TAX SHELTERED ANNUITY ENDORSEMENT
TAX SHELTERED ANNUITY ENDORSEMENT
This Contract is a Tax Sheltered Annuity ("TSA") under Section 403(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), as applied for by the
Owner. This Endorsement is part of the Contract as of the issue date or, if
later, the date shown below. If this is a group contract, the "Owner" includes
the Participant and the "Contract" includes the Participant's Certificate. This
Contract is subject to the requirements of Code Section 403(b), which are part
of the Contract and are summarized in this Endorsement.
CONTRIBUTION LIMITATIONS
(a) Purchase Payments ("Contributions") made on behalf of the Owner under a
salary reduction agreement, along with all other "elective deferral"
contributions of the Owner, may not exceed the annual limits of Code
Section 401(a)(30). Salary reduction Contributions may be increased under
Code Sections 402(g)(7) and 414(v).
(b) Contributions which exceed the limits of Code Section 415 are not excluded
from gross income. They can not be Designated Xxxx Contributions. If
required by IRS regulations, excess Contributions must be separately
accounted for or kept in a separate contract or account.
(c) Contributions which exceed either limit may be returned, distributed or
corrected using any method permitted by the Code or IRS regulations.
NONDISCRIMINATION REQUIREMENTS
(a) Except where the Employer is a "church" (as defined in Code Section
3121(w)), the Plan must satisfy the non-discrimination requirements of Code
Section 403(b)(12).
(b) Contributions not made under a salary reduction agreement will satisfy Code
Section 403(b)(12) if they comply with: 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). Only Code Section 401(a)(17) applies to a governmental
plan (as defined in Code Section 414(d)).
(c) Salary reduction Contributions will satisfy the non-discrimination
requirements of Code Section 403(b)(12) if every employee of the Employer
sponsoring the Plan (with the exclusions allowed under Code Section
403(b)(12)) may elect to make salary reduction Contributions of at least
$200.
DISTRIBUTION RESTRICTIONS; TRANSFERS
(a) Distributions of salary reduction Contributions and income may only be made
when: the Owner attains age 59 1/2; xxxxxx employment with the Employer;
dies; becomes "disabled" (as defined in Code Section 403(b)(11)); or incurs
a financial hardship. A distribution made
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for a hardship may not include income earned on the contributions.
Distributions of amounts other than salary reduction Contributions are
restricted as required under IRS regulations.
(b) Distributions from this Contract must comply with the required minimum
distribution ("RMD") requirements of Code Section 403(b)(10), which are
part of the Contract. Under the RMD rules the Owner's interest in the
Contract must generally begin to be distributed by April 1 of the calendar
year after the later of: (1) the calendar year in which the Owner attains
age 70 1/2, or (2) the calendar year in which the Owner retires.
Distributions during the life of the Owner may be made in any manner that
satisfies the RMD requirements of Code Sections 403(b)(10) and 401(a)(9)
and the IRS regulations in effect under these Sections.
(c) If the Owner dies before all amounts under the Contract are paid,
distributions after death must meet the RMD requirements for death
distributions under Code Sections 403(b)(10) and 401(a)(9) and the IRS
regulations in effect. Usually, distributions must start by the end of the
calendar year after death and be made over a distribution period determined
by the age of the Designated Beneficiary. If the Designated Beneficiary is
not a natural person or elects to delay the start of death distributions,
all amounts under the contract must usually be paid by the end of the fifth
calendar year following the year of the Owner's death. If the Designated
Beneficiary is the Owner's surviving spouse, the date distributions are
required to begin may be delayed.
(d) Death distributions may be made under a method irrevocably designated by
the Owner before death that satisfies the RMD requirements. The Contract
may be divided into separate contracts or accounts for separate Designated
Beneficiaries.
(e) All distributions must comply with a method of distribution offered by the
Company under this Contract.
(f) If the Owner receives a distribution that qualifies as an "eligible
rollover distribution" under Code Section 402(f)(2)(A), and elects to have
the distribution paid directly to an "eligible retirement plan" under Code
Section 402(c), the distribution will be made by a direct transfer to the
eligible retirement plan. These direct transfers are also called "Direct
Rollovers." The Company may establish reasonable administrative rules for
Direct Rollovers.
(g) Other transfers from this Contract to another TSA may only be made if
permitted under IRS regulations under Code Section 403(b). Transfers may
also be made to purchase service credit under a state defined benefit plan.
NONFORFEITABILITY
(a) The Owner's rights under this Contract are non-forfeitable except for
failure to pay future purchase payments.
(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 purpose to any person other than the Company.
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MULTIPLE CONTRACTS
(a) If for any taxable year contributions are made for the Owner under this
Contract and any other TSA, all TSAs shall be treated as a single contract.
DESIGNATED XXXX CONTRIBUTIONS
(a) This Contract (or a separate account under this Contract) may receive
salary reduction Contributions designated as Xxxx Contributions under Code
Section 402A ("Designated Xxxx Contributions"). The Employer's Plan must
allow Designated Xxxx Contributions. The designation by the Owner must be
irrevocable and be made in the Owner's salary reduction agreement (or at
the same time). The Employer must treat these Contributions as includible
in the Owner's income.
(b) Qualified distributions under Code Sections 402A(d)(2) and 408A(d)(2) from
a Xxxx TSA contract or account may be excluded from the Owner's income.
Rollovers to or from a Xxxx TSA contract or account must be from or to
another Xxxx 403(b) contract or account, or another Xxxx account as
permitted by IRS regulations.
PLAN PROVISIONS
The Plan, including certain Plan provisions required by the Employee Retirement
Income Security Act of 1974 ("ERISA") 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 Contributions, including Designated Xxxx
Contributions;
(b) Restrict the time when the Owner may elect to receive distributions from
this Contract;
(c) Require the consent of the Owner's Spouse before the Owner may elect to
receive distributions from 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 under certain
circumstances;
(f) Impose service requirements with the Employer sponsoring the Plan before
the Owner's rights under this Contract become vested; or
(g) Otherwise restrict the Owner's rights under the Contract or give the
Employer (or a Plan representative) the right to exercise certain rights on
the Owner's behalf.
No Plan provision will limit an Owner's Rights under this Contract, unless the
Employer sponsoring the Plan has provided the Company with written notice of
such provision and it is accepted by the Company. In no event shall any Plan
provision enlarge the Company's obligations under this Contract.
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TAX CONSEQUENCES
The Company will not have any liability or responsibility for the state or
federal tax consequences of any purchase payment or distribution. The Company
will not be liable for any tax penalty imposed on a purchase payment or
distribution. The Company is not responsible for any failure by the Owner or the
Employer to comply with the provisions of the Code or any other law.
ADMINISTRATION
The Company is not the Administrator of the Plan. The Company will not have any
responsibility for administering the Plan or for interpreting or deciding any
other question arising under the Plan.
SECURITY BENEFIT LIFE INSURANCE COMPANY
/S/ X. Xxxxxxx Xxxxxx
[X. Xxxxxxx Xxxxxx
Secretary]
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Endorsement Effective Date
(If Other Than Issued Date)
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