Exhibit 99-B.4.1
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Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
000-000-0000
If you have questions about the Contract, call the
toll-free number shown above.
Group, Combination, Deferred Annuity Contract (Nonparticipating)
Aetna Life Insurance and Annuity Company (ALIAC), a stock company, will pay
benefits according to the terms and conditions set forth in this Contract. This
Contract is delivered in [YOUR STATE] and is subject to the laws of that
jurisdiction.
Please read this Contract carefully. It states ALIAC's contractual rights and
obligations as well as the rights and obligations of the Contract Holder and
Participants.
Specifications
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Plan
SPECIMEN
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Type of Plan
SPECIMEN
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Contract Holder
SPECIMEN
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Contract No.
SPECIMEN
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Contract Effective Date
SPECIMEN
Right to Cancel
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The Contract Holder may cancel this Contract within 10 calendar days of
receiving it by returning it to ALIAC at the address shown above, or to the
agent from whom it was purchased. Within seven calendar days of receiving the
cancellation request at its Home Office, ALIAC will return any Contributions
received, plus any increase, or minus any decrease in value, on the amount, if
any, allocated to the Separate Account.
Signed at the Home Office on the Effective Date.
/s/ Xxxxxx X. XxXxxxxxx /s/ Xxxx Xxxxxxx
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President Secretary
All payments and values provided by the group Contract, when based on the
investment experience of the Separate Account, are variable and are not
guaranteed as to fixed dollar amount. Amounts allocated to the Guaranteed
Accumulation Account, if withdrawn before a guaranteed term maturity date, may
be subject to a market value adjustment. The market value adjustment may result
in an increase, or a decrease, in the Individual Account value.
G-CDA-99
Table of Contents
Page
Contract Schedule I. Accumulation Phase S I - 1
Contract Schedule II. Annuity Phase S II - 1
Definitions 1
Section 1. General Contract Provisions 3
1.01 Entire Contract .......................................... 3
1.02 Nonparticipating Contract ................................ 3
1.03 Control of Contract ...................................... 3
1.04 Certificate .............................................. 3
1.05 Incontestability ......................................... 3
1.06 Grace Period ............................................. 3
1.07 Change of Contract ....................................... 3
1.08 Payments ................................................. 4
1.09 Deferral of Payment ...................................... 4
1.10 Proof of Age ............................................. 4
1.11 Evidence of Survival ..................................... 4
1.12 Misstatements and Adjustments ............................ 5
1.13 Reports .................................................. 5
1.14 State Laws ............................................... 5
1.15 Claims of Creditors ...................................... 5
1.16 Maintenance Fee .......................................... 5
1.17 Charges for Additional Services .......................... 5
1.18 Charges Subject to Change ................................ 5
Part I. Accumulation Phase 6
Section 2. Contributions and Individual Account Value 6
2.01 Contributions ............................................ 6
2.02 Premium Tax .............................................. 6
2.03 Individual Account ....................................... 6
2.04 Experience Credit ........................................ 6
2.05 Individual Account Value ................................. 6
Section 3. Separate Account 7
3.01 General .................................................. 7
3.02 Funds Available .......................................... 7
3.03 Change or Substitution of Funds .......................... 7
3.04 Accumulation Units ....................................... 7
3.05 Accumulation Unit Value .................................. 7
3.06 Net Investment Factor .................................... 7
3.07 Charges to the Separate Account .......................... 8
3.08 Fund Transfers ........................................... 8
3.09 Withdrawals from the Separate Account .................... 8
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Page
Section 4. Aetna GET Fund 8
4.01 GET Fund Guarantee Period ............................... 8
4.02 GET Fund Offering Period ................................ 8
4.03 GET Fund Guarantee ...................................... 9
4.04 GET Fund Maturity Date .................................. 9
4.05 Transfers or Withdrawals from the GET Fund .............. 9
Section 5. Fixed Account 9
5.01 Fixed Account Minimum Guaranteed Interest Rate .......... 9
5.02 Transfers from the Fixed Account ........................10
5.03 Withdrawals from the Fixed Account ......................10
Section 6. Fixed Plus Account 10
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate .....10
6.02 Transfers from the Fixed Plus Account ...................10
6.03 Partial Withdrawals from the Fixed Plus Account .........11
6.04 Full Withdrawal of the Total Amount in the Fixed
Plus Account ............................................11
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision ..11
Section 7. Guaranteed Accumulation Account (GAA) 11
7.01 Nonunitized Separate Account ............................11
7.02 GAA Minimum Guaranteed Interest Rate ....................12
7.03 Deposit Period ..........................................12
7.04 Guaranteed Term .........................................12
7.05 Guaranteed Term Groups ..................................12
7.06 Maturity Date, Maturity Value and Reinvestment ..........12
7.07 Transfers and Withdrawals from the GAA ..................12
7.08 Application of the Market Value Adjustment ..............13
7.09 Market Value Adjustment (MVA) ...........................13
Section 8. Transfers, Withdrawals and Distributions 14
8.01 Transfers ...............................................14
8.02 Withdrawals .............................................14
8.03 Withdrawal Restrictions Under the Code ..................14
8.04 Withdrawal Charge .......................................15
8.05 Waiver of Withdrawal Charge .............................15
8.06 Reinstatement ...........................................15
8.07 Required Distributions ..................................15
8.08 Systematic Distribution Options (SDOs) ..................16
8.09 Individual Account Termination ..........................16
Section 9. Loans 16
9.01 Loan Availability .......................................16
Section 10. Death Benefit During the Xxxxxxxxxxxx Xxxxx 00
10.01 Death Benefit ...........................................16
10.02 Contract Beneficiary ....................................16
10.03 Distribution of Death Benefit ...........................16
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Page
Part II. Xxxxxxx Xxxxx 00
Section 11. General Provisions 17
11.01 Election .................................................17
11.02 Change of Annuity Provisions .............................17
11.03 Annuity Options ..........................................17
11.04 Mortality Table ..........................................18
11.05 Payments .................................................18
11.06 Investment Options .......................................18
11.07 Fixed Annuity Minimum Guaranteed Interest Rate ...........19
11.08 Variable Annuity Assumed Annual Net Return Rate Election .19
11.09 Variable Annuity Transfers ...............................19
11.10 Fund Annuity Units .......................................19
11.11 Fund Annuity Unit Value ..................................19
11.12 Fund Annuity Net Return Factor ...........................20
11.13 Death Benefit During the Annuity Phase ...................20
Annuity Tables 21
iii
Contract Schedule I
Accumulation Phase
Control of Contract (see 1.03)
[The Contract Holder controls this Contract.
By notifying us in writing, the Contract Holder may allow
Participants to choose Investment Options for an Individual
Account. The Contract Holder may, however, retain the right to
choose Investment Options for employer Contributions. Unless
otherwise provided by the Plan, we will make payments only at the
written direction of the Contract Holder and a Participant. Unless
otherwise specified by the Plan, we will make an inservice
transfer under Internal Revenue Service Revenue Ruling 90-24 only
at the written direction of the Contract Holder and a Participant
and will make checks payable to the acquiring investment
provider(s).
The Contract and Individual Accounts are nontransferable and
nonassignable except to us in the event of a loan (if allowed
under the Contract) or in the event of a qualified domestic
relations order as allowed under the Retirement Equity Xxx xx 0000
(XXX).
Participants have a nonforfeitable right to the value of employer
Contributions made to their Individual Accounts subject to any
Plan vesting limits as determined by the Contract Holder.
Participants have a nonforfeitable right to the value of employee
Contributions made to their Individual Accounts as provided by
Code Section 403(b) and subject to the terms of the Plan.
The Contract Holder must notify us in writing if the Plan is, or
becomes, subject to the Employee Retirement Income Security Act of
1974 (ERISA) and/or related law or regulations including REA. We
will rely on the Contract Holder's determination and
representation of the applicability of such laws. If the Plan is
subject to ERISA, before we will make a distribution from an
Individual Account, the Contract Holder must certify in writing
that all applicable REA requirements have been met and that the
distribution complies with the Plan.]
Maximum Maintenance Fee (see 1.16)
The maintenance fee for each Individual Account will never be more
than [$30].
Contribution Limits (see 2.01)
[Each year, Contributions to the Contract are limited to the
lesser of:
(a) The maximum exclusion allowance (MEA) limit under Code
Section 403(b); or
(b) The amount set forth in Code Section 415, generally, 25% of
compensation up to $30,000.
In addition, salary reduction Contributions as defined in Code
Section 402(g) may not exceed $10,000, or such larger amount as
adjusted by the Secretary of the Treasury, unless the alternative
limitation under Code Section 402(g)(8) applies.]
Maximum Daily Charges to the Separate Account (see 3.07)
Charges to the Separate Account will never be more than the
following:
Mortality and Expense Risk Charge: [1.50%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
Aetna GET Fund Guarantee Charge (if applicable): [0.75%] (annual basis)
S I - 1
Fixed Interest Options Available (see Section 5, Section 6, and Section 7)
[Fixed Account
- Fixed Account is available for transferred amounts only (no
ongoing Contributions).
Fixed Plus Account
Guaranteed Accumulation Account]
Fixed Account Minimum Guaranteed Interest Rate (see 5.01)
The interest rate will never be less than [3%] (annual basis).
Fixed Account Annual Transfer Limit (see 5.02)
[10%.]
Fixed Plus Account Minimum Guaranteed Interest Rate (see 6.01)
The interest rate will never be less than [3%] (annual basis)
Fixed Plus Annual Account Transfer and Partial Withdrawal Limit (see 6.02 and
6.03)
[20%]
Waiver of Fixed Plus Account Transfer Limit (see 6.05)
[$2,000]
Waiver of Fixed Plus Account Full Withdrawal Provision (see 6.05)
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
made:
[(a) To a Participant who has attained age 59 1/2 and, if
applicable, has completed nine Contribution periods;
(b) When a Participant is separated from service, and when:
(1) Separation from service is documented in a form
acceptable to us;
(2) The amount is paid directly to the Participant; and
(3) When the amount paid for all withdrawals due to
separation from service during the previous
[12-months] does not exceed [20%] of the average
value of all Individual Accounts under the Contract
during that period.
(c) Due to financial hardship as defined in the Code, and when:
(1) The financial hardship is certified by the employer
if applicable;
(2) The amount is paid directly to the Participant; and
(3) When the amount paid for all withdrawals due to
financial hardship during the previous [12-months]
does not exceed [20%] of the average value of all
Individual Accounts under the Contract during that
period.
(d) When the amount in the Fixed Plus Account is [$2,000] or
less (or as otherwise required by the Plan for a lump-sum
cash-out without Participant consent) and during the
previous [12] months no amounts have been withdrawn,
transferred, taken as a loan (if allowed under the
Contract), or used to purchase Annuity payments;
(e) Due to a Participant's death before Annuity payments begin
and paid within six months of the Participant's death;
(f) As provided in Section 8.09; or
(g) To purchase Annuity payments on a life-contingent basis or
payments for a stated period on a fixed-only basis.]
S I - 2
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 7.02)
The interest rate will never be less than [3%] (annual basis).
Withdrawal Restrictions Under the Code (see 8.03)
[Limitations apply to partial and full withdrawals of the
"restricted amount" from this Contract as required by Code Section
403(b)(11). The restricted amount is the sum of:
(1) Contributions attributable to a Participant's salary
reduction Contributions made on and after January 1, 1989;
plus
(2) The net increase, if any, in the Individual Account value
after December 31, 1988 attributable to investment gains
and losses and credited interest.
The "restricted amount" may be partially or fully withdrawn only
if one or more of the following conditions are met. The
Participant has:
(a) Separated from service;
(b) Attained age 59 1/2;
(c) Died;
(d) Become disabled, as defined by the Code;
(e) Experienced financial hardship as defined by the Code. The
amount available for financial hardship is limited to the
lesser of the amount necessary to satisfy the need or
Contributions attributable to salary reduction
Contributions made on or after January 1, 1989; or
(f) Met other circumstances as otherwise allowed by federal
law, regulations or rulings.
No limitations apply to salary reduction Contributions made and
earnings credited to such Contributions made on or before December
31, 1988.
In addition, any portion of an Individual Account representing
amounts transferred from a Code Section 403(b)(7) custodial
account will be subject to the restrictions set forth in the
Code.]
Withdrawal Charge (see 8.04)
For each withdrawal from an Individual Account, we may deduct a
withdrawal charge. This charge is a percentage of the amount
withdrawn. The withdrawal charge is as follows.
[Number of Years Since Individual
Account Established] Withdrawal Charge
[Fewer than 5 5%
5 or more, but fewer than 7 4%
7 or more, but fewer than 9 3%
9 or more, but fewer than 10 2%
10 or more 0%]
The withdrawal charge will never exceed [8.5%] of total
Contributions, or the maximum permitted by National Association of
Securities Dealers, Inc. (NASD) rules.
S I - 3
Waiver of Withdrawal Charge (see 8.05)
The withdrawal charge does not apply when the withdrawal is:
[(a) Used to purchase Annuity payments;
(b) Used to purchase a single premium immediate Annuity or
individual retirement Annuity issued by ALIAC or one of its
affiliates, provided that the right to cancel under the new
Contract is not exercised. We will treat exercise of the
right to cancel as a reinstatement and any subsequent
withdrawal may then be subject to the withdrawal charge
applicable on the date of the withdrawal;
(c) Under a systematic distribution option (see 8.08);
(d) In an amount equal to up to [10%] of the Individual Account
value when the withdrawal is the first partial withdrawal
in a calendar year and is made to a Participant who is at
least age 59 1/2 and not older than age 70 1/2 (not
available when a systematic distribution option is in
effect);
(e) When we terminate an Individual Account as provided in
8.09;
(f) When the Individual Account value is [$3,500] or less and
during the previous 12 months no amounts have been
withdrawn, transferred, taken as a loan (if allowed under
the Contract), or used to purchase Annuity payments;
(g) Made by a Participant who has attained age 59 1/2 and, if
applicable, has completed nine Contribution periods;
(h) Made to a Participant who is separated from service as
documented in a form acceptable to us;
(i) Due to financial hardship as defined in the Code; or
(j) Due to a Participant's death before Annuity payments
begin.]
Required Distributions (see 8.07)
[Generally, for Contributions made and earnings credited after
December 31, 1986, distribution must begin by April 1 of the
calendar year following the later of (1) the calendar year in
which a Participant attains age 70 1/2, or (2) retires. For
Individual Account values as of December 31, 1986, distribution
must begin by the last day of the year in which a Participant
attains age 75 or retires, whichever is
later.
In addition, any portion of an Individual Account representing
amounts transferred from a Code Section 403(b)(7) custodial
account will be subject to the restrictions set forth in the Code.
The entire Individual Account value must be distributed, or begin
to be distributed, over the life or life expectancy of a
Participant, or lives or life expectancies of a Participant and a
beneficiary.]
Individual Account Termination Amount (see 8.09)
[$10,000]
Contract Beneficiary (see 10.02)
[The Contract Holder is the Contract beneficiary. A Participant
may designate a beneficiary under the Plan (the Plan
beneficiary).]
S I - 4
Contract Schedule II
Annuity Phase
Payment Period (see 11.03)
The period for which we will guarantee Annuity payments must be at
least [five] years and no more than [30] years.
Mortality Table (see 11.04)
[Society of Actuaries' 1983 Table a.]
Maximum Number of Funds (see 11.07)
The maximum number of Funds is [five].
Fixed Annuity Minimum Guaranteed Interest Rate (see 11.08)
[3%] (annual basis).
Maximum Daily Charges to the Separate Account (see 11.12)
Charges to the Separate Account will never be more than the
following:
Mortality and Expense Risk Charge: [1.25%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
Number of Annual Transfers Among Funds (see 11.09)
Each calendar year, we allow [five] transfers among funds.
S II - 1
Definitions
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Accumulation Phase
The time between an Individual Account Effective Date and the date on which the
entire Individual Account value is used to purchase Annuity payments, or
otherwise distributed.
Aetna GET Fund (GET Fund)
The Aetna GET Fund is an Investment Option which may be available during the
Accumulation Phase. The GET Fund operates as a series offering. Each series is a
separate Fund.
Aetna Life Insurance and Annuity Company (ALIAC)
Aetna Life Insurance and Annuity Company ("we," and "our," and "us" refer to
ALIAC).
Annuitant
The person whose life expectancy determines the amount and/or duration of the
payments under a life-contingent Annuity option.
Annuity
Payment of an income:
(a) For a stated period;
(b) For the life of one or two people; or
(c) Some combination of (a) and (b).
A fixed Annuity is one in which the payment amount does not vary. A variable
Annuity is one in which the payment amount may vary based on the net investment
results of the Funds.
Annuity Phase
The time during which we make Annuity payments.
Business Day
Each day our Home Office is open for business.
Code
The Internal Revenue Code of 1986, as it is amended from time to time.
Contract
This agreement between ALIAC and the Contract Holder.
Contract Holder
The entity, or person, named in the specifications section on the face page, to
which the Contract is issued.
Contribution
The payment made to us during the Accumulation Phase. The Contribution may be
reduced by any applicable premium tax due.
Effective Date
The date, shown in the specifications section on the face page, on which we
issue the Contract or establish an Individual Account.
Fixed Account
A Fixed Interest Option. The Fixed Account is an obligation of our General
Account.
Fixed Interest Options
Investment options, including the Fixed Account, the Fixed Plus Account and the
Guaranteed Accumulation Account that credit interest. The Fixed Interest Options
available during the Accumulation Phase are shown on Contract Schedule I under
Fixed Interest Options Available.
Fixed Plus Account
A Fixed Interest Option. Limitations apply to withdrawals from the Fixed Plus
Account. The Fixed Plus Account is an obligation of our General Account.
1
Fund
A variable Investment Option available under this Contract. The Funds are
open-end, registered investment management companies (mutual funds) in which the
Separate Account invests.
General Account
The account that holds our assets other than those held in the Separate Account
or Nonunitized Separate Account.
Guaranteed Accumulation Account (GAA)
A Fixed Interest Option that may be available during the Accumulation Phase.
Under this option, we guarantee specified rates of interest for specified
periods of time. Amounts allocated to the Guaranteed Accumulation Account are
held in the Nonunitized Separate Account.
Good Order
Instructions that are complete and clear enough to allow us to act without
exercising discretion.
Home Office
Our main office located at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
Individual Account
An account, or accounts (including, if applicable, employer and employee
accounts) established for each Participant to maintain a record of transactions
and the value of Contributions as invested.
Investment Options
The Funds and Fixed Interest Options available under this Contract.
Maturity Date
The last day of a GAA guaranteed term or the last day of the guarantee period of
an Aetna GET Fund series.
Nonunitized Separate Account
A separate account that holds assets allocated to the Guaranteed Accumulation
Account.
Participant
A person who is covered under the retirement Plan or program for which this
Contract is issued and who has an interest in this Contract.
Plan
The retirement plan or program for which this Contract is issued.
Premium Tax
Any tax assessed by any governmental entity on Contributions or amounts used to
purchase Annuity payments.
Separate Account
An account that buys and holds shares of the Funds through its subaccounts.
Valuation Date
The date and time at which accumulation unit values and Annuity unit values are
calculated. Currently, this calculation is made after the close of business of
the New York Stock Exchange on any normal business day, Monday through Friday,
the New York Stock Exchange is open.
2
Section 1. General Contract Provisions
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1.01 Entire Contract
The entire Contract consists of this document and any endorsements
incorporated.
The Plan, if applicable, is not part of the Contract and ALIAC is
not bound by its terms.
1.02 Nonparticipating Contract
This Contract is nonparticipating. The Contract Holder, a
Participant or a Contract beneficiary have no right to share in
our earnings.
1.03 Control of Contract
Control of the Contract is as shown on Contract Schedule I under
Control of Contract.
1.04 Certificate
Any certificate provided to a Participant summarizes Contract
provisions; it is for information only and is not part of the
Contract. We will provide certificates as required by state law in
the state where the Contract is delivered and as allowed under the
Plan.
1.05 Incontestability
We will not cancel this Contract because of any error of fact.
1.06 Grace Period
Except as provided in 8.09, this Contract and all Individual
Accounts will remain in effect even if Contributions are not
continued.
1.07 Change of Contract
Only an ALIAC officer at the level of Vice President or higher, or
an officer with written delegation of authority from a Vice
President or higher officer, may change the terms of this
Contract. No other ALIAC officer, employee, agent or
representative can change this Contract.
Except as noted below, this Contract may be changed at any time by
written mutual agreement between the Contract Holder and ALIAC.
For changes we initiate requiring Contract Holder consent, we
notify the Contract Holder 60 calendar days in advance of the
change and consider that the Contract Holder has agreed to the
change unless we receive written notice that the Contract Holder
does not agree to the change at least 30 calendar days before the
date the change becomes effective.
If we propose a change requiring Contract Holder consent and the
Contract Holder does not agree to the change, we have the right to
not establish new Individual Accounts and to stop accepting
Contributions to existing Individual Accounts.
We will not reduce the minimum guaranteed interest rate for the
Fixed Account and the Fixed Plus Account.
We have the right to change the following without Contract Holder
consent:
(a) Net Investment Factor (see 3.06) We may change the net
investment factor by notifying the Contract Holder in
writing at least 30 calendar days before the change becomes
effective. If we do this, the change will apply only to
Individual Accounts established, and Contributions
received, after the date the change becomes effective.
3
(b) Guaranteed Accumulation Account (GAA) market value
adjustment (see 7.09) We may change the GAA market value
adjustment by notifying the Contract Holder in writing at
least 90 calendar days before the change becomes effective.
If we do this, the change will apply only to guaranteed
terms offered in deposit periods after the date the change
becomes effective.
(c) Systematic Distribution Options (see 8.08) We may change
systematic distribution options by notifying the Contract
Holder in writing at least 30 calendar days before the
change becomes effective. If we do this, the change will
not apply to Participants or beneficiaries receiving
payments under an option before the date the change becomes
effective.
(d) Annuity Options (see 11.03) We may change Annuity options
by notifying the Contract Holder in writing at least 30
calendar days before the date the change becomes effective.
If we do this, the change will not take effect until at
least 12 months after the Effective Date of the Contract,
or until at least 12 months after any previous change. Any
change will not apply to Participants or beneficiaries
receiving Annuity payments before the date the change
becomes effective.
(e) Mortality Table (see 11.04) We may change the mortality
table by notifying the Contract Holder in writing at least
30 calendar days before the date the change becomes
effective. If we do this, the new table will not apply to
Individual Accounts established before the date the change
becomes effective.
In addition, we may change this Contract as required to comply
with state and federal law without Contract Holder consent by
notifying the Contract Holder at least 30 calendar days before the
date the change becomes effective.
Any unilateral change will not apply to Individual Accounts
established before the date the change becomes effective, but will
apply to Individual Accounts established on or after the date the
change becomes effective. If we make a unilateral change, the
Contract Holder or Participants, as applicable, are permitted to
terminate participation in the Contract before the date the change
becomes effective under the terms of the Contract in effect prior
to the date the change becomes effective.
As required by law, we will make any change of Contract by
endorsement, which may be subject to regulatory approval in the
state where the Contract is delivered.
1.08 Payments
We make payments as directed by the Contract Holder or a
Participant, as applicable. Payment requests must be in writing or
as we otherwise allow in our administrative practice. We determine
the amount of any payment based on the Individual Account value as
of the next Valuation Date following our receipt of a payment
request in Good Order at our Home Office. Generally, we make
payments within seven calendar days.
1.09 Deferral of Payment
We may defer payment up to a period of six months or as otherwise
provided by state and/or federal law.
1.10 Proof of Age
If a life-contingent Annuity option is elected, we may require
proof of the age of an Annuitant.
1.11 Evidence of Survival
We may require proof that any Annuitant under a life-contingent
Annuity option is living.
4
1.12 Misstatements and Adjustments
If we learn that the age of any Annuitant or second Annuitant is
misstated, we will use the correct age to adjust payments. We
reserve the right to obtain reimbursement, or to adjust future
payments for any amount we overpaid. We will pay the amount of any
underpayment.
1.13 Reports
Each calendar year we provide the Contract Holder or a
Participant, as applicable, with a report of the Individual
Account value. We also provide an annual report for the Separate
Account.
1.14 State Laws
This Contract complies with the laws of the state in which it is
delivered. Any cash, death or Annuity payments are equal to or
greater than the minimum required. To determine legal reserve
valuation, we use Annuity tables as required by law; such tables
may be different from those we use to determine Annuity payments.
1.15 Claims of Creditors
Individual Accounts are not subject to the claim of any creditor
of the Contract Holder, a Participant or a beneficiary, except to
the extent permitted by law.
1.16 Maintenance Fee
We may deduct an annual maintenance fee during the Accumulation
Phase.
The amount of the maintenance fee, if any, for this Contract will
never be more than the amount shown on Contract Schedule I under
Maximum Maintenance Fee.
The fee, if any, is deducted proportionately from each Investment
Option in which the Individual Account is invested on the
anniversary of the Individual Account Effective Date. The fee is
also deducted if the entire Individual Account value is withdrawn.
If a Participant has more than one Individual Account, we may
deduct the fee proportionately from all Individual Accounts. We
may eliminate the fee for an Individual Account established with
one lump-sum Contribution.
1.17 Charges for Additional Services
At the request of the Contract Holder, we, or our authorized
representatives, may provide administrative services to the Plan.
We reserve the right to charge for such services.
1.18 Charges Subject to Change
The maintenance fee (see 1.16) and charges to the Separate Account
(see 3.07) may vary (increase, decrease, or be eliminated) based
on the total assets held in all Individual Accounts under the
Contract. In determining total assets, we may aggregate Individual
Accounts established under different ALIAC Contracts. The
aggregate amount is equal to the sum of assets in all Individual
Accounts under this Contract, plus the value of Individual
Accounts under other ALIAC Contracts of the same class issued to
the Contract Holder. We may determine the amount of the
maintenance fee and/or charges to the Separate Account based on
total assets on an annual basis. We will determine initial charges
based on our estimate of the amount that will be allocated to the
Contract during a period mutually agreed upon by the Contract
Holder and us.
5
Part I. Accumulation Phase
Section 2. Contributions and Individual Account Value
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2.01 Contributions
We allocate Contributions in whole percentages among the
Investment Options available as directed by the Contract Holder or
a Participant, as applicable. Changes in future Contribution
allocation may be made at any time without charge. The Contract
Holder or a Participant, as applicable, may also establish an
Individual Account with one lump-sum Contribution.
We reserve the right to establish minimum Contribution amounts and
to refuse to accept any Contribution.
Contributions to Individual Accounts may be limited as provided in
the Code. The limits, if any, are shown on Contract Schedule I
under Contribution Limits.
2.02 Premium Tax
We pay any applicable premium tax when it is due. We will deduct
the amount of any applicable premium tax from the Individual
Account value no earlier than when there is a tax liability. We
reserve the right to deduct any premium tax due before a
Contribution is allocated to an Individual Account.
2.03 Individual Account
We will establish an Individual Account for each Participant.
If required, we will provide accounts that distinguish between
employer and employee Contributions for each Participant.
2.04 Experience Credit
We may apply experience credits (investment, administrative,
mortality or other) under this Contract and may apply such credits
as:
(a) A reduction in the maintenance fee;
(b) A reduction in the mortality and expense risk charge to the
Separate Account;
(c) A reduction in the administrative charge to the Separate
Account; and
(d) An increase in a Fixed Interest Option interest rate.
We will apply experience credits at our sole discretion as we deem
appropriate for the class of contracts to which the Contract is
issued.
2.05 Individual Account Value
As of the most recent Valuation Date, the Individual Account value
is equal to the total of all Contributions:
(a) Plus any interest added on the amount, if any, allocated to
a Fixed Interest Option(s),
(b) Plus or minus the investment experience on the amount, if
any, held in the Separate Account;
(c) Minus any applicable maintenance fees, any amounts
withdrawn, or used to purchase Annuity payments, or any
applicable premium tax; and
(d) Minus any applicable fees or charges deducted.
6
Section 3. Separate Account
================================================================================
3.01 General
The Separate Account, established under Title 38a, Section 38a-433
of the Connecticut General Statutes, buys and holds shares of the
Funds available. The Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940.
We own the assets held in the Separate Account; we are not a
trustee of those assets. Income, gains or losses, realized or
unrealized, are credited to or charged against the Separate
Account without regard to our other income, gains or losses.
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
3.02 Funds Available
We reserve the right to limit the number of Funds in which an
Individual Account may be invested, at one time or cumulatively,
during the Accumulation Phase and/or Annuity Phase.
3.03 Change or Substitution of Funds
We reserve the right to stop offering any Fund or to add Funds. We
may substitute shares of a Fund for shares of another Fund. We
will provide the Contract Holder with reasonable advance notice of
any elimination, addition or substitution of a Fund. If the Plan
is subject to ERISA, we will seek Contract Holder consent in
advance of any Fund substitution. Consent will be deemed given
unless, following notice of substitution and within a prescribed
time period, the Contract Holder notifies us in writing that it
does not consent and provides us with alternative investment
instructions for the shares that would otherwise be affected by
the substitution.
3.04 Accumulation Units
Each Contribution allocated to one or more of the Funds is
credited to an Individual Account as accumulation units. The
number of accumulation units is calculated by dividing the amount
of the Contribution allocated to the Fund by the accumulation unit
value (see 3.05) as of the next Valuation Date following our
receipt of the Contribution in Good Order at our Home Office.
3.05 Accumulation Unit Value
The value of each accumulation unit for any Fund for each
Valuation Date is computed by multiplying the net investment
factor (see 3.06) by the accumulation unit value for such
Valuation Date.
Accumulation unit values may increase or decrease from Valuation
Date to Valuation Date.
3.06 Net Investment Factor
The net investment factor is used to compute the accumulation unit
value for any Fund.
For each Valuation Date, for each Fund, the net investment factor
is equal to 1.0000000, plus the net return rate.
The net return rate equals:
[a - b - c]
------------- - e - f
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
7
d is the total value of the accumulation units and Annuity
units of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule I under Daily Charges to the Separate Account; and
f is if applicable, a fee for the GET Fund guarantee, which
is deducted daily during the guarantee period. The fee,
which is determined before the beginning of each offering
period (see 4.02), is shown on Contract Schedule I under
Maximum Daily Charges to the Separate Account.
The net return rate may be greater or less than zero percent.
3.07 Charges to the Separate Account
During the Accumulation Phase, we may deduct a mortality and
expense risk charge from the Individual Account value invested in
the Separate Account. In addition, we reserve the right to impose
an administrative charge.
The charges to the Separate Account are shown on Contract Schedule
I under Maximum Daily Charges to the Separate Account and are
deducted daily.
3.08 Fund Transfers
During the Accumulation Phase, any portion or all of the
Individual Account value held in a Fund may be transferred to any
other Fund or any available Fixed Interest Option. The Individual
Account value will be based on the Fund's accumulation unit value
next determined after we receive a transfer request in Good Order.
3.09 Withdrawals from the Separate Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 8.02) from the Funds, a withdrawal
charge may apply (see 8.04).
Section 4. Aetna GET Fund (GET Fund)
================================================================================
The following provisions apply if the GET Fund is available.
4.01 GET Fund Guarantee Period
For each GET Fund series, the period for which the GET Fund
guarantee applies. The guarantee period ends on the Maturity Date.
4.02 GET Fund Offering Period
The period, usually from one to three months, during which the
Contract Holder or a Participant, as applicable, may transfer or
allocate amounts to a GET Fund series. Each GET Fund series has a
specific offering period. Amounts transferred or allocated prior
to the date on which the guarantee period begins are invested in
money market instruments.
We will specify a minimum total asset amount required at the end
of an offering period to offer a GET Fund series. If the minimum
is not achieved, we reserve the right not to begin the guarantee
period. If a GET Fund series is not begun, we will mail a notice
to all Contract Holders or Participants, as applicable, who have
made allocations to that GET Fund series no less than 15 calendar
days after the end of the offering period. The Contract Holder or
a Participant, as applicable, then has 45 calendar days from the
end of the offering period to reallocate the amount allocated to
the GET Fund to any other available Investment Options. During
this time, GET Fund assets are invested in money market
instruments. If the Contract Holder or a Participant, as
applicable, makes no election by the end of the 45-day period, at
the next Valuation Date, we will allocate the amount in the
terminated GET Fund series to the money market fund available
under the Contract.
8
We reserve the right to specify a maximum total asset amount for a
GET Fund series. If the maximum is achieved, we reserve the right
to set a date on which we will stop accepting allocations for that
GET Fund series. We will announce the date on which we will stop
accepting transfers and allocations 10 calendar days prior to that
date.
4.03 GET Fund Guarantee
On the Maturity Date of each GET Fund series, the GET Fund
accumulation unit value for that series will not be less than the
GET Fund accumulation unit value determined at the close of
business on the last day of the offering period. If necessary to
offset any shortfall in the GET Fund accumulation unit value, we
will transfer funds from our General Account to the Separate
Account. The GET Fund guarantee does not apply to transfers or
withdrawals made before the Maturity Date.
If GET Fund accumulation units are adjusted at any time during the
guarantee period, the GET Fund guarantee will be restated. We
calculate the restated guarantee so that it is equivalent to the
original guarantee for that GET Fund series.
A daily charge is assessed on the amount, if any, allocated to the
GET Fund. This charge for the GET Fund guarantee is shown on
Contract Schedule I under Maximum Daily Charges to the Separate
Account.
4.04 GET Fund Maturity Date
The GET Fund Maturity Date is the date on which the guarantee
period ends and GET Fund accumulation units are liquidated.
Prior to the Maturity Date for each series, we send a written
notice of the date to each Contract Holder or Participant, as
applicable, who has an Individual Account value in that series. In
response, the Contract Holder or Participant, as applicable, must
tell us to which available Investment Options to transfer the
amount in the GET Fund on the Maturity Date. If we do not receive
instructions, on the Maturity Date we transfer the portion of the
Individual Account value held in the GET Fund to another GET Fund
series, if available. If no GET Fund series is available, we
transfer the amount to the Fund or Funds we designate in the
written notice.
4.05 Transfers or Withdrawals from the GET Fund
Transfers or withdrawals from the GET Fund before the Maturity
Date are based on the GET Fund unit value for the next Valuation
Date following our receipt of the request in Good Order (see 8.01
and 8.02).
Section 5. Fixed Account
================================================================================
The following provisions apply if the Fixed Account is available as shown on
Contract Schedule I under Fixed Interest Options Available.
5.01 Fixed Account Minimum Guaranteed Interest Rate
The Fixed Account minimum guaranteed interest rate is shown on
Contract Schedule I under Fixed Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Account during the calendar year. The one year minimum guaranteed
interest rate will be established prior to each calendar year and
will be made available to the Contract Holder or Participants, as
applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
Participants, as applicable.
9
5.02 Transfers from the Fixed Account
Each calendar year, the percentage shown on Contract Schedule I
under Fixed Account Annual Transfer Limit of the amount in the
Fixed Account may be transferred to any available Investment
Options. The amount available for transfer will be based on the
Individual Account value in the Fixed Account as of the date we
receive the transfer request in Good Order at our Home Office. We
may, on a temporary basis, allow transfer of a larger percentage.
There is no limit on the amount that may be transferred to the
Fixed Plus Account.
5.03 Withdrawals from the Fixed Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 8.02) from the Fixed Account, a
withdrawal charge may apply (see 8.04).
Section 6. Fixed Plus Account
================================================================================
The following provisions apply if the Fixed Plus Account is available as shown
on Contract Schedule I under Fixed Interest Options Available.
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate
The Fixed Plus Account minimum guaranteed interest rate is shown
on Contract Schedule I under Fixed Plus Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Plus Account during the calendar year. The one year minimum
guaranteed interest rate will be established prior to each
calendar year and will be made available to the Contract Holder or
Participants, as applicable, in advance of the calendar year. We,
at our discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
Participants, as applicable.
6.02 Transfers from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit of the amount in the Fixed Plus Account
may be transferred to any available Investment Option.
The amount available for transfer is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
transfer request in Good Order at our Home Office, reduced by any
amount withdrawn, transferred, taken as a loan (if allowed under
the Contract) or used to purchase Annuity payments during the 12
months prior to the transfer request. In addition, we reserve the
right to reduce the amount available for transfer by amounts
withdrawn under a systematic distribution option.
Twenty percent of the amount in the Fixed Plus Account may be
transferred in each of four consecutive 12-months and the balance
transferred in the fifth year subject to the following conditions:
(a) During the five-year period, no additional amounts are
allocated to or transferred from the Fixed Plus Account;
(b) We will include any amount transferred, taken as a loan (if
allowed under the Contract) or used to purchase Annuity
payments during the prior 12-month period when calculating
the amount which equals 20%; and
(c) We reserve the right to include amounts paid under a
systematic distribution option when calculating the amount
which equals 20%.
In addition, we reserve the right to waive the transfer limit when
the amount in the Fixed Plus Account is less than or equal to the
amount shown on Contract Schedule I under Waiver of Fixed Plus
Account Transfer Limit.
10
6.03 Partial Withdrawals from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit may be withdrawn from the Fixed Plus
Account.
The amount available for withdrawal is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
withdrawal request in Good Order at our Home Office, reduced by
any amount withdrawn, transferred, taken as a loan (if allowed
under the Contract), or used to purchase Annuity payments during
the 12-months prior to the request. In addition, we reserve the
right to reduce the amount available by deducting any amount
withdrawn under a systematic distribution option.
The withdrawal limit does not apply when the partial withdrawal
is:
(a) Due to a Participant's death during the Accumulation Phase
and is made within six months of the date of death (this
exception applies to only one partial withdrawal);
(b) Used to purchase Annuity payments; or
(c) Due to other conditions as we may allow without
discrimination.
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account
The Contract Holder, or a Participant, as applicable, may withdraw
the full amount held in the Fixed Plus Account. When we receive a
request for a full withdrawal, no additional transfers, partial
withdrawals or loans (if allowed under the Contract) are allowed.
(a) Twenty percent of the Individual Account value in the Fixed
Plus Account as of the date we receive the withdrawal
request in Good Order at our Home Office reduced by the
amount, if any, transferred, withdrawn, taken as a loan (if
allowed under the contract) or used to purchase Annuity
payments during the prior 12 months; then
(b) Twenty percent of the remaining amount 12 months later;
then
(c) Twenty percent of the remaining amount 12 months later;
then
(d) Twenty percent of the remaining amount 12 months later;
then
(e) The balance of the Individual Account value in the Fixed
Plus Account 12 months later.
No withdrawal charge applies to amounts withdrawn.
The Contract Holder or Participant, as applicable, may cancel a
full withdrawal request from the Fixed Plus Account at any time.
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
as noted on Contract Schedule I under Waiver of Fixed Plus Full
Withdrawal Provision.
Section 7. Guaranteed Accumulation Account (GAA)
================================================================================
The following provisions apply if the Guaranteed Accumulation Account is
available as shown on Contract Schedule I under Fixed Interest Options
Available.
7.01 Nonunitized Separate Account
The Nonunitized Separate Account is established under Title 38a,
Section 38a-433 of the Connecticut General Statutes. There are no
discrete units for this account. We own the assets held in the
Nonunitized Separate Account; we are not a trustee of those
assets. Income, gains or losses, realized or unrealized, are
credited to or charged against the Nonunitized Separate Account
without regard to our other income, gains or losses. Nonunitized
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
11
7.02 GAA Minimum Guaranteed Interest Rate
All Contributions allocated to a GAA guaranteed term (see 7.04)
earn a rate of interest which we determine and which is guaranteed
when the Contribution remains in the guaranteed term until the
Maturity Date. The rate credited will never be less than the
minimum interest rate shown on Contract Schedule I under
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate.
For guaranteed terms of one year or less, one guaranteed rate is
credited for the full guaranteed term. For longer guaranteed
terms, we may credit an initial guaranteed interest rate from the
date of deposit to the end of a specified period within the
guaranteed term. We may credit different interest rates for
subsequent specified periods throughout the guaranteed term.
7.03 Deposit Period
A deposit period is the period of time we determine during which
we accept allocations (Contributions, transfers, or reinvestments)
to one or more guaranteed terms. We reserve the right to extend
the deposit period.
7.04 Guaranteed Term
A guaranteed term is the period of time for which we guarantee the
declared interest rate for allocations (Contributions, transfers,
or reinvestments) to GAA guaranteed terms. We may offer guaranteed
terms ranging in duration from one to ten years. During each
deposit period, we may offer more than one guaranteed term of
varying lengths. The guaranteed term begins the day after the
deposit period ends. The Contract Holder or a Participant, as
applicable, may allocate new Contributions or transfers to any or
all guaranteed terms available in the current deposit period.
7.05 Guaranteed Term Groups
A guaranteed term group is comprised of all GAA guaranteed terms
of the same duration.
7.06 Maturity Date, Maturity Value and Reinvestment
The Maturity Date is the last day of a guaranteed term. The
maturity value is the amount we pay at the end of a guaranteed
term. At least 18 calendar days before any guaranteed term
Maturity Date, we notify the Contract Holder or a Participant, as
applicable, of the projected maturity value and the guaranteed
terms (and the guaranteed interest rates for each) available
during the then-current deposit period. The Contract Holder, or a
Participant, as applicable, may then tell us how to allocate the
maturity value.
If the Contract Holder or a Participant, as applicable, does not
tell us how to reinvest the maturity value, we reinvest it in a
guaranteed term of the same duration if one is available. If no
guaranteed term of the same duration is available, we reinvest the
maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term. We mail a
confirmation of reinvestment. The confirmation includes the
guaranteed term in which we have reinvested the maturity value and
the guaranteed interest rate for that term.
If we have reinvested the maturity value, during the month
following the Maturity Date, the Contract Holder or a Participant,
as applicable, may transfer or withdraw the reinvested amount,
with interest earned (as of the date we receive the request)
without incurring a market value adjustment (see 7.08).
7.07 Transfers and Withdrawals from the GAA
Except as noted below, the Contract Holder or a Participant, as
applicable, may transfer any portion or all of the amount held in
the GAA. Transfers or withdrawals before the Maturity Date may be
subject to a market value adjustment (see 7.08). Amounts invested
in a guaranteed term may not be transferred during the deposit
period or for a period of 90 calendar days after the close of the
deposit period.
12
Unless directed otherwise, when the Contract Holder or a
Participant, as applicable, requests a transfer or withdrawal from
the GAA, we withdraw amounts proportionately from each guaranteed
term in which the Individual Account is invested. Within a
guaranteed term group, we withdraw first from the oldest deposit
period and then from the next oldest and so on until the amount
requested is withdrawn.
7.08 Application of the Market Value Adjustment
Transfers or withdrawals from the GAA before the Maturity Date are
subject to a market value adjustment, except for:
(a) A one-month period following the Maturity Date on which we
have automatically reinvested the value on the Maturity
Date;
(b) Distributions under certain systematic distribution
options; and
(c) When the withdrawal is equal to the minimum distribution
amount required under the Code, using a method permitted by
the Code and which we offer.
For withdrawals and transfers from the GAA made (1) within six
months of a Participant's death; or (2) to purchase Annuity
payments under a life-contingent Annuity option, the amount
withdrawn from the GAA is the greater of:
(a) The aggregate market value adjustment amount which is the
sum of all market value adjusted amounts calculated due to
a withdrawal before the Maturity Date (which may be
positive or negative); or
(b) The amount in the GAA.
For withdrawals made after the six month period following death,
the withdrawal or transfer amount is the aggregate MVA amount.
An MVA applies to amounts withdrawn to purchase Annuity payment
under a period certain Annuity option.
We may change the GAA market value adjustment by notifying the
Contract Holder in writing at least 90 calendar days before the
change becomes effective. Any such change will apply only to
guaranteed terms offered in deposit periods after the date the
change becomes effective and will apply to existing and new
Individual Accounts.
7.09 Market Value Adjustment (MVA)
The market value adjustment reflects any change in yields on U.S.
Treasury Notes from the time an amount is allocated to a GAA
guaranteed term to the time of a transfer or withdrawal prior to
the Maturity Date. When the market value adjustment is applied,
the amount transferred or withdrawn from the GAA is multiplied by
a factor which is calculated as follows:
x
-------
365
(1 + I)
-----------------------
x
-------
365
(1 + j)
13
Where:
I is the deposit period yield
j is the current yield
x is the number of days remaining (computed from
Wednesday of the week of withdrawal) in the
guaranteed term.
The deposit period yield and the current yield are determined as
follows:
Deposit Period Yield
At the close of the last business day of each week of a
deposit period, we compute a yield that is the average of
the yields on U.S. Treasury Notes which mature in the last
three months of the guaranteed term. The deposit period
yield is the average of those yields for the deposit
period. If a withdrawal is made prior to the close of the
deposit period, the deposit period yield is the average of
the yields of U.S. Treasury Notes for each week preceding
the withdrawal. In the event that no U.S. Treasury Notes
will mature in the last three months of the guaranteed
term, we reserve the right to use the U.S. Treasury Notes
that mature in a following quarter.
Current Yield
The Current Yield is the average of the yields of the same
U.S. Treasury Notes used to calculate the deposit period
yield on the last business day of the week preceding
withdrawal.
Section 8. Transfers, Withdrawals and Distributions
================================================================================
8.01 Transfers
During the Accumulation Phase, the Contract Holder or a
Participant, as applicable, may transfer all or any portion of the
Individual Account value among the available Investment Options.
The Individual Account value on any amount transferred from a Fund
will be based on the Fund's accumulation unit value next
determined after we receive the transfer request In Good Order at
our Home Office.
The Contract Holder or a Participant, as applicable, may request a
transfer by properly completing a transfer request form and
sending it to our Home Office, or by otherwise complying with our
administrative procedures. We reserve the right to establish a
minimum transfer amount.
8.02 Withdrawals
As allowed by the Plan, if applicable, and subject to provisions
of the Code (see 8.03), during the Accumulation Phase, the
Contract Holder or a Participant, as applicable, may withdraw any
portion or all of the Individual Account value. The Individual
Account value of any amount withdrawn from a Fund will be based on
the Fund's accumulation unit value next determined after we
receive the transfer request In Good Order.
The Contract Holder or a Participant, as applicable, may request a
withdrawal by properly completing a withdrawal request form and
forwarding it to our Home Office, or by otherwise complying with
our administrative procedures. Unless the Contract Holder or a
Participant, as applicable, requests otherwise, the withdrawal
will be made proportionately from the Investment Options in which
the Individual Account is invested.
A withdrawal charge may apply to amounts withdrawn (see 8.04). In
addition, a market value adjustment may apply to amounts withdrawn
from the GAA (see 7.08 and 7.09) and limitations may apply to
withdrawals from the Fixed Plus Account (see 6.04).
8.03 Withdrawal Restrictions Under the Code
The Code may impose restrictions on the amount and timing of
withdrawals. The restrictions applicable to this Contract are
shown on Contract Schedule I under Withdrawal Restrictions Under
the Code. Withdrawals that do not comply with the Code may be
subject to tax penalties.
14
8.04 Withdrawal Charge
During the Accumulation Phase, we may deduct a withdrawal charge
from the Individual Account value withdrawn. The charge, if any,
is a percentage of the amount withdrawn from the Funds and/or
Fixed Interest Options (except, if applicable, the Fixed Plus
Account). The withdrawal charge will never exceed 8.5% of the
total amount of Contributions.
The withdrawal charge, if any, is shown on Contract Schedule I
under Withdrawal Charge.
8.05 Waiver of Withdrawal Charge
The withdrawal charge (see 8.04) does not apply in any of the
circumstances shown on Contract Schedule I under Waiver of
Withdrawal Charge.
In addition, we reserve the right to reduce, waive or eliminate
the withdrawal charge.
8.06 Reinstatement
Within 30 calendar days after a withdrawal, the Contract Holder or
a Participant, as applicable may elect to reinstate all or a
portion of the proceeds of a full withdrawal if allowed by
applicable law. We must receive the reinstated amount within 60
calendar days of the withdrawal.
Any maintenance fee and withdrawal charge imposed at the time of
the withdrawal is included in the reinstatement. If only a portion
of the amount withdrawn is reinstated, the amount of any
maintenance fee and withdrawal charge deducted will be restored
proportionally. The amount of any market value adjustment deducted
from any amount withdrawn from GAA is not included in the amount
reinstated.
Any amount reinstated to the GA Account will be credited to
guaranteed terms available in the current deposit period. We will
reinvest it in a guaranteed term of the same duration if one is
available. If no guaranteed term of the same duration is
available, we reinvest the maturity value in the guaranteed term
with the next shortest duration. If no shorter guaranteed term is
available, we reinvest the maturity value in the next longest
term.
Amounts withdrawn from a GET Fund series are reinstated to the
current offering period if one is available. If no GET Fund
offering period is available, any amount withdrawn from the GET
Fund is reinstated equally among all other Investment Options in
which the Individual Account is invested.
Amounts are reinstated among the Investment Options in the same
proportion as they were held at the time of withdrawal, except, as
noted above, for amounts from the GET Fund. Any maintenance fee
which falls due after the withdrawal and before the reinstatement
is deducted from the amount reinstated.
The number of accumulation units reinstated to any Fund is based
on the accumulation unit values next computed after we receive the
reinstatement request in Good Order at our Home Office.
Reinstatement is permitted only once.
8.07 Required Distributions
While an Individual Account remains in the Accumulation Phase, the
Code may require distribution of all or a portion of the
Individual Account value. The Contract Holder, a Participant or
Contract beneficiary, as applicable, must tell us when to begin
distributions. We have no responsibility for adverse tax
consequences as the result of the Contract Holder, Participant or
Contract beneficiary, as applicable, not complying with minimum
distribution requirements.
The distribution requirements, if any, are shown on Contract
Schedule I under Required Distributions.
Generally, to meet distribution requirements, the Contract Holder,
a Participant or Contract beneficiary, as applicable, may request
partial withdrawals, a systematic distribution option (see 8.08)
or an Annuity option.
15
8.08 Systematic Distribution Options (SDOs)
During the Accumulation Phase, we may offer one or more
distribution options under which we make regularly scheduled
automatic partial distributions of the Individual Account value.
To request an SDO, the Contract Holder, a Participant or Contract
beneficiary, as applicable, must complete an SDO election form and
forward it to our Home Office.
Each option is available without discrimination to any class of
Contracts. The availability of any specific option may be subject
to terms and conditions applicable to that option. We may
discontinue the availability of an SDO option for future election.
Payments will, however, continue to Participants who elected the
option before the date it is no longer available.
8.09 Individual Account Termination
If the Individual Account value is an amount equal to or less than
the amount shown on Contract Schedule I under Individual Account
Termination Amount and we have received no Contributions for 12
months, we reserve the right to terminate an Individual Account.
Before we do this, we notify the Contract Holder or Participant,
as applicable, 90 calendar days in advance. When we terminate an
Individual Account, we do not deduct a withdrawal charge. We do
not exercise this right when the Individual Account value is equal
to or less than the amount shown on Contract Schedule I under
Individual Account Termination Amount due to investment
performance.
Section 9. Loans
================================================================================
9.01 Loan Availability
If loans are available under the Contract, a loan endorsement is
attached.
Section 10. Death Benefit During the Accumulation Phase
================================================================================
10.01 Death Benefit
If a Participant dies during the Accumulation Phase, we pay a
death benefit. The amount of the death benefit is the Individual
Account value as of the next Valuation Date following our receipt
of acceptable proof of death at our Home Office (see 7.08 for
amounts in the GAA).
10.02 Contract Beneficiary
The Contract beneficiary is shown on Contract Schedule I under
Contract beneficiary. Generally, the Participant may name a
beneficiary under the Plan (the Plan beneficiary). If allowed by
the Plan, when designating the beneficiary, the Contract Holder or
a Participant, as applicable, may specify, the form of payment as
permitted by the Code. The Contract beneficiary and the form of
payment, if applicable, may be designated or changed in writing or
as we may otherwise allow in our administrative procedures.
10.03 Distribution of Death Benefit
Generally, if the Plan beneficiary is the Participant's surviving
spouse, distribution of the death benefit must begin no later than
the year the Participant would have attained age 70 1/2 or any
other date allowed under federal law or regulations.
If the Plan beneficiary is not the Participant's surviving spouse,
generally, the death benefit must be used to purchase Annuity
payments within one year of the year of the Participant's death or
otherwise paid within five years of the year of the Participant's
death.
Annuity payments to a Plan beneficiary may not extend beyond the
period specified in the Code.
16
Part II. Annuity Phase
Section 11. General Provisions
================================================================================
11.01 Election
The Contract Holder, a Participant, Contract or Plan beneficiary,
as applicable, may elect an Annuity option by properly completing
an election form and forwarding it to our Home Office no later
than 30 calendar days before the desired first Annuity payment
date. All Annuity option elections must comply with any Plan
requirements and regulatory requirements including the Code
minimum distribution requirements.
All or any portion of the Individual Account value (after the
deduction of any applicable premium tax) may be used to purchase
Annuity payments (for amounts from the GAA, see 7.08).
The Contract Holder, a Participant, Contract or Plan beneficiary,
as applicable, must also select an Annuity option (see 11.03) and
the Investment Options (see 11.06).
Once payments begin, an Annuity option may not be revoked, nor may
any amount be withdrawn except as noted below.
11.02 Change of Annuity Provisions
We reserve the right to change or eliminate Annuity options (see
11.03) and to change the mortality table (see 11.04) we use to
calculate payment rates for life-contingent Annuity payments. If
we do this, any change will not take effect until at least 12
months after the Contract Effective Date, or until at least 12
months after any previous change. A change to Annuity options or
the mortality table used to calculate payment rates will not apply
to Individual Accounts established before the date the change
becomes effective.
11.03 Annuity Options
The Contract Holder, a Participant, Contract or Plan beneficiary,
as applicable, must elect one of the following:
Option 1: Payments for a Stated Period
This option provides payments for a stated period. The number of
years in the stated period must fall within the range shown on
Contract Schedule II under Payment Period.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time. If a withdrawal is requested within five years of the first
payment, the lump-sum payment is treated as a withdrawal during
the Accumulation Phase and any applicable withdrawal charge
applies (see 8.04).
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 2: Life Income for One Annuitant
This option provides payments for the life of the Annuitant. If
this option is elected, the Contract Holder, a Participant or
Contract beneficiary, as applicable, must also choose one of the
following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period within the range shown
on Contract Schedule II under Payment Period; or
(c) Fixed-only cash refund: at the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal
to the amount applied to the Annuity (minus any applicable
premium tax), minus the amount of payments made to the
Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
17
Option 3: Life Income for Two Annuitants
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have
died. If this option is elected, the Contract Holder, a
Participant, Contract or Plan beneficiary as applicable, must also
choose one of the following:
(a) 100% of the payment amount to continue after the first
death; or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first
death; or
(d) 100% of the payment amount to continue after the first
death with payments guaranteed to the beneficiary after the
second death for a period within the range shown on
Contract Schedule II under Payment Period; or
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount to
continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the
first death with a cash refund to the Contract beneficiary
after the second death. The amount of the cash refund is
equal to the amount applied to the Annuity (minus any
applicable premium tax), minus the amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
Other Options
As allowed under applicable state law, we reserve the right to
make other options available.
11.04 Mortality Table
The mortality table for this Contract is shown on Contract
Schedule II under Mortality Table.
11.05 Payments
The first payment amount must be at least $50 per month or $250
per year. We reserve the right to increase the minimum first
payment amount, if allowed by state law, based on increases
reflected in the Consumer Price Index-Urban (CPI-U) since July 1,
1993.
To calculate the guaranteed first payment of a variable Annuity or
the payments for a fixed Annuity, we will use the Annuitant's
adjusted age and, if applicable, the second Annuitant's adjusted
age. The Annuitant's adjusted age and, if applicable, the second
Annuitant's adjusted age is the person's age as of the birthday
closest to the day Annuity payments begin, reduced as follows:
(a) Reduced by one year for payments before January 31, 2000;
(b) Reduced by two years for payments beginning during the
period from January 1, 2000 through December 31, 2009;
(c) Starting on January 1, 2010, reduced by one additional year
for payments beginning in each succeeding decade.
If a fixed Annuity is elected, we will use the applicable current
settlement option rates if they will provide higher fixed Annuity
payments.
11.06 Investment Options
When an Annuity option is elected, the Contract Holder, a
Participant, Contract or Plan beneficiary, as applicable, must
elect:
(a) A fixed Annuity for which the underlying investment is our
General Account;
18
(b) A variable Annuity for which the underlying investment is
one or more of the available Funds; or
(c) A combination of (a) and (b).
For a variable Annuity, the maximum number of Funds available
during the Annuity Phase is shown on Contract Schedule II under
Maximum Number of Funds. The Funds available during the Annuity
Phase may not be the same as those available during the
Accumulation Phase.
11.07 Fixed Annuity Minimum Guaranteed Interest Rate
For a fixed Annuity, the interest rate will never be less than the
minimum guaranteed rate shown on Contract Schedule II under Fixed
Annuity Minimum Guaranteed Interest Rate.
11.08 Variable Annuity Assumed Annual Net Return Rate Election
If a variable Annuity is elected, the Contract Holder, or
Participant, as applicable must also elect an assumed annual net
return rate of 3.5% or 5%. The initial Annuity payment for the
option elected will reflect the assumed annual net return rate. If
subsequent Annuity payments are to remain level, the Separate
Account must earn this rate, plus enough to cover the mortality
and expense risk charge shown on Contract Schedule II under
Maximum Daily Charges to the Separate Account plus any applicable
administrative charge.
11.09 Variable Annuity Transfers
If a variable Annuity is elected, the Contract Holder, a
Participant, Contract or Plan beneficiary, as applicable, may
request that we transfer all or a portion of the amount allocated
to a Fund to any other available Fund. Transfer requests must be
expressed as a percentage of the allocation among the Funds on
which the variable payment is based. The number of transfers
allowed each calendar year is shown on Contract Schedule II under
Number of Annual Transfers Among Funds. We reserve the right to
allow additional transfers. Transfers are effective as of the next
Valuation Date following our receipt of a transfer request in Good
Order at our Home Office.
11.10 Fund Annuity Units
The number of Fund Annuity units is based on the amount of the
first variable Annuity payment which is
equal to:
(a) The portion of the Individual Account value (minus any
applicable premium tax) used to purchase a variable
Annuity; divided by
(b) One thousand; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion of the variable payment will be divided by
the appropriate Fund's, or Funds', Annuity unit value (see 11.11)
on the tenth Valuation Date before the due date of the first
payment to determine the number of Fund Annuity units. The number
of each Fund's Annuity units remains fixed unless changed by a
subsequent Fund transfer or if the Annuity option provides for a
change in units (i.e., under life income for two annuitants option
after the first death). Each future payment is equal to the sum of
the products of each Fund's Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity unit value on the
tenth Valuation Date before the payment due date is used.
11.11 Fund Annuity Unit Value
For any Valuation Date, a Fund's Annuity unit value is equal to:
(a) The Annuity unit value for the prior Valuation Date;
multiplied by
(b) The Annuity unit net return factor (see 11.12) for the
current Valuation Date; multiplied by
(c) A factor to reflect the assumed annual net return rate. The
factor for an assumed annual net return rate of 5% is
0.9998663; for 3.5% it is 0.9999058.
19
The dollar value of a Fund Annuity unit and the amount of a
variable Annuity payment may increase or decrease due to
investment gain or loss. We will not change the payment amount due
to changes in mortality, expense results, or the administrative
charge.
11.12 Fund Annuity Net Return Factor
The Annuity net return factor(s) are used to compute all variable
Annuity payments for any Fund.
The net return factor(s) for each Fund is equal to 1.0000000 plus
the net return rate.
The net return rate equals:
[a - b - c]
------------- - e
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity
units of the Separate Account on the current Valuation
Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
II under Maximum Daily Charges to the Separate Account.
A net return rate may be more or less than 0%. The value of a
share of a Fund is equal to the net assets of the Fund divided by
the number of shares outstanding.
11.13 Death Benefit During the Annuity Phase
The Contract Holder or a Participant, as applicable, must name a
beneficiary for the Annuity Phase. Unless not allowed by the Plan,
or restricted by the Contract Holder, or a Participant, as
applicable, the beneficiary may name a beneficiary.
If an Annuitant(s) dies, any remaining guaranteed payments
continue to the beneficiary. Payments are made at least as rapidly
as provided by the option in effect at the death of the Annuitant.
Annuity payments to an beneficiary may not extend beyond (1) the
life of the beneficiary, or (2) any period certain greater than
the beneficiary's life expectancy as determined by the Code.
The beneficiary may also elect a lump-sum payment equal to the
present value of any remaining payments.
The interest rate used to determine the first Annuity payment is
used to calculate the present value. The present value is
determined as of the next Valuation Date following our receipt of
acceptable proof of death and a written claim for the death
benefit.
Unless not allowed by the Plan or restricted by the Contract
Holder, or a Participant, as applicable, if the beneficiary dies
while receiving payments, the present value of any remaining
guaranteed payments is paid in a lump-sum to the beneficiary's
beneficiary or to the beneficiary's estate.
20
OPTION 1: Payments for a Specified Period
================================================================================
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
================================================================================
Years Payment Years Payment
================================================================================
5 $17.91 20 $5.51
10 9.61 25 4.71
15 6.87 30 4.18
================================================================================
================================================================================
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate (AIR)
================================================================================
Years Payment Years Payment
================================================================================
5 $18.12 20 $5.75
10 9.83 25 4.96
15 7.10 30 4.45
================================================================================
================================================================================
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate (AIR)
================================================================================
Years Payment Years Payment
================================================================================
5 $18.74 20 $6.51
10 10.51 25 5.76
15 7.82 30 5.28
================================================================================
* Net of any applicable premium tax deduction
21
Option 2: Life Income Based on the Life of One Annuitant
================================================================================
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate
================================================================================
====================================================================================================================================
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
Adjusted payments for payments payments payments payments Cash Refund
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
====================================================================================================================================
55 4.44 4.42 4.39 4.32 4.22 4.19
60 4.95 4.93 4.86 4.73 4.55 4.57
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
70 6.64 6.54 6.23 5.76 5.19 5.70
75 8.06 7.82 7.14 6.25 5.38 6.51
====================================================================================================================================
==============================================================================================================
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
==============================================================================================================
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
==============================================================================================================
55 4.72 4.71 4.67 4.60 4.50
60 5.23 5.21 5.13 5.00 4.82
65 5.94 5.89 5.73 5.48 5.15
70 6.92 6.81 6.49 6.00 5.43
75 8.35 8.08 7.38 6.48 5.62
==============================================================================================================
==============================================================================================================
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
==============================================================================================================
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
==============================================================================================================
55 5.63 5.61 5.56 5.47 5.36
60 6.12 6.09 6.00 5.85 5.65
65 6.82 6.75 6.57 6.30 5.95
70 7.80 7.67 7.30 6.78 6.21
75 9.23 8.93 8.16 7.23 6.38
==============================================================================================================
* Net of any applicable premium tax deduction
22
Option 3: Life Income Based on the Lives of Two Annuitants
====================================================================================================================================
First Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate
====================================================================================================================================
Adjusted Ages payments
============================ guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
====================================================================================================================================
55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67
55 60 3.99 4.44 4.71 3.98 4.20 3.94
65 60 4.38 4.97 5.32 4.38 4.93 4.29
65 70 4.93 5.68 6.15 4.91 5.27 4.74
75 70 5.69 6.68 7.32 5.62 6.67 5.29
75 80 6.78 8.11 8.99 6.54 7.36 5.93
====================================================================================================================================
==========================================================================================================================
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
==========================================================================================================================
Adjusted Ages payments
=============================== guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
==========================================================================================================================
55 50 $3.97 $4.35 $4.56 $3.97 $4.31
55 60 4.27 4.73 5.00 4.26 4.48
65 60 4.66 5.25 5.61 4.65 5.22
65 70 5.19 5.97 6.44 5.17 5.54
75 70 5.95 6.96 7.61 5.87 6.95
75 80 7.04 8.39 9.29 6.79 7.64
==========================================================================================================================
==========================================================================================================================
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
==========================================================================================================================
Adjusted Ages payments
=============================== guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
==========================================================================================================================
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 60 5.15 5.63 5.91 5.14 5.38
65 60 5.52 6.14 6.51 5.51 6.10
65 70 6.04 6.84 7.34 6.00 6.41
75 70 6.77 7.84 8.51 6.68 7.81
75 80 7.86 9.28 10.20 7.57 8.49
==========================================================================================================================
* Net of any applicable premium tax deduction
23
Aetna Life Insurance and Annuity Company
Home Office: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Group Combination, Deferred Annuity Contract
(Nonparticipating)
