Annuity Endorsement
Individual Retirement Annuity (IRA) Contracts
Maintained as a Xxxx XXX
For purposes of qualifying this Contract as an Individual Retirement Xxxxxxx
maintained as a Xxxx XXX under the Code, this annuity endorsement is made part
of the IRA Contract to which it is attached. It modifies certain provisions of
this Contract by adding the following provisions. All Contract provisions apply
except as described or modified in this endorsement. If there is any conflict
between Contract and these endorsement provisions, these endorsement provisions
take precedence.
We reserve the right to modify this endorsement to comply with future changes in
the Code and related regulations. We will obtain the approval of any regulatory
authority for the change and will provide you with a copy of such modified
endorsement.
Definitions
Code
The Internal Revenue Code of 1986, as amended, its regulations thereunder and/or
promulgations of the Internal Revenue Service, as applicable.
Contract
When used in this endorsement, Contract means the annuity contract or annuity
certificate.
Xxxx XXX
X Xxxx Individual Retirement Annuity described in Code Sections 408A and 408(b).
We agree to and reserve the right to modify this Contract to the extent
necessary to qualify this Contract as a Xxxx XXX, as described in Code Sections
408(A) and 408(b) as amended and all related regulations which are in effect
during the term of this Contract
General Provisions
This Contract is established for the exclusive benefit of the individual or his
or her beneficiaries.
Your interest is nonassignable, nonforfeitable and nontransferable. This
contract may not be sold, assigned, or pledged as collateral for a loan, or as
security for the performance of an obligation, or for any other purpose; except
that it may be transferred to your former spouse under a divorce decree or
written instrument incidental to such divorce. If such a transfer occurs, your
former spouse will become both the owner and annuitant.
Annual Reports
We will furnish annual calendar year reports concerning the status of the
annuity. We will also furnish information concerning minimum required
distributions applicable to this contract as prescribed by the Commissioner of
Internal Revenue. It will be mailed to your last known post office address.
Purchase Payments/Contributions
All purchase payments/contributions must be in cash. This Contract does not
require fixed purchase payments.
Maximum permissible annual contribution and restrictions on kinds of
contributions.
Except in the case of a qualified rollover contribution or a recharacterization
(as described below) the total of your contributions to all of your Xxxx IRAs
for a taxable year cannot exceed the lesser of your compensation or:
(i) If you are under age 50, $3000 for any taxable year beginning in 2002
through 2004, $4000 for any taxable year beginning in 2005 through
2007 and $5000 for any taxable year beginning in 2008 and years
thereafter.
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(ii) If you are age 50 or older, $3500 for any taxable year beginning in
2002 through 2004, $4500 for any taxable year beginning in 2005,
$5000 for any taxable year beginning in 2006 through 2007, and $6000
for any taxable year beginning in 2008 and years thereafter.
After 2008, the limits described above will be adjusted by the Secretary of the
Treasury for cost-of-living increases under Code Section 219(b)(5)(c). Such
adjustments will be in multiples of $500.
If you make regular contributions to both Xxxx and nonRoth IRAs for a taxable
year, the maximum regular contribution that can be made to all of your Xxxx IRAs
for that taxable year is reduced by the regular contributions made to your
nonRoth IRAs for the taxable year.
In addition, your maximum contribution amount is phased out ratably between
certain levels of modified adjusted gross income ("modified AGI"). Your IRA
disclosure statement describes these income limits.
Rollovers
(a) Conversions. A qualified rollover contribution (conversion) is a rollover
contribution that meets the requirements of Code Section 408(d)(3), except
the one-rollover-per-year rule of Section 408(d)(3)(B) does not apply if
the rollover contribution is from an IRA other than a Xxxx XXX. A qualified
rollover contribution (conversion) from a nonRoth IRA to this Xxxx XXX,
cannot be made for the year the amount is distributed from the nonRoth IRA,
if:
(i) you are married and file a separate return;
(ii) you are not married and have modified AGI in excess of $100,000;
(iii) you are married and together you and your spouse have modified AGI in
excess of $100,000;
(iv) your rollover contribution is from a SIMPLE IRA and the two year
restriction period has not been satisfied.
(b) SIMPLE IRA Restrictions. If you currently participate in a SIMPLE IRA plan,
your employer cannot make contributions (made pursuant to the terms of your
employer's SIMPLE IRA plan) to this Contract. Also, you cannot convert
funds attributable to contributions made by your employer under its SIMPLE
IRA plan prior to the expiration of the 2 year period beginning on the date
you first participated in your employer's SIMPLE IRA plan.
(c) Recharacterizations: A regular contribution to a nonRoth IRA may be
recharacterized pursuant to the rules in Section 1.408A-5 of the
regulations as a regular contribution to this IRA, subject to the annual
contribution limits.
Annuity Payment Plan Provisions
Change of Retirement Date
You may change the settlement date shown for this Contract. Tell us the new date
by written request. The maximum settlement date is the Contract anniversary on
or proceeding your 90th birthday. If you select a new settlement date, it must
be at least 30 days after we receive your written request at our corporate
office.
Annuity Payment Plans for Contract Owners
You can schedule receipt of irrevocable annuity payments according to one of the
plans (A through E) described in your Contract, or another plan agreed to by us,
provided:
(i) the plan selected provides for payments over your life or the lives
of you and your designated beneficiary and/or the plan selected
provides for a period certain not extending beyond your life
expectancy or the joint and last survivor expectancy of you and your
designated beneficiary;
(ii) payments are made in periodic payments at intervals of no longer than
1 year and must be either nonincreasing or they may increase only as
provided in Q&As 1 and 4 of Section 1.401(a)(9)-6T of the Temporary
Income Tax Regulations;
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(iii) the plan selected satisfies the incidental benefit requirements
specified in Q&A-2 of Section 1.401(a)(9)-6T; and
(iv) the first required payment must be the payment that is required for
one payment interval. The second payment need not be made until the
end of the next payment interval.
Required Distributions
No amount is required to be distributed from this Contract prior to your death.
However, if you commence irrevocable annuity payments according to one of the
plans (A through E) described in your Contract, then required distributions are
considered to commence on your annuity start date.
Distributions Upon Death
(a) If you have commenced irrevocable annuity payments according to one of the
plans (A through E) described in your Contract, upon your death, the
remaining portion of your interest will continue to be distributed under
the annuity payment plan chosen.
(b) If you have not commenced irrevocable annuity payments according to one of
the plans (A through E) described in your Contract, upon your death, in
lieu of receiving a lump sum, your designated beneficiary may receive
payments under one of the following options:
1. Annuity Payment Plan for Beneficiaries
Payments may be made under one of the irrevocable annuity payment plans (A
through E) described in your Contract, provided:
(i) your beneficiary elects the plan within 60 days after we receive all
administrative requirements, including due proof of death;
(ii) the plan provides payments over a period which does not exceed the
life or life expectancy of your beneficiary and/or the plan selected
provides for a period certain not extending beyond the life
expectancy of your beneficiary;
(iii) if your beneficiary is your surviving spouse, payments irrevocably
commence by the later of 12/31 of the year following the year of your
death or 12/31 of the year you would have attained age 70 1/2; and
(iv) if your beneficiary is someone other than your surviving spouse,
payments irrevocably commence no later than 12/31 of the year
following the year of your death.
2. Alternative Payment Plans
If, upon your death your beneficiary does not wish to elect one of the
irrevocable annuity payment plans (A through E) described in the Contract, in
lieu of distributing your entire interest in a lump sum, your designated
beneficiary may choose to receive payments according to an alternative plan as
agreed to by us provided:
(i) the beneficiary elects the plan within 60 days after we receive all
administrative requirements, including due proof of death;
(ii) if your sole designated beneficiary is your surviving spouse, your
entire interest will be distributed, starting by the end of the
calendar year following the calendar year of your death (or by the
end of the calendar year in which you would have attained age 70 1/2,
if later), over such spouse's life or life expectancy corresponding
to such spouse's age each year. If your surviving spouse dies before
required distributions commence to him or her, the remaining interest
will be distributed, starting by the end of the calendar year
following the calendar year of your spouse's death, over the spouse's
designated beneficiary's remaining life expectancy determined using
such beneficiary's age as of his or her birthday in the year
following the death of the spouse;
(iii) if your designated beneficiary is someone other than your surviving
spouse, your entire interest will be distributed, starting by the end
of the calendar year following the calendar year of your death, over
the remaining life expectancy of your designated beneficiary, with
such life expectancy determined using the age of your beneficiary as
of his or her birthday in the year following the year of your death
and reduced by 1 for each subsequent year;
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(iv) if there is no designated beneficiary, or if elected by your
designated beneficiary, your entire interest will be distributed by
the end of the calendar year containing the fifth anniversary of your
death (or of your spouse's death in the case of the surviving
spouse's death before distributions are required to begin);
(v) life expectancy of your beneficiary is determined using the Single
Life Table in Q&A-1 of Section 1.401(a)(9)-9 of the Income Tax
Regulations.
The "interest" in the IRA includes the amount of any outstanding rollover,
transfer and recharacterization under Q&As -7 and -8 of Section 1.408-8 of the
Income Tax Regulations and the actuarial value of any other benefits provided
under the IRA, such as guaranteed death benefits.
3. Sole Spouse Beneficiary Option
If your sole designated beneficiary is your surviving spouse, your spouse may
elect to treat this Contract as his or her own IRA and may choose an irrevocable
annuity payment plan option available to Contract owners. If your surviving
spouse dies after distributions commence to him or her in the form of one of the
annuity payment plans (A through E) described in the Contract, the remaining
interest will continue to be distributed under the annuity payment plan chosen.
An election to treat the Contract as his or her own will be deemed to have been
made if such surviving spouse makes a contribution to the IRA or fails to take
required distributions as a beneficiary.
Designating a Beneficiary
If the death benefit under this Contract becomes payable to your beneficiary,
your beneficiary shall have the right to name a beneficiary. Any such request
from your beneficiary must be made on a form satisfactory to us. Once the change
is received by us, it will take effect as of the date of your request, subject
to any action taken or payment made by us before the receipt.
Endorsement Effective Date
This endorsement is effective as of the date the Contract is issued or the date
the Contract is endorsed, whichever is later.
American Centurion Life Assurance Company
/s/ Xxxx X. Xxxxxxx
Secretary
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