EXHIBIT 10.21
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
HOME OFFICE - ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
ENGLEWOOD, COLORADO
GROUP CONTRACT HOLDER Teleworld 401(k) Plan
GROUP CONTRACT NUMBER 934098-01
Non-Participating
The provisions on the following pages, together with the application for this
Group Annuity Contract, are part of this Group Annuity Contract.
Signed for the Great-West Life & Annuity Insurance Company on the issuance of
the Group Annuity Contract on the Group Annuity Contract Date.
______________________________ _______________________________
Secretary President
_________________________
For the Actuary
This Group Annuity Contract is the legal contract between the Group
Contractholder, for the benefit of the Participants, and the Great-West Life &
Annuity Insurance Company. PLEASE READ THIS CONTRACT CAREFULLY. IT IS A
CONTRACT WHICH MAY PROVIDE FOR PAYMENTS OR VALUES WHICH ARE NOT GUARANTEED AS TO
FIXED-DOLLAR AMOUNT AND WHICH INCREASE OR DECREASE ACCORDING TO THE INVESTMENT
EXPERIENCE OF A VARIABLE ANNUITY ACCOUNT.
Qualified Group Annuity Contract
Contract No. 934098-01
Form No. QGAC 492 FFSII
1.
Table Of Contents
Page
ARTICLE I DEFINITIONS.............................................................................. 1
ARTICLE II OWNERSHIP PROVISIONS.................................................................... 6
2.1 Ownership of Series Account........................................................... 6
2.2 Ownership of Group Annuity Contract................................................... 6
2.3 Participant Annuity Account Value..................................................... 6
2.4 Transfer and Assignment............................................................... 6
ARTICLE III GENERAL PROVISIONS.................................................................... 7
3.1 The Group Annuity Contract............................................................ 7
3.2 Entire Contract....................................................................... 7
3.3 Modifications......................................................................... 7
3.4 Non-Participating..................................................................... 7
3.5 Beneficiary........................................................................... 7
3.6 Currency and Payment of Deposits...................................................... 8
3.7 Age................................................................................... 8
3.8 Proof................................................................................. 8
3.9 Plan Amendments and Changes in Procedure.............................................. 8
3.10 Gender................................................................................ 8
3.11 Representations....................................................................... 8
3.12 Notice................................................................................ 9
3.13 Voting Rights......................................................................... 9
3.14 Tax Consequences of Payments.......................................................... 9
ARTICLE IV PURCHASE PROVISIONS..................................................................... 10
4.1 Commencement and Termination of Coverage.............................................. 10
4.2 Deposits.............................................................................. 10
4.3 Allocation of Deposits................................................................ 10
ARTICLE V ACCOUNT VALUE PROVISIONS.............................................................. 12
5.1 Variable Account Value................................................................ 12
5.2 Accumulation Unit..................................................................... 12
5.3 Accumulation Unit Value............................................................... 12
5.4 Annuity Unit Value.................................................................... 12
i.
Table Of Contents
(continued)
Page
5.5 Expense Charge........................................................................ 13
5.6 Net Investment Factor................................................................. 13
5.7 Guaranteed Account Value.............................................................. 14
5.8 Guaranteed Sub-Account Riders......................................................... 14
5.9 Contract Maintenance Charge........................................................... 14
ARTICLE VI TRANSFERS............................................................................... 15
6.1 Right to Transfer..................................................................... 15
6.2 Transfer Terms........................................................................ 15
6.3 Transfers Within the Group Annuity Contract........................................... 15
6.4 Transfers To Investment Vehicles Outside the Contract................................. 15
6.5 Transfer To The Company............................................................... 16
6.6 Non-Taxable Distribution.............................................................. 16
ARTICLE VII RETIREMENT............................................................................ 17
7.1 Retirement Provisions................................................................. 17
ARTICLE VIII PROVISIONS RELATING TO AMOUNT PAYABLE ON DEATH, IN SERVICE WITHDRAWAL, AND SURRENDER.. 18
8.1 Amount Payable On Death of Participant................................................ 18
8.2 In Service Withdrawal................................................................. 18
8.3 Amount Payable On In Service Withdrawal............................................... 18
8.4 Surrender............................................................................. 19
8.5 Amount Payable On Surrender........................................................... 19
8.6 Payment On Death, In Service Withdrawal and Surrender................................. 19
8.7 Establishment of Alternate Payee Account.............................................. 19
ARTICLE IX METHODS OF PAYMENT...................................................................... 20
9.1 Methods of Payment Provisions......................................................... 20
9.2 Amount To Be Applied.................................................................. 20
9.3 Variable Dollar Method of Payment..................................................... 20
9.4 Fixed Dollar Method of Payment........................................................ 22
9.5 How to Elect a Method of Payment...................................................... 23
9.6 Availability of Options............................................................... 23
ii.
Table Of Contents
(continued)
Page
9.7 Settlement............................................................................ 24
ARTICLE X MODIFICATIONS......................................................................... 25
10.1 Contract Modification................................................................. 25
10.2 Modification of Tables................................................................ 25
10.3 Modification of Guaranteed Sub-Account Riders, If Any................................. 25
10.4 Modification of Variable Sub-Accounts................................................. 26
ARTICLE XI CONTRACT TERMINATION.................................................................... 27
11.1 Contract Termination Date............................................................. 27
11.2 Procedures at Contract Termination Date............................................... 27
11.3 Market Value.......................................................................... 28
11.4 Market Value Adjustment............................................................... 28
11.5 Market Value Adjustment Factor........................................................ 28
11.6 Contract Termination Charge........................................................... 29
ARTICLE XII MISCELLANEOUS PROVISIONS.............................................................. 30
12.1 Inspection of Records................................................................. 30
12.2 Subsidiaries and Affiliates........................................................... 30
TABLE A
TABLE B
TABLE C
GUARANTEED SUB-ACCOUNT RIDERS
CURRENT EXPENSE CHARGE SCHEDULE
iii.
ARTICLE I
DEFINITIONS
Accumulation Period - the period during which the Participant
is covered under this Group Annuity
Contract prior to the Participant's
Annuity Commencement Date.
Accumulation Unit - an accounting unit used to determine the
Variable Contract Value before the
Annuity Commencement Date.
Annuitant - the person upon whose life the payment
of an annuity is based.
Annuity Commencement Date - the date on which a one sum payment is
to be made, or the date on which
payments under a Method of Payment are
to commence, as provided for in the
Plan.
Annuity Payment Period - the period during which the Participant
is covered under this Group Annuity
Contract after the Participant's Annuity
Commencement Date.
Annuity Unit - an accounting unit used to determine the
dollar value of any variable dollar
annuity payment after the first payment.
Beneficiary - the person(s) designated by the
Participant to receive distributions, if
any, payable upon the death of the
Participant. All records of beneficiary
designation(s) and determinations as to
the correctness and/or adequacy of such
designations are the sole responsibility
of the Group Contractholder.
Certificate - represents the amount deposited into the
Guaranteed Certificate Fund, if offered,
under each Interest Guarantee Period.
Each Certificate has its own interest
rate and term.
Company - the Great-West Life & Annuity Insurance
Company.
Deposit - includes contributions, Transfers and
other amounts deposited into Guaranteed
or
1.
Variable Sub-Accounts.
Employer - the employer of a Participant.
Eligible Fund - a fund with certain investment
objectives in which the assets of the
Series Account may be invested.
Employer Deposits - contributions made by the Employer
pursuant to the Plan.
Forfeiture - that portion of the Participant's
Annuity Account Value which is not
vested under the terms of the Plan as of
the date of Surrender.
Group Annuity Contract - this Qualified Group Annuity Contract
which is a binding agreement between the
Group Contractholder and the Company.
Group Annuity Contract Date - the earlier of the date on which Plan
Assets transferred from the previous
insurance carrier or funding vehicle to
the Company, if any, are received and
allocated, or the date on which the
initial salary reduction for
Participants under the Plan is made by
the Employer. The Company will confirm
such date to the Group Contractholder in
writing.
Group Contractholder - the Employer, employee retirement plan,
or trustee(s) of such plan, applying for
this Group Annuity Contract.
Guaranteed Account - the portion of this Group Annuity
Contract providing Guaranteed Sub-
Accounts, each of which guarantees
principal.
Guaranteed Account Value - the sum of the values of the Guaranteed
Sub-Accounts credited to the Participant
under his Participant Annuity Account.
Guaranteed Sub-Account - a sub-division of the Guaranteed
Account. Such subdivision(s) is
described in greater detail in the
attached Guaranteed Sub-Account Riders,
if any.
Home Office - the Company's Home Office located at
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
2.
Investment Division - there is within the Series Account an
Investment Division for each Variable
Sub-Account. Each Investment Division
invests in one-or more Eligible Funds.
The Company may change the Eligible
Funds within an Investment Division at
its sole discretion.
In Service Withdrawal - a withdrawal of some or all of the
Participant's Annuity Account Value
during his service with the Group
Contractholder.
Participant - a person who has met the requirements
for participation in the Plan as
designated by the Group Contractholder
and for whom an account has been
established under the Group Annuity
Contract. For purposes of the Group
Annuity Contract a person will continue
to be a Participant as long as a
Participant Annuity Account is
maintained in his name.
Participant Annuity Account - a separate record established in the
name of each Participant which reflects
the total value of the Participant's
Deposits into the Guaranteed and
Variable Sub-Accounts.
Participant Annuity Account Value - the sum of the Variable and Guaranteed
Account Values credited to the
Participant under his Participant
Annuity Account.
Participant Effective Date - the date on which the first Deposit is
credited to a Participant Annuity
Account.
Payee - any person receiving distributions or
annuity payments under the Group Annuity
Contract, as designated by the Group
Contractholder.
Plan - the plan established and maintained by
the Employer pursuant to Section 401 of
the Internal Revenue Code, as amended.
Although the Company may have knowledge
of certain provisions of the Plan, the
legal sufficiency of the Plan remains
the sole responsibility of the Group
Contractholder.
3.
Plan Administrator - the person(s) designated by the Plan to
perform all administrative functions
required by the Employee Retirement
Income Security Act of 1974, as amended
(ERISA), the Internal Revenue Code,
Department of Labor and any other
applicable law.
Plan Year - the 12 month period established by the
Plan for the Plan's reporting,
disclosure and funding.
Premium Tax - the amount of premium tax, if any,
charged by a state or other government
authority.
Qualified Domestic Relations - a domestic relations order that creates
or recognizes Order (QDRO) the existence
of an alternate payee's right to, or
assigns to an alternate payee the right
to, receive all or a portion of the
benefits payable with respect to a
Participant and that complies with
requirements of the Internal Revenue
Code, Treasury Regulations and any other
applicable law.
Series Account - [The FutureFunds Series II Account], a
separate investment account established
by Great-West Life & Annuity Insurance
Company under Colorado law.
Surrender - a lump-sum payment of the entire
Participant Annuity Account Value as
provided for in the Plan other than as
an In-Service Withdrawal.
Transfer - amounts moved from any Sub-Account to
another Sub-Account or outside the Group
Annuity Contract to another Plan
investment vehicle, in accordance with
Plan provisions and the provisions of
the Contract.
Valuation Date - the date on which an Accumulation Unit
Value and an Annuity Unit Value is
determined.
Valuation Period - the period between the ending of two
successive Valuation Dates.
Variable Account - the portion of the Group Annuity
Contract
4.
providing Variable Sub-Accounts each
having its own Accumulation Unit and
Annuity Unit Value. All monies invested
in the Variable Account are held in the
Series Account, a separate investment
account.
Variable Account Value - the sum of the values of the Variable
Sub-Accounts credited to a Participant
under his Participant Annuity Account.
Variable Sub-Account - a sub-division of the Variable Account.
Each Variable Sub-Account has its own
Accumulation Unit and Annuity Unit
Value.
Written Request - any request in written form,
satisfactory to the Company and received
by the Company at its Home Office, from
the Group Contractholder as required by
any provision of the Group Annuity
Contract. A form or direction in lieu of
the Written Request may be accepted by
the Company in its sole discretion.
5.
ARTICLE II
OWNERSHIP PROVISIONS
2.1 Ownership of Series Account
The Company has absolute ownership of the assets of the Series Account.
All monies invested in the Series Account, however, are held separate and
apart from the Company's general assets. The assets of such separate
account which are equal to the reserves and other Contract liabilities with
respect to such account (e.g. the Participant Annuity Account invested in
the Variable Account) shall not be chargeable with liabilities arising out
of any other Company business.
2.2 Ownership of Group Annuity Contract
The Group Contractholder is the owner of the Group Annuity Contract for the
benefit of the Participants.
2.3 Participant Annuity Account Value
Each Participant for whom a Participant Annuity Account is established and
for whom Deposits have been received by the Company owns his Participant
Annuity Account Value subject to the vesting provisions of the Plan.
2.4 Transfer and Assignment
The interest of the Group Contractholder in this Group Annuity Contract may
not be transferred, sold, assigned, pledged, charged, encumbered or in any
way alienated.
To the extent permitted by law, no proceeds or payments under the Group
Annuity Contract will be subject to the claims of creditors of or legal
process against the Group Contractholder.
To the extent permitted by law no interest of a Participant or Beneficiary
in this Group Annuity Contract may be assigned, charged, attached,
anticipated, given as security or otherwise alienated, and no such interest
shall be subject to execution, seizure or other legal or equitable process.
To the extent permitted by law neither a Participant nor any Beneficiary
may commute or surrender any payment, benefit, or installment to which he
may become entitled by the terms of the Group Annuity Contract.
6.
ARTICLE III
GENERAL PROVISIONS
3.1 The Group Annuity Contract
The Group Annuity Contract is issued by the Company to the Group
Contractholder.
3.2 Entire Contract
This Group Annuity Contract, application, tables, Guaranteed Sub-Account
Riders, if any, and any other rider issued in conjunction with this
Contract constitute the entire contract between the Group Contractholder
and the Company. A copy of the application is attached to the Group
Annuity Contract when issued to the Group Contractholder.
All statements in the application, in the absence of fraud, have been
accepted as representations and not as warranties.
The terms and provisions of the Plan shall not for any purpose be deemed to
form part of this Group Annuity Contract and shall not be binding upon the
Company. Notwithstanding the fact that the Company may have knowledge of
the terms of the Plan, the obligations of the Company shall be measured and
determined solely by the terms and provisions of this Group Annuity
Contract.
3.3 Modifications
After issue, modifications to the Group Annuity Contract under the Contract
Modification provisions become part of the Group Annuity Contract.
Only the President, a Vice-President, the Secretary or a person authorized
to sign for the Actuary of the Company can modify or waive any provisions
of the Group Annuity Contract.
3.4 Non-Participating
This Group Annuity Contract is non-participating. It is not eligible to
share in the Company's divisible surplus.
3.5 Beneficiary
Upon the death of the Participant the Company will make payment to the
designated Beneficiary of the Participant or other payee in accordance with
instructions from the Group Contractholder. All records of Beneficiary
designations and determinations as to the correctness and/or adequacy of
such designations are the sole responsibility of the Group Contractholder.
It is the sole responsibility of the Plan Administrator to monitor
compliance with the
7.
Internal Revenue Code, as amended, when allowing the Participant to-make or
change Beneficiary designations in accordance with Plan provisions. The
Company will rely completely on the instructions of the Plan Administrator.
If the Participant dies and there is no designated surviving Beneficiary or
if the designation of Beneficiary is not adequately made, the Participant
Annuity Account will pass as required under Section 401(a), or other
applicable section, of the Internal Revenue Code of 1986, as amended.
3.6 Currency and Payment of Deposits
All amounts to be paid to or by the Company must be in the currency of the
United States of America. All Deposits to this Group Annuity Contract must
be made payable to the Company or its designated agent.
3.7 Age
If the age of the Participant or Payee has been misstated, the payments
established for him will be made on the basis of his correct age.
If payments were too large because of misstatement, the difference with
interest may be deducted by the Company from the next payment or payments.
If payments were too small, the difference with interest may be added by
the Company to the next payment.
3.8 Proof
The Company reserves the right to require satisfactory proof to establish
the age, continued life, or death of any person, the happening of any event
or contingency provided for under the Plan, or the designation of any
beneficiary before making any payment on the direction of the Group
Contractholder.
3.9 Plan Amendments and Changes in Procedure
The Group Contractholder shall, within thirty (30) days after the adoption
of an amendment to the Plan, send a copy of each such amendment to the
Company at its Home Office.
If the Group Contractholder adopts an amendment to the Plan or adopts any
change in its administrative procedures or policies which are unacceptable
to the Company, the Company reserves the right to adjust the interest rates
credited on the Guaranteed Certificate Fund Sub-Account Rider and the
expense charge provided under Section 5.5, prospectively.
3.10 Gender
Whenever a masculine pronoun is used it shall be deemed in all-instances
where appropriate to mean the feminine pronoun as well.
3.11 Representations
8.
The Company shall be entitled to rely and act solely on the reports,
directions, proofs, notices, elections and other information furnished it
by the Group Contractholder or its agent, and such acts shall be conclusive
and binding as to all Participants and other persons or corporations
claiming interest hereunder.
3.12 Notice
Whenever any application, report, direction, request or election is made or
notice or proof given to the Company, it must be in writing and received by
the Company at its Home Office in Englewood, Colorado. An election shall
be in a form satisfactory to the Company and if made and accepted shall not
be subject to change or further election unless with the consent of the
Company. The Group Contractholder's actions will bind the Employer.
Notice given to the Group Contractholder is considered notice given to the
Employer.
3.13 Voting Rights
The Company will vote the shares of an Eligible Fund held in an Investment
Division of the Series Account.
3.14 Tax Consequences of Payments
Subject to the provisions of the Plan, the Participant, Annuitant, Payee or
Beneficiary, as the case may be, must determine the timing and amount of
any benefit payable to him. Nothing contained herein shall be construed to
be tax or legal advice and the Company assumes no responsibility or
liability for any damages or costs, including but not limited to taxes,
penalties, interest or attorney's fees incurred by the Plan, the Group
Contractholder, the Participant, the Alternate Payee, the Beneficiary, or
any other person arising out of any such determination.
9.
ARTICLE IV
PURCHASE PROVISIONS
4.1 Commencement and Termination of Coverage
A person may commence coverage under the Group Annuity Contract when the
Plan's conditions for participation have been met and the Company has
received written notice from the Group Contractholder that such person has
been designated a Participant. The responsibility for such designation
will rest solely with the Group Contractholder.
Coverage of a Participant will commence as of the Participant Effective
Date and terminate upon a Surrender.
4.2 Deposits
Unless a Contract Termination Date has been declared, the Group
Contractholder shall promptly pay Deposits in cash for all Participants,
and will make all required Group Contractholder Deposits as well. Deposits
on behalf of a Participant will cease upon the his death, ▇▇▇▇▇▇▇
Commencement Date, Surrender of the Participant Annuity Account, or
election to cease making Deposits to the Plan.
The-amount of Deposits to be paid by the Group Contractholder for any
Participant will be determined by the Participant's election and the terms
of the Plan.
The Group Contractholder will report the amount paid as Deposits on forms
acceptable to the Company. The Group Contractholder's report is conclusive
and binding on it and anyone claiming an interest under the Group Annuity
Contract. When the Group Contractholder's report does not coincide with
the Deposits received, the Group Contractholder must reconcile and correct
them. At its sole discretion, the Company may make an interim allocation
to any Variable or Guaranteed Sub-Account which allows for immediate
transfers. Such allocation will be effective until such time as the
Company receives from the Group Contractholder a report which coincides
with the Deposits received.
4.3 Allocation of Deposits
Deposits less Premium Tax, if any, will be allocated in the Participant
Annuity Account effective as of the later of date both the Written Request
of the Group Contractholder on behalf of the Participant and such Deposits
are received by the Company at its Home Office.
Deposits for the Participant will be allocated among any number of
currently offered Variable and Guaranteed Sub-Accounts in accordance with
the latest recorded Written Request of the Group Contractholder on behalf
of the Participant. In the event such
10.
Written Request is, in the sole opinion of the Company, inadequate or
unsatisfactory then no allocation to any Variable or Guaranteed Sub-Account
will be made until a Written Request which is adequate and/or satisfactory
to the Company is received.
Notwithstanding the above the Company may at its sole discretion make an
interim allocation to any Variable or Guaranteed Sub-Account which allows
for immediate Transfers provided however, that if the Group Contractholder
has prior to the Group Annuity Contract Date, provided the Company with
written instructions which designate the Sub-Account to which Deposits
without adequate or satisfactory Written Requests, or Deposits which do not
coincide with the Group Contractholder's Report, are to be automatically
allocated then the Company will make such allocation upon receipt of such
Deposit. Such allocation will be effective until such time as a Written
Request which is adequate and/or satisfactory to the Company is received.
The Group Contractholder on behalf of the Participant may submit a Written
Request for a change in allocation of Deposits, at any time, provided such
change is permitted under the terms of the Plan.
A change of allocation will be effective upon the Company's receipt at its
Home Office of a Written Request unless a later date has been requested on
such Written Request. Such changes in allocation will be effective only for
Deposits which are received after the Company's receipt and recording of
such Written Request.
11.
ARTICLE V
ACCOUNT VALUE PROVISIONS
5.1 Variable Account Value
The Variable Account Value for a Participant on any date during the
Accumulation Period will be the sum of the values of the Variable Sub-
Accounts of the Series Account held for the Participant.
The value of a Participant's interest in a Variable Sub-Account will be
determined by multiplying the number of the Participant's Accumulation
Units by the Accumulation Unit Value for that Variable Sub-Account.
5.2 Accumulation Unit
Deposits will be allocated as requested and applied as of the Valuation
Date coincident with the effective date described in Section 4.3, to
provide Accumulation Units of the selected Variable Sub-Accounts of the
Series Account.
The number of Accumulation Units credited for each Participant to a
Variable Sub-Account will be determined by dividing the amount of the
Deposits and Transfers then applied to such Variable Sub-Account by the
Accumulation Unit Value for that Variable Sub-Account on the Valuation Date
on which the Deposits were allocated and Transfers were made.
The number of Accumulation Units will not change because of a later change
in the Accumulation Unit Value, but the Accumulation Unit Value will vary
to reflect the investment experience of the Variable Sub-Account.
5.3 Accumulation Unit Value
The Accumulation Unit Value of a Variable Sub-Account on any Valuation Date
is equal to the Accumulation Unit Value of that Variable Sub-Account as of
the immediately preceding Valuation Date multiplied by the Net Investment
Factor for the Valuation Period ending on the Valuation Date on which the
Accumulation Unit Value is being determined.
The Accumulation Unit Value may increase, decrease, or remain unchanged as
a result of the investment experience of the Eligible Fund.
5.4 Annuity Unit Value
The Annuity Unit Value of any Variable Sub-Account on any Valuation Date is
equal to the Annuity Unit Value for the immediately preceding Valuation
Date multiplied by the net investment factor for that Variable Sub-Account
for the Valuation Period ending on
12.
the Valuation Date on which the Annuity Unit Value is being determined, and
multiplying the result by a factor of .999905 to neutralize the assumed
investment rate of 3.5% per year used in the applicable Table for Variable
Dollar Method of Payment Options 1, 2, 3, and 4.
The Annuity Unit Value may increase, decrease or remain unchanged as a
result of the investment experience of the Eligible Fund.
5.5 Expense Charge
The Company will deduct an expense charge in the calculation of the net
investment factor. This expense charge may change periodically but for the
first three years after the Group Annuity Contract Date such charge will
not be more than 1.50 % per annum. One three hundred sixty-fifth of the
per annum charge is deducted daily. A copy of the company's current
Expense Charge Schedule is attached to the Group Annuity Contract.
5.6 Net Investment Factor
The Net Investment Factor for any Variable Sub-Account for any Valuation
Period is determined by dividing (A) by (B), and subtracting (C) from the
result where:
(A) is the net result of:
(1) the net asset value per share of the Eligible Fund shares held in
the Variable Sub-Account determined as of the end of the current
Valuation Period, plus
(2) the per share amount of any net dividend (or, if applicable, net
capital gain distributions) made by the Eligible Fund on shares
held in the Variable Sub-Account if the "ex-dividend" date occurs
during the current Valuation Period, minus or plus
(3) a per unit charge or credit for any taxes incurred by or reserved
for in the Variable Sub-Account, which is determined by the
Company to have resulted from the investment operations of the
Variable Sub-Account.
(B) is the net result off
(1) the net asset value per share of the Eligible Fund shares held in
the Variable Sub-Account determined as of the end of the
immediately preceding Valuation Period, minus or plus,
(2) the per unit charge or credit for any taxes incurred by or
reserved for in the Variable Sub-Account for the immediately
preceding Valuation Period.
(C) is the expense charge.
The net investment factor may be greater than, less than, or equal to
one.
13.
Therefore, the Accumulation Unit Value and the Annuity Unit Value may
increase, decrease or remain unchanged.
5.7 Guaranteed Account Value
The Guaranteed Account Value of a Participant Annuity Account on any date
during the Accumulation Period will be the sum of the values of the
Guaranteed Sub-Accounts credited to such Participant Annuity Account.
The Company may offer one or more Guaranteed Sub-Accounts into which
contributions will be deposited at the Written Request of the Participant.
5.8 Guaranteed Sub-Account Riders
The computation of the value of a Guaranteed Sub-Account is described in
greater detail in the attached Guaranteed Sub-Account Riders, if any.
5.9 Contract Maintenance Charge
On the first day of each calendar year a contract maintenance charge will
be declared by the Company and deducted from the Participant Annuity
Account. For the first three calendar years, including the calendar year
in which the Group Annuity Contract Date occurs, the contract maintenance
charge will not be more than $60. If a Participant Annuity Account is
established for a Participant after that date, the contract maintenance
charge will be deducted on the first day of the next quarter and will be
pro-rated for the year remaining. No refund of this charge will be made.
The deduction will be pro-rated among the Variable and Guaranteed Sub-
Accounts based upon their Variable and Guaranteed Account Values on the
date of deduction. Whenever a deduction for a contract maintenance charge
is to be made from a Variable Sub-Account, the Company will cancel
Accumulation Units having a total value equal to the amount of the
deduction. The Group Contractholder may elect to pay such expenses to the
Company separately. If such an election has been made, then the company
will bill the Group Contractholder for such expenses on the first day of
each calendar year and no charge will be made against the Variable and
Guaranteed Sub-Accounts unless payment is not received by the Company
within 60 days of such billing.
14.
ARTICLE VI
TRANSFERS
6.1 Right to Transfer
The Group Contractholder may make Transfers by Written Request on behalf of
the Participant.
6.2 Transfer Terms
(A) When the Company requires it, the Group Contractholder on behalf of
the Participant will execute forms provided by the Company as
necessary to the requested transfer.
(B) No transfers are permitted after the Annuity Commencement Date.
(C) No transfers from the Guaranteed Certificate Fund may be made prior to
the Certificate Maturity Date, as defined in the Guaranteed
Certificate Fund Rider, if any. The amount available for transfer is
the value of that Certificate on its Maturity Date.
6.3 Transfers Within the Group Annuity Contract
(A) Subject to the provisions of Section 6.2, at any time prior to the
Annuity Commencement Date, the Group Contractholder on behalf of the
Participant may by Written Request transfer all or a portion of the
Participant Annuity Account Value within and between the Variable and
Guaranteed Sub-Accounts then offered under the Group Annuity Contract.
(B) If a Transfer under this Section is made within 30 days of the Annuity
Commencement Date, the Company may delay the Annuity Commencement Date
by 30 days, provided however, that upon notification by the Group
Contractholder that such 30 day delay will violate the provisions of
the plan or regulations pertaining to the Plan, the Company will
reduce the period of delay to one which will preclude such violation.
(C) If a Participant dies prior to the Annuity Commencement Date, a
Transfer under this Section may be made after the death of the
Participant by the Group Contractholder on behalf of the Payee to
effect the election or a Method of Payment.
6.4 Transfers To Investment Vehicles Outside the Contract
(A) At any time prior to the Annuity Commencement Date, the Group
Contractholder on behalf of the Participant may by Written Request
transfer all or a portion of the
15.
Participant Annuity Account Value to an account currently offered by
another investment vehicle under the terms of the Plan.
(B) At any time prior to the Annuity Commencement Date, the Group
Contractholder on behalf of the Participant may by Written Request
transfer the entire Participant Annuity Account Value to an account
offered by investment vehicle under another plan which is eligible to
receive such Transfers under the Internal Revenue Code of 1986, as
amended.
(C) The Company will be responsible for meeting the effective date of any
Transfer under Section 6.4(A) or 6.4(B) but the effective date of the
establishment of an account of any transferred investment vehicle
outside the Contract will be the sole responsibility of such
transferee investment vehicle.
(D) If the amount of Transfers to investment vehicles outside the Group
Annuity contract for any calendar year exceeds 10% of the value of the
Guaranteed and Variable Sub-Accounts at the beginning of the calendar
year then such Transfers will be subject to any Termination Charge in
accordance with the provisions of Article XI of the Group Annuity
Contract.
6.5 Transfer To The Company
Amounts transferred to the Company shall be treated as Deposits under
Article IV of this Contract.
6.6 Non-Taxable Distribution
No amount transferred pursuant to these provisions will be treated as a
taxable distribution to the Participant.
16.
ARTICLE VII
RETIREMENT
7.1 Retirement Provisions
If the Group Contractholder reports that a Participant has become eligible
for a retirement benefit in accordance with the provisions of the Plan, the
Company shall pay such benefit in accordance with the provisions of this
section.
On the Company's receipt of the Written Request at least 30 days before the
Annuity Commencement Date, the Group Contractholder on behalf of the
Participant, may, if permitted by the Plan:
(A) elect payment in one sum;
(B) elect or change a Method of Payment;
(C) elect or change the Participant's Annuity Commencement Date to any
future date which is not later than allowed under the terms of the
Plan. If any Annuity Commencement Date would be less than 30 days
from the date that the written request is received, the Company may
delay the Annuity Commencement Date elected by 30 days;
(D) elect payment of a portion of the retirement benefit in one sum and
the balance of such benefit to be paid under a Method of Payment.
The responsibility for determining whether or not an election or Method of
Payment is permitted by the Plan or federal regulations existing at the
time the Written Request is submitted, lies solely with the Plan
Administrator.
17.
ARTICLE VIII
PROVISIONS RELATING TO AMOUNT PAYABLE ON DEATH, IN SERVICE WITHDRAWAL, AND
SURRENDER
8.1 Amount Payable On Death of Participant
If the Participant dies before the Annuity Commencement Date, the amount
payable on death will be the Participant Annuity Account Value, less
Premium Tax, if any.
The Beneficiary of an amount payable on death may elect that payment be
made under the Surrender provisions permitted by the Plan and the Internal
Revenue Code. It is the sole responsibility of the Plan Administrator to
ensure compliance with the required distribution rules of Section 401(a),
or other applicable section, of the Internal Revenue Code of 1986, as
amended, when allowing Beneficiary elections. The Company will rely
completely on the Plan Administrator's instructions. The election of the
Beneficiary must be made not later than sixty (60) days after the date the
Company receives adequate proof of the Participant's death. If no election
is made, payment will be made to the Beneficiary pursuant to the required
distribution rules of Section 401(a), or other applicable section, of the
Internal Revenue Code of 1986, as amended.
8.2 In Service Withdrawal
By Written Request the Group Contractholder may direct the Company to make
an In Service Withdrawal from the Participant Annuity Account payable to
the Participant. The In Service Withdrawal will take effect on the later
of the date elected and the date the Written Request is received at the
Home Office of the Company.
The Group Contractholder must designate in the Written Request the Variable
or Guaranteed Sub-Account(s), or a combination of them, from which the In
Service Withdrawal is to be made.
8.3 Amount Payable On In Service Withdrawal
The amount payable on In Service Withdrawal will be paid in one sum under
the In Service Withdrawal provisions equal to:
(A) all or any portion of the Participant's Annuity Account Value as
requested by the Group Contractholder, on behalf of the Participant,
in accordance with the terms of the Plan, less
(B) Premium Tax, if any, less
(C) Forfeiture, if any, as determined by the Plan Administrator in
accordance with the vesting schedule of the Plan.
18.
8.4 Surrender
By Written Request the Group Contractholder may surrender the Participant
Annuity Account on behalf of the Participant. The Surrender will take
effect on the later of the date elected and the date the Written Request is
received at the Home Office of the Company. Instructions as to the
allocation of any Forfeiture as a result of such surrender must accompany
the Written Request. The responsibility for determining that such
instructions are in accordance with the provisions of the Plan lies solely
with the Plan Administrator.
8.5 Amount Payable On Surrender
If permitted by the Plan the amount payable on Surrender may either be
applied under the Methods of Payment provisions or paid in one sum under
the Surrender provisions equal to:
(A) the Participant Annuity Account Value as of the effective date of the
Surrender, less
(B) Premium Tax, if any, less
(C) Forfeiture, if any.
8.6 Payment On Death, In Service Withdrawal and Surrender
Payment under any of the provisions relating to Amount Payable on Death, In
Service Withdrawal, and Surrender must be made to the order of the Group
Contractholder on behalf of the Participant as directed in the Written
Request.
8.7 Establishment of Alternate Payee Account
In the event the Company receives a request for a payment in connection
with a Qualified Domestic Relations Order (QDRO) and the Group
Contractholder notifies the Company that the Plan does not permit immediate
distributions or in the event the Company is unable to obtain all necessary
information to make a distribution, pursuant to such order, then the
Company will establish a separate account on behalf of the Alternate Payee
named in such order.
19.
ARTICLE IX
METHODS OF PAYMENT
9.1 Methods of Payment Provisions
One of the variable or fixed dollar Methods of Payment or a combination of
them may be elected under this Article, provided however that any Method of
Payment which is not in compliance with the provisions of the Plan may not
be elected.
The provision of Methods of Payment under the Group Annuity Contract is
neither intended to nor shall be construed as providing methods of payment
to a Participant which are not available in accordance with the provisions
of the Plan.
The Company will rely solely on the Plan Administrator's determination that
the amount and Method of Payment elected comply with the provisions of the
Plan and federal regulations existing at the time the Written Request is
submitted.
9.2 Amount To Be Applied
The amount to be applied under the methods of payment provision elected is
the Participant Annuity Account Value, less Premium Tax, if any, and
forfeitures under the Plan.
If a variable dollar method of payment is elected, the amount to be applied
is the Variable Account Value less any Premium Tax, if any and
forfeiture(s) as of the Annuity Commencement Date. The amounts paid may
vary from time to time depending upon the investment experience of the
Variable Sub-Accounts of the Series Account. The essential features as to
how the dollar amounts of these variable annuity values are determined are
explained below in the "Variable Dollar Method of Payment" section.
If a fixed dollar method of payment is elected, the amount to be applied is
the Guaranteed Account Value less any Premium Tax, if any, and
forfeiture(s), as of the Annuity Commencement Date.
If the Participant or Beneficiary elects to apply any or all of the
Guaranteed Account Value to a variable dollar method of payment, or any or
all of the Variable Account Value to a fixed dollar method of payment, a
Transfer(s) must be made pursuant to Section 6.3, prior to the Annuity
Commencement Date. The Transfer(s) must comply with the provisions of
Article VI of the Contract.
9.3 Variable Dollar Method of Payment
(A) Amount of First Monthly Payment
The first monthly payment under a variable dollar method of payment
will be
20.
based on the Variable Account Value credited to the Participant
Annuity Account on the 5th Valuation Date preceding the Annuity
Commencement Date and will be determined by applying the appropriate
rate from the applicable table to the amount applied under the method
of payment. The first monthly payment will be the sum of the variable
dollar annuity payments for each Variable Sub-Account.
(B) Annuity Units
The number of Annuity Units for each Variable Sub-Account to be
credited to the Participant Annuity Account will be determined by
dividing the portion of first monthly payment to be taken from such
sub-account by the sub-account's Annuity Unit Value on the 5th
Valuation Date preceding the date the first payment is due for which
the number of Annuity Units is being computed. The number of Annuity
Units for a Variable Sub-Account remains fixed during the Annuity
Payment Period.
(C) Amount of Monthly Payments After the First
Monthly payments after the first under a variable dollar method of
payment option will vary in amount from time to time depending upon
the investment experience of the Variable Sub-Accounts of the Series
Account. After the first monthly payment, the annuity unit value of
each subsequent monthly payment will increase, decrease, or remain
unchanged depending upon the investment experience of the Variable
Sub-Accounts of the Series Account, as described in the next
paragraph.
The dollar amount of each variable dollar annuity payment to the
Participant or Payee after the first for each Variable Sub-Account is
determined by multiplying (a) the number of Sub-Account Annuity Units
credited to the Participant Annuity Account by (b) the Sub-Account
Annuity Unit Value on the [5th] Valuation Date preceding the date the
annuity payment is due. The total dollar amount of each variable
dollar annuity payment will be the sum of the variable dollar annuity
payments for each Variable Sub-Account.
(D) Variable Dollar Methods of Payment:
Option 1: Variable Life Annuity with Guaranteed Period
The Company will pay a monthly payment for the guaranteed Annuity
Payment Period elected. Payments will continue for the lifetime of the
Annuitant. The guaranteed Annuity Payment Period elected may be 5, 10,
15 or 20 years. The provision on Settlement applies to amounts payable
after the death of the Annuitant. The Table A in effect at the
Participant's Annuity Commencement Date will be applicable to this
Method of Payment.
Option 2: Variable Life Annuity
The Company will pay a monthly payment during the Annuitant's
lifetime. The
21.
Table A in effect at the Participant's Annuity Commencement Date will
applicable to this Method of Payment.
Option 3: Joint and One-Half Survivor Variable Annuity
A joint and one-half survivor variable annuity provides a variable
monthly payment to an Annuitant for his lifetime; thereafter, and upon
receipt by the Company of adequate proof of the Annuitant's death,
one-half of the variable payment continues to a designated Payee, if
living, and terminates upon his death. The Table B in effect at the
Participant's Annuity Commencement Date will be applicable to this
Method of Payment.
Option 4: Any Other Form
The Company will pay any other form of variable annuity which is
acceptable to it, provided for in the Plan, and which has been filed
and approved by the applicable state insurance authority.
9.4 Fixed Dollar Method of Payment
(A) Amount of Payment
Payments under a fixed dollar method of payment option are guaranteed
by the Company as to dollar amount throughout the Annuity Payment
Period.
The amount of payment under any fixed dollar method of payment option
will be determined by applying the Company's then current non-
participating group single premium rates for this class of group
annuity contracts to the amount applied under the Option. Those
current rates will not be less than the rate obtained from the table
which is applicable to the elected Method of Payment.
(B) Fixed Dollar Method of Payment Options:
Option 1: Income of Specified Amount
The Company will pay an income, at 12-, 6-, 3-, or 1-month intervals,
of the amount elected by the Annuitant for an Annuity Payment Period
of not less than 36 months nor more than 240 months. The provision on
Settlement applies to amounts payable after the death of the
Annuitant. The Table C in effect at the Participant's Annuity
Commencement Date will be applicable to this Method of Payment.
Option 2: Income for a Specified Period
The Company will pay an income, at 12-, 6-, 3-, or 1-month intervals,
for the number of years elected by the Annuitant for an Annuity
Payment Period of not less than 36 months nor more than 240 months.
The provision on Settlement applies to amounts payable after the death
of the Annuitant. The Table C in effect
22.
at the Participant's Annuity Commencement Date will be applicable to
this Method of Payment.
Option 3: Fixed Life Annuity with Guaranteed Period
The Company will pay a monthly payment for the lifetime of the
Annuitant but in no event for less than the Guaranteed Annuity Payment
Period. The provision on Settlement applies to amounts payable after
the death of the Annuitant. The Table A in effect at the
Participant's Annuity Commencement Date will be applicable to this
Method of Payment.
The guaranteed Annuity Payment Period elected may be 5, 10, 15 or 20
years, or may be a period referred to as "installment refund". Under
the installment refund period, guaranteed annuity payments will be
made until the total of the payments made equals the amount applied.
Option 4: Fixed Life Annuity
The Company will pay a monthly payment during the Annuitant's
lifetime. The Table A in effect at the Participant's Annuity
Commencement Date will be applicable to this Method of Payment.
Option 5: Joint and One-Half Survivor Fixed Annuity
A joint and one-half survivor fixed annuity provides a fixed monthly
payment to an Annuitant for his lifetime; thereafter, and upon receipt
by the Company of adequate proof of the Annuitant's death, one-half of
the fixed payment continues to a designated Payee, if living, and
terminates upon his death. Table B in effect at the Participant's
Annuity Commencement Date will be applicable to this Method of
Payment.
Option 6: Any Other Form:
The Company will pay any other form of Fixed Annuity which is
acceptable to it, provided for in the Plan, and which has been filed
with and approved by the applicable state insurance authority.
9.5 How to Elect a Method of Payment
The Written Request of the Group Contractholder on behalf of the
Participant or Payee is required to elect, or change the election of, a
Method of Payment option and must be received by the Company at least 30
days prior to the Annuity Commencement Date, or, if the Participant dies
prior to the Annuity Commencement Date, within 60 days of the date the
Company receives adequate proof of the Participant's death. Once payment
has commenced, a change in Method of Payment Option may only be made if
acceptable to the Company.
9.6 Availability of Options
23.
If any payment to be made under the elected Method of Payment will be less
than $50, the Company may make the payments in the most frequent interval
which produces a payment of at least $50.
The minimum amount that may be applied under a variable or fixed dollar
Method of Payment is $3,500. If the amount is less than $3,500, the
Company may pay it in one sum, if such a payment is permitted by the Plan.
9.7 Settlement
If the Payee has died and has received payments or was to receive payments
which had not yet commenced under Variable Dollar Method of Payment Option
1 (Variable Life Annuity with a Guaranteed Period) or under Fixed Dollar
Method of Payment Option 1 (Income of Specified Amount), Option 2 (Income
for a Specified Period), or Option 3 (Fixed Life Annuity with Guaranteed
Period), then any remaining amounts payable under the option elected will
be paid to the Beneficiary or designated Payee subject to Section 3.4 of
the Group Annuity Contract.
24.
ARTICLE X
MODIFICATIONS
10.1 Contract Modification
This Group Annuity Contract may be modified at any time by written
agreement between the Company and the Group Contractholder. No such
modification will, without the written consent of the affected
Participants, affect the terms, provisions, or conditions of this Group
Annuity Contract which are or may be applicable to Deposits paid for
Participants prior to the date of such modification.
However, the Company may at any time and without the consent of the Group
Contractholder or any Participant or other person, but upon 30 days written
notice to the Group Contractholder, modify this Group Annuity Contract in
any respect to conform it to changes in tax or other law, including
applicable regulations or rulings.
10.2 Modification of Tables
Tables A, B, and C are guaranteed for three years commencing on the Group
Annuity Contract Date. The Company may at any time thereafter and without
the consent of the Group Contractholder or any Participant or other person,
but upon 30 days written notice to the Group Contractholder, modify any or
all of Tables A, B, and C.
Provided, however, that if a Method of Payment Option is elected under the
provisions of Sections 9.3 or 9.4 of the Group Annuity Contract, the
applicable table will be the Table A, B or C in effect on the Participant's
Annuity Commencement Date.
10.3 Modification of Guaranteed Sub-Account Riders, If Any
Any Guaranteed Sub-Account Rider may be modified at any time by written
agreement between the Company and the Group Contractholder. No such
modification will, without the written consent of affected Participants,
affect the terms, provisions, or conditions of the riders which are or may
be applicable to Deposits paid for Participants prior to the date of such
modification.
Provided however:
(A) if the Company ceases to offer the Guaranteed Certificate Fund 30 days
written notice will be given to a Participant, no new Deposits will be
allocated and no new Certificates will be issued after the cessation
date. Amounts allocated to Certificates prior to such date will
continue to receive the Credited Interest Rate until the Certificate
Maturity Date.
25.
(B) if the Company ceases to offer the Daily Interest Guarantee Fund then
the provisions of the Daily Interest Guarantee Fund Rider relating to
the cessation of such offering will apply.
10.4 Modification of Variable Sub-Accounts
Notwithstanding the other contract modification provisions, the Company may
offer new or cease offering existing Variable Sub-Accounts. No such
modification shall affect the terms, provisions or conditions which are or
may be applicable to Deposits previously paid to any Variable Sub-Account
which is no longer offered by the Company provided, however, if the Company
ceases to offer a variable Sub-Account [30] days notice will be given to a
Participant. The Group Contractholder on behalf of the Participant must
then transfer the value of the Variable Sub-Account to another Variable
Sub-Account then offered by the Company. If the Group Contractholder on
behalf of the Participant fails to make such Transfer then the company at
its sole discretion will make an allocation to any Variable or Guaranteed
Sub-Account which allows for immediate Transfers. Such allocation will
become effective until such time as a Written Request, for a different
allocation, which is adequate and/or satisfactory to the Company is
received.
26.
ARTICLE XI
CONTRACT TERMINATION
11.1 Contract Termination Date
Either party to the Group Annuity Contract may upon thirty (30) days
advance written notice to the other party declare a "Contract Termination
Date", which shall be any date on or after the expiration of the thirty
(30) day notification period, provided however that the Company may
declare a Contract Termination Date only if:
(A) the Group Contractholder adopts an amendment to the Plan or operates
the Plan in a manner which is unacceptable to the Company, or
(B) the Group Contractholder fails to comply with any provision contained
in this Group Annuity Contract, or
(C) the Plan fails to qualify or becomes disqualified under Internal
Revenue Code Section 401 (a), as amended, or
(D) the total amount of Deposits received by the Company in the preceding
twelve months is less than $25,000,
(E) the sum of all Participant Annuity Account Values falls below $25,000,
or
(F) the Group Contractholder fails to make Deposits which have been
deducted from Participants' paychecks within 90 days of the date on
which such deduction was made, or
(G) Transfers to Investment Vehicles outside the Group Annuity Contract
exceed the limitations provided under Section 6.4(D)
11.2 Procedures at Contract Termination Date
The provisions of this section will apply to Contract Termination for any
reason including termination of the Plan.
After the Contract Termination Date has been declared, no benefit payment
will commence, no Transfers will be made, no method of payment option will
be elected by a Participant, and no Deposits will be accepted under the
provision of the Group Annuity Contract.
If a Contract Termination Date has been declared and them are outstanding
expense charges as set forth in Articles V and VIII of the Group Annuity
Contract, the Company will on the Contract Termination Date debit each
Sub-Account with its share of the amount of outstanding expenses. No later
than thirty (30) days after the Contract
27.
Termination Date and the Company has received payment of the Market Value
Adjustment and the Contract Termination Charge, the Company will pay to
any one person, corporation or other entity named by the Group
Contractholder one sum equal to the value of all monies held in Guaranteed
and Variable Sub-Accounts.
Notwithstanding the above, the Company, at its sole discretion, may pay to
any one person, corporation or other entity named by the Group
Contractholder one sum equal to:
(a) the value of all monies held in the Variable Sub-Account; and
(b) the Market Value of all monies held in the Guaranteed Certificate
Fund relating to the Group Annuity Contract, less
(c) the Contract Termination Charge, if any.
11.3 Market Value
The Market Value of the Guaranteed Certificate Fund on any date is the sum
of the market values of each Certificate of the Guaranteed Certificate
Fund.
The Market Value of any such Certificate will be equal to the value of the
Certificate on the Contract Termination Date declared less the Market
Value Adjustment.
The value of each Guaranteed Certificate on the Contract Termination Date
will be determined by adding Guaranteed Certificate Deposits, Credited
Interest, and Transfers from other Guaranteed Sub-Accounts, and from
Variable Sub-Accounts and subtracting In-Service Withdrawals, Surrenders,
Amounts Payable on Death, Amounts Applied under a Method of Payment
Option, Contract Maintenance Charges, and Premium Tax, if any.
11.4 Market Value Adjustment
The Market Value Adjustment is equal to the value of the Certificate on
the Contract Termination Date declared multiplied by the Market Value
Adjustment Factor.
11.5 Market Value Adjustment Factor
The Market Value Adjustment factor is equal to (a) plus (b), multiplied by
(c) where:
(a) is the difference between
(1) the level equivalent of the Credited Interest Rate on a
Certificate currently offered by the Company to a plan with
the same characteristics as the Plan and which has the same
term as the original term of the Certificate Terminated, and
(2) the level equivalent of the Credited Interest Rate of the
Certificate being terminated.
(b) is .01
28.
(c) is the remaining number of months to the Certificate Maturity
Date of the Certificate being terminated divided by twelve (12).
For purposes of this section "the level equivalent of the Credited
Interest Rate" means the effective interest rate over the term of each
Certificate.
If (a) plus (b) is not positive then the Market Value Adjustment Factor
will be equal to 0 and there will be no Market Value Adjustment.
11.6 Contract Termination Charge
A Contract Termination Charge is applicable if a Contract Termination Date
has been declared subsequent to the nine month period after the Group
Annuity Contract Date and prior to the end of the seven year period
commencing on such date. Such charge is not applicable if the sum of
Participant Annuity Account values exceeds $2,000,000.
The Contract Termination Charge is equal to the following percentage of
the sum of the values of the Guaranteed Account and the Variable Account
on the Contract Termination Date plus the value of all distributions
characterized as plan loans to a Participant over the twelve month period:
Number of Years Elapsed
Since Group Annuity
Contract Date Percentage
----------------------- --------------
Less than 1 7%
1 but less than 2 6%
2 but less than 3 5%
3 but less than 4 4%
4 but less than 5 3%
5 but less than 6 2%
6 but less than 7 1%
29.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Inspection of Records
The Company may inspect the Group Contractholder's records which are
pertinent to the operation of the Plan and the Group Annuity Contract.
Such inspection can take place while the Group Annuity Contract is in
force and during the first year after it is terminated.
12.2 Subsidiaries and Affiliates
The Company may approve the inclusion of subsidiaries and affiliates under
the Group Annuity Contract if such subsidiaries and affiliates under the
Group Annuity Contract if such subsidiaries or affiliates become covered
under the Plan.
30.
TABLE A - Life Annuity
------
Monthly Payment for Each $1,000
of Participant Annuity Account Value
With Guaranteed Period
-----------------------------------
Without
Age of Guaranteed
Payee Period 5 Years 10 Years 15 Years 20 Years
----- ------ ------- -------- -------- --------
50 3.83 3.83 3.82 3.80 3.78
55 4.13 4.12 4.10 4.07 4.02
60 4.52 4.51 4.48 4.41 4.31
65 5.06 5.04 4.97 4.84 4.64
70 5.82 5.77 5.61 5.33 4.94
75 6.93 6.80 6.41 5.82 5.19
If payments commence on any other date than the exact age of the Payee as shown
above, the amount of the monthly payment shall be determined by the Company on
the actuarial basis used by it in determining the above amounts.
31.
TABLE B - Joint and One-Half Survivor Annuity
Monthly Payment for Each $1,000
of Participant Annuity Account Value
Age of If Designated Payee Is Age
------------------------------------------------
Annuitant 50 55 60 65 70 75
--------- -------- -------- -------- -------- -------- --------
50 3.72 3.75 3.78 3.80 3.81 3.82
55 3.92 3.98 4.02 4.06 4.08 4.10
60 4.16 4.25 4.33 4.39 4.44 4.47
65 4.45 4.58 4.70 4.81 4.89 4.95
70 4.79 4.96 5.14 5.32 5.47 5.59
75 5.18 5.42 5.67 5.94 6.20 6.42
If payments commence on any other date than the exact age of the Annuitant or
designated Payee as shown above, the amount of the monthly payment shall be
determined by the Company on the actuarial basis used by it in determining the
above amounts.
32.
TABLE C - Income of Specified Amount
- Income of a Specified Period
Monthly Payment for Each $1,000
of Participant Annuity Account Value
Years Payment
------- -------
3 28.61
4 21.82
5 17.75
6 15.04
7 13.10
8 11.66
9 10.54
10 9.63
11 8.90
12 8.30
13 7.78
14 7.34
15 6.96
16 6.63
17 6.34
18 6.08
19 5.85
20 5.64
To determine the payment for other frequencies of payment, multiply the above
monthly payment by the following factors:
Factor
--------
Quarterly payment 2.99
Semi-annual payment 5.96
Annual payment 11.81
If payments are for an amount or duration different than that outlined above,
the Company will determine the proper amount or duration using the actuarial
basis used to determine the above Table.
33.
GUARANTEED CERTIFICATE FUND
GUARANTEED SUB-ACCOUNT RIDER
ATTACHED TO AND FORMING PART OF THE GROUP ANNUITY CONTRACT
The Guaranteed Certificate Fund is a Guaranteed Sub-Account, whereby credited
interest rates, are credited to Deposits held for varying Interest Guarantee
Periods. With the consent of the Group Contractholder, the Company may offer
Certificates to the Participant who may by Written Request allocate any Deposit
to any one Certificate. The Participant may allocate his Deposits only to those
Certificates currently being offered by the Company.
If the Participant allocates Deposits to Certificates not currently offered by
the Company, the Company will: allocate such Deposits to any Variable or
Guaranteed Sub-Account which allows for immediate transfers.
DEFINITIONS
-----------
Certificate - represents the amount deposited into the
Guaranteed Certificate Fund under each
Interest Guarantee Period, Term and
credited interest rate. Each Certificate
has its own credited interest rate and
Term.
Term - the duration of the Certificate expressed
in months, which will consist of two
periods:
a) an initial Window Period during which
Deposits are received. The duration of
the Window Period will be specified by
the Company.
b) a Holding Period which begins on the day
after the end of the Window Period and
ends on the Certificate Maturity Date.
The Terms available may be limited by the
Company.
Certificate Maturity Date - the last day of the Term.
Interest Guarantee Period - the period from the date of the Deposit to
the Certificate Maturity Date.
Guaranteed Certificate Fund Rider
Form No. GCFR-492
34.
GUARANTEED CERTIFICATE FUND SUB-ACCOUNT RIDER (Continued)
---------------------------------------------
Interest Crediting and Selection of Method of Payment
-----------------------------------------------------
The credited interest rate on an annual effective basis will be compounded daily
and will equal the annual effective rate declared by the Company. A Deposit to
the Guaranteed Certificate Fund until the Certificate Maturity Date will earn a
credited interest rate for the Certificate's Interest Guarantee Period.
If the Participant dies or if the Group Contractholder determines that the
Participant is eligible for a distribution under the provisions of the Plan,
then upon Written Request from the Group Contractholder on behalf of the
Participant, amounts deposited into the Guaranteed Certificate Fund may be paid
in one sum or applied to a Method of Payment pursuant to Article IX of this
Group Annuity Contract prior to the Certificate Maturity Date. Such amounts
will receive the credited interest rate from the date of Deposit to the date the
amount is paid or applied to the elected Method of Payment. No transfers from
the Guaranteed Certificate Fund may be made prior to the Certificate Maturity
Date.
If the Participant has not qualified for a distributable event in accordance
with the provisions of the Plan, amounts deposited into the Guaranteed
Certificate Fund must remain in the Certificate until the Certificate Maturity
Date. Thus, no Method of Payment Option may be elected, and no distributions or
Transfers will be permitted prior to the Maturity Date of each respective
Certificate.
In the event of Contract Termination under Article XI of the Group Annuity
Contract, the provisions of such article will apply.
Certificate Maturity
--------------------
Prior to the Certificate Maturity Date, the Company will offer a Guaranteed or
Variable Sub-Account into which the value of the Certificate may be deposited on
its Maturity Date. The Sub-Account so offered may be either the Guaranteed
Certificate Fund or another Sub-Account.
If the Guaranteed Certificate Fund is offered, the value of the Certificate on
its Maturity Date may upon Written Request be deposited to a new Certificate
which has its own interest rate and Term. The Credited Interest Rate of this
new Certificate may be higher or lower than the Credited Interest Rate of any
other Certificate or Deposit.
If another Sub-Account is offered, the value of the Certificate on its Maturity
Date may upon Written Request be deposited into that Sub-Account. The Credited
Interest Rate of this Deposit may be higher or lower than the Credited Interest
Rate of any other Deposit.
Guaranteed Certificate Fund Rider
Form No. GCFR-492
35.
GUARANTEED CERTIFICATE FUND SUB-ACCOUNT RIDER (Continued)
---------------------------------------------
The Group Contractholder however on behalf of the Participant may elect by
Written Request to Transfer the value of the Certificate on its Maturity Date.
If the Group Contractholder fails to make such request then the Company at its
sole discretion will make an allocation to any variable or Guaranteed Sub-
Account which allows for immediate Transfers. Such allocation will become
effective until such time as a Written Request, for a different allocation is
received.
Transfers
---------
The terms of Article VI of the Contract will apply to any Transfer to or from
the Guaranteed Certificate Fund.
Value of Guaranteed Certificate Fund
------------------------------------
The value of the Guaranteed Certificate Fund of the Participant will be
determined by adding his/her Guaranteed Certificate Fund Sub-Account Deposits
and Credited Interest, and subtracting his/her In-Service Withdrawals,
Surrenders, Amounts Payable on Death, Amounts Applied Under a Method of Payment
Option, Transfers, Contract Maintenance Charges, and Premium Tax, if any.
Guaranteed Certificate Fund Rider
Form No. GCFR-492
36.
EXPENSE CHARGE SCHEDULE
Sum of Participant Annuity Section 5.5
Account Values* Expense Charge
----------------------------------- --------------------
less than 1,000,000 1.50 %
1,000,000 but less than 2,500,000 1.25 %
2,500,000 but less than 5,000,000 1.00 %
5,000,000 but less than 10,000,000 0.75 %
10,000,000 but less than 15,000,000 0.65 %
15,000,000 but less than 25,000,000 0.50 %
25,000,000 or more 0.25 %
* This sum is reviewed once annually to determine the appropriate range.
Expense Charge Schedule
Form No. ECS-492
37.
CALIFORNIA LIFE INSURANCE
GUARANTY ASSOCIATION ACT
NOTICE CONCERNING GENERAL PURPOSES
AND COVERAGE LIMITATIONS
Residents of California who purchase life insurance and annuities should
know that the insurance companies licensed in this state to write these types of
insurance are members of the California Life Insurance (Guaranty Association.
The purpose of this Association is to assure that policyholders will be
protected, within limits, in the unlikely event that a member insurer becomes
financially unable to meet its obligations. If this should happen, the Guaranty
Association will assess its other member insurance companies for the money to
pay the claims of insured persons who live in this state and, in some cases, to
keep coverage in force. The valuable extra protection provided by these
insurers through the Guaranty Association is not unlimited, however, as noted
below.
The California Life Insurance Guaranty Association may not provide coverage
for this policy. If coverage is provided, it may be subject to substantial
limitations or exclusions, and require continued residency in California. You
should not rely on coverage by the California Life Insurance Guaranty
Association in selecting an insurance company or in selecting an insurance
policy.
Coverage is NOT provided for your policy or any portion of it that is not
---
guaranteed by the insurer or for which you have assumed the risk, such as a
variable contract sold by prospectus. Nor is coverage provided for unallocated
annuity contracts.
Insurance companies or their agents are required by law to give or send you
this notice. However, insurance companies and their agents are prohibited by
law from using the existence of the guaranty association to induce you to
purchase any kind of insurance policy.
Policyholders with additional questions may contact:
The California Life Insurance Guaranty Association
P.O. Box 70069 Los Angeles, CO 90070
California Department of Insurance
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
38.
California Notice
The state law that provides for this safety-net coverage is called the
California Life Insurance Guaranty Association Act. Below is a brief summary of
this law's coverages, exclusions and limits. This summary does not cover all
provisions of the law; nor does it in any way change anyone's rights or
obligations under the Act or the rights or obligations of the Association.
COVERAGE
Generally, individuals will be protected by the California Life Insurance
Guaranty Association if they live in this state and hold a life insurance
contract, or an annuity, or if they are insured under a group insurance
contract, issued by a member insurer. The beneficiaries, payees or assignees of
insured persons are protected as well even if they live in another state.
EXCLUSIONS FROM COVERAGE
However, persons holding such policies are not protected by this Association if:
. they are eligible for protection under the laws of another state (this
may occur when the insolvent insurer was incorporated in another state
whose guaranty association protects insureds who live outside that
state);
. the insurer was not authorized to do business in this state;
. their policy was issued by a charitable organization, a fraternal
benefit society, a mandatory state pooling plan, a mutual assessment
company, an insurance exchange, or a grants and annuities society
holding a certificate of authority under Section 11520.
The Association also does not provide coverage for:
. any policy or portion of a policy which is not guaranteed by the
insurer or for which the individual has assumed the risk, such as a
variable contract sold by prospectus;
. any policy of reinsurance (unless an assumption certificate was
issued);
. interest rate yields that exceed an average rate;
. dividends;
. credits given in connection with the administration of a policy by a
group contractholder;
. unallocated annuity contracts;
. any plan or program of an employer or association that provides life
or annuity benefits to its employees or members to the extent the plan
is self-funded or uninsured.
California Notice
LIMITS ON AMOUNT OF COVERAGE
The act also limits the amount the Association is obligated to pay out: The
Association cannot pay more than 80% of what the insurance company would owe
under a policy or contract. Also,
39.
for any one insured life, the Association will. pay a maximum of $250,000-no
matter how many policies and contracts there were with the same company, even if
they provided different types of coverages. Within this overall $250,000 limit,
the Association will not pay more than $100,000 in cash surrender values,
$100,000 in present value of annuities, or $250,000 in life insurance death
benefits - again, no matter how many policies and contracts there were with the
same company, and no matter how many different types of coverages.
40.