TAX-SHELTERED ANNUITY ENDORSEMENT
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This Contract is established as a Tax-Sheltered Annuity ("TSA") under Section
403(b) of the Internal Revenue Code of 1986, as amended (the "Code") or any
successor provision, pursuant to the Owner's request in the application.
Accordingly, this Endorsement is attached to and made part of the Contract as of
its issue date or, if later, the date shown below.
TAX-SHELTERED ANNUITY PROVISIONS
To ensure treatment as a TSA, this Contract will be subject to the requirements
of Code Section 403(b), which are briefly summarized below:
CONTRIBUTION LIMITATIONS
(a) Purchase Payments made on behalf of the Owner pursuant to a salary
reduction agreement when added to "elective deferral" contributions under
all other plans, contracts or arrangements in which the Owner
participates, may not exceed the annual limitation on such contributions
as provided in Code Section 401(a)(30).
(b) Purchase Payments applied to the Contract on behalf of the Owner which
exceed the applicable "exclusion allowance" (within the meaning of Code
Section 403(b)(2)) or the limitations contained in Code Section 415 shall
not be excludable from gross income.
(c) Purchase Payments that exceed any of the foregoing limitations may be
returned, distributed or otherwise corrected using any method permissible
under the Code.
NONDISCRIMINATION REQUIREMENTS
(a) Except if this Contract is purchased by a "church" (within the meaning of
Code Section 3121(w)), the Plan must satisfy the nondiscrimination
requirements of Code Section 403(b)(12).
(b) Purchase Payments not made pursuant to a salary reduction agreement will
satisfy the nondiscrimination requirements of Code Section 403(b)(12)
provided they satisfy the requirements of Code Section 401(a)(4)
(nondiscrimination in contributions), Code Section 401(a)(5) (permitted
disparity), Code Section 401(a)(17) (annual limit on compensation), Code
Section 401(m) (average contribution percentage test) and Code Section
410(b) (coverage).
(c) Purchase Payments made pursuant to a salary reduction agreement will
satisfy the nondiscrimination requirements of Code Section 403(b)(12)
provided that every employee of the Employer sponsoring the Plan, may
elect to make Purchase Payments of more than $200 pursuant to a salary
reduction agreement.
DISTRIBUTION RESTRICTIONS AND REQUIREMENTS
(a) Distributions attributable to Purchase Payments made pursuant to a salary
reduction agreement may be made only when the Owner attains age 59 1/2,
separates from service, dies, becomes "disabled" (within the meaning of
the Code Section 403(b)(11)) or incurs a hardship. A distribution made
due to a hardship may not include income attributable to such Purchase
Payments.
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(b) Distributions from this Contract must comply with the minimum
distribution and incidental death benefit requirements of Code Section
403(b)(10). Accordingly, an Owner's entire interest under the Contract
generally must be distributed (or begin to be distributed) by April 1 of
the calendar year 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 (the "Required Beginning Date").
Distributions commencing not later than the Required Beginning Date may
be made over the life of the Owner or over the lives of the Owner and his
or her Designated Beneficiary (or over a period not extending beyond the
life expectancy of the Owner or the life expectancy of the Owner and his
or her Designated Beneficiary).
(c) If the Owner dies before distribution of his or her interest in the
Contract has begun in accordance with paragraph (b) above, the Owner's
entire interest must be distributed within five years, unless: (i) such
interest is distributed to a Designated Beneficiary over his or her life
(or over a period not extending beyond such Designated Beneficiary's life
expectancy); and (ii) such distribution begins not later than one year
after the Owner's death. If the Designated Beneficiary is the Owner's
surviving spouse, the date on which the distributions are required to
begin shall not be earlier than the date on which the Owner would have
attained age 70 1/2.
(d) If the Owner dies after distribution of his or her interest in this
Contract has begun in accordance with paragraph (b) above but before his
or her entire interest has been distributed, the remaining interest must
be distributed at least as rapidly as under the method of distribution
being used prior to the Owner's death.
(e) All distributions must comply with a method of distribution offered by
the Company under this Contract.
(f) If the Owner receives a distribution from this Contract that qualifies as
an "eligible rollover distribution" (within the meaning of Code Section
402(f)(2)(A)) and elects to have such distribution paid directly to an
"eligible retirement plan" (within the meaning of Code Section 402(c)),
such distribution shall be made in the form of a direct transfer to the
eligible retirement plan. The Company may establish reasonable
administrative rules applicable to such direct transfers.
NONFORFEITABLITY
(a) The Owner's rights under this Contract shall be nonforfeitable except for
failure to pay future Premiums.
(b) This Contract may not be transferred, sold, assigned or pledged as
collateral for a loan or as security for the performance of an obligation
or for any other purposes to any person other than the Company.
MULTIPLE CONTRACTS
(a) If for any taxable year an Owner is covered by this Contract and any
other TSA, all such contracts shall be treated as a single contract.
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PLAN PROVISIONS
The Plan, including certain Plan provisions required by the Employee Retirement
Income Security Act of 1974 or other applicable law, may limit the Owner's
rights under this Contract. The Plan provisions may:
(a) Limit the Owner's right to make Purchase Payments;
(b) Restrict the time when the Owner may elect to receive payments under this
Contract;
(c) Require the consent of the Owner's spouse before the Owner may elect to
receive payments under this Contract;
(d) Require that all distributions be made in the form of a joint and
survivor annuity for the Owner and the Owner's spouse unless both consent
to a different form of distribution;
(e) Require that the Owner's spouse be the Designated Beneficiary;
(f) Require that the Owner remain employed by the Employer sponsoring the
Plan for a specified period of time before the Owner's rights under this
Contract become fully vested; or
(g) Otherwise restrict the Owner's exercise of rights under the Contract or
give the Employer sponsoring the Plan (or a Plan representative) the
right to exercise certain rights on the Owner's behalf.
No such Plan provision shall limit an Owner's rights under this Contract, unless
the Employer sponsoring the Plan has provided the Company with written
notification of such provision. In no event shall any such Plan provision
enlarge the Company's obligations under this Contract.
TAX CONSEQUENCES
(a) The Company will not incur any liability or be responsible for the
timing, purpose or propriety of any contribution or distribution; any tax
or penalty imposed on account of any such contribution or distribution;
or any other failure, in whole or in part, by the Owner or the Employer
to comply with the provisions set forth in the Code or any other law.
ADMINISTRATION
The Company does not act as the administrator of the Plan. Accordingly, the
Company will not incur any liability or be responsible for interpreting the Plan
or deciding any questions arising thereunder.
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
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Secretary President
_____________________________
Endorsement Effective Date
(If Other Than Issue Date)
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