CONTRACT NUMBER: VXX,XXX
CONTRACTHOLDER: ABC SCHOOL
DATE OF ISSUE: JANUARY 1, 1999
CONTRACT DATE: JANUARY 1, 1999
FIRST CONTRACT ANNIVERSARY: JANUARY 1, 2000
American United Life Insurance Company (AUL) issues this contract in
consideration of the Contractholder's application and its payment of
Contributions to AUL. When used in this contract, "we," "us" or "our" refer to
AUL and "you" or "your" refer to the Contractholder.
All provisions and conditions stated on this and subsequent pages are part of
this contract.
This contract is signed for AUL at its Home Office in Indianapolis, Indiana. Our
mailing address is P.O. Box 368, Indianapolis, Indiana 46206-0368.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. You may return the contract for any reason
within ten days after receiving it. If returned, the contract will be considered
void from the beginning and any Contributions will be refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxxx
Chairman of the Board,
President, & Chief Executive Officer
Attest
/s/ Xxxxxxx X. Xxxxx
Secretary
AUL American Series Contract
Guaranteed Benefit Employer-Sponsored TDA Multiple-Fund Group Variable Annuity
(SBR,MBR,NBR)
Current Interest Credited
Nonparticipating
ACCUMULATION UNITS IN AN INVESTMENT ACCOUNT UNDER THIS CONTRACT MAY INCREASE OR
DECREASE IN VALUE ACCORDING TO THE INVESTMENT PERFORMANCE OF THE UNDERLYING
INVESTMENTS HELD BY THE INVESTMENT ACCOUNT. THE VALUE OF SUCH ASSETS AND
ACCUMULATION UNITS IS NOT GUARANTEED. SECTION 4 OF THIS CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your contract, or wish to register a complaint,
you may reach us by calling 0-000-000-0000.
P-GB-K-ERTDAMFVA
TABLE OF CONTENTS
Page
SECTION 1 - DEFINITIONS 3
SECTION 2 - ADMINISTRATION OF PARTICIPANT ACCOUNTS 6
2.1----- How Contributions Are Handled
2.2----- Transfers from Other Retirement Programs
2.3----- Reallocation of Participant Accounts
2.4----- Excess Contributions
2.5----- Transfers from Other Contracts
SECTION 3 - OPERATION OF FIXED INTEREST ACCOUNT 7
3.1----- Allocations to Participant Accounts
3.2----- Provision of Guaranteed Rates for Interest Pockets
3.3----- Renewal of Guaranteed Rates
3.4----- Minimum Rate Guarantee
3.5----- Payout Upon Rejection of Declared Guaranteed Rate
3.6----- Allocation of Withdrawals
SECTION 4 - VALUATION OF INVESTMENT ACCOUNTS 8
4.1----- Operation of Investment Accounts
4.2----- Valuation of Mutual Funds
4.3----- Accumulation Units
4.4----- Value of Accumulation Units
4.5----- Determining the Net Investment Factor
4.6----- Valuing Participant Accounts
SECTION 5 - BENEFIT PAYMENTS AND TRANSFERS 9
5.1----- General Withdrawal Provisions
5.2----- Plan Benefit Payments
5.3----- Other Cash Benefits
5.4----- Transfers Between Investment Options
5.5----- Minimum Amounts
5.6----- Maximum Amounts
SECTION 6 - ANNUITIES 13
6.1----- Annuity Purchases
6.2----- Annuity Options
6.3----- Determining Annuity Amount
6.4----- Proof of Age and Survival; Minimum Payments
6.5----- Annuity Certificates
P-GB-K-ERTDAMFVA.1
SECTION 7 - MORTALITY AND EXPENSE RISK CHARGES
AND ADMINISTRATIVE CHARGES 14
7.1----- Investment Account Mortality and Expense Risk Charges
7.2----- Variable Investment Plus (VIP) Credit Factor
7.3----- Mutual Fund or Portfolio Expense
7.4----- Other Charges
7.5----- Taxes
7.6----- Reduction or Waiver of Charges
SECTION 8 - CONTRACT MODIFICATIONS 15
8.1----- Mutual Amendment
8.2----- Rates and Section 7 Charges
8.3----- Conformance with Law
8.4----- Our Right to Initiate Changes
8.5----- Prohibited Amendments
SECTION 9 - TERMINATION OF CONTRACT 16
9.1----- Termination by You
9.2----- Payment Upon Termination by You
9.3----- Termination by Us
9.4----- Payment Upon Termination by Us
9.5----- Indemnification Required
9.6----- Effect on Contract Obligations
SECTION 10 - GENERAL PROVISIONS 17
10.1----- Ownership
10.2----- Entire Contract
10.3----- Benefit Determinations
10.4----- Recordkeeping Services
10.5----- Representations and Warranties
10.6----- Contractholder Representative; Misstatement of Data
10.7----- Requirement for Writing
10.8----- Quarterly Statement of Account Value
10.9----- Conformity with Law
10.10---- Sex and Number
10.11---- Facility of Payment
10.12---- Voting
10.13---- Acceptance of New Participants or Contributions
10.14---- AUL's Annual Statement
10.15---- AUL's Annual Meeting
10.16---- Nonforfeitability and Nontransferability
TABLE OF GUARANTEED IMMEDIATE ANNUITIES 20
TABLE OF INVESTMENT ACCOUNTS 21
P-GB-K-ERTDAMFVA.2
SECTION 1 - DEFINITIONS
1.1 "Account Value" for a Participant Account as of a date is:
(a) that account's balance in the Fixed Interest Account (FIA) on that
date; plus
(b) the value of that account's Accumulation Units in each Investment
Account on that date.
1.2 "Accumulation Unit" is a valuation device used to measure increases in and
decreases to the value of any Investment Account.
1.3 "Annuity Commencement Date" is the first day of the month an annuity begins
under this contract. This date may not be later than the date a
Participant's periodic benefits are required to commence under the Code.
1.4 "Business Day" is any day both the New York Stock Exchange and our Home
Office are open for the general conduct of business.
1.5 "Code" means the Internal Revenue Code of 1986, as amended, and any
applicable regulations or rulings thereunder.
1.6 The "First Contract Anniversary" is listed on the contract face page.
Subsequent "Contract Anniversaries" are on the same day of each subsequent
year.
1.7 "Contract Quarter" is each of the four successive three-month periods in a
Contract Year.
1.8 The first "Contract Year" starts on the Contract Date and ends on the day
before the First Contract Anniversary. Each subsequent Contract Year starts
on a Contract Anniversary and ends on the day before the next Contract
Anniversary.
1.9 "Contributions" are amounts paid to us, pursuant to the Plan, which we
credit to a Participant Account. Contributions include amounts transferred
from another AUL group annuity contract. The following types of
Contributions are credited to subaccounts under the Participant Accounts:
(a) "Elective Deferrals," which means, with respect to any taxable year,
any Contribution made under a salary reduction agreement. A
Contribution made under a salary reduction agreement is not treated as
an Elective Deferral if, under the salary reduction agreement, the
Contribution is made pursuant to a one-time irrevocable election made
by the Participant at the time of initial eligibility to participate
in the agreement, or is made pursuant to a similar arrangement
involving a one-time irrevocable election specified in Regulations
issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made
under a salary reduction agreement pursuant to a one-time irrevocable
election made by the Participant at the time of initial eligibility to
participate in the agreement, or made
P-GB-K-ERTDAMFVA.3
pursuant to a similar arrangement involving a one-time irrevocable
election specified in Regulations issued under the Code.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
1.10 "Excess Contributions" are Contributions in excess of the applicable Code
limits.
1.11 "Fixed Interest Account" or "FIA" is the portion of our general asset
account as described in Section 3, to which Contributions may be allocated
for accumulation at the Guaranteed Rates.
1.12 "Guaranteed Rates" are the guaranteed annual effective rates of interest we
credit to each Interest Pocket. A Guaranteed Rate may be modified only as
described in Section 3.3.
1.13 "Home Office" is our principal office in Indianapolis, Indiana. For
anything to be "received by AUL," it must be received at our Home Office.
1.14 "Interest Pocket" means a tracking method which associates funds deposited
into the FIA over a specific time period with a specific Guaranteed Rate,
as described in Section 3. After the guaranteed period provided in Section
3.3 has elapsed, we may consolidate two or more Interest Pockets in
conjunction with the announcement of new Guaranteed Rates.
1.15 "Investment Account" means each distinct portfolio established within our
Variable Account and identified in the Table of Investment Accounts in this
contract. Amounts allocated to any Investment Account are invested in the
shares of the corresponding Mutual Fund or Portfolio identified in the
Table of Investment Accounts. Our "Variable Account" is a separate account
we maintain under Indiana law which is called the AUL American Unit Trust
and which is registered under the Investment Company Act of 1940 as a unit
investment trust.
1.16 "Investment Option" is the FIA or any Investment Account. We reserve the
right to provide other Investment Options under this contract at any time.
1.17 "Mutual Fund" means any diversified, open-end, management company made
available by us, and listed in the Table of Investment Accounts.
1.18 "Participant" is any person participating in the Plan that has a
Participant Account.
1.19 "Participant Account" is an account under this contract for each
Participant. Each Participant Account may have subaccounts for each type of
Contribution. We credit Contributions to Participant Accounts and
Contribution-type subaccounts as you direct.
1.20 "Plan" means the Plan Sponsor's Code Section 403(b) plan that invests in
this contract.
1.21 "Plan Sponsor" is ABC School.
1.22 "Portfolio" is a portfolio established within a particular Mutual Fund, as
described in the Mutual Fund's current prospectus.
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1.23 "Valuation Periods" start at the close of each Business Day and end at the
close of the next Business Day.
1.24 The "Withdrawal Charge" is a percentage of the Account Value withdrawn
under this contract. The Withdrawal Charge will not apply to Account Values
withdrawn to provide a benefit payment or an annuity as described in
Sections 5.2 and 6.1, respectively. The percentage varies by the Contract
Year in which a withdrawal is made. The Withdrawal Charge percentage is as
follows:
During Contract Year Percentage
-------------------- ----------
1 3
2 2
3 1
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.25 "Withdrawal Value" is a Participant's Account Value, less any Withdrawal
Charge.
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SECTION 2 - ADMINISTRATION OF PARTICIPANT ACCOUNTS
2.1 How Contributions Are Handled: Contributions we receive are credited to the
appropriate Contribution-type subaccounts of each Participant Account, as
you direct in your allocation instructions. A Participant's initial
Contribution is allocated to the Participant Account by the second Business
Day after we (1) receive the initial Contribution or, if later, (2) receive
all data necessary to complete the allocation (including data required to
establish the Participant Account, the amount of the Participant's
Contribution, and Investment Option elections. Subsequent Contributions are
allocated to the Participant Account on the Business Day we (1) receive
that Contribution or, if later, (2) receive all data necessary to complete
the allocation.
If we do not receive the data required to establish a Participant Account
and instructions regarding the amount of a Contribution for the Participant
within 5 Business Days after we first receive that Contribution, we will
return that Contribution to you unless you consent to us retaining that
Contribution until the earlier of (i) the date we receive such data and
instructions and, therefore, can properly allocate that Contribution to the
Participant Account or (ii) 25 days from the date we receive that
Contribution.
If we receive the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the Participant,
but we do not receive Investment Option elections for that Participant, the
Contribution is allocated to a suspense account. The suspense account earns
interest at the Guaranteed Rate for Contributions received on the same
date. When we receive all required data, amounts in the suspense account,
plus interest, are transferred to the appropriate Investment Option for
each designated Contribution-type.
Participant Accounts may be allocated to Investment Options in any
increments acceptable to us. Investment Option elections remain in effect
until changed by you. A change in Investment Option elections is made by
giving us new Investment Option elections.
2.2 Transfers from Other Retirement Programs: If permitted by the Plan, we may
accept amounts transferred from other Code Section 403(b) funding vehicles.
Such transferred amounts, as identified by you, are credited to a rollover
subaccount, under the appropriate Participant Account.
2.3 Reallocation of Participant Accounts: You may direct us to reallocate all
or a portion of the Account Value of any Participant Account among other
Participant Accounts. You must certify that such reallocation is in
accordance with the Plan.
2.4 Excess Contributions: On receipt of instructions from you, we will withdraw
Excess Contributions, plus gains and minus losses, from a Participant
Account and return them to the Participant, or as you direct. Such
instructions must state the amount to be returned and certify that such
Contributions are Excess Contributions and that such return is permitted by
the Plan and the Code. A return of Excess Contributions is treated like a
Plan benefit payment, under Section 5.2.
No Participant is permitted to have elective deferral contributions (within
the meaning of Code Section 402(g)(3)) made during a calendar year under
this contract, or under any other plans, contracts, or arrangements
maintained by his employer, in excess of the dollar limitation in effect
under Code Section 402(g)(1) and any Regulations issued thereunder for
taxable years beginning in such calendar year.
2.5 Transfers from Other Contracts: We may require amounts transferred to a
Participant Account from other AUL group annuity contracts to be deposited
in a suspense account. We will advise you if this limitation applies before
accepting such a transfer.
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SECTION 3 -- OPERATION OF FIXED INTEREST ACCOUNT
3.1 Allocations to Participant Accounts: We allocate each Participant's
Contributions in the FIA based on the information you provide.
3.2 Provision of Guaranteed Rates for Interest Pockets: At least 10 days in
advance of each calendar quarter, we will declare a Guaranteed Rate for the
Interest Pocket for that quarter. All Contributions or transfers hereunder
which are allocated to the FIA during that quarter will earn interest at
that Guaranteed Rate until that quarterly pocket matures on the second
January 1 following the quarter in which that pocket was established.
3.3 Renewal of Guaranteed Rates: Those quarterly Interest Pockets which mature
at the same time will be combined into an annual renewal Interest Pocket.
Funds associated with that annual renewal Interest Pocket will earn
interest for a full year at the Guaranteed Rate declared for that pocket. A
new Guaranteed Rate for each annual renewal Interest Pocket will be
declared at least 30 days prior to every January 1 for the 5 years
following the establishment of that pocket. An annual renewal Interest
Pocket will mature on January 1 of the sixth year following its
establishment, when it will be combined into one annual portfolio Interest
Pocket. Funds associated with that annual portfolio Interest Pocket will
earn interest for a full year at the Guaranteed Rate for that pocket, which
will be declared at least 30 days prior to every January 1.
You may accept the declared Guaranteed Rate for an annual renewal or
portfolio Interest Pocket either by continuing to allocate Contributions to
the FIA or by otherwise notifying us of your acceptance. You may reject the
declared rate for that pocket by notifying us. This acceptance or rejection
must occur after the declaration of the rate for that pocket and before the
next January 1, when the rate becomes effective. If you neither
specifically accept nor reject the declared Guaranteed Rate for the new
pocket by the deadline, you will be deemed to have accepted the rate. If
you reject the declared Guaranteed Rate for the new annual renewal or
portfolio pocket, the aggregate Withdrawal Value of that pocket will be
paid out as described in Section 3.5.
3.4 Minimum Rate Guarantee: No Guaranteed Rate may be less than an annual
effective interest rate of 3.00%.
3.5 Payout Upon Rejection of Declared Guaranteed Rate: If you reject the
Guaranteed Rate for an Interest Pocket we announce under Section 3.3, the
aggregate Withdrawal Value of that Interest Pocket is paid to you in 6
equal annual installments. The initial installment is calculated on the
date you reject the declared rate and is paid within 7 days from that date.
Subsequent installments are paid on the anniversary of the first
installment payment date. During the installment payment period, interest
is credited to amounts in the terminating pocket at a rate equal to the
current average Guaranteed Rate (as determined on the first installment
payment date) of all your Interest Pockets, less 1%. The minimum rate
guarantee provided in Section 3.4 applies to the interest credited under
this Section. Interest is paid with each installment.
3.6 Allocation of Withdrawals: Withdrawals or transfers from the FIA are on a
first-in/first-out basis, unless the Account or a terminating pocket is
being paid out to you in installments. All amounts paid during an
installment payout period are paid on a pro-rata basis.
P-GB-K-ERTDAMFVA.7
SECTION 4 - VALUATION OF INVESTMENT ACCOUNTS
4.1 Operation of Investment Accounts: All income, gains, or losses, realized or
unrealized, from assets held in any Investment Account are credited to or
charged against the applicable Investment Account without regard to our
other income, gains, or losses. Investment Account assets are not
chargeable with liabilities arising out of any other business we may
conduct.
4.2 Valuation of Mutual Funds: The current prospectus for each Mutual Fund
describes how that Mutual Fund's assets are valued.
4.3 Accumulation Units: We credit amounts allocated to an Investment Account in
Accumulation Units. The Accumulation Unit value used is the one for the
Valuation Period when we allocate the amount to the Investment Account.
4.4 Value of Accumulation Units: We generally establish the Accumulation Unit
value for a new Investment Account at $1.00 on the date the first deposit
is made to the Investment Account. The value of an Accumulation Unit for
any later Valuation Period equals the value of an Accumulation Unit for the
immediately preceding Valuation Period times the Net Investment Factor for
the current Valuation Period. We determine the Accumulation Unit value
before giving effect to any additions, withdrawals, or transfers in the
current Valuation Period.
4.5 Determining the Net Investment Factor: We determine the Net Investment
Factor for each Investment Account by dividing (a) by (b), and then
subtracting (c), where:
(a) is:
(1) the net asset value of a Mutual Fund or Portfolio share at the
end of the current Valuation Period, plus
(2) any dividend or other distribution paid on each Mutual Fund or
Portfolio share during such Valuation Period, plus or minus
(3) any credit or charge for taxes paid or reserved by us during the
Valuation Period that we determine are attributable to the
Investment Account;
(b) is the net asset value of each Mutual Fund or Portfolio share held in
the Investment Account at the end of the prior Valuation Period; and
(c) is a daily charge factor we determine, as described in Section 7.1.
4.6 Valuing Participant Accounts: We determine the Account Value in an
Investment Account by multiplying the Accumulation Units in each
Participant Account by the Accumulation Unit value. The Accumulation Unit
value of an Investment Account changes only on a Business Day.
P-GB-K-ERTDAMFVA.8
SECTION 5 - BENEFIT PAYMENTS AND TRANSFERS
5.1 General Withdrawal Provisions: Subject to the following provisions of this
Section, and prior to notification of contract termination, you may direct
us to withdraw all or a portion of a Participant's Account Value pursuant
to Sections 5.2 and 5.3 to provide a cash payment to you to pay Plan
benefits.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until the Participant has either attained age
59 1/2, separated from service, died, become totally disabled (as
defined by the Plan), or experienced a hardship (as defined by the
Plan). However, in the case of a hardship withdrawal, any gain
credited to such Contributions may not be withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by us pursuant to your or Participant instructions to another
tax-deferred annuity funding vehicle under applicable IRS rules and
regulations is not the provision of a Plan benefit for purposes of
Section 5.2, but instead is a Contract termination as to that amount
for that Participant; and any such withdrawal shall be subject to
application of the Withdrawal Charge pursuant to Section 5.3. You
hereby grant to a Participant the right to direct the withdrawal and
direct transfer of his voluntary Elective Deferrals (as determined by
you) to another tax-deferred annuity funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) We are not responsible for determining a Participant's compliance with
the requirements above. Any withdrawal request submitted by you must
include certification as to the purpose of the withdrawal. You assume
full responsibility for determining whether any withdrawal is
permitted under applicable law and under the terms of a particular
Plan. We may rely solely upon your representations made in the
withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire
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share of the Investment Option. If a withdrawal reduces the
Participant Account's share of an Investment Option to less than $500,
such remaining share shall also be withdrawn.
(h) A withdrawal request is effective, and the Account Value to be applied
pursuant to Sections 5.2, 5.3, or 5.4 is determined, on the Business
Day that we receive a proper withdrawal request (or due proof of
death, if received later).
(i) We will pay any cash lump-sum to you or to whomever you direct within
7 days from the appropriate Business Day as determined in Subsection
(h) above, except as we may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. We reserve the
right to defer the payment of amounts withdrawn from the FIA for a
period of up to 6 months after we receive the withdrawal request.
(j) Withdrawals from a Participant Account's share of the FIA will be made
on a first-in/first- out basis under Section 3.6.
5.2 Plan Benefit Payments: You will advise us of any person for whom a payment
is due under the Plan, including the nature and amount of such payment,
before the date such payment is due or as soon thereafter as is
practicable.
(a) Subject to the limitations provided in Section 5.1 and Subsection (b)
below, prior to notification of contract termination, you may direct
us to withdraw all or a portion of a Participant's Account Value
(subject to Section 7.5) to provide a cash payment to you to pay Plan
benefits (other than full or partial Plan termination benefits
described in Section 5.3) for retirement, death, disability,
termination of employment, hardships, loans, required minimum
distribution benefits pursuant to Code Section 401(a)(9), or benefits
upon attainment of age 59 1/2 or as otherwise allowed by the Code
(provided that such benefit upon attainment of age 59 1/2 is paid in a
taxable distribution to the Participant). Such a withdrawal is not
subject to a Withdrawal Charge. Any Plan benefit cash payment
requested for a Participant who terminates employment on or after the
effective date of Plan termination is deemed to be a Plan termination
benefit, and is subject to a Withdrawal Charge pursuant to Section
5.3. Additionally, if 20% or more of the Participants terminate
employment within the same Contract Year, any Plan benefit cash
payment for such a terminating Participant is subject to a Withdrawal
Charge pursuant to Section 5.3.
(b) Regarding death benefits specifically, notwithstanding the provisions
of Section 9, upon receipt from you of instructions and of due proof
of the Participant's (and, if applicable, the beneficiary's) death
prior to the date the Participant Account is closed, we will apply the
Account Value (subject to Section 7.5) of the Participant Account for
the purpose of providing a death benefit under the Plan. The death
benefit will be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of
payment was previously elected by the Participant). The Participant's
beneficiary may also designate a beneficiary. This death benefit will
be payable:
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(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 7.5) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 6.2 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected will be paid at
least as rapidly as prior to the Participant's death.
Any withdrawal request under this Section must certify the purpose of the
request.
5.3 Other Cash Benefits: Prior to notification of contract termination, you may
direct us to make a cash payment from a Participant Account to you for the
purpose of providing Plan benefits not specifically described in Section
5.2. The Withdrawal Charge will be applied under this Section to any
withdrawal to pay a Plan benefit payable because of the termination or
partial termination of the Plan (as determined under applicable IRS
guidelines and judicial precedent), or if the underlying reason for payment
of such benefit results in the termination or partial termination of the
Plan.
If the entire Account Value is withdrawn, the amount paid equals the
Withdrawal Value, subject to any charges described in Section 7. In all
other instances, the Account Value is reduced by an amount sufficient to
make the payment requested and to cover the Withdrawal Charge and any
charges described in Section 7.
Notwithstanding the previous provisions of this paragraph, in the first
Contract Year in which a Participant Account is established, you may
withdraw from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the request
for the withdrawal) plus Contributions made for that Participant during
that Contract Year, without application of the Withdrawal Charge. In the
next succeeding Contract Year, you may also withdraw from that Participant
Account up to 10% of the sum of the Account Value of that Participant
Account (determined as of the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made for that
Participant during that Contract Year, without application of the
Withdrawal Charge. In any subsequent Contract Year, you may withdraw from
that Participant Account up to 10% of the Account Value of that Participant
Account (determined as of the Contract Anniversary immediately preceding
the request for the withdrawal) without application of the Withdrawal
Charge.
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5.4 Transfers between Investment Options: You may direct us to transfer amounts
between Investment Options, or to initiate Participant-directed transfers
between Investment Options. Transfers are effective on the Business Day we
receive the transfer direction. Transfer directions for a Participant
Account may be made daily on any Business Day. We will make the transfer as
requested within 7 days from the date we receive the request, except as we
may be permitted to defer the transfer of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the federal
securities laws. We reserve the right to defer a transfer of amounts from
the FIA for a period of up to 6 months after we receive the transfer
request.
Notwithstanding the previous paragraph, once a transfer from the FIA has
been made for a Participant, a transfer to the FIA for that Participant is
permitted only after 90 days have elapsed since the date of the last
transfer from the FIA for that Participant. If you make available to
Participants the FIA and any of the Investment Accounts marked with an
asterisk in the Table of Investment Accounts, the 90-day transfer
restriction discussed in the previous sentence does not apply, and Section
5.6 does apply.
5.5 Minimum Amounts: The minimum amount you or a Participant may withdraw or
transfer from an Investment Option is $500 or, if less, the Participant's
entire balance in that Investment Option. If a withdrawal or transfer
reduces the Participant balance in an Investment Option to less than $500,
the entire balance is withdrawn or transferred.
5.6 Maximum Amounts: If you make available to Participants the FIA and any of
the Investment Accounts marked with an asterisk in the Table of Investment
Accounts, no more than 20% of a Participant's FIA Account Value on the
later of the Contract Date or the Contract Anniversary immediately
preceding the request for transfer may be transferred from the FIA during
any Contract Year. However, if the Participant's FIA Account Value is less
than $2,500 on the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer, the amount transferrable
from the FIA for that Participant for that Contract Year is the minimum
amount specified in Section 5.5.
P-GB-K-ERTDAMFVA.12
SECTION 6 - ANNUITIES
6.1 Annuity Purchases: Prior to notification of contract termination, you may
withdraw all or a portion of a Participant's Account Value (subject to
Section 7.5) to provide an annuity, reflecting Plan benefits. Such a
withdrawal is not subject to a Withdrawal Charge. On receipt of an annuity
purchase request, we transfer the entire Participant Account to a suspense
account. Such amounts remain in the suspense account until the Annuity
Commencement Date, when the full balance (including interest) is applied to
purchase the annuity.
Your annuity purchase request must specify the purpose for the annuity, the
election of an annuity option, Annuity Commencement Date, any contingent
annuitant or beneficiary, and any additional information we require. If the
Participant or any contingent annuitant dies before the Annuity
Commencement Date, the annuity election is cancelled.
The minimum amount which you may apply to purchase an annuity is $5,000.
6.2 Annuity Options: You may elect any optional form of annuity we offer at the
time of purchase. Available annuity options always include:
(a) Life Annuity. A monthly annuity is payable as long as the annuitant
lives, and ends with the last payment before the annuitant's death.
(b) Survivorship Annuity. A monthly annuity is payable as long as the
annuitant lives. After the annuitant's death, all or a portion of the
monthly annuity is paid to the contingent annuitant as long as the
contingent annuitant lives.
No annuity may have a certain period extending beyond the life expectancy
of a Participant or the joint life expectancy of a Participant and any
contingent annuitant, as determined on the Annuity Commencement Date.
6.3 Determining Annuity Amount: We compute the annuity amount using the factors
reflected in the Table of Guaranteed Immediate Annuities attached to this
contract. However, if our current single premium, nonparticipating,
immediate annuity rates for this class of group annuity contracts produces
a higher monthly annuity than the Table of Guaranteed Immediate Annuities,
then that more favorable annuity rate is applied.
6.4 Proof of Age and Survival; Minimum Payments: We may require proof of any
annuitant's or contingent annuitant's date of birth before commencing
payments under any annuity. We may also require proof that an annuitant or
contingent annuitant is living before making any annuity payment. If a
monthly annuity is less than our current established minimum payment, we
may make payments on a less-frequent basis or in a single sum.
6.5 Annuity Certificates: We issue to each person for whom an annuity is
purchased a certificate setting forth the annuity's amount and terms.
P-GB-K-ERTDAMFVA.13
SECTION 7 - MORTALITY AND EXPENSE RISK CHARGES
AND ADMINISTRATIVE CHARGES
7.1 Investment Account Mortality and Expense Risk Charges: We deduct from the
average daily net assets of each Investment Account the daily equivalent of
an annual combined mortality risk charge and expense risk charge of 1.25%.
This charge is part of the Net Investment Factor, described in Section 4.5.
7.2 Variable Investment Plus (VIP) Credit Factor: We determine a VIP credit
factor each month by multiplying the portions of the aggregate month-end
Account Value in all Investment Accounts by the monthly equivalent of the
corresponding annual VIP credit factors in the table below. The sum of
these products is divided by the aggregate month-end Account Value in all
Investment Accounts. We multiply the resulting percentage by each
Participant's month-end Account Value in each Investment Account, and add
the resulting amount to the Participant's Account Value for that Investment
Account.
Aggregate Month-End Account Value
allocated to Investment Accounts Annual VIP Credit Factors
--------------------------------- -------------------------
First $750,000 0.00%
Next $750,000 0.20%
Next $1 million 0.35%
Next $2.5 million 0.65%
Next $5 million 0.75%
Over $10 million 0.85%
7.3 Mutual Fund or Portfolio Expense: A Mutual Fund or Portfolio deducts an
investment advisory fee and other expenses from its net asset value, as
described in its current prospectus. Amounts deducted may include
operational, organizational, and extraordinary expenses. Expenses vary from
year-to- year.
7.4 Other Charges: Due and unpaid charges for which the Plan is responsible,
and which the Plan Sponsor and you have otherwise agreed to in writing,
will be deducted from Participant Accounts on a pro-rata basis. These
charges include participant statement mailing fees, Form 5500 fees, annual
administrative fees, data reconciliation and reconstruction fees,
commissions, and contract application/installation fees for a takeover
Plan. Charges for which the Plan Sponsor (not the Plan) is responsible, and
which the Plan Sponsor has otherwise agreed to in writing, must be paid by
the Plan Sponsor. These charges include contract application/installation
fees for a new Plan.
7.5 Taxes: We may deduct charges equal to any premium tax we incur from the
balance applied to purchase an annuity or at such other time as premium
taxes are incurred by us. We may also deduct from Investment Accounts
reasonable charges for federal, state, or local income taxes we incur, that
are attributable to such Investment Accounts.
7.6 Reduction or Waiver of Charges: We may reduce or waive the Withdrawal
Charge or the charges discussed above, if the appropriate expenses
associated with the sale or administration of any contract are reduced, or
if a contract is sold covering our employees or directors, those of the AUL
American Series Fund, Inc., or to either's affiliates.
P-GB-K-ERTDAMFVA.14
SECTION 8 - CONTRACT MODIFICATIONS
8.1 Mutual Amendment: You and we may agree to any change or amendment to this
Contract without the consent of any other person or entity. This contract
cannot be modified or amended, nor can any provision or condition be
waived, except by our written agreement, signed by a corporate officer.
Such authority may be delegated only by a written agreement signed by our
corporate officer.
8.2 Rates and Section 7 Charges: We may announce new Guaranteed Rates, as
described in Sections 3.2 and 3.3 (including the consolidation of existing
Interest Pockets). However, as provided in Sections 3.2 and 3.3, we may not
change the declared Guaranteed Rate applicable to an established Interest
Pocket during the guaranteed period. We may also modify the charge levels
in Section 7, using the procedures of Section 8.4.
8.3 Conformance with Law: We may amend this contract at any time, without your
consent, or that of any other person or entity, if the amendment is
reasonably needed to comply with, or give you or Participants the benefit
of, any provisions of federal or state laws. Any such amendment will be
delivered to you prior to its effective date.
8.4 Our Right to Initiate Changes: In addition to those amendments permitted by
Sections 8.2 and 8.3, we may initiate an additional provision or
modification of any other provision of this contract (including the
addition of a charge for transfers between Investment Options) by giving
you 60 days notice of such modification. Any such modification is effective
without your affirmative assent.
8.5 Prohibited Amendments:
(a) Nothwithstanding our right to initiate changes under Section 8.4, we
may not initiate changes to the minimum Guaranteed Rate specified in
Section 3.4, our obligation to set Guaranteed Rates for the period of
time specified in Sections 3.2 and 3.3, the payment upon rejection of
a declared Guaranteed Rate specified in Section 3.5, the payment
provisions upon contract termination specified in Section 9.2, or the
Table of Guaranteed Immediate Annuities.
(b) No modification to this contract may change the terms of a previously
purchased annuity or reduce any interest guarantee applicable to
Participant Account balances held in the FIA on the modification's
effective date.
P-GB-K-ERTDAMFVA.15
SECTION 9 - TERMINATION OF CONTRACT
9.1 Termination by You: You may terminate this contract by giving us notice.
Such termination is effective on the Business Day that we receive your
notice.
9.2 Payment Upon Termination by You: Upon termination by you, you may elect one
of the following options:
(a) Transfer to Another Contract: You may transfer the aggregate Account
Value of all Participant Accounts, or you may permit a Participant to
transfer his Account Value, to any group annuity contract which we may
make available. Any such amounts are transferred on the termination
effective date.
(b) Payment of Investment Accounts in Lump-Sum and FIA in Installments:
You may have the aggregate Investment Account Withdrawal Value of all
Participant Accounts paid to you in a lump-sum, with the FIA paid in 6
equal annual installments. The aggregate Investment Account Withdrawal
Value will be determined on the termination effective date and paid
within 7 days from the termination effective date, except as we may be
permitted to defer payment in accordance with appropriate provisions
of the federal securities laws. The initial FIA installment is
calculated on the termination effective date and paid within 7 days
from the termination effective date. Subsequent installments are paid
on the anniversary of the termination effective date. During the
installment payment period, interest is credited under the terms
described in Section 3.5.
9.3 Termination by Us: We have the right, subject to applicable state law, to
terminate any Participant Account established under this contract at any
time during the Contract Year if the Account Value of the Participant
Account is less than $200 for the first Contract Year in which a
Contribution is made for the Participant, and $400 for any subsequent
Contract Year, and at least 6 months have elapsed since the last previous
Contribution to the contract. If we elect to terminate a Participant
Account, the termination will be effective on the date 6 months following
the date we give notice to you and the Participant that the Participant
Account is to be terminated, provided that any Contributions made during
the 6-month period are insufficient to raise the Account Value up to the
minimum level.
9.4 Payment Upon Termination by Us: As of the effective date of termination of
a Participant Account by us, we may elect to have a single sum equal to the
Account Value of the Participant Account on the effective date of
termination paid to you within 7 days from that date. Any such payment is
in full settlement of the Participant Account under this contract and in
lieu of any other payment under its terms.
9.5 Indemnification Required: Payments or transfers under Section 9.2 are in
full settlement of our obligations under this contract. Prior to making
such payments or transfers, we may require you and the Plan Sponsor to
indemnify and hold us harmless from any and all losses, claims, or demands
that may later be asserted against us in connection with the making of such
payment or transfer.
9.6 Effect on Contract Obligations: Any annuities purchased prior to
notification of contract termination are unaffected by a termination. We
may refuse further Contributions at any time after a termination notice has
been given. If we have been providing recordkeeping services, such services
stop on the termination effective date. This contract terminates
automatically if no amounts remain in either the FIA or any Investment
Account.
P-GB-K-ERTDAMFVA.16
SECTION 10 - GENERAL PROVISIONS
10.1 Ownership: You own this contract. No other person or entity has any right,
title, or interest in this contract or to amounts received or credited
under it until such amounts are made available to them by you. All amounts
received or credited under this contract become our property. We are
obligated to make only the payments or distributions specified in this
contract.
10.2 Entire Contract: This contract and your application is the entire agreement
between you and us. We are not a party to, nor bound by, a Plan, trust,
custodial agreement, or other agreement, or any amendment or modification
to any of the same. We are not a fiduciary under this contract or under any
such Plan, trust, custodial agreement, or other agreement.
10.3 Benefit Determinations: You will furnish us whatever information is
necessary to establish the eligibility for and amount of annuity or other
benefit due. We rely solely on your instructions and certifications with
respect to Participant benefits. You are fully responsible for determining:
(a) whether benefit payments are permitted under applicable law and the
Plan and
(b) the existence or amount of Excess Contributions (plus gains or minus
losses thereon), or that returns of Excess Contributions are permitted
by the Plan and the Code.
We may rely on your or your designee's statements or representations in
honoring any benefit payment request.
10.4 Recordkeeping Services: We generally provide Plan recordkeeping services
when all of a Plan's funds are held under this contract. We may decline to
provide Plan recordkeeping services if you elect to allocate Plan funds to
investments other than this contract, or if your Plan's recordkeeping
practices, in our judgment, impose a substantial administrative or
financial burden on us.
10.5 Representations and Warranties: You and we mutually represent and warrant,
each to the other, that each is fully authorized to enter into this
contract and that this contract is a valid and binding obligation and that
the execution of this contract does not violate any law, regulation,
judgment, or order by which the representing party is bound. In addition,
you represent and warrant to us that:
(a) the Plan is qualified under Code Section 403(b);
(b) the execution of this contract has been authorized by the Plan
fiduciary responsible for Plan investment decisions; and
(c) the execution or performance of this contract does not violate any
Plan provision or any law, regulation, judgment, or order by which the
Plan is bound.
We do not make any representation or warranty regarding the federal, state,
or local tax status of this contract, any Participant Account, or any
transaction involving this contract.
P-GB-K-ERTDAMFVA.17
10.6 Contractholder Representative; Misstatement of Data: You may designate a
representative to act on your behalf under Section 2 or 3 or to receive any
payment under Sections 5 or 9. We may rely on any information you, your
designee, or a Participant furnish. We need not inquire as to the accuracy
or completeness of such information. If any essential data pertaining to
any person has been omitted or misstated, including, but not limited to, a
misstatement of an annuitant's or contingent annuitant's age, we will make
an equitable adjustment to provide the annuity or other benefit determined
using correct data.
10.7 Requirement for Writing: When reference is made to you, your designee, or a
Participant making a request or giving notice, instruction, or direction,
such request, notice, instruction, or direction must be in writing, or in a
form otherwise acceptable to us, and is effective when we receive it.
10.8 Quarterly Statement of Account Value: Reasonably promptly after the end of
each Contract Quarter, we will prepare a statement of the Account Value for
each Participant Account.
10.9 Conformity with Law: Any benefit payable under this contract shall not be
less than the minimum benefit required by the insurance laws of the state
in which the contract is delivered. Language in this contract referring to
state or federal tax, securities, or other statutes or rules do not
incorporate within this contract any such statutes or rules.
10.10 Sex and Number:
Whenever the context so requires, the plural includes the singular, the
singular the plural, and the masculine the feminine.
10.11 Facility of Payment:
If any Participant, contingent annuitant, or beneficiary is legally
incapable of giving a valid receipt for any payment, and no guardian has
been appointed, we may pay the person or persons who have assumed the care
and principal support of such Participant, contingent annuitant, or
beneficiary. We may also pay you directly or as you otherwise instruct. Any
such payment fully discharges us to the extent of such payment.
10.12 Voting:
We own all Mutual Fund or Portfolio shares held in an Investment Account.
We exercise the voting rights of such shares at all shareholder meetings on
all matters requiring shareholder voting under the Investment Company Act
of 1940 or other applicable laws. Our vote reflects instructions received
from persons having the voting interest in the shares, as follows:
(a) You have the voting interest under this contract. Unless otherwise
required by applicable law, the number of Mutual Fund or Portfolio
shares for which you may give voting instructions is determined by
dividing the aggregate Account Values in the affected Investment
Account by the net asset value of the Mutual Fund or Portfolio shares.
Fractional votes are counted. Our determination is made as of the date
used by the Mutual Fund or Portfolio to determine shareholders
eligible to vote.
(b) We vote shares proportionally, to reflect the voting instructions we
receive in a timely manner from you and from all other
contractholders. If no timely voting instructions are received from
you, we vote shares proportionally, to reflect the voting instructions
we received in a timely manner for all other contracts.
P-GB-K-ERTDAMFVA.18
To the extent permitted by applicable law, we may vote shares in our own
right or may modify the above procedures to reflect changes in the law or
its interpretation.
We will provide prospectuses and other reports as required by applicable
federal law.
10.13 Acceptance of New Participants or Contributions:
We may refuse to accept new Participants or new Contributions at any time.
10.14 AUL's Annual Statement:
No provision of this contract controls, determines, or modifies any AUL
annual statement made to any insurance department, contractholder,
regulatory body, or other person. Nor does anything in such annual
statement control, determine, or modify the provisions of this contract.
10.15 AUL's Annual Meeting:
Unless otherwise notified, our regular annual meeting is held at our Home
Office on the third Thursday in February at 10 a.m. Elections for directors
are held at such annual meeting.
10.16 Nonforfeitability and Nontransferability:
The entire Withdrawal Value of the vested portion (as determined pursuant
to the Plan) of a Participant Account under this contract is nonfor
feitable at all times. No sum payable under this contract with respect to a
Participant may 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 to any person or entity other than AUL. In addition, to the extent
permitted by law, no such sum shall in any way be subject to legal process
requiring the payment of any claim against the payee.
P-GB-K-ERTDAMFVA.19
TABLE OF GUARANTEED IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
10-YEAR CERTAIN
ADJUSTED AGE LIFE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 times (Birth Year - 1915)] rounded to the
nearest integer.
Guaranteed purchase rates are 96% of the net single premium for the benefit
provided based on the unprojected 1994 Group Annuity Reserving Table for females
with interest at 2%.
P-GB-K-ERTDAMFVA.20
TABLE OF INVESTMENT ACCOUNTS
The following Investment Accounts are made available to you under this contract.
By completing a form we require, you may restrict the Investment Accounts you
make available to your Participants. Amounts allocated to any Investment Account
identified below are invested in the shares of the corresponding Mutual Fund or
Portfolio listed below. The Investment Account marked with an asterisk (*) is
not available if your Plan uses the FIA and if you do not want the FIA 20%
annual transfer restriction provided in Section 5.6 to apply.
Investment Account Mutual Fund or Portfolio
------------------------------------------ ------------------------------------------
AUL American Aggressive Investor Portfolio AUL American Aggressive Investor Portfolio
AUL American Bond AUL American Bond
AUL American Conservative Investor AUL American Conservative Investor
Portfolio Portfolio
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Moderate Investor Portfolio AUL American Moderate Investor Portfolio
AUL American Money Market * AUL American Money Market
AUL American Tactical Asset Allocation AUL American Tactical Asset Allocation
Portfolio Portfolio
Xxxxx American Growth Xxxxx American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Xxxxxxx Social Mid-Cap Growth Xxxxxxx Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Janus Aspen Series Worldwide Growth
Portfolio Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity SAFECO Resource Series Trust Equity
Portfolio Portfolio
SAFECO Resource Series Trust Growth SAFECO Resource Series Trust Growth
Portfolio Portfolio
X. Xxxx Price Equity-Income Portfolio X. Xxxx Price Equity-Income Portfolio
P-GB-K-ERTDAMFVA.21
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME XXXX XXX
SOCIAL SECURITY NUMBER 000-00-0000
American United Life Insurance Company hereby certifies that the Contractholder
and AUL have entered into a Multiple-Fund Group Variable Annuity Contract (the
Contract) in connection with the Contractholder's tax-deferred annuity Plan, and
that AUL has created an account in your name to receive Contributions from the
Contractholder for your benefit pursuant to the Contract. When used in this
certificate, "we," "us," or "our" refer to AUL.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
you and your beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
/s/ Xxxxxxx X. Xxxxx
Secretary
GUARANTEED BENEFIT EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
(SBR,MBR,NBR)
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT UNDER THE CONTRACT MAY INCREASE OR
DECREASE IN VALUE ACCORDING TO THE INVESTMENT PERFORMANCE OF THE UNDERLYING
INVESTMENTS HELD BY THE INVESTMENT ACCOUNT. THE VALUE OF SUCH ASSETS AND
ACCUMULATION UNITS IS NOT GUARANTEED. SECTION 4 OF THIS CERTIFICATE EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning the Contract, or wish to register a complaint,
you may reach us by calling 0-000-000-0000.
P-GB-C-ERTDAMFVA
TABLE OF CONTENTS
Page
SECTION 1 - DEFINITIONS 3
SECTION 2 - ADMINISTRATION OF YOUR PARTICIPANT ACCOUNT 6
2.1----- How Contributions Are Handled
2.2----- Transfers from Other Retirement Programs
2.3----- Reallocation of Participant Accounts
2.4----- Excess Contributions
2.5----- Transfers from Other Contracts
SECTION 3 - OPERATION OF FIXED INTEREST ACCOUNT 7
3.1----- Allocations to your Participant Account
3.2----- Provision of Guaranteed Rates for Interest Pockets
3.3----- Renewal of Guaranteed Rates
3.4----- Minimum Rate Guarantee
3.5----- Payout Upon Rejection of Declared Guaranteed Rate
3.6----- Allocation of Withdrawals
SECTION 4 - VALUATION OF INVESTMENT ACCOUNTS 8
4.1----- Operation of Investment Accounts
4.2----- Valuation of Mutual Funds
4.3----- Accumulation Units
4.4----- Value of Accumulation Units
4.5----- Determining the Net Investment Factor
4.6----- Valuing your Participant Account
SECTION 5 - BENEFIT PAYMENTS AND TRANSFERS 9
5.1----- General Withdrawal Provisions
5.2----- Plan Benefit Payments
5.3----- Other Cash Benefits
5.4----- Transfers Between Investment Options
5.5----- Minimum Amounts
5.6----- Maximum Amounts
SECTION 6 - ANNUITIES 12
6.1----- Annuity Purchases
6.2----- Annuity Options
6.3----- Determining Annuity Amount
6.4----- Proof of Age and Survival; Minimum Payments
6.5----- Annuity Certificates
P-GB-C-ERTDAMFVA.1
Page
SECTION 7 - MORTALITY AND EXPENSE RISK CHARGES
AND ADMINISTRATIVE CHARGES 13
7.1----- Investment Account Mortality and Expense Risk Charges
7.2----- Variable Investment Plus (VIP) Credit Factor
7.3----- Mutual Fund or Portfolio Expense
7.4----- Other Charges
7.5----- Taxes
SECTION 8 - CONTRACT MODIFICATIONS 14
8.1----- Mutual Amendment
8.2----- Rates and Section 7 Charges
8.3----- Conformance with Law
8.4----- Our Right to Initiate Changes
8.5----- Prohibited Amendments
SECTION 9 - TERMINATION OF CONTRACT 15
9.1----- Termination by the Contractholder
9.2----- Payment Upon Termination by the Contractholder
9.3----- Termination by Us
9.4----- Payment Upon Termination by Us
9.5----- Indemnification Required
9.6----- Effect on Contract Obligations
SECTION 10 - GENERAL PROVISIONS 16
10.1----- Ownership
10.2----- Entire Contract
10.3----- Benefit Determinations
10.4----- Recordkeeping Services
10.5----- Representations and Warranties
10.6----- Contractholder Representative; Misstatement of Data
10.7----- Requirement for Writing
10.8----- Quarterly Statement of Account Value
10.9----- Conformity with Law
10.10---- Sex and Number
10.11---- Facility of Payment
10.12---- Voting
10.13---- Acceptance of New Contributions
10.14---- AUL's Annual Statement
10.15---- Nonforfeitability and Nontransferability
TABLE OF GUARANTEED IMMEDIATE ANNUITIES 19
P-GB-C-ERTDAMFVA.2
SECTION 1 - DEFINITIONS
1.1 "Account Value" for your Participant Account as of a date is:
(a) your account's balance in the Fixed Interest Account (FIA) on that
date; plus
(b) the value of your account's Accumulation Units in each Investment
Account on that date.
1.2 "Accumulation Unit" is a valuation device used to measure increases in and
decreases to the value of any Investment Account.
1.3 "Annuity Commencement Date" is the first day of the month an annuity begins
under the Contract. This date may not be later than the date your periodic
benefits are required to commence under the Code.
1.4 "Business Day" is any day both the New York Stock Exchange and our Home
Office are open for the general conduct of business.
1.5 "Code" means the Internal Revenue Code of 1986, as amended, and any
applicable regulations or rulings thereunder.
1.6 The "First Contract Anniversary" is listed on the Contract face page.
Subsequent "Contract Anniversaries" are on the same day of each subsequent
year.
1.7 "Contract Quarter" is each of the four successive three-month periods in a
Contract Year.
1.8 The first "Contract Year" starts on the Contract Date and ends on the day
before the First Contract Anniversary. Each subsequent Contract Year starts
on a Contract Anniversary and ends on the day before the next Contract
Anniversary.
1.9 "Contributions" are amounts paid to us, pursuant to the Plan, which we
credit to Participant Accounts, including yours. Contributions include
amounts transferred from another AUL group annuity contract. The following
types of Contributions are credited to subaccounts under your Participant
Account:
(a) "Elective Deferrals," which means, with respect to any taxable year,
any Contribution made under a salary reduction agreement. A
Contribution made under a salary reduction agreement is not treated as
an Elective Deferral if, under the salary reduction agreement, the
Contribution is made pursuant to a one-time irrevocable election made
by you at the time of initial eligibility to participate in the
agreement, or is made pursuant to a similar arrangement involving a
one-time irrevocable election specified in Regulations issued under
the Code.
(b) "Employee Mandatory Contributions," which means Contributions made
under a salary reduction agreement pursuant to a one-time irrevocable
election made by you at the time of initial eligibility to participate
in the agreement, or made pursuant to a similar arrangement involving
a one-time irrevocable election specified in Regulations issued under
the Code.
P-GB-C-ERTDAMFVA.3
(c) "Employer Contributions," which means Contributions made by your
employer that are not made pursuant to (a) or (b) above.
1.10 "Excess Contributions" are Contributions in excess of the applicable Code
limits.
1.11 "Fixed Interest Account" or "FIA" is the portion of our general asset
account as described in Section 3, to which Contributions may be allocated
for accumulation at the Guaranteed Rates.
1.12 "Guaranteed Rates" are the guaranteed annual effective rates of interest we
credit to each Interest Pocket. A Guaranteed Rate may be modified only as
described in Section 3.3.
1.13 "Home Office" is our principal office in Indianapolis, Indiana. For
anything to be "received by AUL," it must be received at our Home Office.
1.14 "Interest Pocket" means a tracking method which associates funds deposited
into the FIA over a specific time period with a specific Guaranteed Rate,
as described in Section 3. After the guaranteed period provided in Section
3.3 has elapsed, we may consolidate two or more Interest Pockets in
conjunction with the announcement of new Guaranteed Rates.
1.15 "Investment Account" means each distinct portfolio established within our
Variable Account and identified in the Table of Investment Accounts in the
Contract. Amounts allocated to any Investment Account are invested in the
shares of the corresponding Mutual Fund or Portfolio identified in the
Table of Investment Accounts. Our "Variable Account" is a separate account
we maintain under Indiana law which is called the AUL American Unit Trust
and which is registered under the Investment Company Act of 1940 as a unit
investment trust.
1.16 "Investment Option" is the FIA or any Investment Account. We reserve the
right to provide other Investment Options under the Contract at any time.
1.17 "Mutual Fund" means any diversified, open-end, management company made
available by us, and listed in the Table of Investment Accounts.
1.18 "Participant" is any person participating in the Plan that has a
Participant Account.
1.19 Your "Participant Account" is an account under the Contract for you. Your
Participant Account may have subaccounts for each type of Contribution. We
credit Contributions to your Participant Account and Contribution-type
subaccounts as the Contractholder directs.
1.20 "Plan" means the Plan Sponsor's Code Section 403(b) plan that invests in
the Contract.
1.21 "Plan Sponsor" is ABC School.
1.22 "Portfolio" is a portfolio established within a particular Mutual Fund, as
described in the Mutual Fund's current prospectus.
1.23 "Valuation Periods" start at the close of each Business Day and end at the
close of the next Business Day.
1.24 The "Withdrawal Charge" is a percentage of the Account Value withdrawn
under the Contract. The Withdrawal Charge will not apply to Account Values
withdrawn to provide a benefit payment
P-GB-C-ERTDAMFVA.4
or an annuity as described in Section 5.2 and 6.1, respectively. The
percentage varies by the Contract Year in which a withdrawal is made. The
Withdrawal Charge percentage is as follows:
During Contract Year Percentage
1 3
2 2
3 1
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from your
Participant Account, exceed 9% of total Contributions allocated to your
Participant Account.
1.25 Your "Withdrawal Value" is a your Account Value, less any Withdrawal
Charge.
P-GB-C-ERTDAMFVA.5
SECTION 2 - ADMINISTRATION OF YOUR PARTICIPANT ACCOUNT
2.1 How Contributions Are Handled: Contributions we receive are credited to the
appropriate Contribution-type subaccounts of your Participant Account, as
the Contractholder directs in its allocation instructions. The initial
Contribution for you is allocated to your Participant Account by the second
Business Day after we (1) receive the initial Contribution or, if later,
(2) receive all data necessary to complete the allocation (including data
required to establish your Participant Account, the amount of the
Contribution for you, and Investment Option elections. Subsequent
Contributions are allocated to your Participant Account on the Business Day
we (1) receive that Contribution or, if later, (2) receive all data
necessary to complete the allocation.
If we do not receive the data required to establish your Participant
Account and instructions regarding the amount of a Contribution for you
within 5 Business Days after we first receive that Contribution, we will
return that Contribution to the Contractholder unless it consents to us
retaining that Contribution until the earlier of (i) the date we receive
such data and instructions and, therefore, can properly allocate that
Contribution to your Participant Account or (ii) 25 days from the date we
receive that Contribution.
If we receive the data required to establish your Participant Account and
instructions regarding the amount of a Contribution for you, but we do not
receive Investment Option elections for you, the Contribution is allocated
to a suspense account. The suspense account earns interest at the
Guaranteed Rate for Contributions received on the same date. When we
receive all required data, amounts in the suspense account, plus interest,
are transferred to the appropriate Investment Option for each designated
Contribution-type.
Your Participant Account may be allocated to Investment Options in any
increments acceptable to us. Investment Option elections remain in effect
until changed by the Contractholder. A change in Investment Option
elections is made by giving us new Investment Option elections.
2.2 Transfers from Other Retirement Programs: If permitted by the Plan, we may
accept amounts transferred from other Code Section 403(b) funding vehicles.
Such transferred amounts, as identified by the Contractholder, are credited
to a rollover subaccount, under the appropriate Participant Account.
2.3 Reallocation of Participant Accounts: The Contractholder may direct us to
reallocate all or a portion of the Account Value of any Participant Account
among other Participant Accounts. The Contractholder must certify that such
reallocation is in accordance with the Plan.
2.4 Excess Contributions: On receipt of instructions from the Contractholder,
we will withdraw Excess Contributions, plus gains and minus losses, from
your Participant Account and return them to the Contractholder, or as the
Contractholder directs. Such instructions must state the amount to be
returned and certify that such Contributions are Excess Contributions and
that such return is permitted by the Plan and the Code. A return of Excess
Contributions is treated like a Plan benefit payment, under Section 5.2.
You are not permitted to have elective deferral contributions (within the
meaning of Code Section 402(g)(3)) made during a calendar year under the
Contract, or under any other plans, contracts, or arrangements maintained
by your employer, in excess of the dollar limitation in effect under Code
Section 402(g)(1) and any Regulations issued thereunder for taxable years
beginning in such calendar year.
2.5 Transfers from Other Contracts: We may require amounts transferred to your
Participant Account from other AUL group annuity contracts to be deposited
in a suspense account. We will advise the Contractholder if this limitation
applies before accepting such a transfer.
P-GB-C-ERTDAMFVA.6
SECTION 3 -- OPERATION OF FIXED INTEREST ACCOUNT
3.1 Allocations to your Participant Account: We allocate your Contributions in
the FIA based on the information the Contractholder provides.
3.2 Provision of Guaranteed Rates for Interest Pockets: At least 10 days in
advance of each calendar quarter, we will declare a Guaranteed Rate for the
Interest Pocket for that quarter. All Contributions or transfers hereunder
which are allocated to the FIA during that quarter will earn interest at
that Guaranteed Rate until that quarterly pocket matures on the second
January 1 following the quarter in which that pocket was established.
3.3 Renewal of Guaranteed Rates: Those quarterly Interest Pockets which mature
at the same time will be combined into an annual renewal Interest Pocket.
Funds associated with that annual renewal Interest Pocket will earn
interest for a full year at the Guaranteed Rate declared for that pocket. A
new Guaranteed Rate for each annual renewal Interest Pocket will be
declared at least 30 days prior to every January 1 for the 5 years
following the establishment of that pocket. An annual renewal Interest
Pocket will mature on January 1 of the sixth year following its
establishment, when it will be combined into one annual portfolio Interest
Pocket. Funds associated with that annual portfolio Interest Pocket will
earn interest for a full year at the Guaranteed Rate for that pocket, which
will be declared at least 30 days prior to every January 1.
The Contractholder may accept the declared Guaranteed Rate for an annual
renewal or portfolio Interest Pocket either by continuing to allocate
Contributions to the FIA or by otherwise notifying us of its acceptance.
The Contractholder may reject the declared rate for that pocket by
notifying us. This acceptance or rejection must occur after the declaration
of the rate for that pocket and before the next January 1, when the rate
becomes effective. If the Contractholder neither specifically accepts nor
rejects the declared Guaranteed Rate for the new pocket by the deadline, it
will be deemed to have accepted the rate. If the Contractholder rejects the
declared Guaranteed Rate for the new annual renewal or portfolio pocket,
the aggregate Withdrawal Value of that pocket will be paid out as described
in Section 3.5.
3.4 Minimum Rate Guarantee: No Guaranteed Rate may be less than an annual
effective interest rate of 3.00%.
3.5 Payout Upon Rejection of Declared Guaranteed Rate: If the Contractholder
rejects the Guaranteed Rate for an Interest Pocket we announce under
Section 3.3, the aggregate Withdrawal Value of that Interest Pocket is paid
to the Contractholder in 6 equal annual installments. The initial
installment is calculated on the date the Contractholder rejects the
declared rate and is paid within 7 days from that date. Subsequent
installments are paid on the anniversary of the first installment payment
date. During the installment payment period, interest is credited to
amounts in the terminating pocket at a rate equal to the current average
Guaranteed Rate (as determined on the first installment payment date) of
all the Contractholder's Interest Pockets, less 1%. The minimum rate
guarantee provided in Section 3.4 applies to the interest credited under
this Section. Interest is paid with each installment.
P-GB-C-ERTDAMFVA.7
3.6 Allocation of Withdrawals: Withdrawals or transfers from the FIA are on a
first-in/first-out basis, unless the Account or a terminating pocket is
being paid out to the Contractholder in installments. All amounts paid
during an installment payout period are paid on a pro-rata basis.
P-GB-C-ERTDAMFVA.8
SECTION 4 - VALUATION OF INVESTMENT ACCOUNTS
4.1 Operation of Investment Accounts: All income, gains, or losses, realized or
unrealized, from assets held in any Investment Account are credited to or
charged against the applicable Investment Account without regard to our
other income, gains, or losses. Investment Account assets are not
chargeable with liabilities arising out of any other business we may
conduct.
4.2 Valuation of Mutual Funds: The current prospectus for each Mutual Fund
describes how that Mutual Fund's assets are valued.
4.3 Accumulation Units: We credit amounts allocated to an Investment Account in
Accumulation Units. The Accumulation Unit value used is the one for the
Valuation Period when we allocate the amount to the Investment Account.
4.4 Value of Accumulation Units: We generally establish the Accumulation Unit
value for a new Investment Account at $1.00 on the date the first deposit
is made to the Investment Account. The value of an Accumulation Unit for
any later Valuation Period equals the value of an Accumulation Unit for the
immediately preceding Valuation Period times the Net Investment Factor for
the current Valuation Period. We determine the Accumulation Unit value
before giving effect to any additions, withdrawals, or transfers in the
current Valuation Period.
4.5 Determining the Net Investment Factor: We determine the Net Investment
Factor for each Investment Account by dividing (a) by (b), and then
subtracting (c), where:
(a) is:
(1) the net asset value of a Mutual Fund or Portfolio share at the
end of the current Valuation Period, plus
(2) any dividend or other distribution paid on each Mutual Fund or
Portfolio share during such Valuation Period, plus or minus
(3) any credit or charge for taxes paid or reserved by us during the
Valuation Period that we determine are attributable to the
Investment Account;
(b) is the net asset value of each Mutual Fund or Portfolio share held in
the Investment Account at the end of the prior Valuation Period; and
(c) is a daily charge factor we determine, as described in Section 7.1.
4.6 Valuing your Participant Account: We determine your Account Value in an
Investment Account by multiplying your Accumulation Units by the
Accumulation Unit value. The Accumulation Unit value of an Investment
Account changes only on a Business Day.
P-GB-C-ERTDAMFVA.9
SECTION 5 - BENEFIT PAYMENTS AND TRANSFERS
5.1 General Withdrawal Provisions: Subject to the following provisions of this
Section, and prior to notification of Contract termination, the
Contractholder may direct us to withdraw all or a portion of your Account
Value pursuant to Section 5.2 and 5.3 to provide a cash payment to the
Contractholder to pay Plan benefits.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until you have either attained age 59 1/2,
separated from service, died, become totally disabled (as defined by
the Plan), or experienced a hardship (as defined by the Plan).
However, in the case of a hardship withdrawal, any gain credited to
such Contributions may not be withdrawn.
(d) Withdrawal of any amount from the Contract which is transferred
directly by us pursuant to the Contractholder's or your instructions
to another tax-deferred annuity funding vehicle under applicable IRS
rules and regulations is not the provision of a Plan benefit for
purposes of Section 5.2, but instead is a Contract termination as to
that amount for you; and any such withdrawal is subject to application
of the Withdrawal Charge pursuant to Section 5.3. The Contractholder
hereby grants to you the right to direct the withdrawal and direct
transfer of your voluntary Elective Deferrals (as determined by the
Contractholder) to another tax-deferred annuity funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) We are not responsible for determining the Contractholder's or your
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder must include certification as to the
purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is permitted
under applicable law and under the terms of a particular Plan. We may
rely solely upon the Contractholder's representations made in the
withdrawal request.
(g) Withdrawals from your share of any Investment Option may not be made
in an amount less than the smaller of $500 or your entire share of the
Investment Option. If a withdrawal reduces your share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(h) A withdrawal request is effective, and the Account Value to be applied
pursuant to Section 5.2, 5.3, or 5.4 is determined, on the Business
Day that we receive a proper withdrawal request (or due proof of
death, if received later).
P-GB-C-ERTDAMFVA.10
(i) We will pay any cash lump-sum to the Contractholder or to whomever the
Contractholder directs within 7 days from the appropriate Business Day
as determined in Subsection (h) above, except as we may be permitted
to defer such payment of amounts withdrawn from the Variable Account
in accordance with appropriate provisions of the federal securities
laws. We reserve the right to defer the payment of amounts withdrawn
from the FIA for a period of up to 6 months after we receive the
withdrawal request.
(j) Withdrawals from your share of the FIA will be made on a
first-in/first-out basis under Section 3.6.
5.2 Plan Benefit Payments: The Contractholder will advise us of any person for
whom a payment is due under the Plan, including the nature and amount of
such payment, before the date such payment is due or as soon thereafter as
is practicable.
(a) Subject to the limitations provided in Section 5.1 and Subsection (b)
below, prior to notification of Contract termination, the
Contractholder may direct us to withdraw all or a portion of your
Account Value (subject to Section 7.5) to provide a cash payment to
the Contractholder to pay Plan benefits (other than full or partial
Plan termination benefits described in Section 5.3) for retirement,
death, disability, termination of employment, hardships, loans,
required minimum distribution benefits pursuant to Code Section
401(a)(9), or benefits upon attainment of age 59 1/2 or as otherwise
allowed by the Code (provided that such benefit upon attainment of age
59 1/2 is paid in a taxable distribution to you). Such a withdrawal is
not subject to a Withdrawal Charge. Any Plan benefit cash payment
requested for you if you terminate employment on or after the
effective date of Plan termination is deemed to be a Plan termination
benefit, and is subject to a Withdrawal Charge pursuant to Section
5.3. Additionally, if 20% or more of the Participants terminate
employment within the same Contract Year, any Plan benefit cash
payment for such a terminating Participant is subject to a Withdrawal
Charge pursuant to Section 5.3.
(b) Regarding death benefits specifically, notwithstanding the provisions
of Section 9, upon receipt from the Contractholder of instructions and
of due proof of your (and, if applicable, your beneficiary's) death
prior to the date your Participant Account is closed, we will apply
the Account Value (subject to Section 7.5) of your Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit will be paid to your beneficiary according to the method of
payment elected by your beneficiary (unless you previously elected the
method of payment). Your beneficiary may also designate a beneficiary.
This death benefit will be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that your entire Account Value (subject to
Section 7.5) must be paid to your beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of your death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 6.2 over a period not to exceed the life or life
expectancy of the beneficiary. If your beneficiary is not your
surviving spouse, the annuity must begin on or before December 31
of the calendar year immediately following the calendar year in
which you die. If your beneficiary is your surviving spouse, the
annuity need not begin before December 31 of the calendar year in
which you would have attained age 70 1/2.
P-GB-C-ERTDAMFVA.11
If you die on or after your Annuity Commencement Date, any interest
remaining under the Annuity Option selected will be paid at least as
rapidly as prior to your death.
Any withdrawal request submitted under this Section must certify the
purpose of the request.
5.3 Other Cash Benefits: Prior to notification of Contract termination, the
Contractholder may direct us to make a cash payment from your Participant
Account to the Contractholder for the purpose of providing Plan benefits
not specifically described in Section 5.2. The Withdrawal Charge will be
applied under this Section to any withdrawal to pay a Plan benefit payable
because of the termination or partial termination of the Plan (as
determined under applicable IRS guidelines and judicial precedent), or if
the underlying reason for payment of the benefit results in the termination
or partial termination of the Plan.
If the entire Account Value is withdrawn, the amount paid equals your
Withdrawal Value, subject to any charges described in Section 7. In all
other instances, your Account Value is reduced by an amount sufficient to
make the payment requested and to cover the Withdrawal Charge and any
charges described in Section 7.
Notwithstanding the previous provisions of this paragraph, in the first
Contract Year in which your Participant Account is established, the
Contractholder may withdraw from your Participant Account up to 10% of the
sum of your Account Value (determined as of the later of the Contract Date
or the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made for you during that Contract Year,
without application of the Withdrawal Charge. In the next succeeding
Contract Year, the Contractholder may also withdraw from your Participant
Account up to 10% of the sum of your Account Value (determined as of the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made for you during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
Contractholder may withdraw from your Participant Account up to 10% of your
Account Value (determined as of the Contract Anniversary immediately
preceding the request for the withdrawal) without application of the
Withdrawal Charge.
5.4 Transfers between Investment Options: The Contractholder may direct us to
transfer amounts between Investment Options, or to initiate
Participant-directed transfers between Investment Options. Transfers are
effective on the Business Day we receive the transfer direction. Transfer
directions for your Participant Account may be made daily on any Business
Day. We will make the transfer as requested within 7 days from the date we
receive the request, except as we may be permitted to defer the transfer of
amounts withdrawn from the Variable Account in accordance with appropriate
provisions of the federal securities laws. We reserve the right to defer a
transfer of amounts from the FIA for a period of up to 6 months after we
receive the transfer request.
Notwithstanding the previous paragraph, once a transfer from the FIA has
been made for you, a transfer to the FIA for you is permitted only after 90
days have elapsed since the date of the last transfer from the FIA for you.
If the Contractholder makes available to you the FIA and the AUL American
Money Market Investment Account, the 90-day transfer restriction discussed
in the previous sentence does not apply, and Section 5.6 does apply.
5.5 Minimum Amounts: The minimum amount the Contractholder or you may withdraw
or transfer from an Investment Option is $500 or, if less, your entire
balance in that Investment Option. If a withdrawal or transfer reduces your
balance in an Investment Option to less than $500, the entire balance is
withdrawn or transferred.
P-GB-C-ERTDAMFVA.12
5.6 Maximum Amounts: If the Contractholder makes available to you the FIA and
the AUL American Money Market Investment Account, no more than 20% of your
FIA Account Value on the later of the Contract Date or the Contract
Anniversary immediately preceding the request for transfer may be
transferred from the FIA during any Contract Year. However, if your FIA
Account Value is less than $2,500 on the later of the Contract Date or the
Contract Anniversary immediately preceding the request for transfer, the
amount transferrable from the FIA for you for that Contract Year is the
minimum amount specified in Section 5.5.
P-GB-C-ERTDAMFVA.13
SECTION 6 - ANNUITIES
6.1 Annuity Purchases: Prior to notification of Contract termination, the
Contractholder may withdraw all or a portion of your Account Value (subject
to Section 7.5) to provide an annuity, reflecting Plan benefits. Such a
withdrawal is not subject to a Withdrawal Charge. On receipt of an annuity
purchase request, we transfer your entire Participant Account to a suspense
account. These amounts remain in the suspense account until your Annuity
Commencement Date, when the full balance (including interest) is applied to
purchase the annuity.
The Contractholder's annuity purchase request must specify the purpose for
the annuity, the election of an annuity option, Annuity Commencement Date,
any contingent annuitant or beneficiary, and any additional information we
require. If you or any contingent annuitant dies before the Annuity
Commencement Date, the annuity election is cancelled.
The minimum amount which the Contractholder may apply to purchase an
annuity is $5,000.
6.2 Annuity Options: The Contractholder may elect any optional form of annuity
we offer at the time of purchase. Available annuity options always include:
(a) Life Annuity. A monthly annuity is payable as long as the annuitant
lives, and ends with the last payment before the annuitant's death.
(b) Survivorship Annuity. A monthly annuity is payable as long as the
annuitant lives. After the annuitant's death, all or a portion of the
monthly annuity is paid to the contingent annuitant as long as the
contingent annuitant lives.
No annuity may have a certain period extending beyond your life expectancy
or the joint life expectancy of you and your contingent annuitant, as
determined on the Annuity Commencement Date.
6.3 Determining Annuity Amount: We compute the annuity amount using the factors
reflected in the Table of Guaranteed Immediate Annuities attached to the
Contract. However, if our current single premium, nonparticipating,
immediate annuity rates for this class of group annuity contracts produces
a higher monthly annuity than the Table of Guaranteed Immediate Annuities,
then that more favorable annuity rate is applied.
6.4 Proof of Age and Survival; Minimum Payments: We may require proof of any
annuitant's or contingent annuitant's date of birth before commencing
payments under any annuity. We may also require proof that an annuitant or
contingent annuitant is living before making any annuity payment. If a
monthly annuity is less than our current established minimum payment, we
may make payments on a less-frequent basis or in a single sum.
6.5 Annuity Certificates: We issue to each person for whom an annuity is
purchased a certificate setting forth the annuity's amount and terms.
P-GB-C-ERTDAMFVA.14
SECTION 7 - MORTALITY AND EXPENSE RISK CHARGES
AND ADMINISTRATIVE CHARGES
7.1 Investment Account Mortality and Expense Risk Charges: We deduct from the
average daily net assets of each Investment Account the daily equivalent of
an annual combined mortality risk charge and expense risk charge of 1.25%.
This charge is part of the Net Investment Factor, described in Section 4.5.
7.2 Variable Investment Plus (VIP) Credit Factor: We determine a VIP credit
factor each month by multiplying the portions of the aggregate month-end
Account Value in all Investment Accounts by the monthly equivalent of the
corresponding annual VIP credit factors in the table below. The sum of
these products is divided by the aggregate month-end Account Value in all
Investment Accounts. We multiply the resulting percentage by your month-end
Account Value in each Investment Account, and add the resulting amount to
your Account Value for that Investment Account.
Aggregate Month-End Account Value
allocated to Investment Accounts Annual VIP Credit Factors
--------------------------------- -------------------------
First $750,000 0.00%
Next $750,000 0.20%
Next $1 million 0.35%
Next $2.5 million 0.65%
Next $5 million 0.75%
Over $10 million 0.85%
7.3 Mutual Fund or Portfolio Expense: A Mutual Fund or Portfolio deducts an
investment advisory fee and other expenses from its net asset value, as
described in its current prospectus. Amounts deducted may include
operational, organizational, and extraordinary expenses. Expenses vary from
year-to- year.
7.4 Other Charges: Due and unpaid charges for which the Plan is responsible,
and which the Plan Sponsor and the Contractholder have otherwise agreed to
in writing, will be deducted from Participant Accounts on a pro-rata basis.
These charges include participant statement mailing fees, Form 5500 fees,
annual administrative fees, data reconciliation and reconstruction fees,
commissions, and Contract application/installation fees for a takeover
Plan. Charges for which the Plan Sponsor (not the Plan) is responsible, and
which the Plan Sponsor has otherwise agreed to in writing, must be paid by
the Plan Sponsor. These charges include Contract application/installation
fees for a new Plan.
7.5 Taxes: We may deduct charges equal to any premium tax we incur from the
balance applied to purchase an annuity or at such other time as premium
taxes are incurred by us. We may also deduct from Investment Accounts
reasonable charges for federal, state, or local income taxes we incur, that
are attributable to such Investment Accounts.
P-GB-C-ERTDAMFVA.15
SECTION 8 - CONTRACT MODIFICATIONS
8.1 Mutual Amendment: The Contractholder and we may agree to any change or
amendment to the Contract without the consent of any other person or
entity. The Contract cannot be modified or amended, nor can any provision
or condition be waived, except by our written agreement, signed by a
corporate officer. Such authority may be delegated only by a written
agreement signed by our corporate officer.
8.2 Rates and Section 7 Charges: We may announce new Guaranteed Rates, as
described in Section 3.2 and 3.3 (including the consolidation of existing
Interest Pockets). However, as provided in Section 3.2 and 3.3, we may not
change the declared Guaranteed Rate applicable to an established Interest
Pocket during the guaranteed period. We may also modify the charge levels
in Section 7, using the procedures of Section 8.4.
8.3 Conformance with Law: We may amend the Contract at any time, without the
Contractholder's consent, or that of any other person or entity, if the
amendment is reasonably needed to comply with, or give the Contractholder
or you the benefit of, any provisions of federal or state laws. Any such
amendment will be delivered to the Contractholder prior to its effective
date.
8.4 Our Right to Initiate Changes: In addition to those amendments permitted by
Section 8.2 and 8.3, we may initiate an additional provision or
modification of any other provision of the Contract (including the addition
of a charge for transfers between Investment Options) by giving the
Contractholder 60 days notice of such modification. Any such modification
is effective without the Contractholder's affirmative assent unless.
8.5 Prohibited Amendments:
(a) Nothwithstanding our right to initiate changes under Section 8.4, we
may not initiate changes to the minimum Guaranteed Rate specified in
Section 3.4, our obligation to set Guaranteed Rates for the period of
time specified in Section 3.2 and 3.3, the payment upon rejection of a
declared Guaranteed Rate specified in Section 3.5, the payment
provisions upon Contract termination specified in Section 9.2, or the
Table of Guaranteed Immediate Annuities.
(b) No modification to the Contract may change the terms of a previously
purchased annuity or reduce any interest guarantee applicable to your
Participant Account balances held in the FIA on the modification's
effective date.
P-GB-C-ERTDAMFVA.16
SECTION 9 - TERMINATION OF CONTRACT
9.1 Termination by the Contractholder: The Contractholder may terminate the
Contract by giving us notice. Such termination is effective on the Business
Day that we receive the Contractholder's notice.
9.2 Payment Upon Termination by the Contractholder: Upon termination by
the Contractholder, it may elect one of the following options:
(a) Transfer to Another Contract: The Contractholder may transfer the
aggregate Account Value of all Participant Accounts, or the
Contractholder may permit you to transfer your Account Value, to
any group annuity contract which we may make available. Any such
amounts are transferred on the termination effective date.
(b) Payment of Investment Accounts in Lump-Sum and FIA in
Installments: The Contractholder may have the aggregate
Investment Account Withdrawal Value of all Participant Accounts
paid to it in a lump-sum, with the FIA paid in 6 equal annual
installments. The aggregate Investment Account Withdrawal Value
will be determined on the termination effective date and paid
within 7 days from the termination effective date, except as we
may be permitted to defer payment in accordance with appropriate
provisions of the federal securities laws. The initial FIA
installment is calculated on the termination effective date and
paid within 7 days from the termination effective date.
Subsequent installments are paid on the anniversary of the
termination effective date. During the installment payment
period, interest is credited under the terms described in Section
3.5.
9.3 Termination by Us: We have the right, subject to applicable state law, to
terminate your Participant Account at any time during the Contract Year if
your Account Value is less than $200 for the first Contract Year in which a
Contribution is made for you, and $400 for any subsequent Contract Year,
and at least 6 months have elapsed since the last previous Contribution to
the Contract. If we elect to terminate your Participant Account, the
termination will be effective on the date 6 months following the date we
give notice to the Contractholder and you that your Participant Account is
to be terminated, provided that any Contributions made during the 6-month
period are insufficient to raise your Account Value up to the minimum
level.
9.4 Payment Upon Termination by Us: As of the effective date of termination of
your Participant Account by us, we may elect to have a single sum equal to
your Account Value on the effective date of termination paid to the
Contractholder within 7 days from that date. Any such payment is in full
settlement of your Participant Account under the Contract and in lieu of
any other payment under its terms.
9.5 Indemnification Required: Payments or transfers under Section 9.2 are in
full settlement of our obligations under the Contract. Prior to making such
payments or transfers, we may require the Contractholder and the Plan
Sponsor to indemnify and hold us harmless from any and all losses, claims,
or demands that may later be asserted against us in connection with the
making of such payment or transfer.
9.6 Effect on Contract Obligations: Any annuities purchased prior to
notification of Contract termination are unaffected by a termination. We
may refuse further Contributions at any time after a termination notice has
been given. If we have been providing recordkeeping services, such services
stop on the termination effective date. The Contract terminates
automatically if no amounts remain in either the FIA or any Investment
Account.
P-GB-C-ERTDAMFVA.17
SECTION 10 - GENERAL PROVISIONS
10.1 Ownership: The Contractholder owns the Contract. No other person or entity
has any right, title, or interest in the Contract or to amounts received or
credited under it until such amounts are made available to them by the
Contractholder. All amounts received or credited under the Contract become
our property. We are obligated to make only the payments or distributions
specified in the Contract.
10.2 Entire Contract: The Contract and the Contractholder's application is the
entire agreement between the Contractholder and us. We are not a party to,
nor bound by, a Plan, trust, custodial agreement, or other agreement, or
any amendment or modification to any of the same. We are not a fiduciary
under the Contract or under any such Plan, trust, custodial agreement, or
other agreement.
10.3 Benefit Determinations: The Contractholder must furnish us whatever
information is necessary to establish the eligibility for and amount of
annuity or other benefit due. We rely solely on the Contractholder's
instructions and certifications with respect to your benefits. The
Contractholder is fully responsible for determining:
(a) whether benefit payments are permitted under applicable law and the
Plan and
(b) the existence or amount of Excess Contributions (plus gains or minus
losses thereon), or that returns of Excess Contributions are permitted
by the Plan and the Code.
We may rely on the Contractholder's or its designee's statements or
representations in honoring any benefit payment request.
10.4 Recordkeeping Services: We generally provide Plan recordkeeping services
when all of a Plan's funds are held under the Contract. We may decline to
provide Plan recordkeeping services if the Contractholder elects to
allocate Plan funds to investments other than the Contract, or if the
Contractholder's Plan's recordkeeping practices, in our judgment, impose a
substantial administrative or financial burden on us.
10.5 Representations and Warranties: The Contractholder and we mutually
represent and warrant, each to the other, that each is fully authorized to
enter into the Contract and that the Contract is a valid and binding
obligation and that the execution of the Contract does not violate any law,
regulation, judgment, or order by which the representing party is bound. In
addition, the Contractholder represents and warrants to us that:
(a) the Plan is qualified under Code Section 403(b);
(b) the execution of the Contract has been authorized by the Plan
fiduciary responsible for Plan investment decisions; and
(c) the execution or performance of the Contract does not violate any Plan
provision or any law, regulation, judgment, or order by which the Plan
is bound.
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We do not make any representation or warranty regarding the federal, state,
or local tax status of the Contract, your Participant Account, or any
transaction involving the Contract.
10.6 Contractholder Representative; Misstatement of Data: The Contractholder may
designate a representative to act on its behalf under Section 2 or 3 or to
receive any payment under Section 5 or 9. We may rely on any information
the Contractholder, its designee, or you furnish. We need not inquire as to
the accuracy or completeness of such information. If any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement of an annuitant's or contingent annuitant's age,
we will make an equitable adjustment to provide the annuity or other
benefit determined using correct data.
10.7 Requirement for Writing: When reference is made to the Contractholder, its
designee, or you making a request or giving notice, instruction, or
direction, such request, notice, instruction, or direction must be in
writing, or in a form otherwise acceptable to us, and is effective when we
receive it.
10.8 Quarterly Statement of Account Value: Reasonably promptly after the end of
each Contract Quarter, we will prepare a statement of your Account Value.
10.9 Conformity with Law: Any benefit payable under the Contract will not be
less than the minimum benefit required by the insurance laws of the state
in which the Contract is delivered. Language in the Contract referring to
state or federal tax, securities, or other statutes or rules do not
incorporate within the Contract any such statutes or rules.
10.10 Sex and Number:
Whenever the context so requires, the plural includes the singular, the
singular the plural, and the masculine the feminine.
10.11 Facility of Payment:
If you, your contingent annuitant, or your beneficiary is legally incapable
of giving a valid receipt for any payment, and no guardian has been
appointed, we may pay the person or persons who have assumed the care and
principal support of you, your contingent annuitant, or your beneficiary.
We may also pay the Contractholder directly or as it otherwise instructs.
Any such payment fully discharges us to the extent of such payment.
10.12 Voting:
We own all Mutual Fund or Portfolio shares held in an Investment Account.
We exercise the voting rights of such shares at all shareholder meetings on
all matters requiring shareholder voting under the Investment Company Act
of 1940 or other applicable laws. Our vote reflects instructions received
from persons having the voting interest in the shares, as follows:
(a) The Contractholder has the voting interest under the Contract. Unless
otherwise required by applicable law, the number of Mutual Fund or
Portfolio shares for which the Contractholder may give voting
instructions is determined by dividing the aggregate Account Values in
the affected Investment Account by the net asset value of the Mutual
Fund or Portfolio shares. Fractional votes are counted. Our
determination is made as of the date used by the Mutual Fund or
Portfolio to determine shareholders eligible to vote.
(b) We vote shares proportionally, to reflect the voting instructions we
receive in a timely manner from the Contractholder and from all other
contractholders. If no timely
P-GB-C-ERTDAMFVA.19
voting instructions are received from the Contractholder, we vote
shares proportionally, to reflect the voting instructions we received
in a timely manner for all other contracts.
To the extent permitted by applicable law, we may vote shares in our
own right or may modify the above procedures to reflect changes in the
law or its interpretation.
We will provide prospectuses and other reports as required by
applicable federal law.
10.13 Acceptance of New Contributions:
We may refuse to accept new Contributions at any time.
10.14 AUL's Annual Statement:
No provision of the Contract controls, determines, or modifies any AUL
annual statement made to any insurance department, contractholder,
regulatory body, or other person. Nor does anything in such annual
statement control, determine, or modify the provisions of the Contract.
10.15 Nonforfeitability and Nontransferability:
The entire Withdrawal Value of the vested portion (as determined pursuant
to the Plan) of your Participant Account under the Contract is
nonforfeitable at all times. No sum payable under the Contract with respect
to you may 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 to any person or entity other than AUL. In addition, to the extent
permitted by law, no such sum shall in any way be subject to legal process
requiring the payment of any claim against the payee.
P-GB-C-ERTDAMFVA.20
TABLE OF GUARANTEED IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
10-YEAR CERTAIN
ADJUSTED AGE LIFE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 times (Birth Year - 1915)] rounded to the
nearest integer.
Guaranteed purchase rates are 96% of the net single premium for the benefit
provided based on the unprojected 1994 Group Annuity Reserving Table for females
with interest at 2%.
P-GB-C-ERTDAMFVA.21
