[LINCOLN FINANCIAL GROUP LOGO]
Lincoln Life & Annuity
Company of New York
P.O. Box 1337
Syracuse, NY 00000-0000
or call: 000-000-0000
GROUP VARIABLE
ANNUITY CONTRACT NO.: EFFECTIVE DATE:
(herein referred to as "You" or "Your")
THIS CONTRACT WAS DELIVERED IN THE State of New York and is subject to the laws
of that jurisdiction.
Lincoln Life & Annuity Company of New York (herein referred to as "LL&A") by
this Contract agrees to provide benefits for Participants in accordance with the
terms and conditions of the Contract. The entire Contract consists of the
provisions on the following pages, including any amendments, schedules, or
endorsements.
This Contract is issued in consideration of the payment of contributions
provided for herein, and your Application, a copy of which is attached hereto
when issued.
IN WITNESS HEREOF, LL&A has issued this Contract at Syracuse, New York on this
_____ day of _________________, 19__, and caused this Contract to be in full
force as of its Effective Date as set forth above.
/s/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxx
------------------------------ ------------------------
Assistant Secretary President
THE ANNUAL MORTALITY AND EXPENSE RISK CHARGE UNDER THIS CONTRACT IS 1.00% AND
THE ASSUMED INTEREST RATE FOR A VARIABLE ANNUITY WILL RANGE FROM 0% TO 6%. SEE
SECTIONS 5.5 AND 9.3 FOR FURTHER INFORMATION.
Non-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.
Form No.: GAC 96-101 (NY)
1
TABLE OF CONTENTS
I. CONTRACT SPECIFICATIONS
1.1 Minimum Contribution Amount
1.2 Separate Account
1.3 Divisions Available Under This Contract
1.4 Limitations On Transfers During The Accumulation Period
1.5 Annual Administration Charge
1.6 Annual Mortality and Expense Risk Charge
1.7 Plan Name
1.8 Employer
1.9 Systematic Withdrawal Set-up Charge
1.10 Pending Allocation Account
II. DEFINITIONS
2.1 Accumulation Unit
2.2 Accumulation Unit Value
2.3 Accumulation Period
2.4 Annuitant
2.5 Annuity Commencement Date
2.6 Annuity Conversion Amount
2.7 Annuity Conversion Factor
2.8 Annuity Payment Calculation Date
2.9 Annuity Period
2.10 Annuity Unit
2.11 Annuity Unit Value
2.12 Beneficiary
2.13 Business Day
2.14 Certificate
2.15 Contributions
2.16 Division(s)
2.17 LL&A
2.18 General Account
2.19 Gross Withdrawal Amount
2.20 Guaranteed Annuity
2.21 Guaranteed Interest Division
2.22 Net Withdrawal Amount
2.23 Participant
2.24 Participant's Account
2.25 Participation Anniversary
2.26 Pending Allocation Account
2.27 Participation Date
2.28 Participation Year
2.29 Plan
2.30 Separate Account
2.31 Sub-Account
2.32 Valuation Date
Form No.: GAC 96-101 (NY)
2
2.33 Valuation Period
2.34 Variable Annuity
2.35 Variable Investment Division
2.36 You or Your
III. CONTRIBUTIONS
3.1 Initial Contribution
3.2 Allocation of Contributions
3.3 Payment of Subsequent Contributions
3.4 Characterization of Transfer Contributions
3.5 Maximum Contribution
3.6 Valuation
3.7 Annual Administration Charge
3.8 Unallocated Contributions
IV. GUARANTEED INTEREST DIVISION
4.1 Participant's Account Balance in Guaranteed Interest Division
4.2 Interest
V. VARIABLE INVESTMENT DIVISION
5.1 Participant's Account Balance in Variable Investment Division
5.2 Accumulation Units
5.3 Accumulation Unit Value
5.4 Net Investment Factor
5.5 Mortality and Expense Risk Charge
VI. TRANSFERS BETWEEN DIVISIONS AND SUB-ACCOUNTS
6.1 Transfers During Accumulation Period
6.2 Transfers During Annuity Period
VII. WITHDRAWALS AND DISTRIBUTIONS
7.1 Withdrawals During the Accumulation Period
7.2 Total Withdrawals
7.3 Partial Withdrawals
7.4 Withdrawal Requirements for Section 403(b) Plans
7.5 Minimum Distribution Requirements for Section 403(b) Plans
7.6 Contingent Deferred Sales Charge
7.7 Systematic Withdrawal Option
7.8 Deferred Rollover Option
VIII. DEATH BENEFITS
8.1 Death Benefit During the Accumulation Period
8.2 Notification of Death
8.3 Payment of Death Benefit
8.4 Death During the Annuity Period
IX. ANNUITIES
9.1 Election of Annuity Option
Form No.: GAC 96-101 (NY)
3
9.2 Guaranteed Annuity
9.3 Variable Annuity
9.4 Basis of Annuity Conversion Factors
9.5 Annuity Options
9.6 Retired Life Certificate
X. LOANS
10.1 General
10.2 Restrictions on Loan Amount
10.3 Minimum Loan Amount
10.4 Number of Loans Outstanding
10.5 Loan Interest Rate
10.6 Effect of Loan on Participant's Account
10.7 Default in Loan Repayment
10.8 Loan Foreclosure
10.9 Deferral Periods
XI. DISCONTINUANCE AND TERMINATION OF CONTRACT
11.1 Contract Discontinuance By Contractholder
11.2 Contract Discontinuance By LL&A
11.3 Effect of Discontinuance
11.4 Contract Termination
XII. GENERAL PROVISIONS
12.1 Contract
12.2 Deactivation
12.3 Contract Amendments
12.4 Contract Interpretation
12.5 Information, Reports and Determinations
12.6 Misstatements
12.7 Assignment
12.8 Market Emergencies
12.9 Deferral Periods
12.10 Deductions for Premium Taxes
12.11 Facility of Payment
12.12 Evidence of Survival
12.13 Non-Waiver
12.14 Receipt of Notice
12.15 Separability of Provisions
12.16 The Separate Account
12.17 Payment of Benefits
12.18 Free-Look Period
Form No.: GAC 96-101 (NY)
4
ARTICLE I - CONTRACT SPECIFICATIONS
1.1 MINIMUM CONTRIBUTION AMOUNT: Your minimum annual Contribution on behalf of
all Participants under this Contract shall be twenty thousand dollars
($20,000). This minimum figure is for aggregate annual Contributions, not
for each Participant.
1.2 SEPARATE ACCOUNT: VA-L
1.3 DIVISIONS AVAILABLE UNDER THIS CONTRACT:
A. Guaranteed Interest Division
B. Variable Investment Division:
Asset Manager Account (Fidelity's VIPF II: Asset Manager Portfolio)
Balanced Account (American Century Variable Portfolios, Inc.: VP
Balanced)
Growth I Account (Fidelity's VIPF: Growth Portfolio)
Index Account (Dreyfus Life and Annuity Index Fund, Inc.)
International Stock Account (X. Xxxx Price International Series, Inc.)
Equity-Income Account (Fidelity's VIPF: Equity-Income Portfolio)
Small Cap Account (Dreyfus Variable Investment Fund: Small Cap
Portfolio)
Global Growth Account (Janus Aspen Series, Worldwide Growth Portfolio)
Mid Cap Value Account (Xxxxxxxxx & Xxxxxx AMT Partners Portfolio)
Mid Cap Growth I Account (Lincoln National Aggressive Growth Fund, Inc.)
Social Awareness Account (Lincoln National Social Awareness Fund, Inc.)
Small Cap Growth Account (Baron Capital Asset Fund)
1.4 LIMITATIONS ON TRANSFERS AND WITHDRAWALS DURING THE ACCUMULATION PERIOD:
Unlimited transfer requests may be made by a Participant each calendar
year.
1.5 ANNUAL ADMINISTRATION CHARGE:
Twenty-five dollars ($25) per Participant
Twenty-five dollars ($25) per Participant who allocates a contribution,
during the year ending on a Participation Anniversary, to any one (1) or
more of the Sub-Accounts established in the Variable Investment Division.
1.6 ANNUAL MORTALITY AND EXPENSE RISK CHARGE APPLICABLE TO VARIABLE INVESTMENT
DIVISION: Annual rate of one percent (1.00%).
1.7 PLAN NAME:
1.8 EMPLOYER:
1.9 SYSTEMATIC WITHDRAWAL SET-UP CHARGE: Thirty dollars ($30). If the total
Account balance is twenty-five thousand dollars ($25,000) or greater, such
amount will be waived.
Form No.: GAC 96-101 (NY) 5
1.10 PENDING ALLOCATION ACCOUNT: An account established under the Variable
Investment Division that invests unallocated contributions in shares of a
money market mutual fund. LL&A life does not guarantee the principal amount
or investment results.
Form No.: GAC 96-101 (NY) 6
ARTICLE II - DEFINITIONS
2.1 ACCUMULATION UNIT: An accounting unit of measure used to record amounts of
increases to, decreases from and accumulations in each Sub-Account during
the Accumulation Period.
2.2 ACCUMULATION UNIT VALUE: The dollar value of an Accumulation Unit in each
Sub-Account on any Valuation Date.
2.3 ACCUMULATION PERIOD: The period commencing on a Participant's Participation
Date and terminating when the Participant's Account balance is reduced to
zero, either through withdrawal(s), conversion to an annuity, imposition of
charges, payment of a Death Benefit or a combination thereof.
2.4 ANNUITANT: The person receiving annuity payments under the terms of this
Contract.
2.5 ANNUITY COMMENCEMENT DATE: The date on which LL&A makes the first annuity
payment to the Annuitant as required by the Retired Life Certificate. This
date, as well as the date each subsequent annuity payment is made, will be
the first day of a calendar month.
2.6 ANNUITY CONVERSION AMOUNT: The amount of a Participant's Account applied
toward the purchase of an Annuity.
2.7 ANNUITY CONVERSION FACTOR: The factor applied to the Annuity Conversion
Amount in determining the dollar amount of an annuitant's annuity payments
for Guaranteed Annuities or the initial payment for Variable Annuities.
2.8 ANNUITY PAYMENT CALCULATION DATE: For Guaranteed Annuities, this is the
first day of a calendar month. For Variable Annuities, this is the
Valuation Date ten (10) business days prior to the first day of a calendar
month.
2.9 ANNUITY PERIOD: The period concurrent with or following the Accumulation
Period, during which an Annuitant's annuity payments are made.
2.10 ANNUITY UNIT: An accounting unit of measure that is used in calculating the
amounts of annuity payments to be made from each Sub-Account during the
Annuity Period.
2.11 ANNUITY UNIT VALUE: The dollar value of an Annuity Unit in each Sub-Account
on any Valuation Date.
2.12 BENEFICIARY: The person(s) designated to receive a Participant's Account
balance in the event of the Participant's death during the Accumulation
Period or the person(s) designated to receive any applicable remainder of
an annuity in the event of the Annuitant's death during the Annuity Period.
2.13 BUSINESS DAY: A day on which LL&A and the New York Stock Exchange are
customarily open for business.
Form No.: GAC 96-101 (NY) 7
2.14 CERTIFICATE: An Active Life Certificate is issued to each Participant
outlining the basic provisions of the Contract. A Retired Life Certificate
is issued to each Annuitant outlining the basic provisions of his Annuity.
2.15 CONTRIBUTIONS: All amounts deposited by You or the Participant under this
Contract including any amount transferred from another contract.
2.16 DIVISION(S): The Guaranteed Interest Division and/or the Variable
Investment Division named in Section 1.3.
2.17 LL&A: Lincoln Life & Annuity Company of New York, at its Home Office in
Syracuse, New York.
2.18 GENERAL ACCOUNT: All assets of LL&A other than those in the Separate
Account specified in Section 1.2 or any other separate account.
2.19 GROSS WITHDRAWAL AMOUNT: The amount by which a Participant's Account is
reduced when a withdrawal occurs, including any applicable Contingent
Deferred Sales Charge and Annual Administration Charge.
2.20 GUARANTEED ANNUITY: An annuity for which LL&A guarantees the amount of each
payment as long as the annuity is payable.
2.21 GUARANTEED INTEREST DIVISION: The Division maintained by LL&A for this and
other contracts for which LL&A guarantees the principal amount and interest
credited thereto, subject to any fees and charges as set forth in this
Contract. Amounts allocated to the Guaranteed Interest Division are part of
the General Account.
2.22 NET WITHDRAWAL AMOUNT: The amount paid to a Participant when a withdrawal
occurs.
2.23 PARTICIPANT: A person who has enrolled under this Contract and maintains a
Participant's Account.
2.24 PARTICIPANT'S ACCOUNT: An account maintained for a Participant during the
Accumulation Period, the total balance of which equals the Participant's
Account balance in the Variable Investment Division plus the Participant's
Account balance in the Guaranteed Interest Division.
2.25 PARTICIPATION ANNIVERSARY: For each Participant, a date at one year
intervals from that Participant's Participation Date. If an anniversary
occurs on a non-Business Day, it is treated as occurring on the next
Business Day.
2.26 PARTICIPATION DATE: A date assigned to each Participant corresponding to
the date on which the first Contribution on behalf of that Participant
under this Contract is received by LL&A. A Participant will receive a new
Participation Date if such Participant makes a
Form No.: GAC 96-101 (NY) 8
Total Withdrawal as defined in Section 7.2, and Contributions on behalf of
the Participant are resumed under any Contract.
2.27 PENDING ALLOCATION ACCOUNT: An account established under the Variable
Investment Division that invests unallocated contributions in shares of a
money market mutual fund. LL&A does not guarantee the principal amount or
investment results.
2.28 PLAN: The Plan named in Section 1.8 which qualifies for federal tax
benefits under Section 403(b) of the Internal Revenue Code of 1986 and
under which this Contract is authorized.
2.29 PARTICIPATION YEAR: A period beginning with one Participation Anniversary
and ending the day before the next Participation Anniversary, except for
the first Participation Year which begins with the Participation Date.
2.30 SEPARATE ACCOUNT: The VA-L Separate Account is a group of assets segregated
from LL&A's General Account whose income, gains and losses, realized or
unrealized, are credited to or charged against the Separate Account without
regard to other income, gains or losses of LL&A. Additional information is
provided in Section 12.15.
2.31 SUB-ACCOUNT(S): An account established in the Variable Investment Division
which invests in shares of a corresponding mutual fund.
2.32 VALUATION DATE: A Business Day. Accumulation and Annuity Units are computed
on each Valuation Date as of the close of trading on the New York Stock
Exchange.
2.33 VALUATION PERIOD: A period used in measuring the investment experience of
each Sub-Account. The Valuation Period begins at the close of trading on
the New York Stock Exchange on one Valuation Date and ends at the
corresponding time on the next Valuation Date.
2.34 VARIABLE ANNUITY: An annuity with payments that increase or decrease in
accordance with the investment results of the selected Sub-Account(s).
2.35 VARIABLE INVESTMENT DIVISION: The Division specified in Section 1.3 which
is maintained by LL&A for this and other Section 403(b) LL&A contracts for
which LL&A does not guarantee the principal amount or investment results.
Amounts allocated to the Variable Investment Division are part of the
Separate Account.
2.36 YOU or YOUR: The Contractholder named on the face page of this Contract.
Form No.: GAC 96-101 (NY) 9
ARTICLE III - CONTRIBUTIONS
3.1 INITIAL CONTRIBUTION: The initial Contribution for a Participant will be
credited to the Participant's Account no later than two Business Days after
it is received by LL&A if it is preceded or accompanied by a completed
enrollment form containing all the information necessary for processing the
Participant's Contribution.
3.2 ALLOCATION OF CONTRIBUTIONS: Participant Contributions will be allocated to
the Divisions and Sub-Accounts according to the percentages requested by
the Participant. The percentages must be whole numbers and may be changed
on an unlimited basis. You or the Participant shall notify LL&A in a form
acceptable to LL&A of such changes. Upon receipt by LL&A, the change will
be effective for all Contributions received concurrently with the
allocation change form and for all future Contributions.
3.3 PAYMENT OF SUBSEQUENT CONTRIBUTIONS: You shall forward Contributions to
LL&A specifying the amount being contributed on behalf of each Participant.
You shall forward such Contributions and provide such allocation
information in accordance with procedures established by LL&A. The
Contributions shall be allocated among the Guaranteed Interest Division and
each Sub-Account in accordance with the percentage information provided by
the Participant subject to the terms of the Plan.
3.4 CHARACTERIZATION OF TRANSFER CONTRIBUTIONS: For all Contributions
transferred from another Contract, LL&A must be provided with the following
information in a form acceptable to LL&A:
(a) The source of the Contributions transferred (e.g. salary reduction,
employer match or post-tax Contributions). LL&A will record all such
transferred amounts where no source information is provided as salary
reduction Contributions.
(b) Identification of Contributions transferred as Contributions made or
earnings credited:
(i) prior to January 1, 1987;
(ii) during 1987 and 1988; or
(iii) subsequent to December 31, 1988.
Amounts not so identified will be treated as attributable to period
(iii) for purposes of Sections 7.4 and 7.5.
3.5 MAXIMUM CONTRIBUTION: Total and overall limitations on Contributions in a
calendar year for a Participant are subject to the limits imposed under
Sections 402(g), 403(b) and 415 of the Internal Revenue Code of 1986 (the
Code), as it may be amended from time to time. LL&A assumes no
responsibility for monitoring these limits for a Participant.
3.6 VALUATION: A Guaranteed Interest Division Contribution will be allocated as
of the Business Day that LL&A receives the Contribution and LL&A will
credit interest
Form No.: GAC 96-101 (NY) 10
beginning with the next calendar day following the Business Day that LL&A
receives the Contribution.
For a Variable Investment Division Sub-Account Contribution, LL&A will
credit a Participant's Account with the number of Accumulation Units for
each Sub-Account selected by the Participant with the number of
Accumulation Units equal to the Contribution Amount divided by the
Accumulation Unit Value which is next computed following LL&A's receipt of
the Contribution.
3.7 ANNUAL ADMINISTRATION CHARGE: LL&A will deduct the amount stated in Section
1.5 from each Participant's Account each year on the last Business Day of
the month in which his Participation Anniversary occurs unless the
Contractholder pays the charge in a single payment. If the Participant's
Account balance is less than this amount on that day, LL&A will deduct the
entire balance from his Account.
When a Total Withdrawal of a Participant's Account, as defined in Section
7.2, occurs on a date other than the last Business Day of the month in
which his Participation Anniversary occurs, LL&A will first deduct the
amount stated in Section 1.5 from his Participant's Account.
ANNUAL ADMINISTRATION CHARGE: LL&A will deduct the amount stated in Section
1.5 on a pro-rata basis from the Participant's Variable Investment Division
Account balance each year on the last Business Day of the month in which
his Participation Anniversary occurs unless the Contractholder pays the
charge in a single payment. If the Participant's Variable Investment
Division Account balance is less than this amount on that day, LL&A will
deduct the entire balance from his Variable Investment Division Account.
When a Participant requests, on a date other than the last Business Day of
the month in which his Participation Anniversary occurs,
(a) a withdrawal, or
(b) a transfer,
from the Variable Investment Division, which would leave a remaining
balance of less than the Annual Administration Charge defined in Section
1.5, LL&A will first deduct the amount stated in Section 1.5 from the
Participant's Variable Investment Division Account balance prior to the
Withdrawal or Transfer.
3.8 UNALLOCATED CONTRIBUTION: If a properly completed enrollment form has not
been received for a Participant, LL&A will deposit such Contributions to
the Pending Allocation Account as described in ARTICLE II - DEFINITIONS,
unless such Contributions are designated to another Account in accordance
with the Plan.
LL&A will follow up with the Contractholder monthly for a period of ninety
(90) days for enrollment information for Participants with deposits in the
Pending Allocation Account.
Within two (2) business days of receipt of a completed enrollment form, the
Participant's Account balance in the Pending Allocation Account will be
transferred to the Divisions
Form No.: GAC 96-101 (NY) 11
and/or Sub-Accounts according to the percentages requested by the
Participant. When the completed enrollment form is received, the
Participation Date will be the date on which the first Contribution on
behalf of the Participant was deposited into the Pending Allocation
Account.
If an enrollment form is not received after the ninety (90) day notice, a
Participant's Account balance in the Pending Allocation Account will be
refunded to the Contractholder within one hundred five (105) days of the
date of the initial Contribution. Contributions received after a refund
while there is still no allocation information, will be deposited to the
Pending Allocation Account.
The Pending Allocation Account will only be used for the purpose mentioned
above; Participants may not direct a portion of their Contributions to this
Account. Contributions deposited in the Pending Allocation Account will not
be afforded the same rights as Contributions under this Contract. The
following Articles and/or Sections under this Contract will not be
applicable: (i) Section 3.7 ANNUAL ADMINISTRATION CHARGE, (ii) ARTICLE VI -
TRANSFERS BETWEEN DIVISION AND SUB-ACCOUNTS, (iii) ARTICLE VII -
WITHDRAWALS AND DISTRIBUTIONS, (iv) ARTICLE IX - PAYOUT ANNUITIES, and (v)
ARTICLE X - LOANS.
Form No.: GAC 96-101 (NY) 12
ARTICLE IV - GUARANTEED INTEREST DIVISION
4.1 PARTICIPANT'S ACCOUNT BALANCE IN GUARANTEED INTEREST DIVISION: The dollar
value of a Participant's Account balance in the Guaranteed Interest
Division as of a date will be equal to the sum of:
(a) Contributions allocated, on behalf of the Participant, to the
Guaranteed Interest Division on or prior to that date, and
(b) Xxxxxxx transferred, on behalf of the Participant, to the Guaranteed
Interest Division from the Variable Investment Division on or prior to
that date, less any;
(c) Gross Withdrawal Amounts from the Guaranteed Interest Division, on
behalf of the Participant, on or prior to that date; and
(x) Xxxxxxx transferred, on behalf of the Participant, to the Variable
Investment Division on or prior to that date; and
(e) Applicable charges to the Participant's Account on or prior to that
date; and
(f) Annuity Conversion Amounts, on behalf of the Participant, on or prior
to that date, plus any;
(g) Interest credited to the Participant's Account balance in the
Guaranteed Interest Division on or prior to that date.
4.2 INTEREST: LL&A will credit interest each day to the portion of the
Participant's Account balance in the Guaranteed Interest Division, using
the previous day's ending balance. The rate of interest credited each day,
if compounded for three hundred sixty-five (365) days, yields the annual
interest rate in effect for the day.
LL&A will declare in advance a guaranteed interest rate which will be
effective for all amounts in the Participant's Account balance in the
Guaranteed Interest Division during the designated year. This rate will
never be less than three percent (3%).
LL&A may also declare in advance separate interest rate guarantees which
are in excess of the guaranteed interest rate for some or all of the
Participant's Account balance in the Guaranteed Interest Division for
specific period(s) during the designated year.
Form No.: GAC 96-101 (NY) 13
ARTICLE V - VARIABLE INVESTMENT DIVISION
5.1 PARTICIPANT'S ACCOUNT BALANCE IN THE VARIABLE INVESTMENT DIVISION: The
Participant's Account balance in the Variable Investment Division is equal
to the sum of the dollar value of a Participant's Account balance in each
Sub-Account as of the end of a Valuation Period which will be equal to the
product of:
(a) The Participant's number of Accumulation Units as of the end of that
Valuation Period; times
(b) The Accumulation Unit Value as of the end of that Valuation Period.
5.2 ACCUMULATION UNITS: The number of Accumulation Units a Participant has in a
Sub-Account as of the end of any Valuation Period is the number of
Accumulation Units the Participant had in that Sub-Account as of the end of
the preceding Valuation Period; plus
(a) The number of Accumulation Units attributable to amounts deposited to
or transferred to that Sub-Account during the current Valuation
Period; minus
(b) The number of Accumulation Units attributable to amounts transferred
from, converted to an annuity, removed as a charge, paid as a death
benefit, or withdrawn from that Sub-Account during the current
Valuation Period.
5.3 ACCUMULATION UNIT VALUE: The initial Accumulation Unit Value for each Sub-
Account was set when the Sub-account was established. The Accumulation Unit
Value may increase or decrease from one Valuation Period to the next.
Subsequent Accumulation Unit Values are determined by multiplying:
(a) The Net Investment Factor for the current Valuation Period by;
(b) The Accumulation Unit Value as of the end of the immediately preceding
Valuation Period.
5.4 NET INVESTMENT FACTOR: The Net Investment Factor is used to measure the
investment experience of a Sub-Account net of the Mortality and Expense
Risk Charge as defined in Section 5.5. The Net Investment Factor for a
Valuation Period is equal to (a) divided by (b) with the result multiplied
by (c) and adjusted by the amount per share of any taxes which are incurred
by LL&A because of the existence of the Sub-Account;
Form No.: GAC 96-101 (NY) 14
where (a) is;
the net asset value per share of the underlying mutual fund held by
the Sub-Account as of the end of the Valuation Period, plus;
the amount per share of any dividend or capital gain distribution from
the underlying mutual fund held by the Sub-Account during the
Valuation Period,
where (b) is;
the net asset value per share of the underlying mutual fund held by
the Sub-Account as of the end of the immediately preceding Valuation
Period,
where (c) is;
one (1.00) minus the Annual Mortality and Expense Risk Charge shown in
Section 1.6 to the n/365th power where n equals the number of calendar
days since the immediately preceding Valuation Date.
5.5 MORTALITY AND EXPENSE RISK CHARGE: This charge is imposed to compensate
LL&A for its assumption of mortality and expense risks under this Contract.
This charge is shown on an annualized basis in Section 1.6 and is deducted
on a daily basis as described in Section 5.4.
Form No.: GAC 96-101 (NY) 15
ARTICLE VI - TRANSFERS BETWEEN DIVISIONS AND SUB-ACCOUNTS
6.1 TRANSFERS DURING ACCUMULATION PERIOD: Participants may transfer all or part
of their Account balance in any Division or Sub-Account to another Division
or Sub-Account subject to the limitations stated in Section 1.4.
You or the Participant must provide transfer requests to LL&A in a form
acceptable to LL&A.
6.2 TRANSFERS DURING ANNUITY PERIOD: An Annuitant may not transfer any part of
the Annuitant's Annuity Conversion Amount.
Form No.: GAC 96-101 (NY) 16
ARTICLE VII - WITHDRAWALS AND DISTRIBUTIONS
7.1 WITHDRAWALS DURING THE ACCUMULATION PERIOD: During the Accumulation Period,
a Participant may withdraw from any or all Divisions, subject to the
restrictions stated in Section 7.4, all or part of the Participant's
Account balance in the Division or Sub-Accounts remaining after reductions
for any applicable Annual Administration Charge (imposed on Total
Withdrawals), Contingent Deferred Sales Charge (CDSC), premium taxes and
outstanding loan, including the loan security thereon. Annuity Conversion
Amounts are not considered withdrawals.
The amount available for withdrawal is subject to all applicable law.
Liquidation of the Participant's Account balance to meet the withdrawal
amount will be made on a pro-rata basis from the Guaranteed Interest
Division and the Sub-Accounts unless the Participant specifies otherwise.
Amounts to be liquidated from the Guaranteed Interest Division will be
withdrawn on a first-in first-out basis in the event that Contributions
from different contribution periods earn different interest rates. The
Contributions from the first contribution period will be withdrawn before
Contributions from the second contribution period.
All withdrawal requests must be submitted in a form acceptable to LL&A and
must indicate the amount and the Division(s) from which the withdrawal is
to be made.
LL&A reserves the right to delay payment of Guaranteed Interest Division
withdrawal amounts per Section 12.9.
7.2 TOTAL WITHDRAWALS: A Total Withdrawal of a Participant's Account will occur
when a Participant who has no outstanding loans:
(a) requests the liquidation of his entire Account balance, or
(b) requests an amount such that the amount requested plus any CDSC as
defined in Section 7.6 results in a remaining Participant's Account
balance being less than the applicable Annual Administration Charge as
defined in Section 1.5; in which case, the request is treated as if it
were a request for liquidation of the Participant's entire Account
balance.
The Participant's Active Life Certificate must be surrendered to LL&A when
a Total Withdrawal of a Participant's Account occurs.
A Participant refund under the Free-look provisions of Section 12.18 is not
considered a Total Withdrawal under this Article.
7.3 PARTIAL WITHDRAWALS: A Partial Withdrawal of a Participant's Account will
occur when:
(a) A Participant who has an outstanding loan makes a withdrawal; or
Form No.: GAC 96-101 (NY) 17
(b) A Participant who has no outstanding loans, requests an amount less
than a total withdrawal.
7.4 WITHDRAWAL REQUIREMENTS FOR SECTION 403(b) PLANS: Withdrawals are subject
to the requirements set forth in Section 403(b) of the Code and regulations
thereof.
(a) Withdrawal Requests for Participants under Section 403(b) Plans
Subject to Title I of ERISA: You must make withdrawal requests on
behalf of Participants. All withdrawal requests will require Your
written authorization and written documentation specifying the portion
of the Participant's Account balance which is available for
distribution to the Participant.
(b) Withdrawal Requests for Participants under Section 403(b) Plans not
Subject to Title I of ERISA: Any portion of the Participant's Account
balance that has been recorded by LL&A as a salary reduction
Contribution made and/or earnings credited prior to January 1, 1989
(including transferred amounts recorded as such pursuant to Section
3.4), may be withdrawn for any reason. Any portion of the
Participant's Account balance that has been recorded by LL&A as a
salary reduction Contribution made and/or earnings credited after
December 31, 1988 (including transferred amounts recorded as such
pursuant to Section 3.4), are subject to the withdrawal restrictions
stated in Section 403(b) of the Code. Participants must certify to
LL&A (and provide supporting information, if requested), that an event
permitting withdrawal has occurred and that LL&A may rely on such
representation in granting the withdrawal request.
7.5 MINIMUM DISTRIBUTION REQUIREMENTS FOR SECTION 403(b) PLANS: Section
403(b)(10) of the Code and regulations thereunder require that
distributions be made from this Contract in a manner which satisfies
requirements similar to the requirements of Section 401(a)(9) including the
incidental death benefit requirements of Section 401(a)(9)(G).
Section 401(a)(9) requires that:
(a) the Participant's Account be distributed not later than the required
beginning date; or
(b) the Participant's Account be distributed not later than the required
beginning date, over the life of the Participant or over the lives of
the Participant and a designated Beneficiary.
A Participant may choose to have the Participant's Account distributed in
one of the following manners:
(a) As a lump sum payment;
(b) As an annuity meeting the requirements of Section 401(a)(9) of the
Code;
(c) As an annual distribution where the amount distributed each calendar
year is at least
Form No.: GAC 96-101 (NY) 18
an amount equal to the quotient obtained by dividing: (a) the amount
of the Participant's Account required to be distributed as of December
31 of the calendar year immediately preceding the calendar year for
which the distribution is being an amount equal to the quotient
obtained by dividing: (a) the amount of the Participant's Account
required to be distributed as of December 31 of the calendar year
immediately preceding the calendar year for which the distribution is
being made; by (b) the life expectancy of the Participant, or the life
expectancy of the Participant and the Beneficiary; or
(d) A combination of the above.
With respect to (c) and (d) above, the life expectancy of the Participant
and a surviving spouse Beneficiary may be recalculated, but not more
frequently than annually. A non-spouse Beneficiary's life expectancy may
not be recalculated.
7.6 CONTINGENT DEFERRED SALES CHARGE: The following schedule of CDSC shall
apply to all Withdrawal Amounts.
(a) WHEN A WITHDRAWAL IS THE CDSC
REQUESTED AND ONE OR WILL EQUAL:
MORE OF THE FOLLOWING
CONDITIONS IS MET:
The Participant has died 0%
The Participant has incurred 0%
a disability for which he is
receiving Social Security
payments
The Participant has attained age 0%
fifty-nine and one-half (59 1/2)
The Participant has separated from 0%
service with the Contractholder and is
age fifty-five (55)
The Participant has separated from 0%
service with the Contractholder
A Participant has requested a withdrawal 0%
which will not exceed twenty percent (20%)
of his Participant's Account balance and
no other withdrawal has been made in that
calendar year
(b) For all other amounts subject to a CDSC, the CDSC will be in
accordance with the schedule below.
Form No.: GAC 96-101 (NY) 19
During Participation Year CDSC Percent
1-5 6%
6-10 3%
11-15 1%
16+ 0%
LL&A may request any reasonable proof necessary to verify that the
withdrawal meets the conditions described above in Section 7.6(a). If You
or the Participant do not furnish the proof requested by LL&A, the CDSC
stated in Section 7.6(b) shall apply.
The CDSC on any withdrawal may be reduced or eliminated but only to the
extent that LL&A anticipates that it will incur lower sales expenses or
perform fewer sales services due to economies arising from (i) the size of
the particular group, (ii) an existing relationship with the
Contractholder, (iii) the utilization of mass enrollment procedures, or
(iv) the performance of sales functions by the Contractholder or an
employee organization which LL&A would otherwise be required to perform.
In no event will the CDSC, when added to any CDSC previously imposed due to
a Participant withdrawal, exceed eight and one-half percent (8.5%) of the
cumulative Contributions to a Participant's Account.
7.7 SYSTEMATIC WITHDRAWAL OPTION: Any Participant who: (a) is at least age
fifty-nine and one-half (59 1/2), or (b) is disabled and receiving Social
Security disability benefits, or (c) is separated from service with the
Contractholder may elect this option.
A Participant must also have a vested Participant Account balance of at
least ten thousand dollars ($10,000) of pre-tax Contributions under this
Contract at the date of the election.
Amounts held for a spousal payee under a Qualified Domestic Relations Order
(QDRO) shall be recognized as eligible for the Systematic Withdrawal
Option. Any spousal payee who wishes to elect this distribution option must
also meet the minimum ten thousand dollar ($10,000) Account balance
requirement and either the age or disability requirement as discussed
above.
A Participant may elect to receive monthly, quarterly, semi-annual, or
annual payments in a flat amount or payments on a monthly basis for an
interest equivalency amount. An interest equivalency amount is an
approximation of the interest earned between each payment period based upon
the interest rate in effect at the beginning of each respective payment
period. This amount will be determined by LL&A. (See Attachment I for
illustration.) A Participant may change the frequency, payment type, or
payment amount of his Systematic Withdrawal Option by submitting a request
in writing on a form acceptable to LL&A. A Participant may make such a
change only once during each calendar year.
A Participant may at any time direct LL&A to cease payments under this
option provided the request is made in writing. A Participant who chooses
to stop receiving systematic withdrawals may not request that any
systematic withdrawal payments begin again until the next calendar year.
Form No.: GAC 96-101 (NY) 20
Systematic withdrawals shall be withdrawn from amounts allocated to the
Guaranteed Interest Division of the Participant's Account balance. If the
balance of the Guaranteed Interest Division is not sufficient to meet the
payment amount requested, the Participant, in writing, may direct LL&A on a
form acceptable to LL&A to transfer the appropriate amount to the
Guaranteed Interest Division; otherwise, such payment will cease.
LL&A will deduct the Systematic Withdrawal Set-Up Charge indicated in
Section 1.10 from the Participant's Account balance each time a Systematic
Withdrawal Option is established.
Payments under this option shall stop upon the earliest of the following
events:
(a) On the date of the Participant's death. A Beneficiary who is a spouse
may elect this option by requesting it in writing on a form acceptable
to LL&A, unless election of this form of benefit would violate any
other requirements of this Contract. The spousal Beneficiary must meet
the ten thousand dollar ($10,000) minimum Account balance requirement
prior to electing the Systematic Withdrawal Option; or
(b) When there is an insufficient Participant Account balance after
deducting the Annual Administration Charge, if any, to pay the amount
requested; or
(c) The Participant fails to meet the requirements of the Systematic
Withdrawal Option as outlined above in the first (1st) paragraph of
this Section.
If a disabled or terminated Participant, who is currently receiving a
Systematic Withdrawal Option payment, returns to service with the
Contractholder, the Contractholder or Participant must notify LL&A in
writing within thirty (30) days from the date of return to service. LL&A
reserves the right to discontinue the Systematic Withdrawal Option payment
under these circumstances.
If a Participant wishes to exercise this option under another LL&A Annuity
Contract, such request shall be considered separate from this Contract and
shall follow the Systematic Withdrawal Option rules under that Annuity
Contract, if permitted.
LL&A may, at its option, discontinue the Systematic Withdrawal Option under
this Contract at any time provided You are given at least thirty (30) days
advance written notice.
7.8 DIRECT ROLLOVER OPTION: Beginning January 1, 1993, a Participant or
Beneficiary may elect this option for any distribution that qualifies as an
Eligible Rollover Distribution as defined by Section 402(c) of the Code and
that meets all the following requirements:
(1) The distribution must be paid directly to either a single Individual
Retirement Account or to a single Tax Deferred Annuity. The check,
wire, or other form of remittance shall be made payable to the
trustee, custodian, or financial institution sponsoring the Individual
Retirement Account or Tax Deferred Annuity. The form of remittance
will not be an instrument that can be negotiated by the Participant.
Form No.: GAC 96-101 (NY)
21
(2) The Participant must provide, in a form acceptable to LL&A, all
information necessary to make the payment to an Individual Retirement
Account or Tax Deferred Annuity.
(3) The Participant or Beneficiary may not revoke a request for payment
under this option for any payment after LL&A has received a written
request for a direct rollover.
Form No.: GAC 96-101 (NY) 22
ARTICLE VIII - DEATH BENEFITS
8.1 DEATH BENEFIT DURING THE ACCUMULATION PERIOD: If death of the Participant
occurs during the Accumulation Period, LL&A will pay the Beneficiary, if
one is living, the greater of the following amounts:
(a) The sum of all Contributions, less any Net Withdrawal Amounts, any
outstanding loan (including principal and due and accrued interest)
and Annuity Conversion Amounts, or
(b) The Participant's Account balance less any outstanding loan (including
principal and due and accrued interest).
LL&A will calculate the Death Benefit as of the end of the Valuation Period
during which it receives both satisfactory notification of the
Participant's death, pursuant to Section 8.2, and the election of a form of
benefit pursuant to Section 8.3. If no election is made pursuant to Section
8.3 within sixty (60) days following LL&A's receipt of satisfactory notice
of death, the Death Benefit will be calculated as of the end of the
Valuation Period during which that sixtieth (60th) day occurs.
If LL&A makes a withdrawal payment pursuant to a Participant request prior
to receiving notice that the Participant has died, but subsequent to the
Participant's death, LL&A will deduct that payment from each of (a) and (b)
above in calculating the Death Benefit.
8.2 NOTIFICATION OF DEATH: LL&A must be notified of a Participant's death no
later than six (6) months from the Participant's date of death in order for
the Beneficiary to receive the Death Benefit amount described in Section
8.1(a) above. The six (6) month period may be extended in situations where
giving notice was not possible. Such notification must be in a form
satisfactory to LL&A. Beneficiaries for whom notification of a
Participant's death is received more than six (6) months after the
Participant's date of death shall receive the Death Benefit amount
described in Section 8.1(b) above.
8.3 PAYMENT OF DEATH BENEFIT: Within sixty (60) calendar days after LL&A
receives satisfactory notification of the Participant's death, the
Beneficiary must make an election to have the Death Benefit applied in one
of the following ways:
(a) As a lump sum payment to the Beneficiary; or
(b) Towards an annuity to be distributed in substantially equal
installments over the life expectancy of the Beneficiary or a period
certain not exceeding the life expectancy of the Beneficiary; or
(c) A combination of the above.
Form No.: GAC 96-101 (NY)
23
A Beneficiary who does not make an election pursuant to this section within
sixty (60) days after LL&A receives notification of the Participant's death
will receive a lump sum payment calculated in accordance with Section
8.1(b) above.
If the Beneficiary is someone other than the spouse of the deceased
Participant, the Code provides that the Beneficiary may not elect an
annuity which would commence later than December 31st of the calendar year
following the calendar year of the Participant's death. If a non-spousal
Beneficiary elects to receive payment in a single lump sum, such payment
must be received no later than December 31st of the fourth (4th) calendar
year following the calendar year of the Participant's death.
If the Beneficiary is the surviving spouse of the deceased Participant,
under the Code, distributions are not required to begin earlier than
December 31st of the calendar year in which the Participant would have
attained age seventy and one-half (70 1/2). If the surviving spouse dies
before the date on which annuity distributions commence, then, for purposes
of the Death Benefit, the surviving spouse shall be deemed to be the
Participant.
If there is no living named Beneficiary on file with LL&A at the time of a
Participant's death, LL&A will pay the Death Benefit to the Participant's
estate in a single lump sum upon receipt of satisfactory proof of the
Participant's death, but not later than December 31st of the fourth (4th)
calendar year following the calendar year of the Participant's death.
Valuation of the Death Benefit shall occur as of the end of the Valuation
Period during which due proof of the Participant's death is received by
LL&A.
8.4 DEATH DURING THE ANNUITY PERIOD: If the Annuitant dies during the Annuity
Period, the Beneficiary, if any, or the Annuitant's estate will receive the
amount payable, if any, according to the in-force annuity options. Any
remaining Participant's Account balance will be paid in accordance with the
provisions of this Article.
Form No.: GAC 96-101 (NY)
24
ARTICLE IX - ANNUITIES
9.1 ELECTION OF ANNUITY OPTION: A Participant eligible to receive a
distribution under the Code or a Beneficiary of a deceased Participant may
notify LL&A in writing in a form acceptable to LL&A that the Participant or
the Beneficiary is electing to convert all or part of the Participant's
Account balance or Death Benefit to an annuity option available under this
Contract. Upon being notified of such an election, LL&A shall calculate the
amount to be converted to an annuity as either the Participant's Account
balance, or a portion thereof, or the Death Benefit as of the initial
Annuity Payment Calculation Date, as appropriate, less the charge for
premium taxes, if any.
If the Participant's Account balance or the Beneficiary's Death Benefit is
less than two thousand dollars ($2,000) or if the amount of the first
scheduled payment is less than twenty dollars ($20), LL&A may, at its
option, cancel the annuity and pay the Participant or Beneficiary his
entire Account balance or Death Benefit in a lump sum.
9.2 GUARANTEED ANNUITY: The payment amount is determined by dividing the
Annuitant's Annuity Conversion Amount in the Guaranteed Interest Division
as of the initial Annuity Payment Calculation Date by the applicable
Annuity Conversion Factor as defined in Section 9.4.
9.3 VARIABLE ANNUITY: The initial payment amount of the Annuitant's Variable
Annuity for each Sub-Account is determined by dividing his Annuity
Conversion Amount in each Sub-Account as of the initial Annuity Payment
Calculation Date by the applicable Annuity Conversion Factor as defined in
Section 9.4.
The amount of the Annuitant's subsequent Variable Annuity payment for each
Sub-Account is determined by:
(a) Dividing the Annuitant's initial Variable Annuity payment amount by
the Annuity Unit Value for that Sub-Account selected for his interest
rate option as described in Section 9.4 as of his initial Annuity
Payment Calculation Date; and
(b) Multiplying the resultant number of annuity units by the Annuity Unit
Values for the Sub-Account selected for his interest rate option for
his respective subsequent Annuity Payment Calculation Dates.
The Annuity Unit Values for each Sub-Account were initially set at ten
dollars ($10), except for the Index Account which was set at nine and
nine hundred six one thousands ($9.9060) of a dollar, for each
interest rate option. Each subsequent Annuity Unit Value for the Sub-
Account selected for an interest rate option is determined by:
(c) Multiplying the Net Investment Factor for the Valuation Period which
ends on the subsequent Valuation Date by the Annuity Unit Value for
the Sub-Account selected as of the end of the immediately preceding
Valuation Period; and
Form No.: GAC 96-101 (NY) 25
(d) dividing this resultant number by one (1.00) plus the interest rate to
the n/365th power, where n is the number of days in the Valuation
Period.
The expenses actually experienced or the mortality actually experienced by
LL&A shall not adversely affect the dollar amount of Variable Annuity
payments to any Annuitant for whom Variable Annuity payments have
commenced.
9.4 BASIS OF ANNUITY CONVERSION FACTORS:
Annuity benefits at their time of commencement will not be less than those
that would be provided by the application of an amount to purchase any
single consideration immediate annuity contract offered by LL&A at the time
to the same class of Annuitants.
(a) Guaranteed Annuities - The maximum Annuity Conversion Factors which
may be used by LL&A under this Contract are based on the 1983
Individual Annuity Mortality Table, set back four (4) years, and an
interest rate of three percent (3.0%). From time to time, lower
conversion factors may be used by LL&A. (Lowering the conversion
factor will increase the amount of the annuity payment.)
(b) Variable Annuities - The Annuity Conversion Factors which are used to
determine the initial payments are based on the 1983 Individual
Annuity Mortality Table, set back four (4) years, and an interest rate
in an integral percentage ranging from zero to six percent (0 to
6.00%) as selected by the Annuitant.
9.5 ANNUITY OPTIONS: The following annuity options are available:
(a) Life
(b) Life with payments guaranteed for ten (10), fifteen (15) or twenty
(20) years
(c) Joint and Survivor
(d) Payments guaranteed for ten (10), fifteen (15) or twenty (20) years
(e) Other offered by LL&A.
To the extent option (d) is elected for a Variable Annuity, the Annuitant
may request at any time during the payment period that the present value of
any remaining installments be paid in one lump sum. However, any lump sum
so elected will be treated as a withdrawal during the Accumulation Period
subject to the applicable CDSC stated in Section 7.6. The CDSC will be
determined as of the date a lump sum is elected by the Annuitant.
9.6 RETIRED LIFE CERTIFICATE: Once an annuity option is selected by a
Participant, or the Beneficiary of a deceased Participant, LL&A will issue
to the Annuitant an appropriate Certificate evidencing LL&A's obligations.
Form No.: GAC 96-101 (NY) 26
ARTICLE X - LOANS
10.1 GENERAL: During a Participant's Accumulation Period, the Participant, if
permitted by the applicable Section 403(b) Plan, may apply for a loan under
this Contract by completing a loan application available from LL&A. Loans
are secured by the Participant's Account balance in the Guaranteed Interest
Division.
10.2 RESTRICTIONS ON LOAN AMOUNT: The maximum amount of each loan, when added
to the outstanding balance of all other loans to the Participant, shall not
exceed the lesser of:
(a) fifty thousand dollars ($50,000) reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to the Participant
during the one (1) year period ending on the day before the date on
which such loan is made, minus the outstanding balance of loans from
the Plan to the Participant on the date on which such loan was made,
or
(b) if the Plan is not subject to Title I of ERISA, the greater of (i) ten
thousand dollars ($10,000) and (ii) one-half (1/2) of the present
value of the vested benefits of the Participant under such plan, or
(c) if the Plan is subject to Title I of ERISA, one-half (1/2) of the
present value of the vested benefits of the Participant under such
plan.
Additionally, the initial amount of a Participant's loan may not exceed
ninety percent (90%) of the Participant's Account balance in the Guaranteed
Interest Division.
The term of the loan shall not exceed five (5) years unless the loan is
used to acquire or construct the principal residence of the Participant.
Level amortization of the loan (with payments not less frequently than
quarterly) is required over the term of the loan.
The above terms are subject to the restrictions imposed under Section 72(p)
of the Code, as it may be amended from time to time.
10.3 MINIMUM LOAN AMOUNT: The initial amount of a loan must be at least one
thousand dollars ($1,000).
10.4 NUMBER OF LOANS OUTSTANDING: A Participant may have only one (1) loan
outstanding at any time and may not establish more than one (1) loan in any
six (6) month period. However, a Participant may renegotiate an outstanding
loan balance once during, the term of the loan.
Form No.: GAC 96-101 (NYA) 27
10.5 LOAN INTEREST RATE: The initial interest rate on a loan will be the lesser
of (a) the rate being credited in the Guaranteed Interest Division as of
the date of the loan, plus one percent (1%), and (b) the Xxxxx'x Corporate
Bond Yield Average, rounded to the nearest five basis points (0.05%) for
the first month in the calendar quarter which precedes the date of the
loan.
The loan interest rate will remain fixed for the term of the loan, unless
the initial interest rate on a hypothetical new loan to the Participant
would be lower than the Participant's actual loan rate by more than fifty
basis points (0.50%). In such case, the loan interest rate will be reduced
to such lower rate as of the first day that such lower rate would
hypothetically be effective but in no event will it decrease less than the
guaranteed minimum interest rate of three percent (3%) as specified in
Section 4.2.
10.6 EFFECT OF LOAN ON PARTICIPANT'S ACCOUNT: When a Participant takes a loan,
LL&A will subdivide his Participant's Account balance in the Guaranteed
Interest Division by establishing a loan reserve account in an amount
initially equal to the initial loan amount. Funds held in the loan reserve
account are held as security for the loan and will accrue interest at a
rate which is three percent (3.0%) below the loan interest rate but will
never be less than the minimum interest rate of three percent (3.0%) as
specified in Section 4.2. To the extent that the loan interest rate is
subsequently reduced, the rate credited to funds in the loan reserve
account will also be reduced in order to maintain the three percent (3.0%)
differential. As the Participant makes repayments to LL&A on the loan, an
amount equal to the principal component of the repayment, plus the interest
accrued in the loan reserve account, will be transferred from his loan
reserve account back to his Participant's Account balance in the Guaranteed
Interest Division.
10.7 DEFAULT IN LOAN REPAYMENT: If a Participant fails to make any principal
and interest payment within ninety (90) days of the payment due date, the
entire outstanding loan balance will be in default. For tax purposes, a
default will be treated as a withdrawal of contributions under the
Contract. The Participant may elect to repay the outstanding loan principal
and interest until such time as the original loan term ends.
10.8 LOAN FORECLOSURE: LL&A will foreclose on a loan in default by liquidating
the value in the Participant's Guaranteed Interest Division to pay off the
loan. The amount liquidated shall equal the sum of the outstanding loan
balance which includes unpaid principal and interest due and accrued.
In no event shall the amount liquidated exceed the Participant's value in
the Guaranteed Interest Division.
As provided for by Federal tax law, LL&A may foreclose on the loan as soon
as one or more of the following events has occurred:
(a) the Participant has attained age fifty-nine and one-half (59-1/2);
(b) the Participant has died;
(c) the Participant has incurred a disability for which he is receiving
Social Security payments;
Form No.: GAC 96-101 (NYA) 28
(d) the Participant has separated from service with the Contractholder; or
(e) the Participant has a financial hardship.
However, in no event will LL&A foreclose on a loan in default until the
original loan term ends.
LL&A will notify the Participant at least thirty-one (31) days in advance
of the effective date of such Loan Foreclosure to provide the Participant
an opportunity to take action to remove the loan from its default status.
On the effective date of such Loan Foreclosure, LL&A will deduct from the
Participant's loan reserve account and from his Participant's Account
balance in the Guaranteed Interest Division an amount sufficient to pay off
the loan principal and interest due and accrued.
10.9 DEFERRAL PERIODS: LL&A may defer the payment of a loan for a period
permitted by the law of the state in which this Contract was delivered but
not more than six (6) months after a written request for the loan was
received.
Form No.: GAC 96-101 (NYA) 29
ARTICLE XI - DISCONTINUANCE AND TERMINATION OF CONTRACT
11.1 CONTRACT DISCONTINUANCE BY CONTRACTHOLDER: You may discontinue this
Contract by written notice to LL&A. This Contract will be deemed
discontinued on the later of the date You specify or the date the written
notice is received by LL&A.
11.2 CONTRACT DISCONTINUANCE BY LL&A: LL&A may, at its option, discontinue
this Contract in whole or in part if (a) You fail to meet the Minimum
Contribution Amount specified in Section 1.1 or (b) a modification in
this Contract is necessary in order to comply with Federal or State
requirements, including the Employee Retirement Income Security Act of
1974, and You refuse to accept a substantially similar contract offered
by LL&A that incorporates such modification. Discontinuance pursuant to
this Section shall be effective as of a date specified by LL&A, provided
You are given at least thirty-one (31) days advance written notice in
which to cure any remediable defaults. Discontinuance by LL&A supersedes
any date established under Section 11.1.
11.3 EFFECT OF DISCONTINUANCE: As of the date this Contract is discontinued
under either 11.1 or 11.2 above:
(a) No further Contributions will be accepted by LL&A.
(b) Participants will be allowed to request withdrawals subject to the
restrictions set forth in Section 403(b) of the Code and regulations
thereof.
(c) Participants will be allowed to request transfers from each Sub-
Account of the Variable Investment Division to the Guaranteed
Interest Division. Transfers from the Guaranteed Interest Division
to the Variable Investment Division are not allowed. Transfers among
the Sub-Accounts of the Variable Investment Division are not
allowed.
(d) Participants will not be allowed to request loans.
(e) LL&A will send written notice to each Participant's last known
address stating that the Contract is discontinued and that the
Participant's remaining Account balance will be distributed in a
lump sum payment at the earlier of:
(1) the Participant's attainment of age fifty-nine and one-half
(59 1/2), or
(2) separation from service, or
(3) the date the Participant directs LL&A to transfer the entire
value of the Participant's Account to another 403(b) funding
vehicle.
11.4 CONTRACT TERMINATION: This Contract will terminate when there are no
Participant Account balances under this Contract.
Form No.: GAC 96-101 (NY)
30
ARTICLE XII - GENERAL PROVISIONS
12.1 CONTRACT: This Contract, together with Your attached Application and any
riders, constitutes the entire Contract between You and LL&A. LL&A is not
a party to any Plan document, and is not responsible for the validity of
any Plan or actions taken by You under that Plan. The terms of this
Contract shall govern with respect to the rights and obligations of LL&A,
notwithstanding any contrary provisions or conditions of any trust or
plan.
LL&A may rely on any action or information provided by You under the
terms of this Contract and shall be relieved and discharged from any
further liability to any party in acting at the direction and upon the
authority of You. All statements made by You shall be deemed
representations and not warranties.
12.2 DEACTIVATION: LL&A may prohibit new Contributions and/or new
Participants under this Contract when LL&A discontinues accepting new
Contributions and/or new Participants for the class of Contractholders
covered by this Contract. This is termed deactivation. LL&A may
deactivate this Contract for the following reasons: (1) fewer than one
hundred (100) Participants are covered by the Contract for the entire
prior twelve (12) month period; or (2) LL&A discontinues offering this
Contract form to the public. In the event of a deactivation, the CDSC in
Section 7.6 shall not apply to any Total Withdrawals or partial
Withdrawals. LL&A will give You not less than ninety (90) days notice of
the date of deactivation.
12.3 CONTRACT AMENDMENTS: LL&A may amend this Contract at any time by
amendment or replacement. Such amendments will not, without Your consent,
adversely alter (a) the minimum interest rate set forth in Section 4.2,
(b) the maximum annuity conversion factors under Section 9.4, or (c) the
amount or terms of any annuity benefit already selected under Section 9.1
prior to the effective date of the change. No change in this Contract
will adversely affect the rights of a Participant with respect to
Contributions received or annuities purchased before the effective date
of the change unless:
(a) Such amendments are made in order to comply with rulings,
regulations and laws applicable to the program provided by this
Contract; or
(b) Your consent to the Amendment is obtained.
LL&A will give You not less than ninety (90) days notice prior to the
effective date of any change made in accordance with this Section.
12.4 CONTRACT INTERPRETATION: Whenever the context so requires, the plural
includes the singular, the singular the plural and the masculine the
feminine.
Form No.: GAC 96-101 (NY) 31
12.5 INFORMATION, REPORTS AND DETERMINATIONS: You shall furnish LL&A with such
facts and information as LL&A may require for the administration of this
Contract, including, upon request, the original or photocopy of any
pertinent records You keep. All information that You furnish to LL&A
pursuant to this Contract, shall be legible, accurate and satisfactory in
form to LL&A. Such information shall be sent to a location designated by
LL&A.
You shall make any determination required under this Contract pursuant to
the terms of the Contract or required under ERISA and shall report that
determination in writing to LL&A. Such determination shall be conclusive
for the purpose of this Contract. LL&A shall be fully protected in
relying on the reports and other information furnished by You and need
not inquire as to the accuracy or completeness of such reports and
information.
12.6 MISSTATEMENTS: If LL&A provides a benefit under this Contract based upon
misstated or omitted information, including but not limited to
misstatement of age, LL&A will make adjustments to the benefit to reflect
the correct information using an interest rate of six percent (6%) per
annum. LL&A is relieved and discharged from any liability and
responsibility with respect to benefits provided in reliance upon
information You furnish.
12.7 ASSIGNMENT: You may not assign this Contract without LL&A's prior
written consent. A Participant or Beneficiary under this Contract may
not, unless permitted by law, assign or encumber any payment due under
this Contract.
12.8 MARKET EMERGENCIES: If transactions are to be made to or from the
Variable Investment Division, LL&A may not suspend the right of
redemption or delay payment for more than seven (7) calendar days after
tender for redemption, except for (1) any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings);
(2) any period when trading in the markets normally utilized is
restricted, or an emergency exists as determined by the Securities and
Exchange Commission, so that disposal of investments or determination of
the Accumulation Unit Value is not reasonably practicable; or (3) for
such other periods as the Securities and Exchange Commission by order may
permit for the protection of the Participants.
12.9 DEFERRAL PERIODS: If a withdrawal is to be made from the Guaranteed
Interest Division, LL&A may defer the payment for the period permitted by
the law of the state in which this Contract was delivered but not more
than six (6) months after a written election is received by LL&A. During
the period of deferral, interest at the then current interest rate(s)
will continue to be credited to a Participant's Account in the Guaranteed
Interest Division.
12.10 DEDUCTIONS FOR PREMIUM TAXES: LL&A will deduct from Participant Account
balances any premium tax levied as a result of the existence of
Participant Accounts by any state or other governmental entity.
Form No.: GAC 96-101 (NY) 32
12.11 FACILITY OF PAYMENT: If any person is, in the judgment of LL&A,
physically or mentally incapable of personally receiving and giving a
valid receipt for any payment due him under this Contract, LL&A may,
unless and until claim shall have been made by a duly appointed legal
guardian or conservator of the person and property of such person, make
such payment or any part thereof to such other person or institution
which, in the judgment of LL&A, is then contributing toward or providing
for the care and maintenance of such person. In no event will any such
payment exceed the maximum allowed under the applicable law of the state
in which this Contract is delivered. Such payment shall fully discharge
LL&A of its obligations to the extent of the payment.
LL&A will make any payment which has become due to a Participant or an
Annuitant and has not been paid prior to his death, to the Participant's
Beneficiary or Beneficiaries, his executors or administrators. If no
Beneficiary or personal representative has been named, LL&A may make
payment to any one or more of the surviving members of the following
classes of relatives; spouse, children, grandchildren, brothers, sisters,
and parents. Such payment shall fully discharge LL&A for all liability to
the extent of the payment.
12.12 EVIDENCE OF SURVIVAL: When a benefit payment is contingent upon the
survival of any person, evidence of such person's survival must be
furnished to LL&A, either by such person's endorsement of the check drawn
for such payment, or by other satisfactory means.
12.13 NON-WAIVER: The failure on LL&A's part to perform or insist upon the
strict performance of any provision or condition of this Contract shall
neither constitute a waiver of LL&A's rights to perform or require
performance of such provision or condition, nor stop LL&A from exercising
any other rights it may have in such provision, condition, or otherwise
in this Contract or any Plan.
12.14 RECEIPT OF NOTICE: Whenever LL&A receives information establishing any
right or conferring any benefit upon any Participant or Beneficiary, such
receipt shall be deemed to take place on any Business Day that such
information is received.
12.15 SEPARABILITY OF PROVISIONS: If any provision of this Contract is
determined to be invalid, the remainder of the provisions shall remain in
full force and effect.
12.16 THE SEPARATE ACCOUNT: The Separate Account is registered and operated as
a Unit Investment Trust under the Investment Company Act of 1940. As
such, the assets of each Sub-Account are invested in a registered
management investment company (mutual fund).
The Separate Account will be legally separated from LL&A's other
accounts. The Separate Account's assets will, at the time during the year
that adjustments in the reserves are made, have a value of at least equal
to the reserves and other contract liabilities with respect to the
Separate Account, and at all other times, will have a value approximately
equal to, or in excess of, such reserves and liabilities. The portion of
the assets having a value equal to, or approximately equal to, the
reserves and contract liabilities will not be chargeable with liabilities
arising out of any other business which LL&A may conduct.
Form No.: GAC 96-101 (NY) 33
LL&A reserves the right, subject to compliance with applicable law,
including approval by You or the Participants if required by law, (1) to
create additional Sub-Accounts, (2) to combine or eliminate Sub-Accounts,
(3) to transfer assets from one Sub-Account to another, (4) to transfer
assets to the General Account and other separate accounts, (5) to cause
the deregistration and subsequent re-registration of the Separate Account
under the Investment Company Act of 1940, (6) to operate the Separate
Account under a committee and to discharge such committee at any time,
(7) to eliminate any voting rights which You or Participants may have
with respect to the Separate Account, (8) to amend the Contract to meet
the requirements of the Investment Company Act of 1940 or other federal
securities laws and regulations, (9) to operate the Separate Account in
any form permitted by law, (10) to substitute shares of another fund for
the shares held by a Sub-Account, and (11) to make any change required by
the Internal Revenue Code, the Employee Retirement Income Security Act of
1974, or the Securities Act of 1933, to the extent not provided in
Section 12.3.
12.17 PAYMENT OF BENEFITS: LL&A shall make payment of benefits under this
Contract directly to a Participant or Beneficiary at the last known
address on file with LL&A.
12.18 FREE-LOOK PERIOD: A Participant will receive an Active Life Certificate
upon LL&A's receipt of a duly completed participation enrollment form. If
the Participant chooses not to participate under this Contract, he may
exercise his Free-look right by sending a written notice to LL&A that he
does not wish to participate under this Contract within ten (10) days
after the date the Certificate is received by the Participant. For
purposes of determining the date on which the Participant has sent
written notice, the postmark date will be used.
If a Participant exercises his Free-look right in accordance with the
foregoing procedure, LL&A will refund in full the Participant's aggregate
Contributions less aggregate withdrawals, or if greater, with respect to
Contributions to the Variable Investment Division, the Participant's
Account balance in the Variable Investment Division on the date the
cancelled Certificate is received by LL&A.
Form No.: GAC 96-101 (NY) 34
SYSTEMATIC WITHDRAWAL OPTION
ATTACHMENT I
------------
The formula for the interest equivalency amount (IEA) is:
29.5/366
IEA = ACCT.BAL x ( (1 + I) - 1)
WHERE:
IEA is the Interest Equivalency Amount.
ACCT. BAL. is the Participant's Account balance at
the later of: the beginning of the contract
year and the most recent date on which the
credited interest rate changed.
I is the interest rate currently being credited
to the contract
EXAMPLE: The Account balance at the beginning of the year is
one hundred thousand dollars ($100,000) and the interest rate
credited to the contract is six percent (6.00%). The Interest
Equivalency Amount for each month of the current year is:
29.5/366
IEA = $100,000 x (1.06 - 1)
= $470.76
Form No.: GAC 96-101 (NY) 35
