EXHIBIT (14)(d)
THE
LUTHERAN
BROTHERHOOD
FAMILY OF
MUTUAL FUNDS
TAX-SHELTERED CUSTODIAL ACCOUNT
UNDER
SECTION
403(b)
OF THE
INTERNAL
REVENUE
CODE
TABLE OF CONTENTS INSTRUCTIONS
General Information.....................2 1. Read the entire
Custody Agreement.......................8 booklet including
Application.........................13-14 the Custody Agreement
Agreement For Salary Reduction......15-17
How to Use the Calculation Form........18 2. Complete the necessary
Calculation Form 1698 19-20 forms in the booklet
Election Limitations (Use LB annuities disk) and mail the following
to LBSC:
SCHEDULE OF CUSTODIAN'S FEES
a. Signed application
Establishing the account $ 5.00 (pages 13 & 14)
Annual fee per fund account $10.00 b. One Agreement For
Processing a lump sum distribution $10.00 Salary Reduction
Processing each periodic distribution $ 2.00 (page 15) if
applicable
c. One Calculation
Form (pages 18-19)
as applicable.
D. $5.00 PROCESSING
FEE.
Leave in booklet for
employee:
* One Agreement For
Salary Reduction
(page 16)
3. The Custodian will
return to the Employee
a copy of the
Application upon
acceptance.
4. It is important that
the Employee carefully
read the prospectus
about the shares of
the mutual fund
selected by the
Employee. The
prospectus for such
shares, required to be
delivered to the
Employee by or on
behalf of the Fund,
describes any sales
charges and additional
information about
which the Employee
should be aware before
making that selection.
THE CUSTODIAN ASSUMES
NO LIABILITY FOR
INVESTMENT RESULTS OF
THE EMPLOYEE'S
SELECTION.
5. The Employee should
seek advice from the
Employee's attorney
regarding the legal
consequences
(including but not
limited to
federal & state tax
matters) of entering
into this Agreement,
contributing to the
Custodial Account, and
ordering the Custodian
to make distributions
from the account. The
Employee should
understand that the
Custodian, and the
Mutual Fund (or any
company associated
therewith), are
prohibited by law from
rendering such advice.
INTRODUCTION
The Internal Revenue Code allows Employees of certain tax-exempt
organizations and of public schools to exclude from their current income
amounts paid by their Employer into special custodial accounts. The
Employer's contributions to the custodial account are also exempt from
current tax. The Employee's tax is deferred until he/she receives payment
from the custodial account as part of his/her retirement income.
ESTABLISHING A TAX-SHELTERED CUSTODIAL ACCOUNT
A tax-sheltered custodial account may be established by an organization
operated exclusively for educational, literary, religious, charitable, or
scientific purposes (a "Charitable Organization") for one or more of its
full or part-time Employees. Such an account may also be established by a
state, a political subdivision of a state, or an agency or instrumentality
of a state or political subdivision thereof, but only for the benefit of an
Employee who performs services for an educational institution.
TAX-SHELTERED CUSTODIAL ACCOUNT (TSCA)
General Information
WHAT IS A TAX-SHELTERED CUSTODIAL ACCOUNT?
It is simply a retirement plan which is tax-favored. If you qualify for a
tax-sheltered custodial account, your dollars go into the plan without
current taxation and the earnings accumulate tax deferred.
WHO IS ELIGIBLE?
Pastors, school teachers, and other persons employed by nonprofit, Internal
Revenue Code Section 501(c)(3) Organizations and Public Educational
Institutions are eligible. The Internal Revenue Code defines 501(c)(3)
organizations as follows:
"Corporations, and any community chest, fund, or foundation, organized
and operated exclusively for religious, charitable, scientific, testing
for public safety, literary, or educational purposes or to xxxxxx
national or international amateur sports competition (but only if no part
of its activities involve the provision of athletic facilities or
equipment), or for the prevention of cruelty to children or animals, no
part of the net earnings of which inures to the benefit of any private
shareholder or individual, no substantial part of the activities of which
is carrying on propaganda, or otherwise attempting to influence
legislation... and which does not participate in, or intervene in
(including the publishing or distributing of statements), any political
campaign on behalf of any candidate for public office."
Specifically, some of the non-profit organizations which will qualify are:
1. Public and private schools, colleges and universities
2. Hospitals
3. Churches
4. Religious organizations
5. Research and scientific foundations
6. Charitable institutions
7. Humane societies
8. Social welfare agencies
9. Museums
10. Symphony orchestras
The Employer's tax counselor will be able to determine definitely if the
organization qualifies under 501(c)(3). The roster of 501(c)(3)
organizations is limited and the following tax-exempt organizations, for
instance, do not qualify:
1. Fraternal benefit societies
2. Labor unions - voluntary employee associations
3. Xxxxxxxx of Commerce - business associations
4. Pleasure or recreation clubs
5. Instrumentalities of the federal government
6. Non-profit cemetery companies
7. Associations providing charitable, educational or recreational
benefits for a specified and limited membership
8. Credit unions
9. Farmers' cooperatives
10. Most mutual or cooperative undertakings
WHAT ARE THE MECHANICS OF THE PLAN?
First, the qualified Employer must agree to invest in Mutual Fund shares
amounts withheld from salary or paid in addition to current salary. The
Funds are owned by the Employee and the benefits are vested immediately.
It is as simple as that. The Employer can make the plan available to all
full or part-time Employees on an individual basis.
HOW DOES A SALARY REDUCTION PLAN WORK?
The law allows an Employee to arrange with his/her Employer that, instead of
contributing a portion of his/her salary through payroll deductions, his/her
salary will be reduced and the amount of the reduction will be used by the
Employer to purchase retirement benefits for the Employee. Instead of
paying income tax currently on the salary deductions, the Employee is
deferring the taxation on the same amount until his/her retirement years.
The "Agreement for Salary Reduction" is on pages 15 and 16 for those who
wish to make such an arrangement with their Employers. The agreement cannot
be retroactive and it applies only to amounts earned after its effective
date.
HOW MUCH MAY BE CONTRIBUTED?
As a general rule, the Employee may contribute each year an amount equal to
his/her "exclusion allowance." An Employee's "exclusion allowance" is 20%
of the "includible compensation" paid him/her by his/her Employer during the
current taxable year, multiplied by his/her years of service, less all past
retirement contributions made by his/her Employer which were not included in
his/her taxable income in prior years. An employee's includible
compensation is the amount earned during the most recent period, ending not
later than the close of the current taxable year, which constitutes a full
year of service. Thus, the most recent period of service may include more
than one tax year if the employee had a part-time job, or if a full-time
employee worked only part of a tax year. However, in all cases an Employee
is treated as having at least one year of service, thus assuring a part-time
Employee of the benefit of an exclusion allowance equal to 20% of his/her
includible compensation for part-time services. Includible compensation
includes sick pay, but not amounts contributed by the employer to TSCAs,
qualified pension plans or state retirement plans.
The above general rule does not contemplate several factors, including past
service, and past and current contributions to other retirement plans, which
will affect the actual maximum exclusion allowance. In order to determine
the current maximum monthly exclusion allowance refer to page 18 and 19.
The formula computation should be made in every case to ensure qualification
for the TSCA plan. Salary reduction TSCAs are limited to $9,500 EXCEPT for
employees who meet eligibility requirements for election limitations (see
page 20) AND who have worked for the current employer for at least fifteen
years. Those employees may contribute up to an aggregate limit of $15,000.
However, the additional contribution in any one year cannot exceed $3,000.
The law also sets a maximum on the annual dollar contribution which may be
made for an Employee. No contribution may be made in any one year which
exceeds 25% of the Employee's compensation for the current year or the
current overall dollar limitation*, whichever is less. IF AGGREGATION OF A
TSCA WITH ANOTHER QUALIFIED PLAN OF THE EMPLOYER CAUSES THE OVERALL
LIMITATION TO BE EXCEEDED, THE EXCLUSION ALLOWANCE WILL BE REDUCED TO THE
EXTENT NECESSARY TO SATISFY THE LIMITATION BEFORE THE OTHER PLAN IS
DISQUALIFIED. However, Employees of educational institutions, hospitals or
home health service agencies, a church or a convention or association of
churches; (and these Employees only) may elect that the maximum contribution
be computed under special rules (Code Section 415(c)(4) which allows certain
Employees to enjoy a greater contribution than that which would be permitted
by the 25% --current overall limitation rule.* THESE SPECIAL RULES DO NOT
PERMIT EXCLUSION OF AMOUNTS UNDER A SALARY REDUCTION ARRANGEMENT IN EXCESS
OF THE LIMIT ON ELECTIVE DEFERRALS EXPLAINED IN THE PREVIOUS PARAGRAPH.
If an Employee also maintains his/her own Xxxxx Plan (as might occur, for
example, where a physician is an Employee of a hospital and maintains a
separate consulting practice), or in certain other circumstances where the
Employee is a participant in other qualified plans, contributions to the
tax-sheltered custodial account and to any Xxxxx Plan, to other qualified
plans and to any eligible deferred compensation plans must be aggregated for
the year in question when computing the maximum dollar contribution which
will qualify for the favored tax treatment under the 25%/$30,000* rule.
In the event that the total contributions made for the Employee exceed the
maximum allowed, the excess is taxed to the Employee as ordinary income and
the Employee is subject to a penalty tax with respect to that excess.
MAY MY EMPLOYER CONTRIBUTE TO A TSCA IN ADDITION TO MY SALARY?
Yes. Tax-Sheltered Custodial Accounts may be established by an Employer for
its Employees; however, in the case of a salary addition plan, the plan is
an Employee benefit plan and is subject to the ERISA nondiscrimination and
coverage rules as well as rules regarding required reporting and disclosure.
*The current overall limitation is set at $30,000 which may be subject to
future IRS cost of living adjustments. Your Lutheran Brotherhood Registered
Representative can answer your questions about the current overall dollar
limitation.
WHAT SPECIAL PROVISIONS APPLY TO CHURCH EMPLOYEES?
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) made changes in
the TSCA provisions for church employees. The changes are summarized below:
1. All service for a particular church organization is counted as service
for one employer.
2. All prior contributions made to one church organization by one or more
churches would be counted as prior contributions made by one employer.
3. Church employees who have adjusted gross incomes of $17,000 or less
are allowed to make an election to replace the exclusion allowance
with a new limit: the lesser of 100% of includible compensation
or $3,000.
4. Church employees are allowed an additional election to replace the 25%
limitation with a $10,000 annual/$40,000 lifetime limitation (subject
to the $9,500 limit discussed above.)
5. Church employees are now allowed to elect election limitations
(catch-up options).
Who are church employees? Church employees include duly ordained,
commissioned, or licensed ministers and lay employees, including employees
of tax-exempt organizations (whether civil law corporations or otherwise
organized) which are controlled by or associated with a church. For this
purpose, a church includes a convention or association of churches, or an
organization which is exempt from tax and is controlled by or associated
with a church or a convention or association of churches.
Church employees who wish to elect either or both of the special TEFRA
limitations should sign a letter requesting the limitation(s). This letter
should be returned with the application, agreement for salary reduction form
and calculation sheet.
HOW ARE CONTRIBUTIONS TO THE TAX-SHELTERED CUSTODIAL ACCOUNT INVESTED?
The law requires that all contributions to the tax-sheltered custodial
account must be invested in shares of a "Regulated Investment Company", such
as in mutual fund shares. The Lutheran Brotherhood tax-sheltered custodial
accounts may be invested in shares of any of the Lutheran Brotherhood Family
of Mutual Funds except the Municipal Bond Fund. The Employee has the
opportunity to select the mutual fund or funds in which he/she wishes the
contribution invested, and Lutheran Brotherhood Securities Corp., will
furnish to the Employee, at his/her request, the current prospectus of one
or more of the Lutheran Brotherhood mutual funds in which the assets of the
custodial account may be invested. The Employee should review each
prospectus before deciding upon the mutual fund or funds in which the
investment should be made.
After the initial investment, the Employee may wish to shift all or part of
the investment from one of these mutual funds to another. The exchange
privilege for each of the Lutheran Brotherhood mutual funds is explained in
the current prospectus of each fund. Any fees or sales charges attributable
to such a shift of investment will be charged to the account.
HOW ARE DIVIDENDS AND DISTRIBUTIONS TO THE TAX-SHELTERED CUSTODIAL ACCOUNT
HANDLED?
All dividends and capital gain distributions with respect to the mutual fund
shares held in the custodial account will be reinvested in additional shares
of any of the Lutheran Brotherhood Family of Funds. If any distribution
with respect to such shares may be received at the election of the
shareholder in additional shares or in cash or other property, the custodian
will elect to receive the distribution in additional shares. All such
dividends and distributions are accumulated in and are received by the
custodial account free of federal tax liability until distribution.
WHEN ARE THE ASSETS OF THE TAX-SHELTERED CUSTODIAL ACCOUNT DISTRIBUTED? AND
HOW?
Until the end of 1988, distributions from a TSCA must begin by April 1 of
the calendar year following the later of (i) the calendar year in which the
employee attains age 70 1/2 or (ii) the calendar year in which the employee
retires. Beginning in 1989 distributions must commence no later than
April 1 of the calendar year following the calendar year in which the
employee attains age 70 1/2. Employees who work beyond age 70 1/2 must
begin distribution even though they continue to work. Prior to the required
beginning date stated above, distributions from the custodial account may be
requested upon the occurence of one or more of the following events:
1. The Employee shall no longer be employed by the Employer; or
2. The Employee shall have attained the age of 59 1/2 years; or
3. The Employee shall have become disabled; or
4. The Employee shall have died; or
5. The Employee shall have suffered financial hardship. (for salary
reduction TSCAs only)
The Employee (or, if he/she has died, his/her specified beneficiary or the
executor or administrator as appropriate) may send written instruction to
the custodian to make distribution in any of the methods set forth below.
However, the Employee, prior to giving such instructions, should consult
his/her own tax advisor in order to determine that such instructions, or
action by the custodian in complying with such instructions, will not
adversely and unexpectedly affect his/her federal tax liability.
Distribution from the account prior to the Employee's death shall be made in
one of the following methods as specified in a written election by the
Employee:
(1) If assets in the account are sufficient and if a systematic
withdrawal plan is then available with respect to the mutual fund
shares held in the custodial account, the Custodian may be instructed
to make installment payments to the Employee in monthly or other
regular intervals as elected by the Employee over a period of time not
exceeding the Employee's life expectancy or the joint and survivor
life expectancy of the Employee's life and a designated beneficiary.
(2) A single-sum payment.
(3) By purchase and distribution of a single-premium fixed or variable
non-transferable annuity contract meeting the requirements of 403(b)
of the Internal Revenue Code.
(4) Any combination of the methods of distribution set forth in this
paragraph.
If the Employee dies before his/her entire interest in the account is
distributed, the following distribution provisions shall apply:
(1) If the Employee dies after the distribution from his/her account has
commenced, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Employee's death.
(2) If the Employee dies before distribution of his/her interest in the
account commences, the Employee's entire interest will be distributed
to the Beneficiary in accordance with one of the following provisions:
(a) The Employee's entire interest will be paid within five (5) years
after the date of the Employee's death.
(b) If the Employee's interest is payable to a Beneficiary designated
by the Employee, then that interest will be distributed in
substantially equal installments over a period not extending beyond
the life expectancy of the Beneficiary. Such distributions shall
begin not later than one (1) year after the date of the Employee's
death.
(c) If the designated Beneficiary is the Employee's surviving spouse,
the spouse may elect to continue the account in his/her name with
distributions commencing no later than the date that the Employee
would have attained age 70 1/2. If the surviving spouse dies
before distributions to him/her begin, then distribution
requirements shall be applied as if the surviving spouse were
the Employee.
The interest of the Employee in the tax-sheltered custodial account is
nonforfeitable during his/her lifetime. Except for the expenses of the
account itself, under no circumstances may the assets of the custodial
account be diverted to purposes other than for the exclusive benefit of the
Employee and his/her beneficiary. The Custody Agreement provides that such
assets, and the benefits so provided, are not subject to alienation,
assignment, garnishment, attachment, execution or levy of any kind, and any
attempt to cause such assets or benefits to be so subjected will not be
recognized except to such extent as may be required by law.
Each Employee should complete the "Specification of Beneficiary" portion of
the Application. Such specification indicates to the custodian the person
or persons to whom the distribution is to be made should the Employee die
before final distribution from the custodial account. In the absence of an
effective specification, distribution will be made by the custodian to the
Employee's estate. The specification may be changed or revoked by the
Employee at any time provided that such change or revocation shall not take
effect until 15 days after receipt thereof by the custodian. If the
Employee has died, the custodian will comply with instructions received from
the beneficiary. If the custodian is furnished with satisfactory proof of
death of the specified beneficiary or beneficiaries prior to the time of
death of the Employee, all distributions will be made to the estate of the
Employee.
WHO ADMINISTERS THE TAX-SHELTERED CUSTODIAL ACCOUNT?
State Street Bank and Trust Company of Boston, Massachusetts, is available
to act as custodian of tax-sheltered custodial accounts. As such, it is to
invest all contributions in the shares of the Lutheran Brotherhood Family of
Mutual Funds designated by the Employee. It also is to collect and reinvest
all dividends and capital gain distributions and credit the shares so
purchased to the custodial account.
The custodian is to keep accurate and detailed records of all receipts,
investments, disbursements and other transactions concerning the custodial
account. After the close of each calendar year, the custodian will forward
to the Employee a written statement reflecting all such activities during
that year, together with a statement of the shares held and their net asset
value at the end of such year.
In order to provide current information concerning the mutual fund shares
held in the custodial account, the custodian will also furnish to, or cause
to be furnished to the Employee all notices, prospectuses, financial
statements and proxy-soliciting materials relating to the mutual fund shares
held in the custodial account. Such information will enable the Employee to
determine how shares held in the custodian account should be voted, and the
custodian will not vote any such share on any proposal except in accordance
with the written instructions of the Employee.
The custodian and the Employer respectively will also keep such records and
file with the Internal Revenue Service and the Department of Labor such
returns, reports, and other information concerning the custodial account as
may be required of either of them.
The custodian intends to delegate its administrative duties to Lutheran
Brotherhood Securities Corp., as contemplated by the plan.
WHAT IS THE COST OF THE TAX-SHELTERED CUSTODIAL ACCOUNT AND HOW IS IT PAID?
The custodian will collect fees for administrative services which,
initially, are the fees specified on the fee schedule set forth in the
Application for the custodial services rendered to the custodial account.
The fee schedule may be amended in the future.
In addition to the fees for administrative services paid to the custodian,
the custodial account may incur expenses such as sales charges upon the
investment of funds, other administration expenses (such as fees for legal
services rendered to the custodian specifically attributable to the
custodial account) and taxes (such as transfer taxes incurred in connection
with the investment or reinvestment of assets of the custodial account or
income, estate, inheritance or other taxes levied or assessed in respect of
such assets).
All such fees and expenses will be collected by the custodian and paid by it
out of the assets of the custodial account. If sufficient cash is not
available in the custodial account at the time payment of such fees or
expenses is due, then the custodian will redeem a sufficient number of
shares then held in the custodial account in order to obtain sufficient
cash.
AMENDMENTS
Pursuant to the terms set forth in the Custody Agreement, the Employer and
the Employee authorize Lutheran Brotherhood Securities Corp. to amend the
Custody Agreement in any respect at any time effective on a stated date; but
only if the purpose of such amendment is to meet the requirements of Section
403(b) of the Internal Revenue Code, as amended, or any successor provision
of law; to obtain expediently a ruling from the Internal Revenue Service
that such requirements are met; or to conform with other applicable law by
the custodial account. The Employee will be informed promptly of any such
amendment. Any other amendment requires the consent of the Employee.
The custodian may resign or be removed. In such event, the Employee shall
appoint a successor custodian qualified to act as such in accordance with
Section 401(f) of the Internal Revenue Code. If the Employee does not
appoint a successor custodian, the custodial account will be terminated.
REPORTING REQUIREMENTS
Tax-Sheltered Custodial Accounts may be subject to annual reporting under
the Internal Revenue Code. Unless exempt from the filing requirements, IRS
regulations require every Employer who maintains a TSCA for its Employees to
file a 5500C or 5500R annually with the IRS regarding each account no later
than seven months after the end of the "plan year". If the "plan year" is
the same as the calendar year, the report is due no later than July 31. If
such a report is filed late, the IRS may assess a penalty of $25 for each
day until such report is actually received.
ADDITIONAL INFORMATION
This description of the Lutheran Brotherhood Family of Mutual Funds
Tax-Sheltered Custodial Account, together with the Custody Agreement and the
Application, have been prepared for the purpose of enabling Employers of the
type described in Section 403(b)(1)(A) of the Internal Revenue Code, as
amended, to establish custodial accounts for their Employees which will be
treated as qualified plans of the type as described in Section 403(b) of the
Code. This description provides merely a summary of the terms of the
Custody Agreement, and in the event of any conflict between this description
and the terms of the Custody Agreement, the latter will control.
It is the responsibility of the Employee to determine that his Employer is
an entity of the type described in the second section of this description,
that he is an Employee of such entity within the meaning of the law, and
that the amount of the contribution made by the Employer does not exceed the
"exclusion allowance" referred to on pages 18 and 19. Neither Lutheran
Brotherhood Securities Corp. nor the custodian shall have any responsibility
in this regard.
Questions concerning the establishment of a custodial account or
contributions to be made to a custodial account should be directed to:
Lutheran Brotherhood Securities Corp. 000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000 Call Toll Free: 0-000-000-0000 - Out of State
residents; 0-000-000-0000 - Minnesota residents; (000) 000-0000 - Local
CUSTODY AGREEMENT
For a Lutheran Brotherhood Family of Mutual Funds Tax-Sheltered
Custodial Account.
SECTION 1. INTRODUCTION
The Employer, being an Employer of the type described in Section
403(b)(1)(A) of the Code, hereby does or previously has established a
Tax-Sheltered Custodial Account (the "Account") with the State Street Bank
and Trust Company for the retirement benefit of the Employee named in the
Application attached hereto upon the terms and conditions set forth in this
Agreement.
This Agreement shall take effect upon acceptance in writing by the State
Street Bank and Trust Company of Boston, Massachusetts, of its appointment
in the Application by the Employer to serve as Custodian in accordance
herewith. As provided more fully in Section 4 below, the Custodian is to
invest all contributions to the Account in Regulated Investment Company
Stock.
SECTION 2. ESTABLISHMENT OF CUSTODIAL ACCOUNT
The Custodian shall open forthwith and maintain an Account for the benefit
of the Employee. The name, address and social security number of the
Employee are set forth on the Application. The Custodian will notify the
Employee of the number of the Account and, if future contributions are made
to the Account, the Account number will also be referred to by them at the
time such contributions are made.
SECTION 3. RECEIPT OF CONTRIBUTIONS
All contributions to the Account shall be made in cash. The Custodian shall
accept and hold in the Account such contributions as it may receive from
time to time from the Employer. The initial contribution shall be
accompanied or preceded by an Application which shall specify the Regulated
Investment Company in which such funds are to be invested. Subsequent
Employer contributions shall be identified as to Employee's name and
Regulated Investment Company account number. If at any time adequate
instructions are not received or, if received, it is, in the opinion of the
Custodian, not clear, the Custodian may hold all or a portion of the
contribution in cash without liability for interest, rising security prices
or distributions pending receipt of a fully executed Application or written
instructions from the Employee.
The Custodian shall also accept and hold in a separate account such
contributions as it may receive from time to time from the Employee. All
such contributions shall be identified as to the Employee's name and account
number and that they are voluntary contributions.
In no event shall a contribution be sent to the Custodian which causes the
annual additions to the account from all sources to exceed either (I) the
lesser of $30,000 or 25% of the Employee's compensation from the Employer
for the taxable year, or (II) such other limit as may be prescribed by
Section 415 of the Code under the circumstances. If an "excess
contribution" as defined in Section 4973(c) of the Code exists with respect
to the Account for a taxable year, then -- upon receiving written notice
specifying the year in question, the amount of the excess, the reason it is
an excess, and the amount of net income in the Account attributable to the
excess -- the Custodian shall redeem sufficient Regulated Investment Company
shares to the Employer in an amount equal to the excess plus such net income
if the Employee so directs the Custodian.
SECTION 4. INVESTMENT OF ACCOUNT ASSETS
The amount of each contribution to the Account shall be applied to the
purchase of full and fractional Shares of the Regulated Investment Company,
which shall be credited to such Account with notation as to cost. Each
contribution after the initial contribution shall be invested in Shares of
the Regulated Investment Company most recently specified by the Employee.
The Regulated Investment Company or Companies in which the assets of the
account shall be invested (selected from the list provided to the Custodian
and to the Employee from time to time by Lutheran Brotherhood Securities
Corp.) will be designated initially and from time to time by the Employee.
The Employee may instruct the Custodian to redeem all or part of the
Regulated Investment Company Shares then credited to the account and to
invest the redemption proceeds in other Regulated Investment Company Shares
designated by the Employee (and selected from such list). By giving such
instructions to the Custodian, the Employee shall be deemed to have
acknowledged receipt of the then current prospectus of each Regulated
Investment Company in which the Account assets are to be invested.
The Employee may instruct the Custodian to exchange all or any part of the
Shares of a Regulated Investment Company held in the Account for Shares of
another Regulated Investment Company provided that the Custodian, as holder
of the Shares then held in the Account, then has the right to exchange such
Shares for the Shares designated by the Employee; and that the then current
prospectus for the Shares to be acquired allows such exchange on the basis
requested. If the above conditions are satisfied, then, upon receipt of
such instruction, the Custodian will forthwith undertake to exercise the
exchange privilege.
All dividends and capital gain distributions received on the Regulated
Investment Company Shares held in the Account shall (unless received in
additional Regulated Investment Company Shares) be reinvested in such Shares
which shall be credited to such Account.
If any distribution on such Regulated Investment Company Shares may be
received at the election of the shareholder in additional Regulated
Investment Company Shares or in cash or other property, the Custodian shall
elect to receive it in additional Shares.
Sales charges attributable to the acquisition of Shares shall be charged to
the Account.
All Regulated Investment Company Shares acquired by the Custodian shall be
registered in the name of the Custodian or of its nominee.
SECTION 5. DISTRIBUTION FROM THE ACCOUNT
Distribution of the account shall be made only in accordance with a written
election communicated to the Custodian by the Employee. Such a written
election may be made only upon the occurrence of an Event of Distribution,
and shall specify the Method of Distribution from among those described
below. The Event of Distribution may be the Employee's termination of
service with the Employer or the Employee's attainment of age 59 1/2 or the
Employee's suffering financial hardship. Alternatively, the Event of
Distribution may be the Employee's disability or death.
However, Custodian assumes (and shall have) no responsibility to make any
distribution unless and until such order specified the elected manner of
distribution. Also, before making any such distribution or before honoring
any assignment of the Custodial account, Custodian shall be furnished with
any and all applications, certificates, tax waivers, signature guarantees,
and other documents (including proof of any legal representatives'
authority) requested in its discretion by Custodian, but Custodian shall not
be liable for complying with an order which appears on its face to be
genuine, or for refusing to comply if not satisfied it is genuine, and
assumes no duty of further inquiry.
Distribution from the account prior to the Employee's death shall be made in
one of the following methods as specified in a written election by the
Employee:
(1) If assets in the account are sufficient and if a systematic withdrawal
plan is then available with respect to the mutual fund shares held in the
custodial account, the Custodian may be instructed to make installment
payments to the Employee in monthly or other regular intervals as elected
by the Employee over a period of time not exceeding the Employee's life
expectancy or the joint and survivor life expectancy of the Employee and
designated beneficiary.
(2) A single-sum payment.
(3) By purchase and distribution of a single-premium fixed or variable
non-transferable annuity contract meeting the requirements of 403(b) of
the Internal Revenue Code.
(4) Any combination of the methods of distribution set forth in this
paragraph.
If the Employee dies before his/her entire interest in the account is
distributed, the following distribution provisions shall apply:
(1) If the Employee dies after the distribution from his/her account has
commenced, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution being
used prior to the Employee's death.
(2) If the Employee dies before distribution of his/her interest in the
account commences, the Employee's entire interest will be distributed to
the Beneficiary in accordance with one of the following provisions:
(a) The Employee's entire interest will be paid within five (5) years
after the date of the Employee's death.
(b) If the Employee's interest is payable to a Beneficiary designated by
the Employee, then that interest will be distributed in substantially
equal installments over a period not extending beyond the life
expectancy of the Beneficiary. Such distributions shall begin not
later than one (1) year after the date of the Employee's death.
(c) If the designated Beneficiary is the Employee's surviving spouse, the
spouse may elect to continue the account in his/her name with
distributions commencing no later than the date that the Employee
would have attained age 70 1/2. If the surviving spouse dies before
distributions to him/her begin, then distribution requirements shall
be applied as if the surviving spouse were the Employee.
(d) If no Beneficiary was designated by the Employee as of his or her
date of death or if the designated Beneficiaries predeceased the
Employee, distribution shall be payable in a single sum to the estate
of the Employee within one year from the date of the Employee's death.
The Custodian and the Employer shall keep such records, make such
identifications and file with the Internal Revenue Service and the
Department of Labor such returns, reports, and other information concerning
the Account as may be required by either of them. The Custodian, the
Employer and the Employee shall furnish to one another such information
relevant to the Account as may be required to carry out such obligations.
SECTION 6. VOTING AND OTHER ACTION
The Custodian shall cause to be forwarded to the Employee all notices,
prospectuses, financial statements, proxies and proxy-soliciting materials
relating to the Regulated Investment Company Shares held in the Account.
The Custodian shall not vote any Regulated Investment Company Shares held
hereunder except in accordance with the written instructions of the
Employee.
SECTION 7. REPORTS
The Custodian shall keep accurate and detailed records of all receipts,
investments, disbursements and other transactions required to be performed
hereunder.
Not later than sixty (60) days after the close of each year, the Custodian
shall forward to the Employee a written report or reports, reflecting the
receipts, disbursements, and other transactions affected by it during such
year and the Shares held in the Account, and the net asset value thereof, at
the close of such year. Upon the expiration of sixty (60) days after the
furnishing of such report to the Employee, the Custodian shall be forever
released and discharged from all liability and accountability to anyone with
respect to its acts, transactions, duties, obligations or responsibilities
as shown in or reflected by such report, except with respect to any such
acts or transactions as to which the Employee shall have filed written
objections with the Custodian within such sixty-day period.
SECTION 8. FEES AND EXPENSES
1. The Custodian will collect the fees for its services hereunder, which
initially, in the aggregate, shall be the fees set forth in the
Application. The Custodian may substitute a different fee schedule at
any time upon thirty (30) days written notice to the Employee.
2. Any income, gift, estate and inheritance taxes, and other taxes of any
kind whatsoever, including transfer taxes, incurred in connection with
the investment or reinvestment of the assets of the Account, that may be
levied or assessed in respect to such assets, and all other
administrative or extraordinary expenses incurred by the Custodian in the
performance of its duties, including fees for legal services rendered to
the Custodian, shall be charged to the Account.
3. All fees and taxes and other administrative expenses may be charged to
the Account, with the right to liquidate Regulated Investment Company
Shares for this purpose or (at the Custodian's option) to the Employee.
SECTION 9. RIGHTS, DUTIES AND RESPONSIBILITIES
The Custodian shall be an agent for the Employer and the Employee to receive
and invest contributions to the account, to hold and distribute account
assets, and to keep adequate records and report thereon, all in accordance
with the terms and conditions of this Agreement. The Custodian may perform
any of its administrative duties through other persons designated by the
Custodian from time to time, except that Regulated Investment Company Shares
must be registered as stated in Section 4 and the Custodian intends
initially to delegate all such duties to Lutheran Brotherhood Securities
Corp.
The Custodian may conclusively rely upon and shall be protected in acting
upon any written order from the Employer or the Employee or his/her
Beneficiary or other notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been properly
executed and, if it acts in good faith, in taking or omitting to take any
other action.
Notwithstanding any other provision of this Agreement, the Custodian shall
have no liability or responsibility for determining the amount of or
collecting any contribution, or determining the amount or timing of any
distribution. The Custodian shall not be obligated or expected to commence
or defend any legal action or proceeding in connection with this Agreement
or such matters unless agreed upon by the Custodian and the Employee, and
unless fully indemnified for so doing to the Custodian's satisfaction. The
Custodian shall not be liable for interest on any cash balances maintained
in the Account.
The Employer and the Employee (and where applicable the Employee's
beneficiary) shall prepare and file with the Internal Revenue Service and
other government agencies such returns, forms and other information at such
times as may be required by either of them.
To the extent permitted by applicable law the Employee and the Employee's
Beneficiary as appropriate, shall always fully indemnify the Custodian and
save it harmless from any and all liability whatsoever which may arise in
connection with this Agreement and matters which it contemplates, except
that which arises due to the Custodian's negligence or willful misconduct.
The parties do not intend to confer any fiduciary duties on the Custodian,
and none shall be implied. Neither shall the Custodian serve as plan
administrator. No amendment to the Account or to this Agreement shall place
any greater burden on the Custodian without its written consent.
The Custodian, the Employer and the Employee shall furnish to one another
such information relevant to the Account as may be required to carry out the
obligations of the parties under this Agreement.
SECTION 10. AMENDMENT
The Employee and the Employer authorize Lutheran Brotherhood Securities
Corp., to amend this Agreement in any respect at any time, effective on a
stated date, in order to meet the requirements of Section 403(b) of the Code
or successor provision of law; to obtain expediently an Internal Revenue
Service determination, opinion or ruling that such requirements are met, or
to conform with other applicable laws. Lutheran Brotherhood Securities
Corp. will give prompt written notice to the Employee and the Custodian of
any such amendment.
Any amendment to this Agreement other than one made for the purpose set
forth in the preceding paragraph shall require the written consent of the
Employee and Lutheran Brotherhood Securities Corp. and notice to the
Custodian.
This Section 10 shall not be construed to reduce the freedom of the Employee
to instruct the Custodian of different or additional investment choices
which may be made within the limit of Section 4, or the freedom of the
Custodian to substitute fee schedules within the limits of Section 8; and no
such agreement of substitution shall be deemed to be an amendment of the
Account or of this Agreement.
SECTION 11. RESIGNATION OR REMOVAL OF CUSTODIAN
The Custodian may resign at any time upon thirty (30) days notice in writing
to the Employee. The Employee may remove the Custodian upon thirty (30)
days notice in writing to the Custodian. Upon such resignation or removal,
the Employee shall appoint a successor custodian which successor shall be a
"bank" as defined in Section 408(n) of the Code and which has agreed to and
is qualified to act as custodian under an agreement having the same force
and the effect as this Agreement.
Upon receipt by the Custodian of written acceptance of such appointment by
the successor custodian, the Custodian shall transfer and pay over to such
successor the assets of the Account and all records (or copies thereof)
pertaining thereto, provided that (if so required by the Custodian) any
successor custodian shall agree not to dispose of any such records without
the Custodian's consent. The Custodian is authorized, however, to reserve
such sum of money or property as it may deem advisable for payment of any
fees, taxes, expenses or costs of the account constituting a charge on or
against the assets of the account on or against the Custodian, with any
balance of such reserve remaining after the payment of all such items to be
paid over to the successor custodian. The successor custodian shall hold
the assets paid over to it under terms similar to those of this Agreement
that qualify under Section 401(f) of the Code.
If within thirty (30) days after the Custodian's resignation or removal, or
such longer time as the Custodian may agree to, the Employee has not
appointed a successor custodian which has accepted such appointment, the
Custodian shall terminate the Account. The Custodian shall not be liable
for the acts or omissions of such successor.
SECTION 12. TERMINATION OF ACCOUNT
Termination of the Account shall be effected by distributing all assets
thereof to the Employee pursuant to the direction of the Employee, or
his/her designated Beneficiary in the event of his/her death, or his or her
personal representative (or, in the absence of such direction, as determined
by the Custodian), in lump sum or in kind subject to the Custodian's right
to reserve funds as provided in Section 11.
If the Custodian receives written notice that the Internal Revenue Service
has determined that the Account fails to satisfy the requirements under
Section 403(b)(7) of the Code, as they existed at the time the Account was
established, by reason of some inadequacy in the original Account or in this
Agreement not removed by a retroactive amendment, the Custodian shall
terminate the Account by distributing the assets thereof to the Employee.
Upon termination of the Account in any manner provided for in this section
or in Section 11, this Agreement shall have no further force and effect.
SECTION 13. MISCELLANEOUS
At no time shall it be possible for any part of the assets of the Account to
be used for, or diverted to, purposes other than for the exclusive benefit
of the Employee except as specifically provided in this Agreement.
The assets of the Account shall be non-transferable and shall not be subject
to alienation, assignment, trustee process, garnishment, attachment,
execution of levy of any kind except by the Custodian for its fees and for
the expenses of the Account; and no attempt to cause such assets to be
subjected shall be recognized except to such extent as may be required by
law or provided for herein.
The tax treatment of any contributions to the Account, and of any earnings
of the Account, depends, among other things, upon the nature of the
Employer, the relationship of the Employee to the Employer, and the amount
of contributions made in any year to the Account (and to other plans,
accounts or contracts with the benefit of special tax treatment) for the
benefit of the Employee. The Custodian and Lutheran Brotherhood Securities
Corp., assume no responsibility with respect to such matters, nor shall any
term or provision of this Agreement be construed as to place any such
responsibility upon any one of them.
Any notice from the Custodian to any person provided for in this Agreement
shall be effective if sent by first-class mail to him/her at his/her last
address on the Custodian's records. Any notice or written instruction from
the Employee to the Custodian may be sent to: Lutheran Brotherhood
Securities Corp., 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000.
This agreement is accepted by the Custodian in, and shall be construed and
administered in accordance with, the laws of the Commonwealth of
Massachusetts.
SECTION 14. DEFINITION
As used in this Agreement, the following terms have the meaning hereinafter
set forth unless a different meaning is clearly required by the context:
"Account" means the custodial account established hereunder for the
retirement benefit of the Employee.
"Agreement" means this Custody Agreement, together with the information,
terms and provisions set forth in the Application.
"Application" means the Application for Retirement Benefit Plan for Employee
of Certain Tax Exempt Organizations or of Public Schools.
"Beneficiary" means the person or persons designated as such on a form
acceptable to the Custodian for use in connection with the Plan, signed by
the Employee, and filed with the Custodian. The form may name persons or
estates to take upon the contingency of survival. However, the Beneficiary
shall be the Employee's estate to the extent that no such designation on
such a form effectively disposes of the Account as of when distribution is
to commence in accordance with it; moreover, a form shall not become
effective for that purpose until the fifteenth day after it is filed with
the Custodian. The form last accepted by the Custodian before such
distribution is to commence, upon becoming effective during the Employee's
lifetime, shall be controlling and, whether or not fully dispositive of the
account, thereupon shall revoke all such forms previously filed by the
Employee.
"Code" means the Internal Revenue Code of 1986 as amended from time to time.
"Custodian" means State Street Bank and Trust Company or any successor
thereto.
"Employee" means the individual named in the Application, and "Employer"
means the organization, state, political subdivision of a state or agency or
instrumentality of such state or political subdivision, named in the
Application.
"Regulated Investment Company" means a domestic corporation which is a
regulated investment company within the meaning of Section 851(a)(2) of the
Code and which issues only redeemable shares, and "Regulated Investment
Company Shares" means such redeemable Shares.
TAX-SHELTERED CUSTODIAL ACCOUNT AGREEMENT APPLICATION
FOR RETIREMENT BENEFIT PLAN FOR EMPLOYEE OF
CERTAIN TAX EXEMPT ORGANIZATIONS OR OF PUBLIC SCHOOLS
----------------------------------------------------------------------------
Check Correct Fund: // LB Fund // LB Income Fund // LB Money Market Fund
// LB High Yield Fund // Other Fund
----------------------------------------------------------------------------
COMPLETE AND SIGN
My TSCA is intended to be:
// Active or // Inactive
// Rollover contribution // Transfer Contribution
MAKE CHECK PAYABLE TO LUTHERAN BROTHERHOOD SECURITIES CORP.
MAIL ALL MATERIAL TO:
Lutheran Brotherhood Securities Corp.
P.O. Box 310
Minneapolis, Minnesota 55440-9188
----------------------------------------------------------------------------
PLEASE BE SURE THAT THE APPLICATION IS SIGNED BY
THE EMPLOYER AND EMPLOYEE.
The Employer and Employee named below hereby apply for the establishment
of a Custodial Account in accordance with the terms of the Custody Agreement
attached hereto, which terms are incorporated herein by reference with the
following additional terms and conditions:
1. THE EMPLOYER:
Name
--------------------------------------------------------------------
Address
-----------------------------------------------------------------
-------------------------------------------------------------------------
Tax Ident. No.
----------------------------------------------------------
2. THE EMPLOYEE:
Name
--------------------------------------------------------------------
Address
-----------------------------------------------------------------
-------------------------------------------------------------------------
Birthday Soc. Sec. No.
---------------------- --------------------------
Phone (Day) (Evening)
------------------- --------------------------
3. All contributions made by the Employer and the Employee are to be
deposited in the Custodial account established hereby or previously
established for the benefit of the Employee. Such funds are to be
invested in accordance with the terms and provisions of the Custody
Agreement, and the Custodian is hereby instructed by the Employee that
such funds initially are to be invested in the shares of the Regulated
Investment Company.
The Employee hereby acknowledges that he/she has received a copy of, and
has read, the current prospectus of the investment company or companies
named above and agrees to the terms and administrative fees thereof. The
fee schedule is listed below and subject to change.
SCHEDULE OF CUSTODIAN'S FEES
Establishing the account........................................$ 5.00
Annual fee per fund account.....................................$10.00
Processing a lump sum distribution..............................$10.00
Processing each periodic distribution...........................$ 2.00
----------------------------------------------------------------------------
Initial contribution $
---------------------
Please bill me: // Monthly $ // Semi-annually $
--------- ---------
// Quarterly $ // Annually $
--------- --------------
// Other $
------------------- ---------------------
// Check here if combined billing -- Make check payable to
Lutheran Brotherhood
if combined billing with TSA.
----------------------------------------------------------------------------
"I the undersigned, certify that I am a qualified purchaser as set forth in
the current prospectus of the Fund" and I certify under penalties of perjury
that the Social Security or Taxpayer Identification Number provided above is
correct, and I am not subject to back-up withholding.
----------------------------------------------------- -------------------
SIGNATURE OF EMPLOYEE DATE
----------------------------------------------------- -------------------
SIGNATURE OF EMPLOYER/TITLE DATE
STATE STREET BANK AND TRUST COMPANY HEREBY ACCEPTS its appointment as
Custodian of the Custodial Account pursuant to the Custody Agreement
(for Trustee only)
----------------------------------------------------- -------------------
SIGNATURE/TITLE DATE
TO BE COMPLETED BY REGISTERED REPRESENTATIVE:
02000 LBSC / 0 / / / / 0 / / / / 0 / / / /
---------- ---------------------------------------
DEALER REGISTERED REPRESENTATIVE ID
---------------------------------------------------------
SIGNATURE OF REGISTERED REPRESENTATIVE DATE
/ / / /
--------- -----------------------------------
AGENCY NO. PRINT GENERAL AGENT NAME
---------------------------------------------------------
SIGNATURE OF PRINCIPAL (Home Office use only)
APPLICATION FOR ASSOCIATE MEMBERSHIP
The following information is mandatory to determine membership status.
BASIS FOR MEMBERSHIP (select one from below)
1. Current Adult or Juvenile
Benefit Contract Member ------------------------------------------
(Lutheran Brotherhood (1) Lutheran Brotherhood Contract No.
contract holder).
2. Current Associate Member
of Lutheran Brotherhood ------------------------------------------
(Mutual Fund shareholder). (2) Lutheran Brotherhood Securities Corp.
Mutual Fund Account No.
3. Current member of a Lutheran church congregation.
4. Baptized in the Christian faith under the auspices of a Lutheran church
and professes to be Lutheran.
5. Baptized in the Christian faith, prior member of a Lutheran church
congregation, and professes to be Lutheran.
6. Affiliated with a Lutheran church organization and professes to
be Lutheran.
---------------------------------------------------------
(3-6) Lutheran Church Congregation Name
7. An employee of an organization with either 50% owners or
50% employees Lutheran.
---------------------------------------------------
SIGNATURE OF EMPLOYEE
----------------------------------------------------------------------------
SUITABILITY REQUIREMENTS
The following information is mandatory to determine suitability of sale.
It is strictly confidential and for Home Office use only.
Occupation
-----------------------------------------------------------------
Taxable Income:
// Under $10,000
// $10,000 to $24,999
// $25,000 to $49,999
// Over $50,000
INITIAL DESIGNATION OF BENEFICIARY(IES)
As primary beneficiary: (a)
Name
------------------------------------------------------------------------
Address
--------------------------------------------------------------------
Soc. Sec. No. Date of Birth / /
--------------------------------- ---------------
Name
------------------------------------------------------------------------
Address
--------------------------------------------------------------------
Soc. Sec. No. Date of Birth / /
--------------------------------- ---------------
As secondary beneficiary (if the person(s) named in (a) should fail to
survive me):
Name
------------------------------------------------------------------------
Address
--------------------------------------------------------------------
Soc. Sec. No. Date of Birth / /
--------------------------------- ---------------
Name
------------------------------------------------------------------------
Address
--------------------------------------------------------------------
Soc. Sec. No. Date of Birth / /
--------------------------------- ---------------
----------------------------------------------------------------------------
* QUALIFY FOR CUMULATIVE DISCOUNT (list all existing account numbers and
identify fund)
------------- ------------- ------------- ------------- -------------
SEE PROSPECTUS FOR DETAILS
----------------------------------------------------------------------------
SPECIAL INSTRUCTIONS OR COMMENTS:
------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
AGREEMENT FOR SALARY REDUCTION
BY THIS AGREEMENT made between
(the "Employee")
------------------------------------------------------------
and
(the "Employer")
------------------------------------------------------------
the parties hereto agree as follows:
EFFECTIVE with respect to amounts earned on or after the first day
of , 19 (which date is subsequent to the execution
--------------------- ---
of this Agreement), the Employee's salary will be reduced by the amount
indicated below, and at the same time the Employer's contribution to the
Employee's Lutheran Brotherhood Family of Mutual Funds Tax-Sheltered
Custodial Account (the "Account") will be increased by a corresponding
amount, to be invested in accordance with the Custody Agreement relating to
the Account and as designated by the Employee.
This Agreement shall be legally binding and irrevocable as to each of the
parties hereto while employment continues; provided, however, that either
party may terminate this Agreement as of the end of any month, so that it
will not apply to salary subsequently earned, by giving at least thirty days
written notice of the date of termination; and provided, further, that no
more than one agreement for such salary reduction may be made within any
taxable year of the Employee.
Reduce my annual gross compensation beginning by
--------------------------
the sum of $ on a basis.*
-------------- -------------------------------------
Monthly, Quarterly, Annually
The amount cannot exceed the exclusion allowance under Section 403(b) of the
Internal Revenue Code, or such other limits as may be prescribed by Code
Section 415 under the circumstances.
*EXCEPTIONS TO THE ABOVE: // 9 monthly // 10 monthly // twice monthly
// every other month // other
----------------
It is understood that the amount of such salary reduction, together with any
contribution by the Employer, will be paid by the Employer directly to State
Street Bank and Trust Company, Boston, Massachusetts.
Signed this day of , 19 :
------ -------------- -- -------------------------------
EMPLOYEE
Signed this day of , 19 :
------ -------------- -- -------------------------------
EMPLOYER/TITLE
AGREEMENT FOR SALARY REDUCTION
BY THIS AGREEMENT made between
(the "Employee")
------------------------------------------------------------
and
(the "Employer")
------------------------------------------------------------
the parties hereto agree as follows:
EFFECTIVE with respect to amounts earned on or after the first day
of , 19 (which date is subsequent to the execution
--------------------- ---
of this Agreement), the Employee's salary will be reduced by the amount
indicated below, and at the same time the Employer's contribution to the
Employee's Lutheran Brotherhood Family of Mutual Funds Tax-Sheltered
Custodial Account (the "Account") will be increased by a corresponding
amount, to be invested in accordance with the Custody Agreement relating to
the Account and as designated by the Employee.
This Agreement shall be legally binding and irrevocable as to each of the
parties hereto while employment continues; provided, however, that either
party may terminate this Agreement as of the end of any month, so that it
will not apply to salary subsequently earned, by giving at least thirty days
written notice of the date of termination; and provided, further, that no
more than one agreement for such salary reduction may be made within any
taxable year of the Employee.
Reduce my annual gross compensation beginning by
--------------------------
the sum of $ on a basis.*
-------------- -------------------------------------
Monthly, Quarterly, Annually
The amount cannot exceed the exclusion allowance under Section 403(b) of the
Internal Revenue Code, or such other limits as may be prescribed by Code
Section 415 under the circumstances.
*EXCEPTIONS TO THE ABOVE: // 9 monthly // 10 monthly // twice monthly
// every other month // other
----------------
It is understood that the amount of such salary reduction, together with any
contribution by the Employer, will be paid by the Employer directly to State
Street Bank and Trust Company, Boston, Massachusetts.
Signed this day of , 19 :
------ -------------- -- -------------------------------
EMPLOYEE
Signed this day of , 19 :
------ -------------- -- -------------------------------
EMPLOYER/TITLE
TIPS FOR COMPLETING THE TSA CALCULATION FORM
The following instructions are intended to assist you in completing the
exclusion allowance calculation for TSAs and TSCAs. All TSA/TSCA
calculations may be done using the annuities disk. By following these
instructions, you should arrive at the total amount your client can
contribute to his or her Lutheran Brotherhood TSA (or TSCA) for the current
year. If you have specific questions on how to complete the calculation,
you can call Advanced Marketing on the Express Line.
----------------------------------------------------------------------------
THE FOLLOWING ITEM NUMBERS REFER AND POINT TO THE SAME IDENTICAL NUMBERS AS
THEY APPEAR ON THE FORM: MAXIMUM ANNUAL LEVEL TSA/TSCA CONTRIBUTION (SALARY
REDUCTION)
----------------------------------------------------------------------------
1a. Only for ELCA pension contributions made by employer during the current
year, or for salary addition TSA contributions made by any employer.
----------------------------------------------------------------------------
1b. Employer contributions to pension plan, state teacher's retirement
plan, or synod plan other than ELCA. Also include any before-tax
pension contributions made by employee. DO NOT put TSA contributions
here.
----------------------------------------------------------------------------
1c. Participants in Sec. 457 plans can include employees of state and local
governments, or other tax-exempt organizations. Contributions will
reduce dollar-for-dollar the allowable contribution to a TSA. Maximum
annual contribution for a Sec. 457 plan is $7,500.
----------------------------------------------------------------------------
2. For church employees, include total years of service with the same
SYNOD, even if employee has served several churches within that synod.
For school employees, include total years of service in the same SCHOOL
DISTRICT.
----------------------------------------------------------------------------
3. Assume normal retirement age 65 unless the employee plans to retire at
a different age.
----------------------------------------------------------------------------
4a. All salary reduction contributions to TSAs and/or TSCAs made through
Dec. 31 of the preceding year. Remember, only contributions made while
employed by the present employer need to be included.
----------------------------------------------------------------------------
4b. All pension contributions made by the current employer, including
before-tax employee contributions if applicable. DO NOT include
interest or dividends on the account, just contributions.
----------------------------------------------------------------------------
4c. All prior salary addition contributions to TSAs and/or TSCAs with the
present employer, as well as all prior contributions to Sec. 457 plans.
----------------------------------------------------------------------------
5. If employee receives housing, car, or other allowance, it should not be
included as salary unless he/she pays taxes on it. If the employee
makes before-tax contributions to the pension plan (1b) or to a
Sec. 457 plan (1c), subtract those amounts from the salary.
----------------------------------------------------------------------------
6. Applies only to employees who also own a controlling interest in a
business and maintain a plan (Xxxxx, SEP, or corporate) for
that business.
----------------------------------------------------------------------------
7. Applies only to employees who contribute to a 401(k) plan or a salary
reduction SEP. Such contributions will reduce dollar-for-dollar the
allowable contribution to a TSA.
----------------------------------------------------------------------------
8. This applies only to employees who have exceeded the $9,500 annual limit
on TSA contributions in effect since 1987. See the TSA booklet for more
information on the Special Exclusion Allowance.
----------------------------------------------------------------------------
LUTHERAN BROTHERHOOD MAXIMUM ANNUAL LEVEL TSA/TSCA CONTRIBUTION
000 Xxxxxx Xxxxxx Xxxxx (xxxxxx xxxxxxxxx)
Xxxxxxxxxxx, Xxxxxxxxx 00000
(LOGO)
----------------------------------------------------------------------------
FOR:
----------------------------------- -------------------------------------
Client's Name Contract/Account No. (if applicable)
----------------------------------------------------------------------------
Answer for your present employer and tax year unless otherwise indicated.
1. $ TOTAL CURRENT CONTRIBUTIONS (Sum of a, b and c)
-------------
(a) $ ELCA and/or salary addition TSA/TSCAs
----------
(b) $ Concordia and other employer plans
----------
(include employer and before-tax
employee contributions)
(c) $ Section 457 Def Comp.
----------
2. YEARS OF SERVICE to date.
---------------
3. ADDITIONAL YEARS TO RETIREMENT
---------------
4. $ TOTAL PRIOR YEARS' CONTRIBUTIONS (sum of a, b and c)
-------------
(a) $ TSA/TSCA reduction
----------
(b) $ Employer plans (include synod plans)
----------
(c) $ TSA/TSCA addition and Section 457 Def Comp
----------
5. $ INCLUDABLE COMPENSATION (salary less any employee
-------------
before-tax contributions entered in 1b and/or any
entry in 1c)
6. $ TOTAL ANNUAL CONTRIBUTIONS to other plans controlled by
-------------
employee (such as an HR-10 Plan on any self-employment
earnings).
7. $ CURRENT ELECTIVE DEFERRALS with other employers (401(k)
-------------
and/or salary reduction SEPs).
8. $ TOTAL CONTRIBUTED SINCE 1/1/87 under Special Exclusion
-------------
Allowance (amount in excess of $9500 per year).
STEP 1: Exclusion Allowance
1. $ 5. $ 3.
--------------------- -------------------- ---------------------
(3. -- 1 YEAR) x (2.+ 3.) x x 5
--------- ----------------
$ $
--------------------- --------------------- ---------------------
4. + - $ (2. + 3.) +
--------------- -------------- -----------
$ $ A B
--------------------- -------------------- -----------------
-------------------- -----------------
x 5
$
--------------------
Divide: $ A DIVIDED BY B =
--------------- ----------------- --------------
$
--------------
GRAND TOTAL
STEP 2: Overall Percentage Limit
1a. $ 5.* $
----------------------- -----------------------
1c. + $ - $
------------------- ----------------------
$ C
------------------------- ----------------------
----------------------
6. + $
---------------------
$
-------------------------
7. + $
---------------------
$
-------------------------
x 4
$
-------------------------
Divide: $ C DIVIDED BY 5 =
----------------- ---------------
$
---------------
GRAND TOTAL
* If there is a figure in box 6. and/or 7. above, add the applicable
earnings upon which these contributions were based to the figure in box 5.
STEP 3: Overall Dollar Limit
$30,000
1a. - $
------------------------
$
-------------------------------
1c. - $
------------------------
$
-------------------------------
6. - $
------------------------
$
-------------------------------
7. - $
------------------------
-----------------
$
-----------------
GRAND TOTAL
----------------------------------------------------------------------------
IMPORTANT: SIGNATURE IS NEEDED ON THE BACK
(IF THIS IS A TWO-SIDED DOCUMENT)
STEP 4: Salary Deferral Limit
$ 9,500
1c. - $
------------------------
$
-------------------------------
7. - $
------------------------
----------------
$
----------------
GRAND TOTAL
OPTIONAL STEP 4: Special Exclusion Allowance. Substitute if Step 4 is
smaller than Steps 1, 2, and 3 and the employee has 15 or more years of
service with a qualifying employer (educational institution, hospital, home
health service agency, health and welfare service agency, or a church,
convention or association of churches).
----------------------------------------------------------------------------
STEP A: $ 3,000 A
----------------------------------------------------------------------------
STEP B: $15,000
8. - $
----------------------
$ B
-----------------------------
-----------------------------
----------------------------------------------------------------------------
STEP C: $ 5,000
2. x
-----------------------
$
-----------------------------
4a. - C
----------------------
$----------------------
----------------------
----------------------------------------------------------------------------
STEP D:
$ 9,500
1c. - $
-----------------------
$
-----------------------------
7. - $
----------------------
$
------------------------------
+ $ Smallest of Step A, B or C
----------------------
---------------
$ Optional Step 4
---------------
GRAND TOTAL
STEP 5:
Compare the results of the computations in steps 1, 2, 3 and 4. The
smallest is the amount the employee may contribute to his/her TSA/TSCA(s).
If the smallest is Step 4 and the employee has at least 15 years of service
to date, the increased special exclusion allowance may be available, see the
Optional Step 4 above.
$ Smallest of steps 1, 2, 3 or 4.
---------------------
- Total annual amount currently being contributed
-------------------
to TSAs/TSCAs with other companies.(Note: LB and
LBSC are not the same company.) Name of other
company:
-----------------------------------------
$ Maximum annual contribution to Lutheran Brotherhood.
----------------------
----------------------
DIVIDED BY Total number of payments to be remitted in current
-------------
taxable year.
$ Maximum Amount per payment.
----------------------
----------------------
Prepared by: Date:
-------------------------------------- ----------------
This form is designed to help to determine the allowable contribution to a
Tax-Sheltered Annuity or Custodial Account. It is the employee's
responsibility to determine that the employer is a 501(c)(3) organization or
public educational institution, that he/she is an employee of that
organization within the meaning of law, and that the amount of contribution
made by the employer does not exceed the lesser of the Exclusion Allowance,
Overall Limitation or the Salary Deferral Limit. Neither Lutheran
Brotherhood, Lutheran Brotherhood Securities Corp. nor the custodian (if
TSCA) shall have any responsibility in this regard.
Employee Signature: Date:
-------------------------------- -----------------
THE
LUTHERAN BROTHERHOOD
FAMILY OF MUTUAL FUNDS
LUTHERAN BROTHERHOOD FUND. . .
seeks growth of capital and of income by concentrating in the stocks of
high quality companies.
LUTHERAN BROTHERHOOD HIGH YIELD FUND. . .
seeks high current income and growth of capital by investing primarily
in high yield, lower-rated corporate bonds.
LUTHERAN BROTHERHOOD INCOME FUND. . .
seeks to obtain as high a current income as possible consistent with
preservation of principal with a secondary objective of obtaining
long-term growth of capital in order to maintain the investor's
purchasing power.
LUTHERAN BROTHERHOOD MONEY MARKET FUND. . .
seeks current income consistent with stability of principal. The fund
offers a convenient means of accumulating an interest in a
professionally managed diversified portfolio limited to money market
instruments maturing in one year or less.
Principal Distributors of the Lutheran Brotherhood Funds
000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000
Call toll free:
0-000-000-0000 - Out of state residents
0-000-000-0000 - Minnesota residents
(000) 000-0000
THIS BOOKLET IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS CONTAINING FURTHER INFORMATION
ABOUT SALES CHARGES AND OTHER IMPORTANT FACTS.
