INDIVIDUAL RETIREMENT ANNUITY (IRA)
CONTRACT AMENDMENT
Made a part of the Contract ("this Contract")
Issued by the Lincoln National Life Insurance Company ("LNL")
to which this amendment is attached
1. This amendment will be controlling and overrides any contradictory
provision in the Contract.
2. If the Contract is an immediate annuity, certain provisions of this IRA
Contract Amendment may not apply because distributions will have already
commenced under the Contract.
3. This Contract is for the exclusive benefit of the Owner and his or her
beneficiary(s). Joint or contingent owners cannot be named under the
Contract.
4. The Contract will not be transferable except to LNL on surrender or
settlement. The Owner may not sell or assign the Contract, nor may it be
discounted or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose
CONTRIBUTIONS
5. The minimum purchase payment for the Contract is determined under the
Contract provisions and may cause the Contract to only be available for
rollovers and transfers equal to or greater than the minimum amount.
(a) Except in the case of a rollover contribution (as permitted by
Internal Revenue Code Sections 402(c), 402(e)(6), 403(a)(4),
403(b)(8), 403(b)(10), 408(d)(3) and 457(e)(16)) or a contribution
made in accordance with the terms of a Simplified Employee Pension
("SEP") as described in Section 408(k), no contributions will be
accepted unless they are in cash, and the total of such contributions
shall not exceed:
$3,000 for any taxable year beginning in 2002 through 2004;
$4,000 for any taxable year beginning in 2005 through 2007; and
$5,000 for any taxable year beginning in 2008 and years thereafter.
After 2008, the limit will be adjusted by the Secretary of the
Treasury for cost-of-living increases under Code Section 219(b)(5)(C).
Such adjustments will be in multiples of $500.
(b) In the case of an individual who is 50 or older, the annual cash
contribution limit is increased by $500 for any taxable year beginning
in 2002 through 2005; and $1,000 for any taxable year beginning in
2006 and years thereafter.
(c) The annual purchase payment under a SEP may not exceed the amount
permitted under Code Section 408(j) and (k). The annual purchase
payment under a Salary Reduction SEP ("SARSEP") may not exceed the
amount permitted under Code Section 408(k)(6).
(d) No contributions will be accepted under a SIMPLE IRA plan established
by any employer pursuant to Code Section 408(p). Also, no transfer or
rollover of funds attributable to contributions made by a particular
employer under its SIMPLE IRA plan will be accepted from a SIMPLE IRA,
that is, an IRA used in conjunction with a SIMPLE IRA plan, prior to
the expiration of the 2-year period beginning on the date the
individual first participated in that employer's SIMPLE IRA plan.
6. This Contract does not require fixed purchase payments. LNL does not impose
a penalty upon the Owner if the Owner stops and resumes making purchase
payments. The entire interest of the Owner in this Contract is
nonforfeitable and the "automatic nonforfeiture option" provision is not
applicable to this Contract.
7. Purchase payments made pursuant to this Contract must be from
"compensation" of the Owner. "Compensation" means wages, salaries,
professional fees, or other amounts derived from or received for personal
services actually rendered (including, but not limited to commissions paid
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, and bonuses) and includes
earned income, as defined in Code Section 401(c)(2) (reduced by the
deduction the self-employed individual takes for contributions made to a
self-employed retirement plan). For purposes of this definition, Section
401(c)(2) will be applied as if the term trade or business for purposes of
Code Section 1402 included service described in subsection (c)(6).
Compensation does not include amounts derived from or received as earnings
or profits from property (including, but not limited to, interest and
dividends) or amounts not includible in gross income. Compensation also
does not include any amount received as a pension or annuity or as deferred
compensation. The term "compensation" will include any amount includible in
the individual's gross income under Code Section 71 with respect to a
divorce or separation instrument described in subparagraph (A) of Section
71(b)(2).
DISTRIBUTIONS
8. Notwithstanding any provision of this IRA Contract Amendment to the
contrary, the distribution of the Owner's interest in the IRA shall be made
in accordance with the requirements of Code Section 408(b)(3) and the
regulations thereunder, the provisions of which are herein incorporated by
reference. If distributions are not made in the form of an annuity on an
irrevocable basis (except for acceleration), then distribution of the
interest in the IRA (as determined under paragraph 11) must satisfy the
requirements of Code Section 408(a)(6) and the regulations thereunder,
rather than paragraphs (a), (b) and (c) below and paragraphs 9 and 10.
(a) The entire interest of the Owner will commence to be distributed no
later than the first day of April following the calendar year in which
such individual attains age 70 1/2(the "required beginning date") over
(a) the life of such individual or the lives of such individual and
his or her designated beneficiary or (b) a period certain not
extending beyond the life expectancy of such individual or the joint
and last survivor expectancy of such individual and his or her
designated beneficiary. Payments must be made in periodic payments at
intervals of no longer than 1 year and must be either non-increasing
or they may increase only as provided in Q&As-1 and -4 of Section
1.401(a)(9) - 6T of the Temporary Income Tax Regulations. In addition,
any distribution must satisfy the incidental benefit requirements
specified in Q&A-2 of Section 1.401(a)(9) -6T unless otherwise
provided.
(b) The distribution periods described in paragraph (a) above cannot
exceed the periods specified in Section 1.401(a)(9) -6T of the
Temporary Tax Regulations.
(c) If annuity payments commence, the first required payment can be made
as late as April 1 of the year following the year the individual
attains age 70 1/2 and must be the payment that is required for one
payment interval. The second payment need not be made until the end of
the next payment interval.
9. If the Owner dies on or after required distributions commence, the
remaining portion of his or her interest will continue to be distributed
under the contract distribution option chosen.
10. If the Owner dies before required distributions commence, his or her entire
interest will be distributed at least rapidly as follows:
(a) If the designated beneficiary is someone other than the Owner's
surviving spouse, the entire interest will be distributed, starting by
the end of the calendar year following the calendar year of the
Owner's death, over the remaining life expectancy of the designated
beneficiary, with such life expectancy determined using the age of the
beneficiary as of his or her birthday in the year following the year
of the Owner's death, or, if elected, in accordance with paragraph (c)
below.
(b) If the Owner's sole designated beneficiary is the Owner's surviving
spouse, the entire interest will be distributed, starting by the end
of the calendar year following the calendar year of the Owner's death
(or by the end of the calendar year in which the Owner would have
attained age 70 1/2, if later), over such spouse's life, or, if
elected, in accordance with paragraph (c) below. If the surviving
spouse dies before the required distributions commence to him or her,
the remaining interest will be distributed, starting by the end of the
calendar year following the calendar year of the spouse's death, over
the spouse's designated beneficiary's age as of his or her birthday in
the year following the death of the spouse, or, if elected, will be
distributed in accordance with paragraph (c) below. If the surviving
spouse dies after required distributions commence to him or her, any
remaining interest will continue to be distributed under the contract
option chosen.
(c) If there is no designated beneficiary, or if applicable by operation
of paragraph (a) or (b) above, the entire interest will be distributed
by the end of the calendar year containing the fifth anniversary of
the Owner's death (or of the spouse's death in the case of the
surviving spouse's death before distributions are required to begin
under paragraph (b) above).
(d) Life expectancy is determined using the Single Life Table in Q&A -1 of
Section 1.401(a) (9) -9 of the Income Tax Regulations. If
distributions are being made to a surviving spouse as the sole
designated beneficiary, such spouse's remaining life expectancy for a
year is the number in the Single Life Table corresponding to such
spouse's age in the year. In all other cases, remaining life
expectancy for a year is the number in the Single Life Table
corresponding to the beneficiary's age in the year specified in
paragraph (a) or (b) and reduced by 1 for each subsequent year.
11. The "interest" in the IRA includes the amount of any outstanding rollover,
transfer and recharacterization under Q&As -7 and -8 of Section 1.408 -8 of
the Income Tax Regulations and the actuarial value of any other benefits
provided under the IRA, such as guaranteed death benefits.
12. For purposes of paragraphs 9 and 10 above, required distributions are
considered to commence on the Owner's required beginning date or, if
applicable, on the date distributions are required to begin to the
surviving spouse under paragraph (10)(b) above. However, if distributions
start prior to the applicable date in the preceding sentence, on an
irrevocable basis (except for acceleration) under an annuity contract
meeting the requirements of Section 1.401(a)(9) -6T of the Temporary Income
Tax Regulations, then required distributions are considered to commence on
the annuity starting date.
13. If the sole designated beneficiary is the Owner's surviving spouse, the
spouse may elect to treat the IRA as his or her own IRA. This election will
be deemed to have been made if such surviving spouse makes a contribution
to the IRA or fails to take required distributions as a beneficiary.
14. At least once each Contract Year, LNL shall furnish to the Owner of this
Contract reports concerning
the status of this annuity and such information concerning required minimum
distributions as are prescribed by the Internal Revenue Service.
15. This Contract will be amended from time to time to comply with the
provisions of the Internal Revenue Code, related regulations and other
published guidance.
16. The Owner has the sole responsibility for determining whether any purchase
payment is deductible for federal income purposes.
The Lincoln National Life Insurance Company
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Executive Vice President and
Chief Executive Officer of Annuities
