Q&A-1(e) and provides for periodic distributions that begin
no later than the Spouse's Required Beginning Date, or
(2) Any other method that provides for periodic distributions
that begin no later than the Spouse's Required Beginning
Date and do not extend beyond the Applicable Distribution
Period determined in accordance with subparagraph 9(c)(i)
above.
(d) If as of the Applicable Designation Date the Contract (taking any
Separate Shares into account) has at least one Designated Beneficiary
and no entity (e.g., a trust or estate) is treated under Reg. (ss)
1.401(a)(9)-4, Q&A-3 as a beneficiary under the Contract, then -
(i) To the extent that no irrevocable election to the contrary has
been filed with PL&A by the deceased Owner or any such Designated
Beneficiary by the DB Election Date (and no Surviving Spouse is
the sole Designated Beneficiary), then annual distributions of
the remaining interest in the Contract must be made over the
Applicable Distribution Period starting with the DB Required
Beginning Date. In that case, the RMD amount that must be
distributed each Distribution Year with respect to the Contract
shall be equal to the quotient obtained by dividing the account
balance for the Contract (as determined in accordance with
subparagraph 8(b)(i) above) by the Applicable Distribution
Period. For these purposes -
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(1) The Applicable Distribution Period for the Distribution Year
next following the Owner's Year of Death is determined by the
Measuring Designated Beneficiary's remaining Life Expectancy,
using such beneficiary's age as of such beneficiary's birthday
in such Distribution Year; and
(2) For a subsequent Distribution Year the Applicable Distribution
Period is reduced by one year for each calendar year that has
elapsed since the calendar year next following the Owner's
Year of Death.
However, if the Owner dies on or after the Required Beginning
Date, such Applicable Distribution Period shall not be shorter
than the Applicable Distribution Period measured by using the
Owner's remaining Life Expectancy in accordance with paragraph
9(b) above and Reg. (ss) 1.401(a)(9)-5, Q&A-5(a)(1). Such RMD must
be distributed no later than the DB Required Beginning Date, and
for each subsequent Distribution Year by December 31 thereof.
However, any Designated Beneficiary may arrange to have any
portion (or all) of such RMD (that is distributable with respect
to such beneficiary's interest in the Contract) distributed from
another Non Xxxx XXX formerly owned by such deceased Owner for
which such beneficiary is also a designated beneficiary (rather
than from the Contract) in accordance with Reg. (ss) 1.408-8,
Q&A-9.
(ii) Any such Designated Beneficiary may make an irrevocable election
in writing with PL&A by the DB Election Date to have such
Designated Beneficiary's entire interest under the Contract
distributed under another method offered by PL&A that qualifies
under Code Section 401(a)(9). In addition to any optional method
that qualifies under the 5-year rule in paragraph 9(a) above, such
optional methods include the following:
(1) Any annuity option that satisfies Reg. (ss) 1.401(a)(9)-5,
Q&A-1(e) and provides for periodic distributions that begin
no later than the DB Required Beginning Date, or
(2) Any other method that provides for periodic distributions that
begin no later than the DB Required Beginning Date and do not
extend beyond the Applicable Distribution Period determined in
accordance with subparagraph 9(d)(i) above.
(e) Any amount payable to a minor child of the Owner shall be treated as
if it is payable to the Surviving Spouse if the remainder of the
interest becomes payable to such spouse when such child reaches the
age of majority.
(f) Unless the Owner provides to the contrary in writing to PL&A, any
beneficiary of any interest under the Contract shall have an unlimited
right after the Notice Date, upon 30 days written notice to PL&A, to
withdraw any portion or all of such interest or to apply any such
amount to an annuity option that qualifies under Reg. (ss)
1.401(a)(9)-5, Q&A-1(e).
(g) If the Owner dies before the entire interest under the Contract has
been distributed, no additional cash Contributions or rollover
Contributions shall be allowed into the Contract, except where the
Surviving Spouse elects (or is deemed to elect) to convert the
Contract to be his or her own IRA, as specified above in this Section
9.
10. PL&A shall furnish annual calendar year reports concerning the status of
the Contract and such information concerning RMDs as is prescribed by the
IRS. If Contributions made on the Owner's behalf under the SIMPLE IRA Plan
maintained by the Owner's employer are received by PL&A directly from such
employer, PL&A will provide such employer with the summary description
required by Code Section 408(l)(2)(B).
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C. Tax Qualification Provisions
The Contract as amended by this rider is intended to qualify as part of a
tax-qualified individual retirement arrangement, plan or contract that
meets the requirements of Code Section 408(p) and any applicable
Regulations relating thereto. To that end, the provisions of this rider and
the Contract (including any other rider or endorsement) are to be
interpreted to ensure or maintain such tax qualification, despite any other
provision to the contrary. PL&A reserves the right to amend this rider to
comply with any future changes in the Code or any Regulations, rulings or
other published guidance under the Code, or to reflect any clarifications
that may be needed or are appropriate to maintain such tax qualification,
without consent (except for the states of Michigan, Pennsylvania, South
Carolina and Washington, where affirmative consent is required). PL&A shall
provide the Owner with a copy of any such amendment.
All other terms and conditions of your Contract remain unchanged.
PACIFIC LIFE & ANNUITY COMPANY
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer Secretary
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