CONTRACT OWNER:
CONTRACT NUMBER:
EFFECTIVE DATE:
CONTRACT ANNIVERSARY:
JURISDICTION:
PLAN:
The Minnesota Mutual Life Insurance Company (herein called Minnesota Mutual)
agrees to accept purchase payments hereunder from the Contract Owner, to
account for such purchase payments in the manner provided herein, and to pay
contract benefits in such amounts and to such persons as are designated in
writing by the Contract Owner or its designee.
This contract is issued in consideration of the application by the Contract
Owner, a copy of which is attached to, and made a part of this contract, and
the tender of purchase payments under this contract by the Contract Owner.
Minnesota Mutual agrees to make annuity and other payments in accordance with
the provisions on this and the subsequent pages, all of which are a part of
this contract.
This contract shall be governed by the laws of the jurisdiction indicated
above. This contract is executed by Minnesota Mutual at its Home Office in
Saint Xxxx, Minnesota, to take effect as of the Effective Date.
Secretary Registrar President
GROUP DEFERRED VARIABLE ANNUITY CONTRACT
ALLOCATED
PROVISION FOR FIXED AND VARIABLE ANNUITY PAYMENTS
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT
94-9310 Rev. 2-96 1
TABLE OF CONTENTS
SECTION 1. DEFINITIONS PAGE
1.01 Plan 2
1.02 Participant 2
1.03 Annuitant 2
1.04 Annuity Payments 2
1.05 Fixed Annuity 2
1.06 Variable Annuity 2
1.07 Annuity Commencement Date 2
1.08 General Account 2
1.09 Separate Account 3
1.10 Participant's Accumulation Value 3
1.11 Fund 3
1.12 Valuation Date 3
1.13 Valuation Period 3
1.14 Participation Year 3
1.15 Unit 3
1.16 1940 Act 4
SECTION 2. PURCHASE PAYMENTS
2.01 Amount of Purchase Payments 5
2.02 Application of Purchase Payments 5
2.03 Allocation of Purchase Payments 5
2.04 Separate Account Allocation 5
2.05 Changes to the Separate Account 6
SECTION 3. CONTRACT CHARGES
3.01 Deferred Sales Charge 7
3.02 Separate Account Charges 7
SECTION 4. VALUATION
4.01 Participant's Accumulation Value 9
4.02 Accumulation Unit Value 9
4.03 Net Investment Factor 9
4.04 Annuity Unit Value 10
4.05 General Account Interest 10
1A
SECTION 5. WITHDRAWALS AND TRANSFERS
5.01 Withdrawal Provisions 11
5.02 Transfer of Participant's Accumulation Value 11
5.03 Transfers of the General Account 12
5.04 Transfers from the Separate Account 12
SECTION 6. BENEFIT PROVISIONS
6.01 Death Benefits 13
6.02 Annuity Commencement Date 13
6.03 Election of Annuity Option 13
6.04 Application of Accumulation Value 13
6.05 Annuity Payment Options 14
6.06 Election of Annuity Form 14
6.07 Determination of Fixed Annuity Payment 14
6.08 Determination of Variable Annuity Payments 16
6.09 Transfers During the Annuity Period 17
6.10 Lump Sum Settlement 18
SECTION 7. SUSPENSION AND TERMINATION
7.01 Suspension of Purchase Payments 19
7.02 Termination of Contract 19
7.03 Effect of Termination 20
7.04 Lump Sum Termination Value 20
7.05 Installment Termination Value 21
7.06 Final Termination 22
SECTION 8. GENERAL PROVISIONS
8.01 Contract 23
8.02 Modification of Contract 23
8.03 Beneficiary 23
8.04 Participation in Divisible Surplus 23
8.05 Certificates and Statements 24
8.06 Misstatement of Age 24
8.07 Assignment 24
8.08 Contract Values 24
8.09 Annuity Reserves 24
1B
SECTION 1. DEFINITIONS
1.01 PLAN
"Plan" means the Plan specified on Page 1 of this contract. The Plan must
meet the requirements for qualification under Section 457 of the Internal
Revenue Code, as amended, or other section of the Code allowing similar tax
treatment.
1.02 PARTICIPANT
A person eligible to participate under the Plan, and on whose behalf purchase
payments have been or are being made under this contract.
1.03 ANNUITANT
A person eligible to receive lifetime benefits under this contract. Joint
annuitants will be considered a single entity.
1.04 ANNUITY PAYMENTS
A series of payments made at regular intervals to the Annuitant or any other
payee. Annuity Payments will be due and payable only on the first day of a
calendar month.
1.05 FIXED ANNUITY
An annuity payable from the General Account, with payments which remain fixed
as to dollar amount throughout the period of Annuity Payments.
1.06 VARIABLE ANNUITY
An annuity payable from the Separate Account with payments which increase or
decrease in dollar amount to reflect the investment experience of the
sub-accounts of the Separate Account.
1.07 ANNUITY COMMENCEMENT DATE
The date upon which Annuity Payments begin, as determined in accordance with
the Plan.
1.08 GENERAL ACCOUNT
All assets of Minnesota Mutual other than those in Separate Accounts
established by Minnesota Mutual.
2
1.09 SEPARATE ACCOUNT
A separate investment account titled Minnesota Mutual Group Variable Annuity
Account. This Separate Account was established by Minnesota Mutual for this
class of contract under Minnesota law. The Separate Account is composed of
several sub-accounts. The assets of the Separate Account belong to Minnesota
Mutual and shall be held and applied exclusively for the holders of those
contracts on a variable basis for which the Separate Account has been
established. Those assets are not subject to claims arising out of any other
business which Minnesota Mutual may conduct.
1.10 PARTICIPANT'S ACCUMULATION VALUE
The sum of the individual Participant's values under this contract in the
General Account and/or the Separate Account. In the General Account, this is
the General Account Accumulation Value. In the Separate Account, this is the
Separate Account Accumulation Value. The Separate Account portion is
composed of the Participant's interests in one or more sub-accounts of the
Separate Account. The total of these shall be the Participant's Separate
Account Accumulation Value. Interests in the sub-accounts shall be valued
separately.
1.11 FUND
The mutual fund or separate investment portfolio within a series mutual fund
which is designated as an eligible investment for the Separate Account.
1.12 VALUATION DATE
Any date on which a Fund is valued.
1.13 VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
1.14 PARTICIPATION YEAR
A period of one year beginning on the first day of the month in which
purchase payments were first received under this contract on behalf of a
Participant, or on an anniversary of that date.
1.15 UNIT
A measure of a Participant's interest in the Separate Account or sub-account
of the Separate Account.
3
1.16 1940 ACT
The Investment Company Act of 1940, as amended, or any similar successor
federal legislation.
4
SECTION 2. PURCHASE PAYMENTS
2.01 AMOUNT OF PURCHASE PAYMENTS
The amount of purchase payments to be paid by the Contract Owner by or on
behalf of a Participant shall be determined by the Contract Owner in
accordance with the provisions of the Plan. All purchase payments are payable
at the Home Office of Minnesota Mutual. The Home Office is at 000 Xxxxxx
Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000.
2.02 APPLICATION OF PURCHASE PAYMENTS
There are usually no deductions made from purchase payments. However,
Minnesota Mutual reserves the right to make a deduction from purchase
payments for state premium taxes, where applicable.
2.03 ALLOCATION OF PURCHASE PAYMENTS
Purchase payments may be allocated to the General Account or to the
sub-accounts of the Separate Account. Purchase payments for each Participant
shall be allocated to the General Account or to the sub-accounts of the
Separate Account in accordance with the instructions of the Participant or
the Contract Owner. The initial allocation is established as specified in
the application for participation under this contract which must be signed by
the Participant. The allocation may be changed as to future purchase
payments by written notice to Minnesota Mutual from the Participant or
Contract Owner. That notice must be received by Minnesota Mutual at its Home
Office on or prior to the date of receipt of those future purchase payments.
2.04 SEPARATE ACCOUNT ALLOCATION
Amounts allocated to the sub-accounts of the Separate Account will be applied
by Minnesota Mutual to provide accumulation units. Minnesota Mutual will
determine the number of accumulation units by dividing the purchase payment
by the then current accumulation unit value. That determination will be made
as of the Valuation Date coincident with or next following the date on which
such purchase payment is received by Minnesota Mutual at its Home Office, and
shall be made separately for purchase payments allocated to each of the
sub-accounts. The number of accumulation units so determined shall not be
affected by any subsequent change in the accumulation unit value.
The Separate Account is divided into sub-accounts. For each sub-account
there is a Fund for the investment of that sub-account's assets. Amounts are
invested in the Funds at their net asset value. Purchase payments may be
applied to one or more of the sub-accounts. Minnesota Mutual reserves the
right to add, combine or remove any sub-accounts of the Separate Account.
5
If investment in a Fund should no longer be possible or if Minnesota Mutual
determines it to be inappropriate for contracts of this class, another Fund
may be substituted. Substitution may be with respect to existing
Accumulation Values, future purchase payments and future Annuity Payments.
2.05 CHANGES TO THE SEPARATE ACCOUNT
Minnesota Mutual reserves the right to transfer assets of the Separate
Account to another Separate Account. The transfer will be of assets
associated with this class of contracts, as determined by Minnesota Mutual.
If this type of transfer is made, the term "Separate Account", as used in
this contract, shall then mean the Separate Account to which the assets were
transferred.
Minnesota Mutual reserves the right, when permitted by law, to:
(a) de-register the Separate Account under the Investment Company Act of 1940;
(b) restrict or eliminate any voting rights of contract owners or other
persons who have voting rights as to the Separate Account; and
(c) combine the Separate Account with one or more other Separate Accounts.
6
SECTION 3. CONTRACT CHARGES
3.01 DEFERRED SALES CHARGE
The deferred sales charge is the charge made on Participant withdrawals,
including contract termination, during the first six Participation Years.
The amount withdrawn plus any deferred sales charge is deducted from the
Participant's Accumulation Value. In the Separate Account, accumulation
units will be cancelled of a value equal to the charge and withdrawal.
The charge is indicated in the table shown below. These percentages decrease
uniformly by .083% for each of the first 72 months of participation.
End of
Participation Year Charge
------------------ ------
(Participation Date) 6.0%
1 5.0%
2 4.0%
3 3.0%
4 2.0%
5 1.0%
6 0%
In no event will the amount of deferred sales charge exceed 9% of the total
purchase payments made on behalf of each Participant.
3.02 SEPARATE ACCOUNT CHARGES
There are three charges which are imposed by Minnesota Mutual on the assets
of the Separate Account. They are the mortality risk charge, the expense
risk charge and the administrative charge. These charges are deducted on each
Valuation Date from the assets of the Separate Account.
The mortality risk charge is for the mortality guarantees Minnesota Mutual
makes under the contract. Actual mortality results incurred by Minnesota
Mutual shall not adversely affect any payments or values under this contract.
On an annual basis, this charge shall not exceed .60% of the net asset value
of the Separate Account.
The expense risk charge is for the guarantee that the deductions provided in
this contract will be sufficient to cover its expenses. Actual expense
results incurred by Minnesota Mutual shall not adversely affect any payments
or values under this contract. On an annual basis, this charge shall not
exceed .65% of the net asset value of the Separate Account.
7
The administrative charge is designed to cover the administrative expenses
incurred by Minnesota Mutual under this contract. On an annual basis, this
charge shall not exceed .40% of the net asset value of the Separate Account.
8
SECTION 4. VALUATION
4.01 PARTICIPANT'S ACCUMULATION VALUE
A Participant's General Account Accumulation Value as of any date is the sum
of the following transactions made on behalf of a Participant: all purchase
payments allocated to the General Account plus interest, dividends and
transfers into the General Account, less any transfers out of the General
Account, any previous withdrawals and any applicable deferred sales charge.
A Participant's Separate Account Accumulation Value is the sum of the
Participant's interest in each sub-account of the Separate Account which is
equal to the number of accumulation units held on behalf of the Participant
multiplied by the accumulation unit value for the appropriate sub-account of
the Separate Account.
4.02 ACCUMULATION UNIT VALUE
The accumulation unit value for each sub-account of the Separate Account will
be valued on each Valuation Date according to the net investment experience
of that sub-account. The value of an accumulation unit for each sub-account
was originally set at $1.00 on the first Valuation Date. For any subsequent
Valuation Date, its value is equal to its value on the preceding Valuation
Date multiplied by the net investment factor for that sub-account for the
valuation period ending on the subsequent Valuation Date.
4.03 NET INVESTMENT FACTOR
The net investment factor for a valuation period is the gross investment rate
for such valuation period, less a deduction for the charges associated with
the Separate Account at a rate of no more than 1.65% per annum.
The gross investment rate is equal to:
(a) the net asset value per share of a Fund share held in the sub-account of
the Separate Account determined at the end of the current valuation period;
plus
(b) the per-share amount of any dividend or capital gain distributions by the
Fund if the "ex-dividend" date occurs during the current valuation period;
divided by
(c) the net asset value per share of that Fund share held in the sub-account
determined at the end of the preceding valuation period.
9
4.04 ANNUITY UNIT VALUE
The value of an annuity unit for a sub-account is determined monthly as of
the first day of the month. The value is equal to the annuity unit value for
that sub-account as of the first day of the preceding month multiplied by the
product of (a) .996338; and (b) a sub-account investment factor. This
investment factor is the accumulation unit value for that sub-account on the
Valuation Date next following the fourteenth day of the preceding month
divided by the accumulation unit value for that sub-account on the Valuation
Date next following the fourteenth day of the second preceding month. For
any date other than the first of a month, the annuity unit value is that
value on the first day of the next month.
4.05 GENERAL ACCOUNT INTEREST
Interest will be credited to amounts allocated to the General Account at such
interest rate as may be declared from time to time by Minnesota Mutual for
this contract, in accordance with its usual practices for contracts of this
class. Interest will be credited at a rate of no less than 3% per year,
compounded annually.
10
SECTION 5. WITHDRAWALS AND TRANSFERS
5.01 WITHDRAWAL PROVISIONS
Withdrawals may be made only for the purpose of:
(a) providing Plan benefits in accordance with Section 6,
(b) transfers to the Contract Owner in accordance with Section 7.03,
(c) transfers to Plan options available to Participants other than those
provided for in this Contract, or
(d) other withdrawals as allowed in the Plan and mutually agreed upon by
Minnesota Mutual and the Contract Owner.
The amount available for withdrawal shall be the Participant Accumulation
Value less any applicable deferred sales charge. If withdrawals during the
first calendar year of participation are equal to or less than 10% of the
total purchase payments made on behalf of the Participant, the charge will
not apply. In subsequent calendar years there will be no charge for
withdrawals equal to or less than 10% of the prior calendar year Participant
Accumulation Value. If a Participant's withdrawals in any calendar year
exceed this amount, the deferred sales charge will apply to the excess.
Withdrawal amounts shall be deducted from the Participant's General Account
Accumulation Value on a first in, first out (FIFO) basis. Unless otherwise
instructed by the Participant or the Contract Owner, withdrawal amounts will
be made from a Participant's interest in the General Account and each
sub-account of the Separate Account in the same proportion that the value of
that Participant's interest in the General Account and any sub-account bears
to that Participant's total Accumulation Value.
Withdrawals are made upon written request from the Participant or Contract
Owner to Minnesota Mutual. The withdrawal date will be the Valuation Date
coincident with or next following the receipt of the request by Minnesota
Mutual at its Home Office.
From the General Account, withdrawals as described in (c) above, in
combination with transfers as described in 5.03, will be limited to the
greater of $1,000 or 10% of the Participant's General Account Accumulation
Value in each calendar year. From the sub-accounts of the Separate Account,
withdrawals as described in (c) above will not be limited as to amount. Such
withdrawals may be taken once per year or in 12 monthly installments.
5.02 TRANSFER OF PARTICIPANT'S ACCUMULATION VALUE
Transfers of a Participant's Accumulation Value may be made among the
Participant's General Account and the sub-accounts of the Separate Account.
Such a transfer is made upon the written
11
request from the Participant or Contract Owner to Minnesota Mutual. The
transfer date will be the Valuation Date coincident with or next following
the receipt of the transfer request by Minnesota Mutual at its Home Office.
5.03 TRANSFERS OF THE GENERAL ACCOUNT
All transfers of General Account Accumulation Value of the Participant's
Account shall be on a first in, first out (FIFO) basis. In each calendar
year, amounts withdrawn by Participants for transfer to other Plan options,
as described in 5.01(c), combined with amounts transferred from the
Participant's General Account Accumulation Value to the sub-accounts of the
Separate Account, may not exceed the greater of $1,000 or 10% of their
General Account Accumulation Value. Transfers are permitted once per year or
in 12 monthly installments.
5.04 TRANSFERS FROM THE SEPARATE ACCOUNT
For transfers from the sub-accounts of the Separate Account, a number of
Accumulation Units will be surrendered such that the Accumulation Value of
the surrendered Accumulation Units equals the amount transferred. Transfers
between the sub-accounts of the Separate Account are unlimited as to amount
and frequency.
12
SECTION 6. BENEFIT PROVISIONS
6.01 DEATH BENEFITS
In the event of the death of a Participant prior to the Annuity Commencement
Date, the beneficiary of that Participant will receive as a death benefit the
greater of: (a) the Participant's Accumulation Value, determined as of the
Valuation Date coincident with or next following the date due proof of death
is received by Minnesota Mutual at its Home Office; or (b) the total of the
Participant's purchase payments received by Minnesota Mutual less any prior
Participant withdrawals. The death benefit will be paid in a single sum; or
at the option of the beneficiary the death benefit may be applied under
Option 2, or Option 4 of the Annuity Payment Options specified in Section
6.05, subject to the minimum payment requirements of Section 6.04.
6.02 ANNUITY COMMENCEMENT DATE
The Contract Owner or the Participant shall notify Minnesota Mutual in
writing at its Home Office to begin Annuity Payments for a Participant,
specifying the date such Annuity Payments are to commence. Unless otherwise
permitted by the Plan, such date may be the first day of any calendar month
provided that it may not be earlier than 30 days following the date such
notice is given and provided further that it may not be later than April 1st
of the calendar year following the calendar year in which the Participant
attains age 70 1/2.
6.03 ELECTION OF ANNUITY OPTION
The Contract Owner or the Participant may elect to have Annuity Payments made
under any of the Annuity Payment Options described in Section 6.05, provided
such election is received in writing by Minnesota Mutual at its Home Office
at least 30 days prior to the Annuity Commencement Date. If no such election
is received by Minnesota Mutual, Annuity Payments will be made in accordance
with Option 2A, a life income with a period certain of 120 months.
6.04 APPLICATION OF ACCUMULATION VALUE
As of the Annuity Commencement Date, Minnesota Mutual shall apply the
Participant's Accumulation Value to provide Annuity Payments under the
Annuity Payment Option determined in accordance with Section 6.03; provided,
however, that the first monthly payment under such Annuity Payment Option
must be at least $20.00 in amount. If such first monthly payment would be
less than $20.00 in amount, the Participant's Accumulation Value will be paid
to the Participant in a lump sum as of his Annuity Commencement Date, and the
Participant shall thereafter have no further rights under this contract. The
requirement that the first monthly payment be at least $20.00 shall be
imposed separately for the portion of the Annuity Payments payable as a Fixed
Annuity and the portion payable as a Variable Annuity under each of the
sub-accounts of the Separate Account.
13
6.05 ANNUITY PAYMENT OPTIONS
Option 1 - Life Annuity - An annuity payable monthly during the lifetime of
the Annuitant and terminating with the last monthly payment preceding the
death of the Annuitant.
Option 2 - Life Annuity with a Period Certain of 120 months (Option 2A), 180
months (Option 2B), or 240 months (Option 2C) - An annuity payable monthly
during the lifetime of the Annuitant, with the guarantee that if the
Annuitant dies before payments have been made for the Period Certain elected,
payments will continue to the beneficiary during the remainder of such Period
Certain. The beneficiary may elect to receive the commuted value of the
remaining guaranteed payments in a lump sum. The value will be based on the
then current dollar amount of one payment and the same interest rate which
served as a basis for the annuity.
Option 3 - Joint and Last Survivor Annuity - An annuity payable monthly
during the joint lifetime of the Annuitant and a designated joint annuitant
and continuing thereafter during the remaining lifetime of the survivor.
Option 4 - Period Certain Annuity - An annuity payable monthly for a Period
Certain of from 5 to 20 years, as elected. If the Annuitant dies before
payments have been made for the Period Certain elected, payments will
continue to the beneficiary during the remainder of such Period Certain. The
beneficiary may elect to receive the commuted value of the remaining
guaranteed payments in a lump sum. The value will be based on the then
current dollar amount of one payment and the same interest rate which served
as a basis for the annuity.
Payments under any of these Annuity Payment Options will be determined in
accordance with Section 6.07 for a Fixed Annuity and with Section 6.08 for a
Variable Annuity. If, when Annuity Payments are elected, Minnesota Mutual is
using annuity purchase rates for this class of contract which would result in
larger Annuity Payments, they will be used instead of those guaranteed in
this contract.
Minnesota Mutual reserves the right to require proof satisfactory to it of
the age of a Annuitant and any joint annuitant prior to making the first
payment under any Annuity Payment Option. Once Annuity Payments begin, the
Annuity Payment Option may not be changed.
6.06 ELECTION OF ANNUITY FORM
Unless Minnesota Mutual shall be notified in writing to the contrary by the
Contract Owner or Participant at least 30 days prior to the Annuity
Commencement Date, General Account Accumulation Value will be applied to
provide a Fixed Annuity and Separate Account accumulation units will be
applied to provide a Variable Annuity.
6.07 DETERMINATION OF FIXED ANNUITY PAYMENT
The tables contained in this contract are used to determine the amount of
guaranteed fixed monthly Annuity Payments. They show the dollar amount of
the monthly payment which can be
14
purchased with each $1,000 of Participant Accumulation Value, after deduction
of any applicable premium taxes not previously deducted under the provisions
of Section 2.03 and a fee of $200. Amounts shown in the tables are based on
the Progressive Annuity Table with interest at the rate of 3.0% per annum,
assuming births in the year 1900, with an age setback of six years. The
amount of each payment depends upon the adjusted age of the Participant and
any joint annuitant. The adjusted age is determined from the actual age
nearest birthday at the time the first payment is due in the following manner:
Calendar Year
of Birth Adjusted Age is Equal to -
-------------- --------------------------
1900-1919 Actual Age
1920-1939 Actual Age Minus 1
1940-1959 Actual Age Minus 2
1960-1979 Actual Age Minus 3
1980 and Later Actual Age Minus 4
GUARANTEED MINIMUM DOLLAR AMOUNT OF FIXED MONTHLY PAYMENT WHICH
IS PURCHASED WITH EACH $1,000 OF VALUE APPLIED
Single Life Annuities
Adjusted Age ---------------------
of Annuitant Option 1 Option 2A Option 2B Option 2C
------------- -------- --------- --------- ---------
50 $3.99 $3.97 $3.94 $3.89
51 4.05 4.03 4.00 3.95
52 4.13 4.10 4.06 4.00
53 4.20 4.17 4.13 4.06
54 4.28 4.25 4.20 4.12
55 4.37 4.33 4.27 4.18
56 4.46 4.41 4.35 4.25
57 4.55 4.50 4.42 4.31
58 4.65 4.59 4.51 4.38
59 4.76 4.69 4.59 4.44
60 4.87 4.79 4.68 4.51
61 4.99 4.90 4.77 4.58
62 5.12 5.01 4.86 4.65
63 5.26 5.13 4.96 4.72
64 5.40 5.25 5.06 4.79
65 5.56 5.39 5.16 4.85
66 5.72 5.52 5.27 4.92
67 5.90 5.67 5.37 4.99
68 6.09 5.82 5.48 5.05
69 6.29 5.97 5.59 5.11
15
70 6.51 6.13 5.69 5.16
71 6.74 6.30 5.80 5.21
72 6.99 6.48 5.90 5.26
73 7.26 6.66 6.01 5.31
74 7.54 6.84 6.11 5.34
75 7.86 7.03 6.20 5.38
Option 3 -- Joint and Last Survivor Life Annuity
Adjusted Age of Annuitant*
Adjusted Age of --------------------------
Joint Annuitant* 55 60 62 65 67 70 75
---------------- ---- ---- ---- ---- ---- ---- ----
54 $3.80 $3.93 $3.98 $4.04 $4.08 $4.13 $4.19
59 3.95 4.14 4.21 4.32 4.38 4.46 4.57
61 4.00 4.22 4.31 4.43 4.50 4.61 4.75
64 4.07 4.34 4.44 4.60 4.70 4.83 5.03
66 4.12 4.41 4.53 4.71 4.82 4.99 5.23
69 4.17 4.50 4.65 4.86 5.01 5.23 5.56
74 4.25 4.64 4.81 5.09 5.29 5.60 6.11
* Dollar amounts of the monthly payments for ages not shown in this table will
be calculated on the same basis as those shown and may be obtained from us
upon request.
Option 4 -- Fixed Period Annuity
Fixed Period Dollar Amount Fixed Period Dollar Amount
(Years) of Payment (Years) of Payment
------------- -------------- ------------- -------------
5 $17.91 13 $7.71
6 15.14 14 7.26
7 13.16 15 6.87
8 11.68 16 6.53
9 10.53 17 6.23
10 9.61 18 5.96
11 8.86 19 5.73
12 8.24 20 5.51
6.08 DETERMINATION OF VARIABLE ANNUITY PAYMENTS
The dollar amount of the first monthly variable Annuity Payment is determined
by applying the Participant's Separate Account Accumulation Value (after
deduction of any premium taxes not previously deducted) to a rate per $1,000
which is based on the Progressive Annuity Table with interest at the rate of
4.5% per annum, assuming births in the year 1900, with an age setback of
16
six years. The amount of the first payment depends upon the annuity payment
option selected and the adjusted age of the annuitant and any joint
annuitant. The adjusted ages shall be determined using the same table as
illustrated in Section 6.06 for determination of fixed Annuity Payments. A
number of annuity units is then determined by dividing this dollar amount by
the then current annuity unit value. Thereafter, the number of annuity units
remains unchanged during the period of Annuity Payments. This determination
is made separately for each sub-account of the Separate Account. The number
of annuity units is based upon the available value in each sub-account as of
the date Annuity Payments are to begin.
The dollar amount of the second and later variable Annuity Payments is equal
to the number of annuity units determined for each sub-account multiplied by
the annuity unit value for that sub-account as of the due date of the
payment. This amount may increase or decrease from month to month.
The dollar amounts determined for each sub-account will be aggregated for
purposes of making payment.
6.09 TRANSFERS DURING THE ANNUITY PERIOD
Participant amounts held as annuity reserves may be transferred among the
Variable Annuity sub-accounts during the annuity period. The change must be
made by written request. The annuitant and joint annuitant, if any, must
make such an election.
A transfer will be made on the basis of annuity unit values. The transfer
will be effective for future Annuity Payments and will occur the middle of
the month preceding the next Annuity Payment affected by the transfer
request. The number of annuity units from the sub-account being transferred
will be converted to a number of annuity units in a new sub-account. The
Annuity Payment option will not change. The first Annuity Payment after the
transfer will be for the same amount as it would have been without the
transfer. The number of annuity units will be set at that number of units
which are needed to pay that same amount on the transfer date.
Transfers of annuity reserves from any sub-account must be at least equal to:
1) $5,000; or 2) the entire amount of reserve remaining in that sub-account.
In addition, Annuity Payments must have been in effect for a period of
12 months before a change may be made. Such transfers are allowed only once
every 12 months. The written request for transfer must be received by
Minnesota Mutual at least 30 days in advance of the due date of the Annuity
Payment subject to the transfer.
Amounts held as reserves to pay a Variable Annuity may also be transferred to
provide a Fixed Annuity from the General Account, subject to the dollar
amount and frequency limitations described above. The amount transferred
will be applied to provide a Fixed Annuity amount of the same annuity option
based upon the adjusted age of the annuitant and any joint annuitant at the
time of the transfer. Once fixed Annuity Payments begin, the annuity
reserves may not be transferred back to provide a Variable Annuity.
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6.10 LUMP SUM SETTLEMENT
By written notice to Minnesota Mutual by the Contract Owner at least 30 days
prior to the Annuity Commencement Date, a lump sum settlement of a
Participant's Accumulation Value decreased by any applicable deferred sales
charge may be elected in lieu of the application of such value to provide
Annuity Payments for the Participant under an Annuity Payment Option. After
such lump sum settlement has been made, the Participant shall have no further
rights under this contract.
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SECTION 7. SUSPENSION AND TERMINATION
7.01 SUSPENSION OF PURCHASE PAYMENTS
The Contract Owner may suspend purchase payments at any time by giving
60 days written notice to Minnesota Mutual of such suspension. The suspension
may be with respect to all Participants, or only with respect to those
Participants in such class or classes as are specified by the Contract Owner.
Except as to those Participants for whom purchase payments are suspended, the
contract shall continue to operate during a period of suspension as if such
suspension had not occurred. Purchase payments may be resumed at any time
upon written notice to Minnesota Mutual by the Contract Owner.
7.02 TERMINATION OF CONTRACT
With 30 days written notice to Minnesota Mutual, the Contract Owner may
terminate this contract at any time due to the existence of any of the
following circumstances:
(a) Malfeasance, misfeasance or fraud on the part of Minnesota Mutual.
(b) Failure by Minnesota Mutual to perform any provision of this contract,
subject to Minnesota Mutual having 90 days to cure any failure of contract
performance.
(c) A material change in Minnesota Mutual's financial position, defined as
the occurrence of two or more of the following:
- Minnesota Mutual's Standard & Poor's rating falls to A+ or lower.
- Minnesota Mutual's Xxxxx'x rating falls to A3 or lower.
- Minnesota Mutual's Duff & Xxxxxx rating falls to A+ or lower.
- Minnesota Mutual's A.M. Best rating falls to A- or lower.
However, in the event of any drop in ratings that is a result of a
recalibration of the life insurance industry by any of the aforementioned
rating agencies Minnesota Mutual and the Contract Owner will use their best
efforts to amend this provision consistent with any such recalibration.
Minnesota Mutual may terminate this contract as of a date specified by
written notice to the Contract Owner in the event that:
(a) The contract is no longer part of a Plan qualified under Section 457, or
other provision of the Internal Revenue Code allowing similar tax treatment;
or
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(b) Minnesota Mutual reasonably determines that it is necessary to amend or
modify this contract to be consistent with law or regulation changes; or to
ensure the financial soundness of the Contract; and the Contract Owner does
not assent to the amendment or modification.
The contract will automatically be terminated in the event of termination of
the Plan, as of the effective date of such termination.
7.03 EFFECT OF TERMINATION
After termination, no further purchase payments will be accepted by Minnesota
Mutual under this contract.
Termination of the contract will have no effect on Participants as to whom
Annuity Payments have commenced. As to other Participants, Participant
Accumulation Values shall continue to be maintained under the contract until:
(a) withdrawn to provide benefits under the conditions of Section 5.01;
(b) applied to provide Annuity Payments; or (c) transferred to the Contract
Owner as provided in Section 7.04 or Section 7.05. While Participant
Accumulation Values are maintained under this contract, the withdrawal and
transfer provisions will continue to apply on the same basis as prior
to termination.
If the Participant Accumulation Values are to be transferred to the Contract
Owner, Minnesota Mutual shall determine a liquidation date which shall be a
Valuation Date not later than 180 days after the date of termination.
7.04 LUMP SUM TERMINATION VALUE
The lump sum termination value will be equal to the sum of all Participant's
Separate Account Accumulation Values decreased by any applicable deferred
sales charge plus the lesser of:
a) The sum of all Participant's General Account Accumulation Values
decreased by any applicable deferred sales charge; or
b) The sum of all Participant's General Account Market Values.
A market value will be determined in aggregate for Participant General
Account Accumulation Values based on the following formula:
6
Market value = (Participant General Account x (1 + G)
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Accumulation Value (1 + C + .0025)
less any applicable
deferred sales charge)
where G = the greater of:
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(a) the weighted interest crediting rate in effect on all Participant
General Account Accumulation Values under this contract as of the
liquidation date; or
(b) the weighted interest crediting rate in effect on all Participant
General Account Accumulation Values at any time during the six month period
preceding the liquidation date.
C = the lesser of:
(a) the current interest crediting rate in effect for new purchase payments
to this contract as of the liquidation date; or
(b) the interest crediting rate in effect for new purchase payments to this
contract as of six months prior to the liquidation date, adjusted by the
interest yield on a 10 year U.S. Treasury note as of the liquidation date,
less the yield six months prior to the liquidation date.
However, Minnesota Mutual guarantees that the Participant General Account
Market Value will not be less than the sum of all allocations made to the
General Account by or on behalf of each Participant, accumulated at 3% per
annum, less any Participant withdrawals, any applicable deferred sales charge
and less any transfers of General Account accumulation values to the Group
Variable Annuity Account.
Within seven days after the termination of the contract, Minnesota Mutual
will make payment to the Contract Owner of the Separate Account Accumulation
Value held on behalf of each Participant. However, Minnesota Mutual reserves
the right to defer payment for any period during which the New York Stock
Exchange is closed for trading or when the Securities and Exchange Commission
has determined that a state of emergency exists which may make such
determination and payment impractical.
Minnesota Mutual will make payment to the Contract Owner of the General
Account portion of the lump sum termination value on the liquidation date.
7.05 INSTALLMENT TERMINATION VALUE
Under the installment method of liquidation, Minnesota Mutual will make
payment to the Contract Owner of the Separate Account Accumulation Value
decreased by any applicable deferred sales charge held on behalf of each
Participant within seven days following the termination of the contract.
However, Minnesota Mutual reserves the right to defer payment for any period
during which the New York Stock Exchange is closed for trading or when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make such determination and payment impractical.
The General Account portion of each Participant's Accumulation Value will be
paid to the Contract Owner in substantially equal installments over a five
year period with each installment decreased by any applicable deferred sales
charge. The Contract Owner may elect annual or quarterly installments with
the first installment due as of the liquidation date and the last
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installment due at the end of the five year period. The amount of each
installment will be determined by dividing the total Participant General
Account Accumulation Values as of each installment date by the number of
remaining installments including the installment which is being calculated,
determining the Accumulation Value attributable to each individual
participant, and then applying any applicable deferred sales charge to that
Participant's Accumulation Value to determine the actual amount payable.
During the installment period, Participant General Account Accumulation
Values will continue to earn interest at a rate determined by using the same
methodology for determining such rate in effect immediately prior to
termination. The gross yield on assets, before reduction for expense margin,
assumed in employing the methodology will be determined in the same way as
immediately prior to termination. This rate shall not be less than the
hypothetical yield for a portfolio of five-year treasuries would be under the
same historical cash flow for the General Account. The expense margin
assumed in employing the methodology will be no greater than the expense
margin used immediately prior to termination plus .25%.
7.06 FINAL TERMINATION
This contract shall finally terminate when each Participant's Accumulation
Value is reduced to zero and Minnesota Mutual shall have completed all
payments due hereunder.
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SECTION 8. GENERAL PROVISIONS
8.01 CONTRACT
This contract is delivered in, and shall be construed according to the laws
of the jurisdiction specified on Page 1 hereof. With respect to all
transactions regarding this contract, except as may be otherwise specifically
provided, Minnesota Mutual may deal with the Contract Owner on the basis that
the Contract Owner has full ownership and control of the contract. No
obligation under the Plan is assumed by Minnesota Mutual, nor shall the Plan
or any amendment thereto be construed to amend or modify this contract in any
way except with the express written consent of Minnesota Mutual.
8.02 MODIFICATION OF CONTRACT
This contract may be modified at any time by written agreement between
Minnesota Mutual and the Contract Owner. However, no such modification will
adversely affect the rights of any Participant unless the modification is
made to comply with a law or government regulation.
No person except the President, a Vice President, the Secretary, or an
Assistant Secretary of Minnesota Mutual has authority on behalf of Minnesota
Mutual to modify the contract or to waive any requirement of the contract.
Minnesota Mutual shall not be bound by any promise or representation made by
or to any agent or person other than as above.
8.03 BENEFICIARY
A Participant may designate a beneficiary to receive any amount which may
become payable to such beneficiary under the terms of the Plan. The
designation may be made or changed by the Participant at any time during his
lifetime by filing satisfactory written notice with Minnesota Mutual at its
Home Office. The new designation shall take effect only upon being recorded
by Minnesota Mutual at its Home Office. When so recorded, even if the
Participant is not then living, it shall take effect as of the date the
notice was signed, subject to any payment made by Minnesota Mutual before
recording the change.
The interest of any beneficiary who dies before the Participant shall
terminate at the death of that beneficiary. If the interest of all
designated beneficiaries has terminated, any proceeds payable at the
Participant's death shall be paid to the Participant's estate.
8.04 PARTICIPATION IN DIVISIBLE SURPLUS
This is a participating contract. The portion, if any, of the divisible
surplus of Minnesota Mutual accruing upon this contract shall be determined
annually by Minnesota Mutual and shall be credited to the contract on such
basis as is determined by Minnesota Mutual.
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8.05 CERTIFICATES AND STATEMENTS
Minnesota Mutual shall make available to each Participant a certificate which
describes the Participant's rights and privileges under this contract.
Minnesota Mutual shall issue to each Participant as to whom Annuity Payments
are provided hereunder an individual certificate setting forth the amount and
terms of such Annuity Payments. At least once in each Contract Year,
Minnesota Mutual will furnish to the Participant a statement of each
Participant's Individual Account, the current accumulation unit value, and
each Participant's Accumulation Value. Such statement shall be as of a date
within two months of the mailing of the statement.
8.06 MISSTATEMENT OF AGE
If a person's age has been misstated, the amount payable under this contract
as an annuity will be that amount which would have been paid based upon that
person's correct age. In the case of an overpayment, Minnesota Mutual may
either deduct the required amount from that person's future annuity payments
under this contract; or, require the person to pay Minnesota Mutual in cash;
or both may be done until Minnesota Mutual has been fully repaid. In the case
of an underpayment, Minnesota Mutual will pay the required amount with the
next payment.
8.07 ASSIGNMENT
The Participant's Accumulation Value may not be assigned, sold, transferred,
discounted or pledged by the Participant as collateral for a loan or as
security for the performance of an obligation or for any other purpose. To
the maximum extent permitted by law, the Participant's Accumulation Value and
any benefits payable under this contract shall be exempt from the claims of
creditors of the Participant.
8.08 CONTRACT VALUES
Amounts payable at death, withdrawal benefits, Accumulation Values and the
annuity benefit described in this contract are not less than the minimum
benefits required by any statute of the state in which this contract is
delivered.
8.09 ANNUITY RESERVES
Reserves held by Minnesota Mutual for Annuity Payments under this contract
shall not be less than those reserves required by the law in the state in
which this contract is delivered.
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