RELIASTAR
LIFE INSURANCE COMPANY 403(b) RIDER
OF NEW YORK
A Stock Company
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The following language amends and takes precedence over contrary language in the
Contract to which it is attached. The Effective Date of this Rider shall be the
later of January 1, 2002, or the Contract Date.
On the basis of the application for which this Contract is issued and to which
this Rider is attached, the Contract is intended to qualify under Section 403(b)
of the Internal Revenue Code. In the event of any conflict between the
provisions of this Rider and the Contract, the provisions of this Rider will
control.
1. All references in this Rider to:
(a) "IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
(b) "Contract" means the Contract to which this Rider is attached.
(c) "Employee or Owner" means the Owner of the Contract to which this
Rider is attached
(d) "Designated Beneficiary" means the beneficiary named by the Owner in
the Contract.
(e) "We", "our", and "us" means Reliastar Life Insurance Company of New
York.
2. This Contract is nontransferable. Other than to us, it may not be sold,
assigned, discounted or pledged as collateral for a loan or as security for
the performance of an obligation or for any other purpose.
3. This Contract is valid only if it is purchased:
(a) for an Employee by an employer as described in IRC Section 501(c)(3)
which is exempt from income tax under IRC Section 501(a); or
(b) for an Employee who performs services for an educational organization
described in IRC Section 170(b)(1)(A)(ii), by an employer which is a
state, a political subdivision of a state, or an agency or
instrumentality of a state or political subdivision thereof; or
(c) by an individual in a rollover as permitted by IRC Sections 402(c)(1),
403(b)(8), 403(b)(10) and 408(d)(3); or
(d) by an individual in a direct transfer meeting the requirements of
Internal Revenue Service Rev. Rul. 90-24.
4. The premium payments applicable to this contract must be attributable to
the Employee's salary reduction agreement, or to permitted employer
contributions, except in the case of a rollover contribution or direct
transfer. The premium payments must be in cash. Except as provided in
Paragraph 5 below, the total of applicable premium payments made pursuant
to a salary reduction agreement for any tax year shall not exceed the
lesser of:
(a) $11,000 (or such higher amount as may be permitted under IRC Section
402(g)(1) in effect for such tax year, except to the extent of any
alternative limitation permitted under IRC Section 402(g)(7)); or
(b) the applicable limit described in IRC Section 415.
Except as provided in Paragraph 5 below or in the case of a rollover
contribution or direct transfer, total premium payments in any tax year,
whether attributable to the Employee's salary reduction agreement, or to
permitted employer contributions, shall not exceed the applicable limit
described in IRC Section 415.
In addition, premium payments under this Contract may not exceed those
permitted under the incidental death benefit rules of Treasury Regulations
Section 1.401-1(b)(1)(i), as interpreted by applicable Revenue Rulings.
Accordingly, in no event shall the aggregate amount of premiums under this
Contract, at any time, exceed fifty percent (50%) of the aggregate amount
of the cumulative employer contributions (including salary reduction
contributions) allocated to the Employee under the tax sheltered annuity
program with respect to which this Contract is purchased.
We reserve the right to refund premiums when necessary to comply with the
foregoing limits.
RLNY-RA-1035 1
5. An Employee who is eligible to make contributions to this Contract pursuant
to a salary reduction agreement for any year and who has attained age 50
before the close of the year shall be eligible to make catch-up
contributions in accordance with, and subject to the limitations of, IRC
Section 414(v). Such catch-up contributions shall not be taken into account
for purposes of the provisions of the Contract implementing the required
limitations of IRC Sections 402(g), 403(b) and 415. The Contract shall not
be treated as failing to satisfy the requirements of IRC Section 403(b)(12)
by reason of the making of such catch-up contributions.
6. To the extent attributable to contributions made pursuant to salary
reduction agreements, distribution of the assets of this Contract may not
be made before the Owner:
(a) attains age 59 1/2;
(b) has a severance from employment;
(c) dies;
(d) becomes disabled; or
(e) incurs a financial hardship (limited to contributions only, not
earnings).
The above restrictions do not apply with respect to that portion of the
value of the Contract that is equal to the value of the Contract as of
December 31, 1988.
7.(a)Notwithstanding any provision of this Contract to the contrary, the
distribution of the Owner's interest in the Contract shall be made in
accordance with the requirements of IRC Sections 403(b)(10) and 401(a)(9)
and the regulations thereunder, the provisions of which are herein
incorporated by reference, including Section 1.403(b)-3 of the Income Tax
Regulations. The portion of this Contract that is equal to the
undistributed value of the Contract as of December 31, 1986, shall be
distributed in accordance with the incidental benefit requirements
described in Q&A-3 of Section 1.403(b)-3 of the Income Tax Regulations. The
required minimum distributions for this Contract may be withdrawn from
another IRC 403(b) contract of the Owner in accordance with Q&A-4 of
Section 1.403(b)-3 of the Income Tax Regulations.
(b) If distributions are made in the form of an annuity on an irrevocable basis
(except for acceleration), then distributions must satisfy the requirements
of Q&A-4 of Section 1.401(a)(9)-6T of the Temporary Income Tax Regulations,
rather than Paragraphs 7(c), 7(d), 7(e), and 8 below.
(c) The Owner's entire interest in the Contract will commence to be distributed
no later than the Owner's "required beginning date." The Owner's "required
beginning date" will be the first day of April following the later of: (i)
the calendar year in which the Owner attains age 70 1/2, or (ii) the
calendar year in which the Owner retires from employment with the employer
maintaining the plan applicable to this Contract. The Owner's "first
distribution calendar year" will be the calendar year immediately preceding
the Owner's required beginning date.
(d) The amount to be distributed each year, beginning with the Owner's first
distribution calendar year and continuing through the year of death, shall
not be less than the quotient obtained by dividing the value of the
Contract as of the end of the preceding year by the distribution period in
the Uniform Lifetime Table in Q&A-2 of Section 1.401(a)(9)-9 of the Income
Tax Regulations, using the Owner's age as of his or her birthday in the
year. However, if the Owner's sole designated beneficiary is his or her
spouse and such spouse is more than 10 years younger than the Owner, then
the distribution period is determined under the Joint and Last Survivor
Table in Q&A-3 of Section 1.401(a)(9)-9 of the Income Tax Regulations,
using the ages as of the Owner's and spouse's birthdays in the year.
(e) The required minimum distribution for the first distribution calendar year
can be made as late as the Owner's required beginning date. The required
minimum distribution for any other year must be made by the end of such
year.
RLNY-RA-1035 2
8.(a)Death On or After Required Distributions Commence. If the Owner dies on
or after the required beginning date, the remaining portion of his or her
interest will be distributed at least as rapidly as follows:
(i) If the designated beneficiary is someone other than the Owner's
surviving spouse, the remaining interest will be distributed over the
remaining life expectancy of the designated beneficiary, with such
life expectancy determined using the age of the beneficiary as of his
or her birthday in the year following the year of the Owner's death,
or over the period described in Paragraph 8(a)(iii) if longer.
(ii) If the Owner's sole designated beneficiary is the Owner's surviving
spouse, the remaining interest will be distributed over such spouse's
life or over the period described in Paragraph 8(a)(iii) if longer.
Any interest remaining after such spouse's death will be distributed
over such spouse's remaining life expectancy determined using the
spouse's age as of his or her birthday in the year of the spouse's
death, or, if the distributions are being made over the period
described in Paragraph 8(a)(iii), over such period.
(iii)If there is no designated beneficiary, or if applicable by operation
of Paragraph 8(a)(i) or 8(a)(ii), the remaining interest will be
distributed over the Owner's remaining life expectancy determined in
the year of the Owner's death.
(iv) The amount to be distributed each year under Paragraph 8(a)(i),
8(a)(ii) or 8(a)(iii), beginning with the calendar year following the
calendar year of the Owner's death, is the quotient obtained by
dividing the value of the Contract as of the end of the preceding year
by the remaining life expectancy specified in such paragraph. Life
expectancy is determined using the Single Life Table in Q&A-1 of
Section 1.401(a)(9)-9 of the Income Tax Regulations. If distributions
are being made to a surviving spouse as the sole designated
beneficiary, such spouse's remaining life expectancy for a year is the
number in the Single Life Table corresponding to such spouse's age in
the year. In all other cases, remaining life expectancy for a year is
the number in the Single Life Table corresponding to the beneficiary's
or Owner's age, as the case may be, in the year specified in Paragraph
8(a)(i), 8(a)(ii) or 8(a)(iii) and reduced by 1 for each subsequent
year.
(b) Death Before Required Beginning Date. If the Owner dies before the required
beginning date, his or her entire interest will be distributed at least as
rapidly as follows:
(i) If the designated beneficiary is someone other than the Owner's
surviving spouse, the entire interest will be distributed, starting by
the end of the calendar year following the calendar year of the
Owner's death, over the remaining life expectancy of the designated
beneficiary, with such life expectancy determined using the age of the
beneficiary as of his or her birthday in the year following the year
of the Owner's death, or, if elected, in accordance with Paragraph
8(b)(iii).
(ii) If the Owner's sole designated beneficiary is the Owner's surviving
spouse, the entire interest will be distributed, starting by the end
of the calendar year following the calendar year of the Owner's death
(or by the end of the calendar year in which the Owner would have
attained age 70 1/2, if later), over such spouse's life, or, if
elected, in accordance with Paragraph 8(b)(iii). If the surviving
spouse dies before distributions are required to begin, the remaining
interest will be distributed, starting by the end of the Calendar year
following the calendar year of the spouse's death, over the spouse's
designated beneficiary's remaining life expectancy determined using
such beneficiary's age as of his or her birthday in the year following
the death of the spouse, or, if elected, will be distributed in
accordance with Paragraph 8(b)(iii). If the surviving spouse dies
after the distributions are required to begin, any remaining interest
will continue to be distributed over the spouse's remaining life
expectancy determined using the spouse's age as of his or her birthday
in the year of the spouse's death.
(iii)If there is no designated beneficiary, or if applicable by operation
of Paragraph 8(b)(i) or 8(b)(ii), the entire interest will be
distributed by the end of the calendar year containing the fifth
anniversary of the Owner's death (or of the spouse's death in the case
of the surviving spouse's death before distributions are required to
begin under Paragraph 8(b)(ii)).
RLNY-RA-1035 3
(iv) The amount to be distributed each year under Paragraph 8(b)(i) or
8(b)(ii) is the quotient obtained by dividing the value of the
Contract as of the end of the preceding year by the remaining life
expectancy specified in such paragraph. Life expectancy is determined
using the Single Life Table in Q&A-1 of Section 1.401(a)(9)-9 of the
Income Tax Regulations. If distributions are being made to a surviving
spouse as the sole designated beneficiary, such spouse's remaining
life expectancy for a year is the number in the Single Life Table
corresponding to such spouse's age in the year. In all other cases,
remaining life expectancy for a year is the number in the Single Life
Table corresponding to the beneficiary's age in the year specified in
Paragraph 8(b)(i) or 8(b)(ii) and reduced by 1 for each subsequent
year.
(c) The "value" of the Contract includes the amount of any outstanding rollover
and transfer under Q&As-7 and -8 of Section 1.408-8 of the Income Tax
Regulations.
9. Notwithstanding any provision of this Contract to the contrary that would
otherwise limit an Owner's election under this Contract, an Owner may
elect, at any time and in the manner prescribed by us, to have any portion
of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Owner in a Direct Rollover.
For the purpose of this paragraph, the following definitions apply:
(a) Eligible Rollover Distribution is any distribution of all or any
portion of the assets of the Contract, not including:
(i) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the Owner or the joint lives (or joint
life expectances) of the Owner and the Owner's designated beneficiary,
or for a specified period of ten years or more;
(ii) any distribution to the extent such distribution is required under IRC
Sections 401(a)(9) or 403(b)(10); and
(iii) any amount that is distributed on account of hardship.
In addition, the portion of any distribution that is not includible in
the gross income of the Owner may be considered part of an Eligible
Rollover Distribution; provided, however, such portion may be
transferred only to an individual retirement account or annuity
described in IRC Section 408(a) or (b), or to another annuity
described in Section 403(b) that agrees to separately account for
amounts so transferred, including separately accounting for the
portion of such distribution which is includible in gross income and
the portion of such distribution which is not so includible.
(b) Eligible Retirement Plan is:
(i) an annuity described in IRC Section 403(b);
(ii) an individual retirement account described in IRC Section 408(a);
(iii) an individual retirement annuity described in IRC Section 408(b);
(iv) an employee's qualified trust described in IRC Section 401(a) which is
exempt from tax under IRC Section 501(a);
(v) an annuity plan described in IRC Section 403(a); or
(vi) an eligible deferred compensation plan under IRC Section 457(b) which
is maintained by a state, political subdivision of a state, or any
agency or instrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts transferred
into such plan from this Contract.
(c) Direct Rollover is a payment by us to the Eligible Retirement Plan
specified by the Owner.
(d) Owner, for the purposes of this paragraph, includes the Owner's surviving
spouse and the Owner's spouse or former spouse who is an alternate payee
under a qualified domestic relations order, as defined in IRC Section
414(p).
RLNY-RA-1035 4
10. This Contract shall be for the exclusive benefit of the Owner or his or her
beneficiary. The Owner's rights under this Contract will be
non-forfeitable.
11. We reserve the right to amend or administer the Contract and Rider as
necessary to comply with the provisions of the IRC, Internal Revenue
Service Regulations or published Internal Revenue Service Rulings. We will
send a copy of such amendment to the Owner. It will be mailed to the last
post office address known to us. Any such changes will apply uniformly to
all Policies that are affected and the Owner will have the right to accept
or reject such changes.
12. Except in the case of a Contract purchased by a church, no premium payments
applicable to this Contract can be made unless all employees of the
employer may elect to have the employer make contributions of more than
$200 under a salary reduction agreement. For purposes of this paragraph any
Employee who is a participant in (a), (b) or (c) below may be excluded.
(a) an eligible deferred compensation plan under IRC Section 457(b);
(b) a qualified cash or deferred arrangement; or
(c) another IRC Section 403(b) annuity.
In addition, any non-resident aliens and students who normally work less
than twenty (20) hours per week may be excluded.
Signed: /s/ J.R. Gelder
President
RLNY-RA-1035 5
