Draft 4/13/92
(herein called the Company)
ISSUES THIS CONTRACT
No. GA-1234
TO
The ABC Company
(herein called the Policyholder)
to provide the retirement annuity and other benefits described herein.
This contract is issued in consideration of the application of the
Policyholder, and the payment of the contributions provided for herein.
This contract is delivered in and governed by the laws of the State of
ABC.
The provisions on the following pages are a part of the contract.
Effective Date of contract, February 1, 1992.
Executed at Worcester, Massachusetts, February 1, 1992.
|S| Xxxxxxx X. Xxxxx |S| Xxxx X. X'Xxxxx
Secretary President
GROUP VARIABLE ANNUITY CONTRACT
WITH ALLOCATED FUND ACCOUNTS
AND SEPARATE ACCOUNTS
PARTICIPATING
PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
GA-IRA-2.00-92 Contributory
TABLE OF CONTENTS
Page
Part I - Definitions .................................................. 1
Part II - IRA Accounts and Beneficiaries ............................... 3
Part III - Contributions ................................................ 4
Part IV - General Account Interest ..................................... 6
Part V - Separate Account Unit Values ................................. 7
Part VI - IRA Account Transfers ........................................ 9
Part VII - IRA Account Fees and Contract Guarantees ..................... 10
Part VIII - IRA Account Surrenders and Partial Redemptions ............... 11
Part IX - Death Benefits ............................................... 12
Part X - Annuity Options .............................................. 13
Part XI - General Provisions ........................................... 17
Part XII - Annuity Option Tables ........................................ 22
PART I
DEFINITIONS
1.01 "Accumulation Unit" means the measure by which a Participant-
Owner's interest in a Separate Account is determined prior to the
Annuity Date.
1.02 "Accumulated Value" means the value of an IRA Account on any
Valuation Date prior to the Annuity Date. The value of an IRA
Account on any Valuation Date is equal to the sum of the value of
all Accumulation Units plus the value of all General Account
accumulations then credited to the IRA Account.
1.03 "Annuity Date" means the date on which annuity payments are to
begin. If a Participant-Owner does not elect an Optional Annuity
Date, annuity payments will begin on the date elected by the
Participant-Owner in his IRA Account application.
1.04 "Beneficiary" means the person or institution designated in writing
on a form furnished by or satisfactory to the Company to receive
any death benefit payable under the contract upon the Participant
Owner's or other designated person's death.
1.05 "Certificate" means the individual certificate issued to each
Participant-Owner describing the benefits to which he is entitled
under this contract. In the event of any change in the contract
affecting the benefits of a Participant-Owner, a new certificate or
certificate rider will be issued to the Participant-Owner. The
certificate in no way modifies or voids any of the provisions of
this contract and shall not constitute a part of this contract.
1.06 "Code" means the Internal Revenue Code of 1986, as amended.
1.07 "Company" means State Mutual Life Assurance Company of America.
1.08 "Funds" means the Growth Fund, Income Appreciation Fund, Money
Market Fund, Equity Index Fund and Government Bond Fund of SMA
Investment Trust and such other Funds as may be made available by
the Company from time to time. Any additional Funds shall be added
to this contract by an endorsement.
1.09 "General Account" means the investment account established and
maintained by the Company for its assets which are not allocated to
a Separate Account. All contributions made by Participant-Owners
which are allocated to a General Account Sub-Account are part of
the Company's General Account.
-1-
1.10 "Home Office" means the Company's office located at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
1.11 "IRA Account" means an account established under the contract for a
Participant-Owner in accordance with Section 408(b) of the Code.
1.12 "Participant-Owner" means an employee or former employee of the
Policyholder who makes contributions under the contract in
accordance with its provisions.
1.13 "Separate Account" means the Company's Separate Account I and such
other of the Company's Separate Accounts that may be offered as an
investment choice to Participant-Owners from time to time. Any
additional Separate Accounts shall be added to this contract by an
endorsement.
1.14 "Sub-Account" means either a General Account or Separate Account
Sub-Account.
General Account Sub-Accounts shall be established from time to time
by the Company for purposes of crediting interest to Net
Contributions allocated to the General Account. Each General
Account Sub-Account shall have a stated interest rate guaranteed
until a specific maturity date, as described in Section 4.02.
Interest rates and maturity dates shall be specified by the
Company.
Separate Account Sub-Account means each subdivision of a Separate
Account. The assets of each Separate Account Sub-Account are
invested exclusively in shares of the corresponding Fund of SMA
Investment Trust or other corresponding Fund made available by the
Company.
1.15 "Surrender Value" means the Accumulated Value of an IRA Account
less any applicable surrender charges (as specified on page 11),
and IRA Account fee (as specified on page 9).
1.16 "Valuation Date" means the time as of which the Accumulated Values
of all IRA Accounts are determined. Valuation Dates occur at the
close of business on each day on which the New York Stock Exchange
is open for trading. The Company reserves the right to change the
time which it designates as the Valuation Date. The Company also
reserves the right to change the frequency of Valuation Dates.
1.17 "Valuation Period" means the interval between two consecutive
Valuation Dates.
1.18 "Written Request" or "Written Notice" means a request or notice in
writing satisfactory to the Company and filed at its Home Office.
-2-
With the consent of the Company, IRA Account investment transfers,
contribution allocation instructions and other specified
transactions that may be made by Written Request may also be made
by Participant-Owners by telephone request. A properly completed
authorization form must be on file at the Company's Home Office
before telephone instructions will be honored.
PART II
IRA ACCOUNTS AND BENEFICIARIES
2.01 IRA Accounts. Each IRA Account established under the contract is
intended to be an individual retirement annuity qualified under
Code Section 408(b) and Regulations thereunder. Each IRA Account
is for the exclusive benefit of the Participant-Owner,
Participant Owner's Beneficiary and, in the case of an IRA
Account established for a Participant-Owner's spouse, such spouse
and such spouse's Beneficiary. Each IRA Account established under
the contract shall meet the following requirements:
(a) Each Participant-Owner is the owner of his IRA Account.
(b) Only cash or checks will be accepted as a contribution to an
IRA Account.
(c) Contributions shall be subject to the limitations set forth
in Part III.
(d) IRA Accounts may not be transferred by the Participant-Owner.
(e) No part of the Participant-Owner's interest in his IRA
Account can be forfeited.
(f) A Participant-Owner may not make any loans under his IRA
Account. An IRA Account cannot be pledged, assigned or
otherwise used to secure a loan.
(g) Payments must be made or commenced not later than the April 1
following the taxable year in which the Participant-Owner
attains age 70 1/2. Distributions shall be made in accordance
with the requirements of Code Section 401(a)(9) and
Regulations thereunder.
(h) IRA Account death benefits must be paid as provided in Part
IX.
-3-
2.02 IRA Account Beneficiary. Each IRA Account Beneficiary is as named
in the IRA Account application unless changed in accord with the
terms of this contract. All death benefits prodded by this
contract will be divided equally among the surviving
Beneficiaries, unless the Participant-Owner directs otherwise.
Unless the Participant-Owner directs otherwise, the interest of a
Beneficiary who dies before the Participant-Owner will pass to any
surviving Beneficiaries in proportion to their share in the
proceeds. If there is no surviving Beneficiary, the deceased
Beneficiary's interest will pass to the estate of the
Participant-Owner.
A Participant-Owner may declare the choice of any Beneficiary to be
irrevocable.
2.03 Change of Beneficiary. A Participant-Owner may change any
Beneficiary, except an irrevocable one, any time while his IRA
Account is in force. Such change may be made only by Written
Request. When the Company receives the request, the change will
take place as of the date it was signed, even if the
Participant-Owner is not living on the date the Company receives
the request. Any rights created by the change will be subject to
any payment made or action taken by the Company before the change
was recorded.
PART III
CONTRIBUTIONS
3.01 Initial Contributions. Establishment of IRA Accounts. A
Participant-Owner who receives a distribution from a qualified
retirement plan sponsored or maintained by the Policyholder which
is eligible for rollover treatment (as described in Code Section
402(a)(5), 402(a)(6) or 403(a)(4)) may establish an IRA Account
by making a contribution under this contract in an amount not to
exceed the taxable portion of such distribution. Provided, that
for a rollover IRA Account to be established the initial
contribution must be at least $3,500 (or such smaller amount as
meets the Company's then current minimum requirement for the
initial contribution).
A Participant-Owner who has established an IRA Account by means
of a rollover contribution as described above may establish an
additional IRA Account for his spouse. Such spousal IRA shall be
established and maintained in accordance with Code Sections
219(c) and 408(b). If a spousal IRA Account is established, the
spouse shall be treated as a Participant-Owner for purposes of
this contract.
-4-
Unless a Participant-Owner requests otherwise in writing, separate
IRA Accounts shall be maintained for (1) rollover contributions and
(2) annual deductible and non-deductible contributions made by the
Participant-Owner.
3.02 Additional Contributions. After an IRA Account has been
established, and while the IRA Account is in force, a Participant-
Owner may make additional contributions, as described below:
(a) No additional contribution of less than $1,000 (or such
smaller amount as meets the Company's then minimum
contribution requirement) will be accepted by the Company.
(b) Except for additional rollover contributions or spousal IRA
contributions described in (c) and (d) below, for any taxable
year of the Participant-Owner, the Participant-Owner may make
deductible or nondeductible contributions that, in total, do
not exceed the lesser of $2,000 or 100% of the
Participant-Owner's Compensation for the taxable year.
"Compensation" means compensation as defined in Code Section
219(f) and Regulations thereunder. Compensation includes
income from employment, fees and net earnings from
self-employment and alimony but does not include such items
as investment income, rent or royalties.
(c) A Participant-Owner may make an additional rollover
contribution as defined in Code Section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3).
(d) If a spousal IRA Account has been established, for any
taxable year a Participant-Owner may contribute up to
$2,250 in total to his and his spousal IRA Accounts;
provided, however, that except for additional rollover
contributions described in (c) above, a maximum
contribution of $2,000 may be made to any one IRA Account
for a taxable year.
3.03 Contribution Requirements. All contributions are payable at the
Company's Home Office. The initial contribution will be credited
to an IRA Account as of the date that both the properly completed
application for the IRA Account and the initial payment are
received by the Company at its Home Office. If the application is
incomplete, or does not specify how payments are to be allocated,
the initial contribution will be returned within five business
days. After an IRA Account has been established, additional
payments intended to be allocated to the General Account must be
received by the Company no later than 1:00 p.m. Eastern time in
order to be credited to an IRA Account on the date of receipt.
Additional payments received after that time intended to be
allocated to the General Account will be credited to the IRA
Account the next business day. Additional payments intended to be
allocated to a Separate Account
-5-
Sub-Account will be credited to an IRA Account at the unit value
computed as of the Valuation Date that the payment is received at
the Company's Home Office.
Each contribution shall be accompanied by a form provided by or
satisfactory to the Company which shall indicate the type of
contribution being made, the taxable year for which the
contribution is intended (if applicable) and investment allocation
instructions.
Contributions described in Section 3.02(b) or (d) must be received
by the Company by April 15 of the year immediately following the
calendar year to which the contributions are attributable.
3.04 Net Contributions. Each Net Contribution is equal to the gross
contribution received by the Company less the amount of any premium
tax which must be paid by the Company as a result of the payment
being credited to an IRA Account.
Net Contributions will be allocated to the General Account or
applied to purchase Separate Account Accumulation Units, as
directed by the Participant-Owner. In the case of an allocation
to a Separate Account Sub-Account, the number of Accumulation
Units to be credited to an IRA Account will be determined as
provided in Section 5.01.
3.05 Net Contribution Allocations. Net Contributions will be allocated
on a percentage basis among the General Account and/or the
Separate Account Sub-Accounts as specified in writing by the
Participant-Owner; provided, however, that if a Net Contribution
is to be allocated between two or more Sub-Accounts, at least
$500 must be allocated to each Account. If the percentage
allocation elected by the Participant-Owner would result in an
allocation of less than $500 to any one Sub-Account, the Company
reserves the right to allocate such amount in accordance with
Company rules and procedures.
By Written Request, at any time the Participant-Owner may change
the allocation of future Net Contributions.
PART IV
GENERAL ACCOUNT INTEREST
4.01 Crediting of Interest. Interest will be credited daily to Net
Contributions allocated to each General Account Sub-Account.
Interest will be credited from the Valuation Date the Net
Contribution is credited to the Sub-Account to the Valuation Date
preceding the date the Net Contribution is distributed from the
Sub-Account. Interest will be calculated on a simple interest
method, based on the ending daily balances in the Sub-Account, with
interest compounded annually.
-6-
4.02 Establishment of Sub-Accounts: Interest Rates. Sub-Accounts will
be established on the first day of each calendar month for Net
Contributions to be allocated to the General Account during the
month. The interest guarantee or guarantees applicable to Net
Contributions to be allocated during a month will be determined
in advance by the Company and will apply for the deposit period
and thereafter until the Sub-Account maturity date. Until changed
by the Company, Sub-Account maturity dates will occur three years
following the last day of the deposit period (i.e., the last day
of the calendar month. All Sub-Account effective dates, deposit
periods, interest guarantees and maturity dates will be specified
by the Company at least 30 days prior to the Sub-Account
effective date. Although the Company currently intends to follow
the rules outlined above, the Company reserves the right to
change prospectively the frequency of Sub-Account effective
dates, to change the length of deposit periods and to change the
period of interest guarantees. Provided, that the interest rate
applicable to Net Contributions allocated to the General Account
will be guaranteed for a period of at least one year and in no
event will such interest rate be less than an interest rate of 4
1/2% compounded annually for the first five years; 4% compounded
annually for the next five years; and 3 1/2% compounded annually
thereafter.
4.03 Application of Accumulated Values on Sub-Account Maturities. At
least 30 days prior to the maturity date of a General Account
Sub-Account, the Company will notify affected Participant-Owners
in writing of the interest guarantee and new maturity date that
will be established for Sub-Account Accumulated Values upon the
Sub-Account maturity date. Unless a Participant-Owner directs
otherwise, IRA Account amounts allocated to a matured Sub-Account
will be allocated to the General Account Sub-Account effective on
the day following the Sub-Account maturity date. Any such
direction must be in writing and must be received by the Company
at least 5 business days prior to the Sub-Account maturity date.
PART V
SEPARATE ACCOUNT UNIT VALUES
5.01 Accumulation Unit Values. Accumulation Units will be credited to
IRA Accounts for benefits funded by a Separate Account
Sub-Account. The number of Accumulation Units to be credited to
an IRA Account at the time any Net Contribution is to be
allocated will be equal to the portion of the Net Contribution to
be allocated, as specified by the Participant-Owner, divided by
the dollar value of the applicable Sub-Account Accumulation Unit
as of the Valuation Date such payment is allocated.
-7-
The dollar value of a Sub-Account Accumulation Unit as of any
Valuation Date will be determined by multiplying the dollar value
of such Accumulation Unit as of the immediately preceding Valuation
Date by the Net Investment Factor for the Valuation Period at the
end of which the Accumulation Unit value is being determined.
On any Valuation Date prior to the Annuity Date, the Accumulated
Value of the portion of an IRA Account allocated to a Separate
Account Sub-Account will be the sum of the value of all such
Sub-Account Accumulation Units then credited to the IRA Account.
5.02 Adjusted Gross Investment Rate. The Adjusted Gross Investment Rate
of a Separate Account Sub-Account for any Valuation Period is equal
to:
(a) (i) the investment income of such Sub-Account for the
Valuation Period, plus capital gains and minus capital
losses of such Sub-Account for the Valuation Period,
whether realized or unrealized; minus
(ii) an amount for capital gains taxes and any other taxes
based on income of, assets in, or the existence of such
Sub-Account, whichever may be applicable; divided by
(b) the amount of such Sub-Account's assets at the beginning of
the Valuation Period.
The Adjusted Gross Investment Rate may be positive or negative.
5.03 Net Investment Rate and Net Investment Factor. The Net Investment
Rate of a Separate Account Sub-Account for any Valuation Period
shall be equal to the Sub-Account Adjusted Gross Investment Rate
for such Valuation Period decreased by (a) a factor equivalent to
.0090 per annum for mortality and expense risks and (b) a factor
equivalent to .0025 per annum for administrative charges
associated with the Sub-Account. Such factors may be increased or
decreased by the Board of Directors of the Company, but in no
event shall they exceed the maximum stated in the Guarantees
provision.
The Net Investment Factor of a Separate Account Sub-Account is
1.000000 plus the Sub-Account Net Investment Rate.
-8-
PART VI
6.01 IRA Account Transfers. Prior to the Annuity Date, a
Participant-Owner may request in writing that:
(a) all or a portion of his IRA Account allocated to the General
Account be transferred to one or more Separate Account
Sub-Account(s);
(b) all or a portion of his IRA Account allocated to a Separate
Account Sub-Account be transferred to the General Account; or
(c) all or a portion of his IRA Account allocated to one Separate
Account Sub-Account be transferred to one or more other
Separate Account Sub-Account(s).
6.02 Transfer Date. Subject to the restrictions described herein, all
transfers shall be made on the Valuation Date coincident with, or
next following, the date a Written Request for such transfer is
received by the Company.
6.03 Transfer Restrictions. Transfers from a General Account
Sub-Account may be made without restriction on the Sub-Account
maturity date. During each calendar year a Participant-Owner may
make up to four additional transfers .Such transfers ma be made
from Separate Account Sub-Accounts or from General Account
Sub-Accounts prior to their maturity date. Provided, that the
maximum dollar amount that may be transferred during a calendar
year from General Account Sub-Accounts prior to their maturity
date is 20% of the value on the preceding December 31 of the
portion of the Participant-Owner's IRA Account Accumulated Value
that was allocated to the General Account. Transfers from
non-matured General Account Sub-Accounts will be on a LIFO
(Last-in-First-out) basis (i.e., transfers will be first made
from the most recently established Sub-Account).
Transfers from General Account and Separate Account Sub-Accounts
must be in a minimum amount of $500, or the entire portion of the
Participant-Owner's IRA Account allocated to the Sub-Account, if
less.
6.04 Minimum Balances. If a transfer would reduce the value of the
portion of a Participant-Owner's IRA Account allocated to a General
Account or Separate Account Sub-Account to less than $1,000, the
Company reserves the right to include the remaining value allocated
to the Sub-Account in the total to be transferred.
-9-
PART VII
IRA ACCOUNT FEES AND CONTRACT GUARANTEES
7.01 IRA Account Fees. While an IRA Account is in force and prior to
the Annuity Date, the Company will deduct an annual IRA Account
fee. The amount of the fee will be $25. This fee will be deducted
on the last Valuation Date of the month in which occurs the
anniversary date of the establishment of the IRA Account and also
on the date the IRA Account is surrendered. The fee will be
deducted pro rata from each General Account and Separate Account
Sub-Account to which IRA Account Net Contributions are currently
allocated. Provided, however, that the fee will be reduced or
eliminated, as necessary, to the extent its full deduction would
result in amounts allocated to a General Account Sub-Account
being credited with interest at a rate lower than the minimum
rate specified in Section 4.02.
7.02 Contract Guarantees. Except to the extent the contract may be
amended in accordance with Section 11.02, the Company makes the
following guarantees for IRA Accounts established under this
contract:
(a) The factors deducted from the Adjusted Gross Investment Rate
of a Separate Account Sub-Account to obtain its Net
Investment Rate will not exceed the equivalent of (i) .90%
per annum for mortality and expense risks and (ii) .25% per
annum for administrative charges.
(b) The IRA Account Fee and Surrender Charge will not exceed the
amount specified in this contract.
(c) The interest rate for Net Contributions allocated to the
General Account will be guaranteed for at least one year and
will never be at a rate less than the applicable minimum rate
specified in Section 4.02.
The Company assumes the risk that actual mortality experience and
expenses may exceed the maximum charges made to cover such
mortality and expenses. If actual mortality experience and
expenses exceed the amounts provided for such costs, the Company
will absorb the resultant losses. If actual mortality experience
and expenses are less than the amounts provided for such costs,
the difference will be a profit to the Company.
-10-
PART VIII
IRA ACCOUNT SURRENDERS AND PARTIAL REDEMPTIONS
8.01 IRA Account Surrender Privilege. At any time prior to the Annuity
Date, a Participant-Owner may, by Written Request, surrender his
IRA Account for its Surrender Value. The Surrender Value will be
based on the Accumulated Value of the IRA Account on the
Valuation Date coincident with or next following the date the
Company receives the Written Request. When surrendered, an IRA
Account is terminated. After termination, the Company will have
no further liability for the IRA Account.
The Surrender Value for the portion of an IRA Account allocated
to a Separate Account shall be paid within 7 days (plus any
period of extension under applicable laws, rules and regulations
governing the redemption of variable annuities) from the date of
receipt of such Written Request.
The Surrender Value for the portion of an IRA Account allocated
to the General Account shall norm be aid within 7 days from the
date of receipt of such Written Request; however, the Company may
defer payment for up to 6 months from the date when the Written
Request is received. If payment of amounts allocated to the
General Account is deferred for 30 days or more, the amount
payable will draw interest at a rate of not less than 3 1/2% per
year.
8.02 IRA Account Partial Redemption Privilege. A Participant-Owner may,
by Written Request, redeem a part of the Accumulated Value of his
IRA Account, subject to the terms of this provision. This privilege
may be exercised before the Annuity Date and before the
Participant-Owner's death.
The amount of each Partial Redemption must be at least $500. No
Partial Redemption will be permitted if less than $1,000 would
remain credited to the IRA Account after payment of the amount
requested to be redeemed and deduction of any applicable charge.
The Written Request must indicate the dollar amount to be paid and,
in the case of a redemption from a Separate Account, the type of
Accumulation Units to be canceled. Partial Redemptions from the
General Account will be on a LIFO (Last-In-First-Out) basis (i.e.,
redemptions shall first be made from the most recently established
General Account Sub-Account). If a Partial Redemption is requested,
the dollar amount of the request will be paid to the
Participant-Owner. In addition, the amount of any applicable
Redemption Charge will be deducted from the Accumulated Value. The
time limits of the Surrender Privilege Provision will apply to
Partial Redemptions.
-11-
8.03 Life Expectancy Distribution Benefit Redemptions. To the extent
permitted under Company rules, for each calendar year life
expectancy distributions (LED) may made to Participant-Owners and
their Beneficiaries. If the LED amount distributed from an IRA
Account during the calendar year does not exceed the minimum amount
required to be distributed to satisfy the requirements of Code
Section 401(a)(9), as determined by the an under its current life
expectancy distribution rules, such amount shall not be subject to
any redemption charge. Additional amounts withdrawn pursuant to an
LED election may also be withdrawn without charge; provided,
however, that amounts withdrawn during a calendar year from the
General Account on other than a Sub-Account maturity date pursuant
to an LED election shall be subject to the redemption charge
described in Section 8.04 to the extent that the aggregate amount
of such withdrawals made during the calendar year exceeds the
greater of (1) the minimum required to be paid to satisfy the
requirements of Code Section 401(a)(9), as determined in
accordance with the Company's life expectancy distribution rules,
or (2) 20% of the portion of the IRA Account Accumulated Value
allocated to the General Account on the preceding December 31.
8.04 IRA Account Surrender and Redemption Charge. Except for LED
distributions described in Section 8.03, if a Participant-Owner
surrenders his IRA Account or makes a Partial Redemption, a charge
of 4% will be made on the amount withdrawn from a General Account
Sub-Account on other than its maturity date. Provided, that the
total charges for Partial Redemptions and Surrender will not exceed
8% of the gross contributions allocated to the IRA Account.
8.05 Company's Right to Terminate. If no contributions have been
credited to an IRA Account for a period of three years, the
Company reserves the right to terminate the IRA Account for its
remaining Accumulated Value at any time its Accumulated Value is
less than $1,000.
PART IX
DEATH BENEFITS
9.01 Benefit Upon Death of Participant-Owner. If a Participant-Owner
dies prior to the Annuity Date while his IRA Account is in force,
the Company will pay a death benefit equal to the Accumulated
Value of the IRA Account as of the Valuation Date coincident with
or next following the date of receipt by the Company at its Home
Office of due proof of the Participant-Owner's death.
Unless the Participant-Owner has chosen a Death Benefit Annuity in
accordance with Section 10.03, if the Participant-Owner dies prior
to the Annuity Date, the death benefit will be paid to the
Participant-Owner's Beneficiary in one sum. Payment will be made
within 7 days of the date on which due proof of death is received
at the Company's Home Office.
-12-
However, at the Written Request of the Beneficiary, the death
benefit may be used to provide an annuity for the Beneficiary. Such
an annuity will be provided in accordance with the Annuity Options
provisions of this contract.
If a Participant-Owner dies on or after the Annuity Date and before
all guaranteed annuity payments have been made, any remaining
payments will be made to the Participant-Owner's Beneficiary. If
there is more than one Beneficiary, the death benefit will be paid
in one sum. This sum will be the commuted value of any unpaid
payments certain, commuted as of the Valuation Date coincident with
or next following the date of receipt by the Company at its Home
Office of due proof of death. Such commuted value will be computed
on the basis of the interest rate used in the determination of the
annuity benefit.
9.02 Additional Option for Spouse Beneficiary. If a Participant-Owner
dies prior to the Annuity Date while his IRA Account is in force
leaving his spouse as Beneficiary, at the Written Request of the
spouse Beneficiary, and with the consent of the Company:
(a) the death benefit will not be paid on the Participant-Owner's
death; however, all or a portion of the death benefit may be
withdrawn without charge within one year of the date on which
notice of death is received at the Company's Home Office;
(b) the spouse will become Owner of the Participant-Owner's IRA
Account; and
(c) as Owner, the spouse will be entitled to all rights and
benefits provided to Participant-Owners under this contract.
PART X
ANNUITY OPTIONS
10.01 Annuity Benefit. A Participant-Owner may choose the form of annuity
benefit to commence on the Participant-Owner's Annuity Date. The
benefit will be limited to the Annuity Options set forth below, and
any other option offered by the Company for this class of contracts.
If the Participant-Owner does not choose an option, Option I will
apply.
Each Participant-Owner's Certificate will be endorsed on the Annuity
Date. The endorsement will set forth the annuity benefits payable to
the Participant-Owner.
10.02 Funding of Annuity Options. All Annuity Options are funded through
the General Account.
-13-
10.03 Death Benefit Annuity. A Participant-Owner may direct that all or
part of any death benefit payable before the Annuity Date be paid
to the Beneficiary under one or more of the Annuity Options
provided in this contract.
If a Participant-Owner dies before the Annuity Date without
specifying an Annuity Option for the Beneficiary, the Beneficiary
may choose an option.
A corporate or fiduciary Beneficiary may choose only Option V.
10.04 Proof of Age and Survival of Payee. Proof of the payee's date of
birth is a condition precedent to payment of any annuity benefits
under this contract. The proof must be satisfactory to the Company,
and must be received at its Home Office.
The Company may require evidence that a payee is living. Such
evidence must be satisfactory to the Company and may be required
before any annuity payment is made under this contract.
10.05 Minimum Payments. Every Annuity Option must be paid on a monthly
basis. The initial monthly payment must be at least $50. If the
chosen option produces an initial monthly payment of less than $50,
the Surrender Value or death benefit will be paid in one sum. A
single payment of the Surrender Value will be made to the
Participant-Owner. A single payment of the death benefit will be
made to the Beneficiary.
10.06 Payment Period. Annuity payments to any payee shall cease with the
last payment due prior to the date of death of such payee (or
surviving payee in the case of joint payees) or with the later
completion of all guaranteed payments, as the case may be.
10.07 Annuity Value. The Annuity Value to be applied under an Annuity
Option will be the amount described below, less any premium taxes
payable by the Company as a result of the Annuity Option selection:
(a) If Option V is chosen at any time - the Surrender Value.
(b) If Option I, II, III, IV-A, IV-B, or any other Option offered
by the Company involving a life contingency is chosen - the
Accumulated Value.
(c) If a death benefit annuity is payable at any time - the
Accumulated Value.
The amount applied under an Annuity Option will be based on the IRA
Account Accumulated Value on a Valuation Date not more than four
weeks (uniformly applied) preceding the Annuity Date.
-14-
10.08 Monthly Payments. The amount of the first payment under Options I
through III will be determined on the basis of:
(a) the age nearest birthday of the payee on the Annuity Date;
and
(b) the Annuity Value applied under the Option.
The amount of the first monthly payment under Options IV-A and IV-B
will be determined on the basis of:
(a) the ages nearest birthday of the payees on the Annuity Date;
and
(b) the Annuity Value applied under the Option.
The amount of the first payment under Option V will be based on the
number of years certain selected and the Annuity Value applied.
The amount of each subsequent payment under Options I, II, III,
IVA, IVB and V will be in the same amount as the first payment;
except that under Option IVB, after the death of the first payee,
the amount of each payment to the surviving payee shall be 2/3rds
of the amount of the first payment.
10.09 Annuity Purchase Rates. The first payment under an Annuity Option
for each $1,000 of Annuity Value applied will be the greater of:
(a) the rate per $1,000 of Annuity Value applied specified in the
Company's published Non-Guaranteed Current Annuity Option
rates applicable to this class of contracts; or
(b) the rate set forth in Part XII of the contract for the
applicable Annuity Option.
The premium rates set forth in Part XII for annuities involving a
life contingency are equal to 102% of the premium rates
calculated using the 1983 Group Annuity Mortality Table with
Projection H (ages set back four years) assuming calendar year of
birth of 1930, and with interest at 5% per annum.
The premium rates set forth in Part XII for Option V are equal to
102% of the premium rates calculated using 5% interest per annum if
the period certain is for 10 years or longer; 4% if the period
certain is at least 5 years but less than 10 years; and 3% if the
period certain is less than 5 years.
-15-
10.11 Brief Description of Annuity Options.
OPTION I - LIFE ANNUITY WITH 120 MONTHLY PAYMENTS
GUARANTEED
Monthly payments during the life of the payee. If the payee dies
before 120 payments have been made, the monthly payments will
continue to the Beneficiary until a total of 120 payments have been
made.
OPTION II- LIFE ANNUITY
Monthly payments during the life of the payee.
OPTION III - UNIT REFUND LIFE ANNUITY
Monthly payments during the life of the payee. If the payee dies,
the monthly payments will be continued to the Beneficiary if (a)
exceeds (b) below.
(a) the dollar amount of the Annuity Value applied under this
option, divided by the first monthly payment.
(b) the number of monthly payments made under this option before
the death of the payee.
If (a) exceeds (b), the monthly payments will continue until the
total number of payments equals the number determined in (a).
OPTION IV-A - JOINT AND SURVIVOR LIFE ANNUITY
Monthly payments jointly to two payees during their joint lives.
One of the payees must be the Participant-Owner. If this option
is chosen after the Participant-Owner dies, one of the payees
must be the Beneficiary. The payments will continue during the
life of the survivor. The monthly payment to the survivor will be
the same amount which was paid during the joint lives of the two
payees.
OPTION IV-B - JOINT AND TWO-THIRDS SURVIVOR LIFE ANNUITY
Monthly payments jointly to two payees during their joint lives.
One of the payees must be the Participant-Owner. If this option
is chosen after the Participant-Owner dies, one of the payees
must be the Beneficiary. The payments will continue during the
life of the survivor. The monthly payment to the survivor will be
2/3rds of the amount which was paid during the joint lives of the
two payees.
OPTION V - ANNUITY CERTAIN
Monthly payments for a number of years. The number of years
selected may be from 1 to 30.
-16-
PART XI
GENERAL PROVISIONS
11.01 Entire Contract. This contract and the application of the
Policyholder, if any, a copy of which is attached to and made a
part of this contract, and the individual IRA Account
applications of the Participant-Owners constitute the entire
contract between the parties. All statements made by the
Policyholder or by the Participant-Owners shall be deemed
representations and not warranties and no such statement shall be
used in any contest unless it is contained in a written signed
application nor, if such statement was made by a
Participant-Owner, unless a copy of the application containing
such statement is, or has been, furnished to such
Participant-Owner or to his Beneficiary.
Only the President or a Vice President of the Company has power to
amend this contract, and no amendment will be effective unless it
is in writing.
11.02 Contract Amendments. The Company may amend the provisions of the
contract with advance written notice of 90 days to the Policyholder
and affected Participant-Owners. Provided, however, that no
amendment will affect:
(a) the amount or terms of any annuity purchased prior to the
effective date of the amendment; or
(b) the interest credited to or guaranteed with respect to a
General Account Sub-Account prior to the maturity date of
such Sub-Account.
Any amendment to the guarantees provided in Section 7.02 shall
apply only to IRA Accounts established under the contract after
the amendment effective date.
Amendments made by the Company to this contract shall be consistent
with amendments made by the Company under all contracts of this
class.
The consent of any Participant-Owner or Beneficiary will not be
required for any amendment to this contract.
Notwithstanding the foregoing, the Company may amend the contract
and any Certificate issued thereunder at any time without the
consent of any person to comply with applicable federal and state
laws, regulations and rulings. Such amendments will be effective as
required.
11.03 Right to Revoke IRA Account. A Participant-Owner may revoke his
IRA Account at any time between the date of his Account
application and the date 10 days after receipt of his Certificate
and receive a refund of the greater of (1) his entire
contribution; or (2) the IRA Account Accumulated Value plus any
amounts deducted from the Account or by SMA
-17-
Investment Trust for taxes, charges or fees. If a
Participant-Owner has elected that all or a portion of his
initial contribution be allocated to a Separate Account, the
Company will not make such Separate Account Allocation until the
Valuation Date that is 15 days from the date the IRA Account is
established. During such 15-day period such portion of the
initial contribution shall be allocated to the Money Market
Sub-Account. At the end of the 15-day period, such portion, plus
earnings, will be transferred to the appropriate Separate Account
Sub-Account.
In order to revoke an IRA Account, the Participant-Owner must
mail or deliver the Certificate (if it has already been received)
to the Home Office of the Company or to any local agency of the
Company. Mailing or delivery must occur on or before 10 days
after receipt of the Certificate for revocation to be effective.
11.04 Incontestability. This contract will be incontestable after one
year from its date of issue. No statement made by any
Participant-Owner shall be used in contesting the validity of his
IRA Account after such Account has been in force prior to contest
for a period of one year nor unless it is in a written
application signed by him.
11.05 Non-Assignability. This contract may not be assigned without the
written consent of the Company.
11.06 Protection of Proceeds. To the extent permitted by law, no payment
due or to become due a person under this contract or under any
Certificate issued hereunder may be assigned, nor shall any such
payment be subject to any creditor's claims.
11.07 Misstatement of Age. If a payee's age is misstated, the Company
will adjust all benefits under this contract to those that the
Annuity Value applied would have purchased at the correct age.
Any underpayments already made by the Company will be made up
immediately. Any overpayments made by the Company will be charged
against the benefits due after the adjustment.
11.08 Optional Annuity Date. A Participant-Owner may elect to change the
Annuity Date to an Optional Annuity Date. The Optional Annuity Date
may be changed at any time upon request. The Optional Annuity Date
must be the first day of any month:
(a) before the Participant-Owner's 85th birthday; and
(b) on or after the Participant-Owner's 50th birthday.
Any election to change the Annuity Date must be made by Written
Request.
The Written Request must be received at the Company's Home Office
at least one month before the Annuity Date.
-18-
11.09 Reports. The Company will furnish a report to each Participant-
Owner containing:
(a) a statement of the Accumulated Value of the portion of his
IRA Account allocated to the General Account;
(b) a statement of the number of Separate Account Accumulation
Units allocated to his IRA Account;
(c) the value of each Separate Account Accumulation Unit; and
(d) such other information as may be required by applicable laws,
rules and regulations.
This information shall be furnished when required by applicable
laws, rules and regulations.
11.10 Addition, Deletion, or Substitution of Separate Account
Investments. The Company reserves the right, subject to
compliance with applicable law, to make additions to, deletions
from, or substitutions for the shares of a Fund if the shares of
a Fund are no longer available for investment or if, in the
Company's judgment, further investment in any eligible Fund
should become inappropriate in view of the purposes of the
Sub-Accounts.
The Company will not substitute any shares attributable to a
Participant-Owner's interest in a Separate Account Sub-Account
without notice to the Participant-Owner and any prior approval of
the Securities and Exchange Commission required by the Investment
Company Act of 1940. This shall not prevent the Separate Account
from purchasing other securities for other series or classes of
contracts, or from permitting a conversion between series or
classes of policies or contracts on the basis of requests made by
owners.
The Company reserves the right to establish additional Separate
Account Sub-Accounts and to make such Sub-Accounts available to
any class or series of policies or contracts as the Company deems
appropriate. Each new Sub-Account would invest in a new
investment company or in shares of another open-end investment
company. Subject to obtaining any required approvals or any
consents required by applicable law, the Company also reserves
the right to eliminate or combine existing Separate Account
Sub-Accounts and to transfer the assets of one or more Separate
Account Sub-Accounts to any other Separate Account Sub-Accounts.
In the event of any substitution or change, the Company may, by
appropriate endorsement, make such changes in this and other
policies as may be necessary or appropriate to reflect the
substitution or change. If the Company considers it to be in the
best interests of contractholders, the Separate Account or any
Separate Account Sub-Account(s) may be operated as a management
company under the Investment Company Act
-19-
of 1940, or it may be deregistered under that Act in the event
registration is no longer required, or it may be combined with
other separate accounts of the Company.
11.11 Change of Name. Subject to compliance with applicable law, the
Company reserves the right to change the names of the Separate
Account or the Separate Account Sub-Accounts.
11.12 Federal Tax Considerations. The Company intends to make a charge
for any effect which the income, assets or existence of the
Separate Account may have upon its tax. The Separate Account
presently is not subject to tax, but the Company reserves the
right to assess a charge for taxes if the Separate Account at any
time becomes subject to tax.
11.13 Splitting of Units. The Company reserves the right to split the
value of an Accumulation Unit, if such action is deemed to be in
the best interest of the Participant-Owners and the Company. In
effecting any such split of unit value, strict equity will be
preserved and such split will have no material effect upon the
benefits, provisions or investment return of this contract or
upon the Participant-Owner, any Beneficiary, or the Company. A
split may be effected either to increase or decrease the number
of units.
11.14 Insulation of Separate Accounts. The investment performance of
the assets of a Separate Account is determined separately from
the other assets of the Company. The assets of a Separate Account
equal to the reserves and other contract liabilities with respect
to such Account shall not be chargeable with liabilities arising
out of any other business which the Company may conduct.
11.15 Meaning of Words used in Contract. Whenever any words are used
herein in the masculine gender, they shall be construed as though
they were used in the feminine or neuter gender in all cases
where they would so apply. Whenever any words are used herein in
the singular form, they shall be construed as though they were
also used in the plural form in all cases where they would so
apply.
11.16 Separate Account Voting Rights. Each Participant-Owner is
entitled to vote at meetings of contract owners of those Separate
Account Sub-Accounts to which the Participant-Owner currently has
allocated a portion of his IRA Account Accumulated Value. The
number of votes which a Participant-Owner may cast shall be
determined by dividing the dollar value of the Accumulation Units
of the Sub-Account by the net asset value of one Fund share.
Proper written notice of such meetings as required by law, shall be
given to each Participant-Owner.
-20-
Participant-Owners entitled to vote and the number of votes which
each may cast shall be determined as of a record date within ninety
days of the date of the meeting. To be entitled to vote, a
Participant-Owner must be a Participant-Owner on both the record
date as of which the number of votes is determined and the date of
the meeting. In determining the number of votes a person may cast,
fractional votes shall be disregarded.
11.17 Policyholder's Participation in Divisible Surplus. While this
Contract remains in force, the Company will annually ascertain and
credit to each IRA Account any divisible surplus allocable to such
Account. Annuities purchased under this contract are
non-participating.
-21-
Part XII
==============================Annuity Option Tables============================
Showing Amount of First Monthly Annuity Benefit Payment
For Each $1,000 of Annuity Value Applied
-------------------------------------------------------------------------------
Age
Nearest
Birthday OPTION I OPTION II OPTION III
-------------------------------------------------------------------------------
Life Annuity
with 120 Monthly Unit Refund
Payments Life Life
Guaranteed Annuity Annuity
---------------------------------------------------------
50 $ 5.06 $ 5.10 $ 5.00
51 5.11 5.16 5.05
52 5.17 5.22 5.10
53 5.23 5.29 5.16
54 5.29 5.36 5.22
55 5.36 5.43 5.28
56 5.43 5.50 5.34
57 5.50 5.58 5.41
58 5.58 5.67 5.49
59 5.66 5.76 5.56
60 5.74 5.85 5.64
61 5.83 5.96 5.72
62 5.93 6.07 5.80
63 6.03 6.18 5.92
64 6.13 6.31 6.01
65 6.24 6.44 6.11
66 6.36 6.59 6.21
67 6.48 6.74 6.36
68 6.60 6.91 6.47
69 6.73 7.09 6.59
70 6.87 7.28 6.71
71 7.01 7.48 6.91
72 7.15 7.69 7.05
73 7.30 7.91 7.19
74 7.46 8.15 7.33
75 7.61 8.41 7.59
-------------------------------------------------------------------------------
-22-
========================Annuity Option Tables (Continued)======================
Showing Amount of First Monthly Annuity Benefit Payment For Each $1,000 of
Annuity Value Applied
-------------------------------------------------------------------------------
OPTION IV-A
Joint and Survivor
Life Annuity
Older Age
----------------------------------------------------------------------
50 55 60 65 70 75 80
-------------------------------------------------------------------------------
Y 50 $ 4.65 $ 4.73 $ 4.82 $ 4.89 $ 4.95 $ 5.00 $ 5.03
0
U 55 4.85 4.97 5.08 5.18 5.25 5.31
N
G 60 5.13 5.29 5.44 5.57 5.66
E
R 65 5.52 5.74 5.94 6.10
A 70 6.06 6.36 6.64
G
E 75 6.81 7.24
80 7.87
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
OPTION IV-B
Joint and Two Thirds Survivor
Life Annuity
Older Age
----------------------------------------------------------------------
50 55 60 65 70 75 80
-------------------------------------------------------------------------------
Y 50 $ 4.94 $ 5.07 $ 5.22 $ 5.40 $ 5.60 $ 5.82 $ 6.06
0
U 55 5.22 5.39 5.59 5.83 6.08 6.35
N
G 60 5.59 5.83 6.10 6.39 6.70
E
R 65 6.10 6.43 6.78 7.16
A 70 6.82 7.25 7.73
G
E 75 7.80 8.40
80 9.17
-------------------------------------------------------------------------------
-23-
========================Annuity Option Tables (Continued)======================
Showing Amount of First Monthly Annuity Benefit Payment For Each $1,000 of
Annuity Value Applied
------------------------------------------------------
OPTION V
------------------------------------------------------
Xxxxxxx Xxxxxxx
Number of for a specified
Years Certain Number of Years
------------------------------------------------------
1 $ 82.78
2 42.00
3 28.41
4 21.62
5 17.96
6 15.25
7 13.32
8 11.87
9 10.75
10 10.30
11 9.57
12 8.97
13 8.47
14 8.03
15 7.66
16 7.34
17 7.05
18 6.80
19 6.58
20 6.38
21 6.20
22 6.04
23 5.90
24 5.76
25 5.64
26 5.53
27 5.43
28 5.34
29 5.25
30 5.17
------------------------------------------------------
-24-
Draft 4/13/92
(herein called the Company)
XXXXXX CERTIFIES that the retirement annuity and other benefits
described herein will be provided for the Participant-Owner and his
Beneficiary, in accordance with and subject to the conditions and provisions
of the Company's Group Annuity Contract No. GA-1234.
-------
Participant-Owner: Xxxx X. Xxx
-----------
Annuity Date: First Day of March , 2006
--------------
(month) (year)
Certificate Number: 001-620
-------
Date of Participation: May 1, 1992
-----------
The provisions described on the subsequent pages of this Certificate are
made a part of this Certificate. This Certificate does not modify any of the
provisions of the Contract either in its present form or as later amended.
RIGHT TO REVOKE IRA ACCOUNT: The Participant-Owner may revoke his IRA
Account established under the contract at any time between the date of his
Account application and the date 10 days after receipt of this Certificate
and receive a refund of the greater of (1) his entire contribution; or (2)
his IRA Account Accumulated Value plus any amounts deducted from the Account
or by SMA Investment Trust for taxes, charges or fees. If the Owner has
elected that all or a portion of his initial contribution be allocated to a
Separate Account, the Company will not make such Separate Account allocation
until the Valuation Date that is 15 days from the date his IRA Account is
established. During such 15-day period such portion of the initial
contribution shall be allocated to the Money Market Sub-Account. At the end
of the 15-day period, such portion, plus earnings, will be transferred to the
appropriate Separate Account Sub-Account.
In order to revoke an IRA Account, the Participant-Owner must mail or
deliver this Certificate (if it has already been received) to the Home Office
of the Company or to any local agency of the Company. Mailing or delivery
must occur on or before 10 days after receipt of the Certificate for
revocation to be effective.
PAYMENTS AND VALUES PROVIDED BY THE CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
|S| Xxxxxxx X. Xxxxx |S| Xxxx X. X'Xxxxx
Secretary President
GAC-IRA-2.00-92
(Endorsements)
(Back of Cover Page)
TABLE OF CONTENTS
-----------------
Page
Part I - Definitions .................................................... 1
Part II - IRA Accounts and Beneficiaries ................................. 3
Part III - Contributions .................................................. 4
Part IV - General Account Interest ....................................... 6
Part V - Separate Account Unit Values ................................... 7
Part VI - IRA Account Transfers .......................................... 8
Part VII - IRA Account Fees and Contract Guarantees ....................... 9
Part VIII - IRA Account Surrenders and Partial Redemptions ................. 10
Part IX - Death Benefits ................................................. 11
Part X - Annuity Options ................................................ 12
Part XI - General Provisions ............................................. 15
Part XII - Annuity Option Tables .......................................... 19
PART I
DEFINITIONS
1.01 "Accumulation Unit" means the measure by which the Owner's interest
in a Separate Account is determined prior to the Annuity Date.
1.02 "Accumulated Value" means the value of the Owner's IRA Account on
any Valuation Date prior to the Annuity Date. The value of an IRA
Account on any Valuation Date is equal to the sum of the value of
all Accumulation Units plus the value of all General Account
accumulations then credited to the IRA Account.
1.03 "Annuity Date" means the date on which annuity payments are to
begin. If the Owner does not elect an Optional Annuity Date,
annuity payments will begin on the Annuity Date specified on the
face page of this Certificate.
1.04 "Beneficiary" means the person or institution designated in writing
on a form furnished by or satisfactory to the Company to receive
any death benefit payable under the Contract upon the Owner's or
other designated person's death.
1.05 "Code" means the Internal Revenue Code of 1986, as amended.
1.06 "Company" means State Mutual Life Assurance Company of America.
1.07 "Funds" means the Growth Fund, Income Appreciation Fund, Money
Market Fund, Equity Index Fund and Government Bond Fund of SMA
Investment Trust and such other Funds as may be made available by
the Company from time to time. Any additional Funds shall be added
to this Certificate by an endorsement.
1.08 "General Account" means the investment account established and
maintained by the Company for its assets which are not allocated to
a Separate Account. All contributions made by the Owner which are
allocated to a General Account Sub-Account are part of the
Company's General Account.
1.09 "Group Annuity Contract" or "Contract" means the Company's Group
Annuity Contract specified on the face page of this Certificate.
1.10 "Home Office" means the Company's office located at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
-1-
1.11 "IRA Account" means the account established under the Contract for
the Owner in accordance with Section 408(b) of the Code.
1.12 "Participant-Owner" or "Owner" means the individual specified on
the face page hereof.
1.13 "Separate Account" means the Company's Separate Account I and such
other of the Company's Separate Accounts that may be offered as an
investment choice under the Contract to the Owner from time to
time. Any additional Separate Accounts shall be added to this
Certificate by an endorsement.
1.14 "Sub-Account" means either a General Account or Separate Account
Sub-Account.
General Account Sub-Accounts shall be established from time to time
by the Company under the Contract for purposes of crediting
interest to Net Contributions allocated to the General Account.
Each General Account Sub-Account shall have a stated interest rate
guaranteed until a specific maturity date, as described in
Section 4.02. Interest rates and maturity dates shall be specified
by the Company.
Separate Account Sub-Account means each subdivision of a Separate
Account. The assets of each Separate Account Sub-Account are
invested exclusively in shares of the corresponding Fund of SMA
Investment Trust or other corresponding Fund made available by the
Company.
1.15 "Surrender Value" means the Accumulated Value of the IRA Account
less any applicable surrender charges (as specified on page 11),
and IRA Account fee (as specified on page 9).
1.16 "Valuation Date" means the time as of which the Accumulated Value
of the IRA Account is determined. Valuation Dates occur at the
close of business on each day on which the New York Stock
Exchange is open for trading. The Company reserves the right to
change the time which it designates as the Valuation Date. The
Company also reserves the right to change the frequency of
Valuation Dates.
1.17 "Valuation Period" means the interval between two consecutive
Valuation Dates.
1.18 "Written Request" or "Written Notice" means a request or notice in
writing satisfactory to the Company and filed at its Home Office.
With the consent of the Company, IRA Account investment transfers,
contribution allocation instructions and other specified
transactions that may be made by Written Request may also be made
by the Owner by telephone request. A properly completed
authorization form must be on file at the Company's Home Office
before telephone instructions will be honored.
-2-
PART II
IRA ACCOUNTS AND BENEFICIARIES
2.01 IRA Accounts. Each IRA Account established under the Contract is
intended to be an individual retirement annuity qualified under
Code Section 408(b) and Regulations thereunder. Each IRA Account
is for the exclusive benefit of the Owner, the Owner's
Beneficiary and, in the case of an IRA Account established for an
Owner's spouse, such spouse and such spouse's Beneficiary. Each
IRA Account established under the Contract shall meet the
following requirements:
(a) Each Participant-Owner is the owner of his IRA Account.
(b) Only cash or checks will be accepted as a contribution to an
IRA Account.
(c) Contributions shall be subject to the limitations set forth
in Part III.
(d) IRA Accounts may not be transferred by the Owner.
(e) No part of the Owner's interest in his IRA Account can be
forfeited.
(f) An Owner may not make any loans under his IRA Account. An IRA
Account cannot be pledged, assigned or otherwise used to
secure a loan.
(g) Payments must be made or commenced not later than the April 1
following the taxable year in which the Owner attains age 70
1/2. Distributions shall be made in accordance with the
requirements of Code Section 401(a)(9) and Regulations
thereunder.
(h) Death benefits must be paid as provided in Part IX.
2.02 IRA Account Beneficiary. Each IRA Account Beneficiary is as named
in the IRA Account application unless changed in accord with the
terms of the Contract. All death benefits provided under the
Contract will be divided equally among the surviving
Beneficiaries, unless the Owner directs otherwise.
Unless the Owner directs otherwise, the interest of a Beneficiary
who dies before the Owner will pass to any surviving Beneficiaries
in proportion to their share in the proceeds. If there is no
surviving Beneficiary, the deceased Beneficiary's interest will
pass to the estate of the Owner.
An Owner may declare the choice of any Beneficiary to be
irrevocable.
-3-
2.03 Change of Beneficiary. The Owner may change any Beneficiary,
except an irrevocable one, any time while the IRA Account is in
force. Such change may be made only by Written Request. When the
Company receives the request, the change will take place as of
the date it was signed, even if the Owner is not living on the
date the Company receives the request. Any rights created by the
change will be subject to any payment made or action taken by the
Company before the change was recorded.
PART III
CONTRIBUTIONS
3.01 Initial Contributions, Establishment of IRA Accounts. An employee
or former employee of the Policyholder who receives a
distribution from a qualified retirement plan maintained by the
Policyholder which is eligible for rollover treatment (as
described in Code Section 402(a)(5), 402(a)(6) or 403(a)(4)) may
establish an IRA Account by making a contribution under the
Contract in an amount not to exceed the taxable portion of such
distribution. To establish an IRA Account, the initial
contribution must be at least $3,500 (or such smaller amount as
meets the Company's then current minimum requirement for the
initial contribution).
An Owner may establish an additional IRA Account for his spouse.
Such spousal IRA shall be established and maintained in
accordance with Code Sections 219(c) and 408(b). If a spousal IRA
Account is established, the spouse shall be treated as an Owner
for purposes of the Contract. Any such spouse shall be issued a
separate Certificate.
Unless an Owner requests otherwise in writing, separate IRA
Accounts shall be maintained under the Contract for (1) rollover
contributions and (2) annual deductible and non-deductible
contributions made by the Owner. A separate Certificate shall be
issued for each separate IRA Account maintained for the Owner.
3.02 Additional Contributions. After an IRA Account has been
established, and while the IRA Account is in force, an Owner may
make additional contributions, as described below:
(a) No additional contribution of less than $1,000 (or such
smaller amount as meets the Company's then minimum
contribution requirement) will be accepted by the Company.
(b) Except for additional rollover contributions or spousal IRA
contributions described in (c) and (d) below, for any
taxable year of the Owner, the Owner may make deductible or
nondeductible contributions that, in total, do not exceed
the lesser of $2,000 or 100% of the Owner's Compensation
for the taxable year. "Compensation" means compensation as
defined in Code Section 219(f) and Regulations thereunder.
Compensation includes
-4-
income from employment, fees and net earnings from
self-employment and alimony but does not include such items
as investment income, rent or royalties.
(c) An Owner may make an additional rollover contribution as
defined in Code Section 402(a)(5), 402(a)(6), 402(a)(7),
403(a)(4), 403(b)(8), or 408(d)(3).
(d) If a spousal IRA Account has been established, for any
taxable year an Owner may contribute up to $2,250 in total
to his and his spousal IRA Accounts; provided, however,
that except for additional rollover contributions described
in (c) above, a maximum contribution of $2,000 may be made
to any one IRA Account for a taxable year.
3.03 Contribution Requirements. All contributions are payable at the
Company's Home Office. The initial contribution will be credited
to an IRA Account as of the date that both the properly completed
application for the IRA Account and the initial payment are
received by the Company at its Home Office. If the application is
incomplete, or does not specify how payments are to be allocated,
the initial contribution will be returned within five business
days. After an IRA Account has been established, additional
payments intended to be allocated to the General Account must be
received by the Company no later than 1:00 p.m. Eastern time in
order to be credited to the IRA Account on the date of receipt.
Additional payments received after that time intended to be
allocated to the General Account will be credited to the IRA
Account the next business day. Additional payments intended to be
allocated to a Separate Account Sub-Account will be credited to
an IRA Account at the unit value computed as of the Valuation
Date that the payment is received at the Company's Home Office.
Each contribution shall be accompanied by a form provided by or
satisfactory to the Company which shall indicate the type of
contribution being made, the taxable year for which the
contribution is intended (if applicable) and investment
allocation instructions.
Contributions described in Section 3.02(b) or (d) must be received
by the Company by April 15 of the year following the calendar year
to which the contributions are attributable.
3.04 Net Contributions. Each Net Contribution is equal to the gross
contribution received from the Owner less the amount of any premium
tax which must be paid by the Company as a result of the payment
being credited to the Contract.
-5-
Net Contributions will be allocated to the General Account or
applied to purchase Separate Account Accumulation Units, as
directed by the Owner. In the case of an allocation to a Separate
Account Sub-Account, the number of Accumulation Units to be
credited to the IRA Account will be determined as provided in
Section 5.01.
3.05 Net Contributions Allocations. Net Contributions will be
allocated on a percentage basis among the General Account and/or
the Separate Account Sub-Accounts as specified in writing by the
Owner, provided, however, that if a Net Contribution is to be
allocated between two or more Sub-Accounts, at least $500 must be
allocated to each Account. If the percentage allocation elected
by the Owner would result in an allocation of less than $500 to
any one Sub-Account, the Company reserves the right to allocate
such amount in accordance with Company rules and procedures.
By Written Request, at any time the Owner may change the allocation
of future Net Contributions.
PART IV
GENERAL ACCOUNT INTEREST
4.01 Crediting of Interest. Interest will be credited daily to Net
Contributions allocated to each General Account Sub-Account.
Interest will be credited from the Valuation Date the Net
Contribution is credited to the Sub-Account to the Valuation Date
preceding the date the Net Contribution is distributed from the
Sub-Account. Interest will be calculated on a simple interest
method, based on the ending daily balances in the Sub-Account, with
interest compounded annually.
4.02 Establishment of Sub-Accounts; Interest Rates. Sub-Accounts will be
established on the first day of each calendar month for Net
Contributions to be allocated to the General Account during the
month. The interest guarantee or guarantees applicable to Net
Contributions to be allocated during a month will be determined in
advance by the Company and will apply for the deposit period and
thereafter until the Sub-Account maturity date. Until changed by the
Company, Sub-Account maturity dates will occur three years following
the last day of the deposit period (i.e., the last day of the
calendar month). All Sub-Account effective dates, deposit periods,
interest guarantees and maturity dates will be specified by the
Company at least 30 days prior to the Sub-Account effective date.
Although the Company currently intends to follow the rules outlined
above, the Company reserves the right to change prospectively the
frequency of Sub-Account effective dates, to change the length of
deposit periods and to change the period of interest guarantees.
Provided, that the interest rate applicable to Net Contributions
allocated to the General Account will be guaranteed for a period of
at least one year and in no
-6-
event will such interest rate be less than an interest rate of
4 1/2% compounded annually for the first five years; 4% compounded
annually for the next five years; and 3 1/2% compounded annually
thereafter.
4.03 Application of Accumulated Values on Sub-Account Maturities. At
least 30 days prior to the maturity date of a General Account
Sub-Account, the Company will notify the Owner, if affected, in
writing of the interest guarantee and new maturity date that will
be established for Sub-Account Accumulated Values upon the
Sub-Account maturity date. Unless the Owner directs otherwise,
amounts allocated to a matured Sub-Account will be allocated to
the General Account Sub-Account effective on the day following
the Sub-Account maturity date. Any such direction must be in
writing and must be received by the Company at least 5 business
days prior to the Sub-Account maturity date.
PART V
SEPARATE ACCOUNT UNIT VALUES
5.01 Accumulation Unit Values. Accumulation Units will be credited to
the IRA Account for benefits funded by a Separate Account
Sub-Account. The number of Accumulation Units to be credited to
the IRA Account at the time any Net Contribution is to be
allocated will be equal to the portion of the Net Contribution to
be allocated, as specified by the Owner, divided by the dollar
value of the applicable Sub-Account Accumulation Unit as of the
Valuation Date such payment is allocated.
The dollar value of a Sub-Account Accumulation Unit as of any
Valuation Date will be determined by multiplying the dollar value
of such Accumulation Unit as of the immediately preceding Valuation
Date by the Net Investment Factor for the Valuation period at the
end of which the Accumulation Unit value is being determined.
On any Valuation Date prior to the Annuity Date, the Accumulated
Value of the portion of the IRA Account allocated to a Separate
Account Sub-Account will be the sum of the value of all such
Sub-Account Accumulation Units then credited to the IRA Account.
5.02 Adjusted Gross Investment Rate. The Adjusted Gross Investment Rate
of a Separate Account Sub-Account for any Valuation Period is equal
to:
(a) (i) the investment income of such Sub-Account for the
Valuation Period, plus capital gains and minus capital
losses of such Sub-Account for the Valuation Period,
whether realized or unrealized; minus
(ii) an amount for capital gains taxes and any other taxes
based on income of, assets in, or the existence of
such Sub-Account, whichever may be applicable;
divided by
-7-
(b) the amount of such Sub-Account's assets at the beginning of
the Valuation Period.
The Adjusted Gross Investment Rate may be positive or negative.
5.03 Net Investment Rate and Net Investment Factor. The Net Investment
Rate of a Separate Account Sub-Account for any Valuation Period
shall be equal to the Sub-Account Adjusted Gross Investment Rate
for such Valuation Period decreased by (a) a factor equivalent to
.0090 per annum for mortality and expense risks and (b) a factor
equivalent to .0025 per annum for administrative charges
associated with the Sub-Account. Such factors may be increased or
decreased by the Board of Directors of the Company, but in no
event shall they exceed the maximum stated in the Guarantees
provision.
The Net Investment Factor of a Separate Account Sub-Account is
1.000000 plus the Sub-Account Net Investment Rate.
PART VI
IRA ACCOUNT TRANSFERS
6.01 IRA Account Transfers. Prior to the Annuity Date, the Owner may
request in writing that:
(a) all or a portion of his IRA Account allocated to the General
Account be transferred to one or more Separate Account
Sub-Account(s);
(b) all or a portion of his IRA Account allocated to a Separate
Account Sub-Account be transferred to the General Account;
or
(c) all or a portion of his IRA Account allocated to one
Separate Account Sub-Account be transferred to one or more
other Separate Account Sub-Account(s).
6.02 Transfer Date. Subject to the restrictions described herein, all
transfers shall be made on the Valuation Date coincident with, or
next following, the date a Written Request for such transfer is
received by the Company.
6.03 Transfer Restrictions. Transfers from a General Account
Sub-Account may be made without restriction on the Sub-Account
maturity date. During each calendar year the Owner may make up to
four additional transfers. Such transfers may be made from
Separate Account Sub-Accounts or from General Account
Sub-Accounts prior to their maturity date. Provided, that the
maximum dollar amount that may be transferred during a calendar
year from General Account Sub-Accounts prior to their maturity
date is 20% of the value on the preceding December 31 of the
portion of the IRA Account Accumulated Value that
-8-
was allocated to the General Account. Transfers from non-matured
General Account Sub-Accounts will be on a LIFO (Last-in-First-out)
basis (i.e., transfers will be first made from the most recently
established Sub-Account).
Transfers from General Account and Separate Account Sub-Accounts
must be in a minimum amount of $500, or the entire portion of the
IRA Account allocated to the Sub-Account, if less.
6.04 Minimum Balances. If a transfer would reduce the value of the
portion of the IRA Account allocated to a General Account or
Separate Account Sub-Account to less than $1,000, the Company
reserves the right to include the remaining value allocated to the
Sub-Account in the total to be transferred.
PART VII
IRA ACCOUNT FEES AND CONTRACT GUARANTEES
7.01 IRA Account Fees. While the IRA Account is in force and prior to
the Annuity Date, the Company will deduct an annual IRA Account
fee. The amount of the fee will be $25. This fee will be deducted
on the last Valuation Date of the month in which occurs the
anniversary date of the establishment of the IRA Account and also
on the date the IRA Account is surrendered. The fee will be
deducted pro rata from each General Account and Separate Account
Sub-Account to which IRA Account Net Contributions are currently
allocated. Provided, however, that the fee will be reduced or
eliminated, as necessary, to the extent its full deduction would
result in amounts allocated to a General Account Sub-Account
being credited with interest at a rate lower than the minimum
rate specified in Section 4.02.
7.02 Contract Guarantees. The Company makes the following guarantees for
IRA Accounts established under the Contract:
(a) The factors deducted from the Adjusted Gross Investment Rate
of a Separate Account Sub-Account to obtain its Net
Investment Rate will not exceed the equivalent of (i) .90%
per annum for mortality and expense risks and (ii) .25% per
annum for administrative charges.
(b) The IRA Account Fee and Surrender Charge will not exceed the
amount specified in this Certificate.
(c) The interest rate for Net Contributions allocated to the
General Account will be guaranteed for at least one year and
will never be at a rate less than the applicable minimum
rate specified in Section 4.02.
-9-
The Company assumes the risk that actual mortality experience and
expenses may exceed the maximum charges made to cover such
mortality and expenses. If actual mortality experience and
expenses exceed the amounts provided for such costs, the Company
will absorb the resultant losses. If actual mortality experience
and expenses are less than the amounts provided for such costs,
the difference will be a profit to the Company.
PART VIII
IRA ACCOUNT SURRENDERS AND PARTIAL REDEMPTIONS
8.01 Surrender Privilege. At any time prior to the Annuity Date, the
Owner may, by Written Request, surrender his IRA Account for its
Surrender Value. The Surrender Value will be based on the
Accumulated Value of the IRA Account on the Valuation Date
coincident with or next following the date the Company receives the
Written Request. When surrendered, the IRA Account is terminated.
After termination, the Company will have no further liability for
the IRA Account.
The Surrender Value for the portion of the IRA Account allocated to
a Separate Account shall be paid within 7 days (plus any period of
extension under applicable laws, rules and regulations governing
the redemption of variable annuities) from the date of receipt of
such Written Request.
The Surrender Value for the portion of the IRA Account allocated to
the General Account shall normally be paid within 7 days from the
date of receipt of such Written Request; however, the Company may
defer payment for up to 6 months from the date when the Written
Request is received. If payment of amounts allocated to the General
Account is deferred for 30 days or more, the amount payable will
draw interest at a rate of not less than 3 1/2% per year.
8.02 Partial Redemption Privilege. The Owner may, by Written Request,
redeem a part of the Accumulated Value of the IRA Account, subject
to the terms of this provision. This privilege may be exercised
before the Annuity Date and before the Owner's death.
The amount of each Partial Redemption must be at least $500. No
Partial Redemption will be permitted if less than $1,000 would
remain credited to the IRA Account after payment of the amount
requested to be redeemed and deduction of any applicable charge.
The Written Request must indicate the dollar amount to be paid and,
in the case of a redemption from a Separate Account, the type of
Accumulation Units to be canceled. Partial Redemptions from the
General Account will be on a LIFO (Last-In-First-Out) basis (i.e.,
redemptions shall first be made from the most recently established
General Account Sub-Account). If a Partial Redemption is requested,
the
-10-
dollar amount of the request will be paid to the Owner. In
addition, the amount of any applicable Redemption Charge will be
deducted from the Accumulated Value. The time limits of the
Surrender Privilege Provision will apply to Partial Redemptions.
8.03 Life Expectancy Distribution Benefit Redemptions. To the extent
permitted under Company rules, for each calendar year life
expectancy distributions (LED) may be made to the Owner and his
Beneficiary. If the LED amount distributed from the IRA Account
during the calendar year does not exceed the minimum amount
required to be distributed to satisfy the requirements of Code
Section 401(a)(9), as determined by the Company under its current
life expectancy distribution rules, such amount shall not be
subject to any redemption charge. Additional amounts withdrawn
pursuant to an LED election may also be withdrawn without charge;
provided that amounts withdrawn during a calendar year from the
General Account on other than a Sub-Account maturity date
pursuant to an LED election shall be subject to the redemption
charge described in Section 8.04 to the extent that the aggregate
amount of such withdrawals made during the calendar year exceeds
the greater of (1) the minimum required to be paid to satisfy the
requirements of Code Section 401(a)(9), as determined in
accordance with the Company's life expectancy distribution rules,
or (2) 20% of the portion of the IRA Account Accumulated Value
allocated to the General Account on the preceding December 31.
8.04 IRA Account Surrender and Redemption Charge. Except for LED
distributions described in Section 8.03, if the Owner surrenders
the IRA Account or makes a Partial Redemption, a charge of 4%
will be made on the amount withdrawn from a General Account
Sub-Account on other than its maturity date. Provided, that the
total charges for Partial Redemptions and Surrender will not
exceed 8% of the gross contributions allocated to the IRA Account.
8.05 Company's Right to Terminate. If no contributions have been
credited to an IRA Account for a period of three years, the
Company reserves the right to terminate the IRA Account for its
remaining Accumulated Value at any time its Accumulated Value is
less than $1,000.
PART IX
DEATH BENEFITS
9.01 Benefit Upon Death of Owner. If the Owner dies prior to the
Annuity Date while the IRA Account is in force, the Company will
pay a death benefit equal to the Accumulated Value of the IRA
Account as of the Valuation Date coincident with or next
following the date of receipt by the Company at its Home Office
of due proof of the Owner's death.
-11-
Unless the Owner has chosen a Death Benefit Annuity in accordance
with Section 10.03, if the Owner dies prior to the Annuity Date,
the death benefit will be paid to the Owner's Beneficiary in one
sum. Payment will be made within 7 days of the date on which due
proof of death is received at the Company's Home Office. However,
at the Written Request of the Beneficiary, the death benefit may
be used to provide an annuity for the Beneficiary. Such an
annuity will be provided in accordance with the Annuity Options
provisions of the Contract, as described in Part X.
If the Owner dies on or after the Annuity Date and before all
guaranteed annuity payments have been made, any remaining
payments will be made to the Beneficiary. If there is more than
one Beneficiary, the death benefit will be paid in one sum. This
sum will be the commuted value of any unpaid payments certain,
commuted as of the Valuation Date coincident with or next
following the date of receipt by the Company at its Home Office
of due proof of death. Such commuted value will be computed on
the basis of the interest rate used in the determination of the
annuity benefit.
9.02 Additional Option for Spouse Beneficiary. If the Owner dies prior
to the Annuity Date while the IRA Account is in force leaving his
spouse as Beneficiary, at the Written Request of the spouse
Beneficiary, and with the consent of the Company:
(a) the death benefit will not be paid on the Owner's death;
however, all or a portion of the death benefit may be
withdrawn without charge within one year of the date on
which notice of death is received at the Company's Home
Office;
(b) the spouse will become Owner of the IRA Account; and
(c) as Owner, the spouse will be entitled to all rights and
benefits provided to Owners under the Contract.
PART X
ANNUITY OPTIONS
10.01 Annuity Benefit. The Owner may choose the form of annuity benefit
to commence on the Owner's Annuity Date. The benefit will be
limited to the Annuity Options described below, and any other
option offered by the Company under the Contract.
If the Owner does not choose an option, Option I will apply.
This Certificate will be endorsed on the Annuity Date. The
endorsement will set forth the annuity benefits payable to the
Owner.
-12-
10.02 Funding of Annuity Options. All Annuity Options are funded through
the General Account.
10.03 Death Benefit Annuity. The Owner may direct that all or part of any
death benefit payable before the Annuity Date be paid to the
Beneficiary under one or more of the Annuity Options provided in
the Contract.
If the Owner dies before the Annuity Date without specifying an
Annuity Option for the Beneficiary, the Beneficiary may choose an
option.
A corporate or fiduciary Beneficiary may choose only Option V.
10.04 Proof of Age and Survival of Payee. Proof of the payee's date of
birth is required before payment of any annuity benefits. The proof
must be satisfactory to the Company, and must be received at its
Home Office.
The Company may require evidence that a payee is living. Such
evidence must be satisfactory to the Company and may be required
before any annuity payment is made.
10.05 Minimum Payments. Every Annuity Option must be paid on a monthly
basis. The initial monthly payment must be at least $50. If the
chosen option produces an initial monthly payment of less than $50,
the Surrender Value or death benefit will be paid in one sum. A
single payment of the Surrender Value will be made to the Owner. A
single payment of the death benefit will be made to the
Beneficiary.
10.06 Payment Period. Annuity payments shall cease with the last payment
due prior to the date of death of the payee (or surviving payee in
the case of joint payees) or with the later completion of all
guaranteed payments, as the case may be.
10.07 Annuity Date. The Annuity Value to be applied under an Annuity
Option will be the amount described below; any premium taxes
payable by the Company as a result of the Annuity Option selection:
(a) If Option V is chosen - the Surrender Value.
(b) If Option I, II, III, IV-A, IV-B, or any other Option
offered by the Company involving a life contingency is
chosen - the Accumulated Value.
(c) If a death benefit annuity is payable - the Accumulated
Value.
The amount applied under an Annuity Option will be based on the IRA
Account Accumulated Value on a Valuation Date not more than four
weeks (uniformly applied) preceding the Annuity Date.
-13-
10.08 Monthly Payments. The amount of the first payment under Options I
through III will be determined on the basis of:
(a) the age nearest birthday of the payee on the Annuity Date;
and
(b) the Annuity Value applied under the Option.
The amount of the first monthly payment under Options IV-A and IV-B
will be determined on the basis of:
(a) the ages nearest birthday of the payees on the Annuity Date;
and
(b) the Annuity Value applied under the Option.
The amount of the first payment under Option V will be based on the
number of years certain selected and the Annuity Value applied.
The amount of each subsequent payment under Options I, II, III,
IVA, IVB and V will be in the same amount as the first payment;
except that under Option IVB, after the death of the first payee,
the amount of each payment to the surviving payee shall be 2/3rds
of the amount of the first payment.
10.09 Annuity Purchase Rates. The first payment under an Annuity Option
for each $1,000 of Annuity Value applied will be the greater of:
(a) the rate per $1,000 of Annuity Value applied specified in the
Company's published Non-Guaranteed Current Annuity Option
rates applicable to the Contract; or
(b) the rate set forth in Part XII of this Certificate for the
applicable Annuity Option.
10.10 Brief Description of Annuity Options.
OPTION I - LIFE ANNUITY WITH 120 MONTHLY PAYMENTS GUARANTEED
Monthly payments during the life of the payee. If the payee dies
before 120 payments have been made, the monthly payments will
continue to the Beneficiary until a total of 120 payments have been
made.
OPTION II- LIFE ANNUITY
Monthly payments during the life of the payee..
-14-
OPTION III - UNIT REFUND LIFE ANNUITY
Monthly payments during the life of the payee. If the payee dies,
the monthly payments will be continued to the Beneficiary if (a)
exceeds (b) below.
(a) the dollar amount of the Annuity Value applied under this
option, divided by the first monthly payment.
(b) the number of monthly payments made under this option before
the death of the payee.
If (a) exceeds (b), the monthly payments will continue until the
total number of payments equals the number determined in (a).
OPTION IV-A - JOINT AND SURVIVOR LIFE ANNUITY
Monthly payments jointly to two payees during their joint lives.
One of the payees must be the Owner. If this option is chosen
after the Owner dies, one of the payees must be the Beneficiary.
The payments will continue during the life of the survivor. The
monthly payment to the survivor will be the same amount which was
paid during the joint lives of the two payees.
OPTION IV-B - JOINT AND TWO-THIRDS SURVIVOR LIFE ANNUITY
Monthly payments jointly to two payees during their joint lives.
One of the payees must be the Owner. If this option is chosen
after the Owner dies, one of the payees must be the Beneficiary.
The payments will continue during the life of the survivor. The
monthly payment to the survivor will be 2/3rds of the amount
which was paid during the joint lives of the two payees.
OPTION V - ANNUITY CERTAIN
Monthly payments for a number of years. The number of years
selected may be from 1 to 30.
PART XI
GENERAL PROVISIONS
11.01 Contract Amendments. The Company may amend the provisions of the
Contract with advance written notice of 90 days to the Policyholder
and affected Owners. Provided, however, that no the guarantees
provided in Section 7.02 may not be amended or deleted and no
amendment will affect:
(a) the amount or terms of any annuity purchased prior to the
effective date of the amendment; or
-15-
(b) the interest credited to or guaranteed with respect to a
General Account Sub-Account prior to the maturity date of
such Sub-Account.
The consent of any Owner or Beneficiary will not be required for
any amendment to the Contract.
Notwithstanding the foregoing, the Company may amend the Contract
and this Certificate at any time without the consent of the Owner
or any person to comply with applicable federal and state laws,
regulations and rulings. Such amendments will be effective as
required.
11.02 Protection of Proceeds. To the extent permitted by law, no payment
due or to become due a person under the Contract or under this
Certificate may be assigned, nor shall any such payment be subject
to any creditor's claims.
11.03 Misstatement of Age. If a payee's age is misstated, the Company
will adjust all annuity benefits to those that the Annuity Value
applied would have purchased at the correct age. Any
underpayments already made by the Company will be made up
immediately. Any overpayments made by the Company will be charged
against the benefits due after the adjustment.
11.04 Optional Annuity Date. The Owner may elect to change the Annuity
Date to an Optional Annuity Date. The Optional Annuity Date may be
changed at any time upon request. The Optional Annuity Date must be
the first day of any month:
(a) before the Owner's 85th birthday; and
(b) on or after the Owner's 50th birthday.
Any election to change the Annuity Date must be made by Written
Request.
The Written Request must be received at the Company's Home Office
at least one month before the Annuity Date.
11.05 Reports. The Company will furnish a report to the Owner
containing a statement of value of his IRA Account; and such
other information as may be required by applicable laws, rules
and regulations.
This information shall be furnished when required by applicable
laws, rules and regulations.
-16-
11.06 Addition, Deletion, or Substitution of Separate Account
Investments. The Company reserves the right, subject to
compliance with applicable law, to make additions to, deletions
from, or substitutions for the shares of a Fund if the shares of
a Fund are no longer available for investment or if, in the
Company's judgment, further investment in any eligible Fund
should become inappropriate in view of the purposes of the
Sub-Accounts.
The Company will not substitute any shares attributable to an
Owner's interest in a Separate Account Sub-Account without notice
to the Owner and any prior approval of the Securities and
Exchange Commission required by the Investment Company Act of
1940. This shall not prevent the Separate Account from purchasing
other securities for other series or classes of contracts, or
from permitting a conversion between series or classes of
policies or contracts on the basis of requests made by owners.
The Company reserves the right to establish additional Separate
Account Sub-Accounts and to make such Sub-Accounts available to
any class or series of policies or contracts as the Company deems
appropriate. Each new Sub-Account would invest in a new
investment company or in shares of another open-end investment
company. Subject to obtaining any required approvals or any
consents required by applicable law, the Company also reserves
the right to eliminate or combine existing Separate Account
Sub-Accounts and to transfer the assets of one or more Separate
Account Sub-Accounts to any other Separate Account Sub-Accounts.
In the event of any substitution or change, the Company may, by
appropriate endorsement, make such changes in this and other
policies as may be necessary or appropriate to reflect the
substitution or change. If the Company considers it to be in the
best interests of contract holders, the Separate Account or any
Separate Account Sub-Account(s) may be operated as a management
company under the Investment Company Act of 1940, or it may be
deregistered under that Act in the event registration is no longer
required, or it may be combined with other separate accounts of the
Company.
11.07 Change of Name. Subject to compliance with applicable law, the
Company reserves the right to change the names of the Separate
Account or the Separate Account Sub-Accounts.
11.08 Federal Tax Considerations. The Company intends to make a charge
for any effect which the income, assets or existence of the
Separate Account may have upon its tax. The Separate Account
presently is not subject to tax, but the Company reserves the
right to assess a charge for taxes if the Separate Account at any
time becomes subject to tax.
11.09 Splitting of Units. The Company reserves the right to split the
value of an Accumulation Unit, if such action is deemed to be in
the best interest of the Owners and the Company. In effecting any
such split of unit value, strict equity will be preserved and
such split will have no material effect
-17-
upon the benefits, provisions or investment return of the Contract
or upon the Owner, any Beneficiary, or the Company. A split may be
effected either to increase or decrease the number of units.
11.10 Insulation of Separate Accounts. The investment performance of
the assets of a Separate Account is determined separately from
the other assets of the Company. The assets of a Separate Account
equal to the reserves and other contract liabilities with respect
to such Account shall not be chargeable with liabilities arising
out of any other business which the Company may conduct.
11.11 Meaning of Words used in Certificate. Whenever any words are used
herein in the masculine gender, they shall be construed as though
they were used in the feminine or neuter gender in all cases where
they would so apply. Whenever any words are used herein in the
singular form, they shall be construed as though they were also
used in the plural form in all cases where they would so apply.
11.12 Separate Account Voting Rights. The Owner is entitled to vote at
meetings of contract owners of those Separate Account Sub-Accounts
to which the Owner currently has allocated a portion of the IRA
Account Accumulated Value. The number of votes which the Owner may
cast shall be determined by dividing the dollar value of the
Accumulation Units of the Sub-Account by the net asset value of one
Fund share.
Proper written notice of such meetings as required by law, shall be
given the Owner.
Owners entitled to vote and the number of votes which each may cast
shall be determined as of a record date within ninety days of the
date of the meeting. To be entitled to vote, the Owner must be an
Owner on both the record date as of which the number of votes is
determined and the date of the meeting. In determining the number
of votes a person may cast, fractional votes shall be disregarded.
-18-
Part XII
==============================Annuity Option Tables============================
Showing Amount of First Monthly Annuity Benefit Payment
For Each $1,000 of Annuity Value Applied
----------------------------------------------------------------------------
Age
Nearest
Birthday OPTION I OPTION II OPTION III
----------------------------------------------------------------------------
Life Annuity
with 120 Monthly Unit Refund
Payments Life Life
Guaranteed Xxxxxxx Xxxxxxx
----------------------------------------------------------
50 $ 5.06 $ 5.10 $ 5.00
51 5.11 5.16 5.05
52 5.17 5.22 5.10
53 5.23 5.29 5.16
54 5.29 5.36 5.22
55 5.36 5.43 5.28
56 5.43 5.50 5.34
57 5.50 5.58 5.41
58 5.58 5.67 5.49
59 5.66 5.76 5.56
60 5.74 5.85 5.64
61 5.83 5.96 5.72
62 5.93 6.07 5.80
63 6.03 6.18 5.92
64 6.13 6.31 6.01
65 6.24 6.44 6.11
66 6.36 6.59 6.21
67 6.48 6.74 6.36
68 6.60 6.91 6.47
69 6.73 7.09 6.59
70 6.87 7.28 6.71
71 7.01 7.48 6.91
72 7.15 7.69 7.05
73 7.30 7.91 7.19
74 7.46 8.15 7.33
75 7.61 8.41 7.59
----------------------------------------------------------------------------
-19-
========================Annuity Option Tables (Continued)======================
Showing Amount of First Monthly Annuity Benefit Payment For Each $1,000 of
Annuity Value Applied
--------------------------------------------------------------------------------
OPTION IV-A
Joint and Survivor
Life Annuity
Older Age
-----------------------------------------------------------------------
50 55 60 65 70 75 80
--------------------------------------------------------------------------------
Y 50 $ 4.65 $ 4.73 $ 4.82 $ 4.89 $ 4.95 $ 5.00 $ 5.03
0
U 55 4.85 4.97 5.08 5.18 5.25 5.31
N
G 60 5.13 5.29 5.44 5.57 5.66
E
R 65 5.52 5.74 5.94 6.10
A 70 6.06 6.36 6.64
G
E 75 6.81 7.24
80 7.87
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPTION IV-B
Joint and Two Thirds Survivor
Life Xxxxxxx
Xxxxx Age
-----------------------------------------------------------------------
50 55 60 65 70 75 80
--------------------------------------------------------------------------------
Y 50 $ 4.94 $ 5.07 $ 5.22 $ 5.40 $ 5.60 $ 5.82 $ 6.06
0
U 55 5.22 5.39 5.59 5.83 6.08 6.35
N
G 60 5.59 5.83 6.10 6.39 6.70
E
R 65 6.10 6.43 6.78 7.16
A 70 6.82 7.25 7.73
G
E 75 7.80 8.40
80 9.17
--------------------------------------------------------------------------------
-20-
========================Annuity Option Tables (Continued)======================
Showing Amount of First Monthly Annuity Benefit Payment For Each $1,000 of
Annuity Value Applied
------------------------------------------------------
OPTION V
------------------------------------------------------
Xxxxxxx Xxxxxxx
Number of for a specified
Years Certain Number of Years
------------------------------------------------------
1 $ 82.78
2 42.00
3 28.41
4 21.62
5 17.96
6 15.25
7 13.32
8 11.87
9 10.75
10 10.30
11 9.57
12 8.97
13 8.47
14 8.03
15 7.66
16 7.34
17 7.05
18 6.80
19 6.58
20 6.38
21 6.20
22 6.04
23 5.90
24 5.76
25 5.64
26 5.53
27 5.43
28 5.34
29 5.25
30 5.17
------------------------------------------------------
-21-
