TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 1 ----- Parties to this Contract
Section 2 ----- Other Defined Terms
ARTICLE II CONTRIBUTIONS AND ACCOUNTS
Section 1 ----- Contributions
Section 2 ----- Separate Account B
Section 2A ----- Determination of Unit Value of Separate Account B
Section 2B ----- Determination of Net Investment Factor
Section 3 ----- Investment Accounts
Section 4 ----- Forfeitures
Section 5 ----- Transfers Between Investment Accounts
Section 6 ----- Disposition of an Investment Account
Section 7 ----- Cancellation of Investment Account Units
Section 8 ----- Funds
ARTICLE III EXPENSES
Section 1 ----- Expenses
ARTICLE IV BENEFITS
Section 1 ----- Distribution of Benefits
ARTICLE IVA INCOME BENEFITS
Section 1 ----- Income Benefits
Section 2 ----- Options
Section 3 ----- Amount and Form of Benefit Payments
Section 4 ----- Change in Variable Annuity Payments
Section 5 ----- Adjustment to Variable Annuity Reserves
Section 6 ----- Mortality and Expense Guarantees
Section 7 ----- Basis of Annuity Purchases
Section 8 ----- Cancellation of Annuity
ARTICLE IVB OTHER BENEFITS
Section 1 ----- Benefits Available Upon Termination, Retirement, or Disability
Section 2 ----- Benefits Payable at Death
Section 2A ----- Options for Benefits Payable at Death
Section 3 ----- Withdrawals
(CE)
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ARTICLE V TRANSFERS; CESSATION
Section 1 ----- Transfer to Another Funding Agent
Section 2 ----- Transfer to a Companion Contract
Section 3 ----- Transfer from a Companion Contract
Section 4 ----- Cessation of Contributions
ARTICLE VI CHARGES AND LIMITATIONS
Section 1 ----- Limitations on Payments and Transfers from Investment Accounts
Section 2 ----- Charges for Discontinuation of Participation Under the
Contract
ARTICLE VII GENERAL PROVISIONS
Section 1 ----- Certificates
Section 2 ----- Beneficiary
Section 3 ----- Dividends
Section 4 ----- Contract
Section 5 ----- Plan and Plan Amendments
Section 6 ----- Waiver and Modification
Section 7 ----- Misstatements
Section 8 ----- Information, Proofs and Determination of Facts
Section 9 ----- Amendment
Section 10 ----- Contributions
Section 11 ----- Modification in Mode of Payment of Annuity
Section 12 ----- Commutation of Payments
Section 13 ----- Facility of Payment
Section 14 ----- Pronouns
Section 15 ----- Assignment
Section 16 ----- Investment Manager
Section 17 ----- Basis of Reserve
Section 18 ----- Substituted Securities
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ARTICLE I -- DEFINITIONS
SECTION 1--PARTIES TO THIS CONTRACT. This contract is between the Contractholder
and Principal Mutual Life Insurance Company.
Contractholder means the holder of this contract named on the face page and will
be referred to in this contract as you or your.
Principal Mutual Life Insurance Company will be referred to in this contract as
we, us, or our.
SECTION 2--OTHER DEFINED TERMS.
Annual Average Balance means the total value at the beginning of the Deposit
Year of all Investment Accounts which correlate to a Plan Participant under this
contract and other Plan assets that correlate to a Plan Participant that are not
allocated to the contract or an associated or Companion Contract but for which
the Company provides recordkeeping services (outside assets), adjusted by the
time weighted average of Contributions to, and withdrawals from, Investment
Accounts and outside assets (if any) which correlate to Plan Participant during
the period.
Annuity Change Factor means the factor described in Article IVA, Section 4.
Annuity Commencement Date means the beginning date for annuity payments.
Annuity Premium means the amount applied under this contract to purchase an
annuity.
Annuity Purchase Date means the date an Annuity Premium is applied to purchase
an annuity.
Companion Contract means a group annuity contract not registered with the
Securities and Exchange Commission offering guaranteed interest crediting rates
which may be issued by us to you for the purpose of funding benefits under the
Plan. We must agree in writing that a contract is a Companion Contract.
Contract Date means the date this contract is effective, as shown on the face
page.
Contract Year means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
Contributions means amounts you pay to us which we have accepted under Article
II, Section 1.
Deposit Year means the twelve month period selected by you.
Division means a part of Separate Account B invested in shares of a single
Mutual Fund. You may choose to limit the Divisions available to Plan
Participants under this contract.
Employer means the corporation, sole proprietor, firm, organization, agency or
political subdivision named as employer in the Plan and any successor.
Flexible Income Option means a form of distributing benefits as described in
Article IVA, Section 2.
Funding Agent means an insurance company, custodian or trustee designated by you
and authorized to receive any amount or amounts transferred under Article V,
Section 1. Funding Agent will also mean Principal Mutual Life Insurance Company
where you direct us to transfer such amounts from this contract to another group
annuity contract issued by us to you.
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Internal Revenue Code means the Internal Revenue Code of 1986, as amended and
the regulations thereunder. Reference to the Internal Revenue Code means such
Code or the corresponding provisions of any subsequent revenue code and
regulations thereunder.
Investment Account means the account established as described in Article II,
Section 3.
Investment Account Value means the value of an Investment Account for a Division
which on any date will be equal to the number of units then credited to such
account multiplied by the Unit Value for this series of contracts for that
Division for the Valuation Period in which such date occurs.
Mutual Fund means a registered open-end investment company in which a Division
of Separate Account B invests.
Net Investment Factor means, for a Division, the factor described in Article II,
Section 2B, for this series of contracts.
Normal Income Form means the form of benefit to be provided under the Plan if
the Owner of Benefits does not elect some other form. If the Plan does not
specify a normal income form, the Normal Income Form will be:
(a) for an unmarried Plan Participant, the variable annuity specified in Option
1 of Article IVA, Section 2, with a minimum period of 10 years.
(b) for a married Plan Participant, the variable annuity with one-half
survivorship specified in Option 4 of Article IVA, Section 2.
Notification means any form of notice that is received by us at our home office
and that is approved in advance by us, including approved written forms,
electronic transmissions, telephone transmissions, facsimiles or photocopies. We
will notify you regarding the acceptable forms of notice we will allow. At our
discretion, we may require that another form of notice be used in a particular
case or that a particular notice be confirmed.
Owner of Benefits means the entity or individual that has the exclusive right to
be paid benefits and exercise rights and privileges pursuant to such benefits.
The Plan Participants are the Owners of Benefits.
Plan means the retirement plan established by the Employer in effect on the date
this contract is executed and as amended from time to time, which the Employer
has designated to us in writing as the plan funded by this contract.
Plan Participant means a person who is (i) a participant under the Plan, (ii) a
spouse beneficiary of a deceased participant, or (iii) an alternate payee under
a Qualified Domestic Relations Order, in whose name records of contributions and
accounts are kept under this contract.
Qualified Domestic Relations Order means a Qualified Domestic Relations Order as
defined in Internal Revenue Code Section 414(p)(1)(A).
Quarterly Date means the last Valuation Date in the third, sixth, ninth and
twelfth month of each Deposit Year.
Separate Account B means Principal Mutual Life Insurance Company Separate
Account B as described in Article II, Section 2.
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Termination of Employment means a Plan Participant's termination of employment
with the Employer, determined under the Plan and as reported to us.
Total and Permanent Disability means that a Plan Participant is disabled, as the
result of sickness or injury, so as to be prevented from engaging in any
substantial gainful activity and such total disability has been continuous for a
period of at least six months. The Plan Participant must submit due proof
thereof which is acceptable to us.
Unit Value means the value of a unit of a Division of Separate Account B, as
described in Article II, Section 2A.
Valuation Date means the date on which the net asset value of a Mutual Fund is
determined.
Valuation Period means the period of time between when the net asset value of a
Mutual Fund is determined on one Valuation Date and when such value is
determined on the next following Valuation Date.
Variable Annuity Payments means a series of periodic payments which are not
guaranteed as to dollar amounts but which will increase or decrease to reflect
the investment experience of the Common Stock Division of Separate Account B.
Periodic payments made pursuant to the Flexible Income Option as described in
Article IVA, Section 2, are not Variable Annuity Payments.
Variable Annuity Reserves means the reserves held for annuities in the course of
payment.
Yearly Date means the Contract Date and the same day of each year thereafter.
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ARTICLE II -- CONTRIBUTIONS AND ACCOUNTS
SECTION 1--CONTRIBUTIONS. Contributions may be accepted by us under this
contract on any date on or after the Contract Date, subject to the provisions of
Article VII, Section 10. A Contribution is any amount determined or allowed by
the Plan to be paid to us. Contributions which correlate to a Plan Participant
may be paid to us at any time on or after the Contract Date. Contributions in
excess of those determined by the Plan may be paid to us only with our consent.
All Contributions are payable directly to us at our home office in Des Moines,
Iowa.
Contributions may be directed to any Investment Accounts available as described
in Section 3 of this Article, as specified by Notification to us. Contributions
will be added to each Investment Account in the amount or percentage specified
in the Notification on file with us. If we have no Notification on file for a
particular Contribution, we will direct such Contribution to the Money Market
Division Investment Account which correlates to the Plan Participant in whose
name the Contribution was made. The investment direction may be changed at any
time by filing a new Notification with us. The Money Market Division will be
available for this purpose even if you choose not to make the Money Market
Division available as an investment option for Plan Participants under this
contract.
We will maintain separate accounting records for each type of Contribution which
correlate to Plan Participants that is permitted or required to be made under
the Plan.
SECTION 2--SEPARATE ACCOUNT B. We have established and will maintain a separate
account called Principal Mutual Life Insurance Company Separate Account B
(Separate Account B). Separate Account B is divided into several Divisions. The
Divisions of Separate Account B available on the Contract Date for Contributions
are the Capital Accumulation Division, Government Securities Division and Money
Market Division. Each Division invests amounts credited in a Mutual Fund at net
asset value. Any and all distributions made by a Mutual Fund in respect of its
shares held by Separate Account B will be reinvested in additional shares of
such Mutual Fund, at net asset value. A redemption of Mutual Fund shares by
Separate Account B is at net asset value. We reserve the right to change the
Mutual Funds in which Separate Account B invests as provided in Article VII,
Section 18.
Amounts which will be credited to Separate Account B include amounts held in
connection with this contract and other contracts we designate as participating
in Separate Account B, and amounts which are credited to it by us for the
purpose of maintaining reserves for Variable Annuity benefits.
In addition, all income, gains and losses, whether or not realized, and expenses
with respect to Separate Account B or a Division thereof will be credited to or
charged against such Separate Account B or such Division without regard to our
income, gains, losses, or expenses or the income, gains, losses or expenses of
any other Division of Separate Account B. The assets of Separate Account B or a
Division thereof will not be charged with any of our liabilities or any
liabilities arising out of any other Division of Separate Account B.
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SECTION 2A--DETERMINATION OF UNIT VALUE OF SEPARATE ACCOUNT B. The Unit Value
for a Division of Separate Account B is the basis of determining the value of
interests of Owners of Benefits in such Division. The Unit Value for each
Division is determined on each date on which the net asset value of its
underlying Mutual Fund is determined.
The Unit Value for a Division for a Valuation Period is the value determined as
of the end of such period. The Unit Value for each Division was fixed at $1.00
for the Valuation Period in which the first amount of money was credited to that
Division of Separate Account B under this series of contracts. The Unit Value
for a Division for any later Valuation Period is equal to its Unit Value for the
immediately preceding Valuation Period multiplied by the Net Investment Factor
for such Division for this series of contracts for such later Valuation Period.
SECTION 2B--DETERMINATION OF NET INVESTMENT FACTOR. The Net Investment Factor
for a Division for this series of contracts for any specified Valuation Period
is equal to
(a) the quotient obtained by dividing (i) the net asset value of a share of its
Mutual Fund as of the end of such Valuation Period, plus the per share
amount of any dividend or other distribution made by such Mutual Fund
during such Valuation Period (less any adjustment for taxes, if any) by
(ii) the net asset value of a share of such Mutual Fund as of the end of
the immediately preceding Valuation Period,
reduced by
(b) a mortality and expense risks charge of a number equal to the ratio of (i)
the number of days in the Valuation Period, to (ii) 365, multiplied by
.64%.
The amounts derived from applying the rate specified in subparagraph (b) above
will be accrued daily and will from time to time be transferred from Separate
Account B at our discretion. The net asset value of a share of a Mutual Fund is
determined and reported by such Mutual Fund or its agent.
SECTION 3--INVESTMENT ACCOUNTS. An Investment Account for each type of
Contribution will be established to correlate with each Plan Participant for
each Division of Separate Account B under this contract, as directed by you, or
the Owner of Benefits, as provided by the Plan. We will maintain each of these
Investment Accounts until the Investment Account Value is either applied to
provide an annuity for the Owner of Benefits under Article IVA, or paid to the
Owner of Benefits or the beneficiary, or transferred in accordance with the
provisions of this contract.
Each Contribution of each type will be allocated to the Division or Divisions of
Separate Account B in accordance with the Notification on file with us and will
result in a credit of units to the appropriate Investment Account. The number of
units credited will be determined by dividing the portion of the Contribution
allocated to a Division by the Unit Value for such Division for the Valuation
Period within which the Contribution was received by us.
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SECTION 4--FORFEITURES. When we are notified that an event has occurred, as
determined by the Plan, which requires a reduction to any Investment Accounts,
we will identify and segregate the amounts involved in the Investment Accounts
affected. Any segregated amounts will become forfeitures and the necessary units
will be cancelled in accordance with Article II, Section 7. The resulting
amounts will be added to any other forfeiture amounts and will be applied in
accordance with Plan provisions on the earliest date which is consistent with
Plan provisions. Any amounts allocated because of this Section will be
considered a Contribution under Section 1 of this Article, and the provisions of
Section 1 will apply.
SECTION 5--TRANSFERS BETWEEN INVESTMENT ACCOUNTS. All or any portion of an
Investment Account which correlates to a Plan Participant may be transferred to
another Investment Account correlating to such Plan Participant under this
contract for the same type of Contribution. Any transfer is subject to the
following:
(a) We must receive Notification to transfer from you, or the Owner of
Benefits, as permitted by the Plan. The Notification will specify the
amount to be transferred and the accounts involved.
(b) No transfer will be effective if it is within one month before the Annuity
Commencement Date.
(c) All transfers are subject to the limitations contained in Article VI,
Section 1.
Any transfer under this Section will be an application from the Investment
Account from which the funds are transferred as of the date of transfer and will
be treated as a Contribution to the appropriate Investment Account as of the
date of the transfer.
SECTION 6--DISPOSITION OF AN INVESTMENT ACCOUNT. Units will remain credited to
each Investment Account until cancelled for one of the following:
(a) Application to purchase an annuity for the Owner of Benefits.
(b) Payment of a single sum cash benefit to the Owner of Benefits or the
beneficiary.
(c) Transfer or adjustment of the value of such account, according to the terms
of this contract.
(d) Payment of the charges described in Article VI, Section 2.
(e) Payment of the expenses described in Article III, Section 1.
SECTION 7--CANCELLATION OF INVESTMENT ACCOUNT UNITS. When a payment, transfer,
application is made or an expense is paid from an Investment Account, the number
of units to be cancelled will be determined by dividing the dollar amount of the
payment, transfer, application or expense by the Unit Value for such Investment
Account.
SECTION 8--FUNDS. We are the sole owner of all funds received under this
contract.
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ARTICLE III -- EXPENSES
SECTION 1--EXPENSES. We charge a one-time application fee of $925, payable when
the application is submitted to us. We also make a contract administration
charge and a recordkeeping charge each Quarterly Date and upon certain
withdrawals of all Investment Account Values which correlate to a Plan
Participant. We will charge you for services you ask us to perform that are not
covered by the contract administration and recordkeeping charges, including, but
not limited to, charges for producing sample documents. We will inform you of
the charges for such services before we perform them.
The contract administration charge assessed on the Quarterly Date is equal to
one-fourth of the product obtained by multiplying the Annual Average Balance at
the end of the preceding quarter by .35%, with a $750 annual minimum.
If all Investment Accounts which correlate to a Plan Participant are cancelled
as a result of a withdrawal at any time other than a Quarterly Date, the
contract administration charge assessed will be the product of (i) the value at
the immediately preceding Quarterly Date of the Investment Accounts so
cancelled, adjusted by the time weighted average of Contributions to, and
withdrawals from, such Accounts for the period from such Quarterly Date through
the date of cancellation, multiplied by (ii) the percentage figure described
above pro-rated for the period.
The recordkeeping charge is $34 per Plan Participant per year and is based on
the number of Plan Participants, both active and inactive, for whom there are
Investment Accounts or for whom we provide recordkeeping services on outside
assets during the quarter. Outside asset recordkeeping charges will be figured
as follows:
Outside Lives
1 - 25 $1,000.00
26 - 49 $15.30 / member + $614.70
50 - 99 $13.95 / member + $682.20
100 - 299 $12.60 / member + $817.20
300 - 499 $10.35 / member + $1,492.20
500 - 999 $8.55 / member + $2,392.20
1,000 - 2,499 $6.30 / member + $4,642.20
2,500 - 4,999 $5.40 / member + $6,892.20
5,000 & Over $4.50 / member + $11,392.20
Extra Outside Asset Accounts Plus 15% of Outside Asset charge
for each extra acct
One-fourth of the annual charge is normally assessed each Quarterly Date. The
amount of the standard recordkeeping charge is subject to adjustment, up or
down, depending on whether employer reports and summaries and benefit plan
reports for Plan Participants are to be prepared on other than a quarterly
basis, whether more or less than two non-discrimination tests under Internal
Revenue Code Sections 401(k) and 401(m) are to be performed annually, and
whether Plan Participant data, investment elections, and ongoing Contributions
are to be reported in our standard format by modem, magnetic tapes or diskettes.
In addition, if reports are mailed directly to Plan Participants, there is an
additional charge of $3 per Plan Participant per year. The amount of the
adjustment is prescribed in a written service and expense agreement we have with
you. You must advise us before each Quarterly Date of any circumstances which
would result in an adjustment to the amount of the charge. A 5% additional
recordkeeping charge will apply if investment charges and transfers are made by
paper rather than our toll-free number.
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An additional location recordkeeping fee of $600 per year applies for each
additional employee group or location requiring separate (i) communication with
us, (ii) benefit plan reports, or (iii) profit sharing-style allocations. In
addition, separate contract administration, recordkeeping, and documentation
fees may apply for each employee group or location requiring separate government
reports and/or sample plan documents.
If the first Deposit Year is less than twelve months, the recordkeeping charge
will be adjusted so that the full amount of the annual charge per Plan
Participant will be assessed during the Deposit Year.
If all Investment Accounts which correlate to a Plan Participant are cancelled
as a result of a withdrawal at any time during the Deposit Year, we will charge
the unassessed portion of the full annual recordkeeping charge attributable to
the Plan Participant.
If the contract administration or recordkeeping charge is being deducted from
Investment Accounts which correlate to a Plan Participant, we will reduce the
charges to be deducted, if necessary, so that the charges will not exceed 1% of
the aggregate Investment Account Values which correlate to the Plan Participant
at the time the charges are made. If we have also issued a Companion Contract to
you, the recordkeeping charge chargeable under the Companion Contract with
respect to any Plan Participant will be reduced by the amount of the
recordkeeping charge paid under this contract.
The contract administration and recordkeeping charges (or certain components
thereof) may be deducted from the Investment Accounts or may be paid separately
by you, as specified in your written service and expense agreement with us. If
such charges are deducted from Investment Accounts, the portion of the charges
attributable to a Plan Participant is allocated to the Investment Accounts which
correlate to the Plan Participant in proportion to the relative values of such
Investment Accounts. The charges will be an application from each such Account
when deducted, and will be made by cancelling units as described in Article II,
Section 7.
If charges are being paid separately by you, these charges must be paid to us
directly at our home office in Des Moines, Iowa. We will send you a statement of
the charges periodically in accordance with our written service and expense
agreement with you. Such charges must be paid within 31 days from the date of
the statement. If the contract administration and recordkeeping charges
attributable to investments in the contract are not paid within 31 days from the
date of the statement date, we will deduct them from the Investment Accounts as
set out above. If this automatic deduction of the charges occurs twice in any
twenty-four (24) month period, we will deduct the contract administration and
recordkeeping charges from the Investment Accounts thereafter until a new
written service and expense agreement is completed with us.
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ARTICLE IV -- BENEFITS
SECTION 1--DISTRIBUTION OF BENEFITS. Benefits will be payable to an Owner of
Benefits or a beneficiary under this contract as an annuity or in flexible
income payments as described in Article IVA, or in a single sum payment as
described in Article IVB.
Depending on Plan provisions, benefits may be payable at the request of the
Owner of Benefits or because of a Plan Participant's
(a) Termination of Employment,
(b) retirement (whether early, normal or late),
(c) disability,
(d) death, or
(e) withdrawal as described in Article IVB, Section 3.
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ARTICLE IVA-- INCOME BENEFITS
SECTION 1--INCOME BENEFITS. An Owner of Benefits may elect to have all or any
portion of the Investment Accounts which correlate to a Plan Participant used to
provide a Flexible Income Option or purchase a benefit payment for the Owner of
Benefits, payable under any option of Section 2 of this Article, as long as the
benefit conforms to Plan provisions and complies with the following:
(a) The amount available to provide the annuity is as specified by the Plan, as
reported to us by you.
(b) The Owner of Benefits, as permitted by the Plan, must request us to
purchase, using a form we either furnish or approve.
(c) If no optional form of income is elected, the Normal Income Form will be
purchased.
(d) Subject to the provisions of Article VII, Section 11, the Annuity Premium
amount applied for an Owner of Benefits must be at least $1,750. (If other
annuities have been provided from the Investment Accounts which correlate
to the Plan Participant under the contract, this provision does not apply.)
(e) Except for the Flexible Income Option, the form of annuity and the
contingent annuitant named (if any) cannot be changed after the Annuity
Purchase Date.
(f) The Annuity Commencement Date will be one month following the Annuity
Purchase Date.
(g) Variable Annuity Payments payable under any option of Section 2 of this
Article must be paid on a monthly basis.
(h) Flexible Income Option payments may be made on a monthly, quarterly,
semi-annual or annual basis unless the Plan specifies otherwise.
SECTION 2--OPTIONS. Any of the options described below may be chosen as the form
of income for payment of benefits.
Option 1--Variable Annuity with Minimum Period. This provides benefit payments
starting on the Annuity Commencement Date for the minimum period elected and
continuing for the lifetime of the Plan Participant. The minimum period may be
0, 5, 10, 15, or 20 years or the period (called the installment refund period)
required for the sum of all benefit payments to equal the amount applied,
assuming all payments are in the same amount as the initial payment. If this
option is chosen, we must have Notification of the length of the minimum period
and the beneficiary, if applicable, designated by the Owner of Benefits.
Option 2--Joint and Survivor Variable Annuity with Minimum Period. This provides
benefit payments starting on the Annuity Commencement Date for a minimum period
of 10 years. Benefits will be paid for the joint lifetimes of the Plan
Participant and the contingent annuitant named in the election and continue
after the death of either payee in the amount that would have been payable to
them jointly for the lifetime of the survivor. If both payees die before the end
of the minimum period, the remaining payments for the minimum period will be
paid to the beneficiary. If this option is chosen, we must have Notification of
the name and date of birth of the contingent annuitant and the beneficiary
designated by the Owner of Benefits.
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Option 3--Joint and Two-Thirds Survivor Variable Annuity. This provides benefit
payments, starting on the Annuity Commencement Date, for the joint lifetimes of
the Plan Participant and the contingent annuitant named in the election. At the
death of either payee, two-thirds of the amount that would have been payable had
both survived will be continued to the survivor for his lifetime. If this option
is chosen, we must have Notification of the name and date of birth of the
contingent annuitant.
Option 4--Variable Annuity with One-Half Survivorship. This provides benefit
payments starting on the Annuity Commencement Date and continuing for the
lifetime of the Plan Participant. If the Plan Participant dies on or after the
Annuity Commencement Date, one-half of the benefit payment will be continued to
the contingent annuitant for the lifetime of the contingent annuitant. If this
option is chosen, we must have Notification of the name and date of birth of the
contingent annuitant.
Option 5--Flexible Income Option. In place of a variable annuity payable under
Option 1, 2, 3 or 4 above or a single sum benefit payable under Article IVB,
Section 1, the Owner of Benefits may instead choose to receive benefits under
the Flexible Income Option.
(a) We will pay to the Owner of Benefits a portion of the aggregate
Investment Account Values on the date or dates requested each Year and
continuing for a period not to exceed the life or life expectancy of
the Plan Participant, or the joint lives or life expectancy of such
Plan Participant and the designated beneficiary, if such beneficiary is
the Plan Participant's spouse. Payments will end, however, on the date
no amounts remain in such accounts or the date such accounts are paid
or applied in full in accordance with (b) below.
Payments will be subject to the following:
(1) The life expectancy of the Plan Participant and his spouse, if
applicable, will be determined in accordance with the life
expectancy tables contained in Internal Revenue Regulation
Section 1.72-9. Life expectancy will be determined as of the
date on which the first payment is made. Life expectancy will
be redetermined by us annually each year thereafter.
(2) Payments may begin at any time after the Flexible Income
Option is requested. Payments must begin no later than the
latest date permitted or required by the Plan or regulations
to be the Annuity Commencement Date.
(3) Unless the Plan specifies otherwise, payments will be made
annually, semiannually, quarterly, or monthly as requested by
the Owner of Benefits and agreed to by us. The annual amount
payable will be the lesser of the aggregate Investment Account
Values which correlate to the Plan Participant or the minimum
annual amount determined in accordance with the minimum
distribution rules of the Internal Revenue Code. Such amount
will be determined by multiplying (i) by (ii) below:
(i) The value of the Investment Accounts which correlate to
the Plan Participant on the date life expectancy was
determined for the Plan Participant or for the Plan
Participant and his spouse for the current Year.
(ii) A fraction, the numerator of which is 1 and the
denominator of which is the expected return multiple
(life expectancy) for the Plan Participant's age or for
ages of the Plan Participant and his spouse as shown in
the tables contained in Internal Revenue Code Section
1.72-9. Age, for this purpose, means age nearest
birthday.
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Subject to the limitations of Article VI, Section 1 and the
charges in Article VI, Section 2, an Owner of Benefits may
request a payment in excess of the amount described above in
accordance with the provisions of (b) below.
(4) If the Plan Participant should die before the aggregate
Investment Account Values have been paid or applied in full,
the provisions of Article IVB, Sections 2 and 2A will be
applicable.
(5) Year for purposes of this Section means the twelve month
period starting on the Owner of Benefits' installment payment
starting date and each corresponding twelve month period
thereafter.
(b) An Owner of Benefits may request a payment in excess of the minimum
described in (a) above. Such payment may be equal to all or any portion
of the Investment Account Values which correlate to the Plan
Participant; provided, however, that if the requested payment would
reduce the total value of such accounts to a total balance of less than
$1,750 then such request will be a request for the total of such
Investment Accounts.
The Owner of Benefits may request termination of the Flexible Income Option by
giving us Notification (i) requesting an excess payment equal to the remaining
balance of the aggregate Investment Account Values which correlate to a Plan
Participant, (ii) requesting that the remaining balance of the aggregate
Investment Account Values be applied to provide an annuity in accordance with
one of the options of this Section, or (iii) a combination, as long as the
amount applied to provide an annuity is at least $1,750. Any excess payment will
be subject to the limitations of Article VI, Section 1 and the charges in
Article VI, Section 2, as previously described.
We will make such excess payment on the later of (i) the date requested, or (ii)
the date seven calendar days after we receive your Notification. The Annuity
Commencement Date for amounts so applied will be one month after the Annuity
Purchase Date. The Annuity Purchase Date for amounts so applied will be the
first Valuation Date of the month following our receipt of your Notification or
the first Valuation Date of such subsequent month as requested.
If the Owner of Benefits chooses the Flexible Income Option, an additional
annual charge of $25.00 will be assessed in the same manner as the recordkeeping
charge described in Article III, Section 1.
By written agreement with you, we may provide other options permitted by the
Plan.
SECTION 3--AMOUNT AND FORM OF BENEFIT PAYMENTS. We must have Notification no
later than the last Valuation Date in the month which begins two months before
the Annuity Commencement Date of the percentage of the aggregate Investment
Accounts which correlate to the Plan Participant to be applied under Article IVA
which is to provide Variable Annuity Payments as determined pursuant to the
Plan.
Variable Annuity Payments will be provided by the Investment Accounts, which
correlate to the Plan Participant, held under the Capital Accumulation Division
of Separate Account B. Therefore, before any annuity may begin, any amount which
is to be used to provide Variable Annuity Payments will be transferred to
Investment Accounts held under the Capital Accumulation Division of such account
as of the last Valuation Date in the month which begins two months before the
Annuity Commencement Date. After any such transfer, the value of the Capital
Accumulation Division Investment Accounts will be applied on the Annuity
Purchase Date to provide Variable Annuity Payments. The Annuity Commencement
Date will be the first day of a month. If an annuity is purchased under this
contract, the Capital Accumulation Division will be available for purposes of
the annuity even if you choose not to offer the Capital Accumulation Division as
an investment option for Plan Participants.
4A--3;TDSA-VA2;9504
The amount of the first Variable Annuity Payment will be determined by us based
on
(a) the amount applied on the Annuity Purchase Date to provide the annuity
income,
(b) the option chosen,
(c) the age of the Plan Participant and the contingent annuitant, if any,
(d) the purchase rate applicable on the Annuity Purchase Date for the optional
form elected by the Owner of Benefits as determined in accordance with
Section 7 of this Article.
If the Flexible Income Option of Article IVA, Section 2 is elected, Investment
Accounts correlating to the Plan Participant need not be transferred to the
Common Stock Division of Separate Account B. Payments under the Flexible Income
Option will be withdrawn from the Investment Accounts which correlate to the
Plan Participant in accordance with the Owner of Benefits' Notification. If the
Notification does not specify the order of application, payments will be
withdrawn on a pro rata basis from the Investment Accounts which correlate to
the Plan Participant.
SECTION 4--CHANGE IN VARIABLE ANNUITY PAYMENTS. The dollar amounts of Variable
Annuity Payments are not guaranteed and will increase or decrease depending on
the investment performance of the Common Stock Division of Separate Account B.
The initial monthly annuity income payment will be as determined above.
Thereafter, each monthly payment will be equal to the product of (i) the
Variable Annuity Payment for the previous calendar month multiplied by (ii) the
Annuity Change Factor for the month of the payment.
Annuity Change Factor is the percentage determined by dividing (a) by (b);
(a) The number which results from dividing (i) the Unit Value for the Common
Stock Division of Separate Account B for the first Valuation Date in the
calendar month beginning one calendar month before such given calendar
month by (ii) the Unit Value for such Division for the first Valuation Date
in the calendar month beginning two months before such given calendar
month.
(b) An amount equal to one plus the effective interest rate for the number of
days between the two Valuation Dates specified in subparagraph (a) above at
the interest rate used in the determination of the purchase rates in effect
at the time the Variable Annuity Payments began.
We reserve the right to amend or change the basis for determining the Annuity
Change Factor as provided in Article VII, Section 9. Any such change will apply
only to Variable Annuity benefits beginning after the date of the amendment or
change, except such retroactive changes as are necessary to meet the
requirements of any law or regulation issued by any government agency to which
we are subject.
SECTION 5--ADJUSTMENT TO VARIABLE ANNUITY RESERVES. Each Variable Annuity
Payment made under this Contract will be deducted from the Variable Annuity
Reserves and will be an application of a portion of such Variable Annuity
Reserves on the date paid.
4A--4;TDSA-VA2;9203
SECTION 6--MORTALITY AND EXPENSE GUARANTEES. We will, at least once each year,
make transfers between the Variable Annuity Reserves for the Common Stock
Division of Separate Account B and our general account assets so that the
Variable Annuity Reserves of the Common Stock Division of Separate Account B
will be equal to the total of our liabilities for Variable Annuity Payments
payable from Separate Account B, as determined by us. These transfers, if
needed, will adjust the Common Stock Division of the Separate Account for the
difference between actual mortality and expense experience since the last
transfer and the mortality and expense assumptions used in the purchase rates
for Variable Annuity Payments paid from the Common Stock Division. The transfers
are necessary to support our guarantees as to such mortality and expense rates.
No transfers will be made because of investment gains or losses. There will be
no adjustment to Variable Annuity Payments because of this transfer.
The mortality and expense assumptions in the annuity purchase rates used to
determine the first Variable Annuity Payment are guaranteed after benefit
payments begin. Variations in the dollar amount of such payments are based
entirely upon the investment performance of the Common Stock Division of
Separate Account B.
SECTION 7--BASIS OF ANNUITY PURCHASES. The Variable Annuity purchase rates under
this contract will be determined on the basis of the purchase rate in effect on
the Owner of Benefits' Annuity Purchase Date for contracts of this class. This
purchase rate will not be less favorable to the Owner of Benefits than the rates
shown in Table 1. These rates are based on (i) interest at the rate of 2.5% per
year and (ii) mortality according to the 1983 Table a for Individual Annuity
Valuation projected with Scale G to the year 2001, female and unisex set back 5
years in age. If you report to us that all or a portion of the amount of income
to be provided to an Owner of Benefits is to use purchase rates which recognize
the sex of the Plan Participant (and contingent annuitant, if applicable), we
will use sex-distinct annuity purchase rates for the portion so reported. Such
rates will not be less favorable than the rates shown in Table 1.
We reserve the right to amend or change the basis for determining Variable
Annuity purchase rates pursuant to Section 9 of Article VII. No such change will
apply to Variable Annuity Payments which were in the course of payment before
the date of change.
SECTION 8--CANCELLATION OF ANNUITY. If you determine and report to us that under
the provisions of the Plan in effect on an Owner of Benefits' Annuity Purchase
Date, the annuity purchased for an Owner of Benefits is to be reduced, then the
fraction you report of the variable annuity purchased for that Owner of Benefits
will be cancelled and the amount of payments paid to the Owner of Benefits, the
beneficiary or contingent annuitant will be reduced accordingly.
The Variable Annuity Reserve for any annuity cancelled under this Section will
be treated as a forfeiture under Article II, Section 4.
4A--5;TDSA-VA2;9203
ARTICLE IVB -- OTHER BENEFITS
SECTION 1--BENEFITS AVAILABLE UPON TERMINATION, RETIREMENT OR DISABILITY. All or
a portion of the amounts available to an Owner of Benefits under this contract
may be paid to him by us in a single sum on or after the Plan Participant's
Termination of Employment, retirement under the Plan or Total and Permanent
Disability under the Plan if
(a) the Plan allows such payment, and
(b) we receive a written request from the Owner of Benefits, using a form we
either furnish or approve.
The amount of any cash benefit available will be determined as of the date we
receive the request at our home office, or some later date specified in the
request. It will consist of that part of the Investment Accounts which correlate
to the Plan Participant in which he is vested under the vesting provisions of
the Plan.
Any amount payable to an Owner of Benefits under this Section is subject to the
limitations of Article VI, Section 1. If such amount is payable by reason of the
Plan Participant's death or Total and Permanent Disability it is not subject to
the charges of Article VI, Section 2. However, if such amount is payable for any
other reason, it is subject to the charges of Article VI, Section 2.
Any payment from the Investment Account or Accounts will be in accordance with
Article II, Section 7. The payment will be an application from the account paid
on the date of payment and it will be in lieu of any other benefits available
under this contract for the amounts applied.
SECTION 2--BENEFITS PAYABLE AT DEATH.
Subsection (1)--Before Annuity Purchase Date. If a Plan Participant dies before
the Annuity Purchase Date, we will, upon receipt of due proof of death, pay any
death benefit in accordance with Plan provisions. If the Plan does not provide
for another method, or if no other method has been chosen, we will pay this
benefit to the beneficiary in accordance with Section 2A of this Article. We
will determine the value of this death benefit as of the date of payment or
application to effect an annuity.
Any payment made under this Section is subject to the limitation provisions of
Article VI, Section 1 but is not subject to the charges described in Article VI,
Section 2.
Subsection (2)--After Annuity Purchase Date. If a Plan Participant dies after
the Annuity Purchase Date, benefits will be paid under the form of annuity in
effect for the Owner of Benefits.
Subsection (3)--Proof of Death. We will accept as due proof of death a certified
copy of the death certificate, a certified copy of a decree of a court of
competent jurisdiction as to the finding of death, a written statement by a
medical doctor who attended the deceased during his last illness, or any other
proof that is satisfactory to us.
4B--1;TDSA-VA2;9203
SECTION 2A--OPTIONS FOR BENEFITS PAYABLE AT DEATH. By Notification to us, an
Owner of Benefits may have an annuity purchased for the beneficiary if the
aggregate value of the Investment Accounts which correlate to the Plan
Participant is at least $1,750.
If no such Notification is on file with us, a beneficiary may choose to have an
annuity purchased under this contract or may choose to receive a single sum
benefit. If we do not receive Notification of such choice within 120 days after
the date we receive due proof of death, the beneficiary will be deemed to be a
Plan Participant under this contract.
Any election under this Section will be in lieu of any benefits payable under
Section 2 of this Article.
SECTION 3--WITHDRAWALS. Upon Notification from the Owner of Benefits, we will
pay to the Owner of Benefits all or a portion of the vested portion of the
Investment Account(s) which correlate to a Plan Participant, subject to the
following:
(a) We must receive the Notification to do so from the Owner of Benefits. The
Notification will specify the amount to be withdrawn and the Investment
Accounts involved.
(b) The Notification must be before the Annuity Purchase Date.
(c) The Plan must allow for such withdrawal.
(d) The Notification will be accompanied (at our request) by the Owner of
Benefits' certificate, if any, issued as described in Article VII, Section
1.
(e) The amount withdrawn from each of the Investment Accounts which correlate
to a Plan Participant will be determined in accordance with the
Notification from the Owner of Benefits. If we don't receive such
Notification, the amount withdrawn will be determined on a pro rata basis.
We will determine and pay the amount available in accordance with the above. The
amount of any cash benefit available will be determined as of the date we
receive the request at our home office, or some later date specified in the
request. Any payment from the Investment Account or Accounts will be in
accordance with Article II, Section 7. The payment will be an application from
the account paid on the date of payment and it will be in lieu of any other
benefits available under this contract for the amounts applied.
Any amount payable to an Owner of Benefits under this Section is subject to the
limitations of Article VI, Section 1. If such amount is payable for a reason
other than the Plan Participant's death or Total and Permanent Disability, it is
subject to the charges of Article VI, Section 2. In addition, if expenses are
being deducted under Article III, Section 1,
(f) and a withdrawal is requested of all of the Investment Accounts which
correlate to a Plan Participant, such expenses will be deducted before
payment is made to the Owner of Benefits.
(g) and a partial withdrawal is requested from the Investment Accounts which
correlate to a Plan Participant, such expenses will be deducted from the
remaining Investment Accounts which correlate to the Plan Participant.
4B--2;TDSA-VA2;9504
ARTICLE V -- TRANSFERS; CESSATION
SECTION 1--TRANSFER TO ANOTHER FUNDING AGENT. You and not the Owner of Benefits
may give us Notification requesting payment of all or a portion of the
Investment Accounts to another Funding Agent or to you if you are the Owner of
Benefits. The amount of any Investment Accounts to be transferred will be
determined as of the end of the Valuation Period in which we receive such
request. Xxxxxxx transferred will be subject to the charges and limitations of
Article VI, Sections 1 and 2.
SECTION 2--TRANSFER TO A COMPANION CONTRACT. If we have issued a Companion
Contract to fund the Plan, the Owner of Benefits may give us Notification
requesting a transfer of all or a portion of the Investment Account Values which
correlate to a Plan Participant to a Companion Contract. The amount to be
transferred from each Investment Account which correlates to a Plan Participant
will be as specified in the Owner of Benefits' Notification. If the Notification
does not specify, the amount to be transferred will be determined on a pro rata
basis. The amount of any Investment Accounts to be transferred will be
determined as of the end of the Valuation Period in which we receive such
request. The amount transferred will be subject to the limitations of Article
VI, Section 1, but not the charges of Article VI, Section 2. If such Companion
Contract allows for a transfer of unmatured Investment Accounts before the end
of their guarantee periods, no transfers with respect to a Plan Participant will
be allowed to any accounts under the Companion Contract which correlate to that
Plan Participant if any amounts from an unmatured Investment Account have been
transferred to any of the Investment Accounts which correlate to such Plan
Participant from the Companion Contract during the previous six months.
SECTION 3--TRANSFER FROM A COMPANION CONTRACT. If we have issued a Companion
Contract to fund the Plan and if permitted by the Companion Contract, amounts
transferred from a Companion Contract may be transferred to Investment Accounts
which correlate to a Plan Participant at any time at least one month before the
Owner of Benefits' Annuity Commencement Date. The amount and date of any such
transfer will be in accordance with the provisions of the Companion Contract.
Any transferred amount will be a Contribution in accordance with Article II,
Section 1.
SECTION 4--CESSATION OF CONTRIBUTIONS. Cessation of Contributions will be
effective as of any of the following dates:
(a) On the date you notify us in writing that cessation of Contributions is to
occur.
(b) On the date the Plan terminates.
(c) On the date no Investment Account Values remain under this contract.
Upon cessation of Contributions, no further persons will become Plan
Participants and no further Contributions will become payable.
All provisions of this contract will remain effective as to any Investment
Accounts which have not been paid or applied in full.
Once all Investment Accounts have been paid or applied in full, we will have no
further obligation in regard to such accounts.
5--1;TDSA-VA2;9204
ARTICLE VI -- CHARGES AND LIMITATIONS
SECTION 1--LIMITATIONS ON PAYMENTS AND TRANSFERS FROM INVESTMENT ACCOUNTS.
We will make payments and transfers in full within seven calendar days after the
date we receive your Notification at our home office or the requested date of
payment or transfer, if later. We will defer any payment or transfer made under
this contract during any period that the right to redeem Mutual Fund shares is
suspended as permitted under the provisions of the Investment Company Act of
1940. If any deferment of payment or transfer is effective, and if said payment
or transfer has not been cancelled by Notification to us within the period of
deferment, the amount to be paid or transferred will be determined as of the
first Valuation Date following the expiration of the permitted deferment, and
the payment or transfer will be made within seven calendar days thereafter. We
will notify you in the event of any such deferment of more than 30 days.
SECTION 2--CHARGES FOR DISCONTINUATION OF PARTICIPATION UNDER THE CONTRACT.
If a single sum payment is made from any of the Investment Accounts which
correlate to a Plan Participant within seven years after the first Contribution
which correlates to such Plan Participant is accepted by us, a charge will be
made for such payment under this Section. Payments to which such charge applies
include amounts transferred to another Funding Agent other than amounts
transferred to a Companion Contract. The charge described in this Section will
not apply to aggregate payments made in any Deposit Year under the Flexible
Income Option described in Article IVA, Section 2 that do not exceed the greater
of (i) the minimum annual amount determined in accordance with the minimum
distribution rules of the Internal Revenue Code, or (ii) 10% of the aggregate
value of the Investment Accounts which correlate to a Plan Participant
determined as of the last Valuation Date in the preceding Deposit Year. The
charge described in this Section will also not apply to amounts transferred
between Investment Accounts which correlate to a Plan Participant, amounts
transferred to a Companion Contract, amounts applied to provide Variable Annuity
Payments and to payments made due to the Plan Participant's death or Total and
Permanent Disability. The amount of the charge is as follows:
Number of Years from date
of first Contribution which
correlates to a Plan Percentage of Single
Participant is accepted by us Sum Payment
----------------------------- --------------------
Less than 1 5.00%
1 less than 2 4.25
2 but less than 3 3.50
3 but less than 4 2.75
4 but less than 5 2.00
5 but less than 6 1.25
6 but less than 7 .50
7 or more 0
The amount of charge will be an application from the Investment Accounts being
paid on the date of payment.
The amount of the charge described in this section that may be deducted will be
limited, however, so that the amount of any such charge will never exceed 9% of
the Contributions to Investment Accounts which correlate to a Plan Participant.
6--1;TDSA-VA2;9203
The amount of any single sum payment will be limited to an amount, which, when
added to any applicable charges, equals the value of the Investment Accounts
which correlate to such Plan Participant.
In our sole discretion and on a basis uniformly and consistently applied to
contracts of this class, we may agree to waive this charge.
6--2;TDSA-VA2;9203
ARTICLE VII -- GENERAL PROVISIONS
SECTION 1--CERTIFICATES. If the Owner of Benefits is a Plan Participant and he
contributes under the Plan and the state of issue so requires, we will prepare
and send to the Employer, for delivery to each Owner of Benefits, an individual
certificate setting out a statement of the benefits to which that Owner of
Benefits is entitled and to whom death benefits are payable. If benefits become
payable to an Owner of Benefits under one of the options of Article IVA, we will
issue an individual certificate setting forth the amount, form and period of
payment of the annuity benefits.
SECTION 2--BENEFICIARY. The beneficiary is the person or persons named by the
Owner of Benefits to whom benefits (other than any income payable to a
contingent annuitant under the provisions of Article IVA, Section 2) are payable
under this contract upon the death of the Plan Participant, subject to the
provisions of Section 13 of this Article. An Owner of Benefits will name or
change a beneficiary by filing a written beneficiary designation to that effect
with us, but the designation will not be effective until we receive it. When we
receive the designation, it will be effective as of the date it is executed, but
any payments we made before receipt of the designation will discharge us to the
extent of such payments. We reserve the right to require the Owner of Benefits'
certificate for endorsement of any change of beneficiary.
If annuity benefits become payable under Option 1 of Article IVA, Section 2, and
if the death of the Plan Participant occurs before all of the payments for the
minimum period provided for under such Option 1 have been made, any remaining
payments for the balance of such period will be paid when due to the Owner of
Benefits or to the beneficiary or beneficiaries then surviving; provided,
however, that the Owner of Benefits or each beneficiary will have the right to
request in writing and receive the commuted value of any such remaining payments
due then in one sum.
If annuity benefits become payable under Option 2 of Article IVA, Section 2, and
if the death of both the Plan Participant and the contingent annuitant occur
before payments have been made for the minimum period of ten years, any
remaining payments for the balance of such period will be paid when due to the
Owner of Benefits or to the beneficiary or beneficiaries then surviving;
provided, however, that the Owner of Benefits or each beneficiary will have the
right to request in writing and receive the commuted value of any such remaining
payments due them in one sum.
Unless otherwise specified by the Owner of Benefits with our consent or by the
Plan,
(a) if any beneficiary dies before the Plan Participant, any payment which
would have become payable to such beneficiary, if living, will be payable
when due to the beneficiary or beneficiaries surviving the Plan Participant
in the order provided.
(b) if any beneficiary survives the Plan Participant but dies before receiving
all of the payments which would have become payable to such beneficiary, if
living, payment will be paid when due to the surviving beneficiary or
beneficiaries, if any, in the order provided.
(c) if the last survivor of all named beneficiaries dies after the death of the
Plan Participant (and the contingent annuitant, if any), and before all
payments due the beneficiary have been made, the remaining payments will be
commuted and the commuted value paid to the executor or administrator of
the estate of the last survivor of the beneficiaries.
7--1;TDSA-VA2;9203
If no named beneficiary survives the Plan Participant (and the contingent
annuitant, if any), or no beneficiary has been named, any amount which would
have become payable to a beneficiary will be commuted and the commuted value
paid to the Owner of Benefits, if living, otherwise to the executor or
administrator of the Owner of Benefits (the executor or administrator of the
estate of any contingent annuitant, if he survives the Owner of Benefits).
If the beneficiary is not a natural person taking in his own right (that is, a
trust or an estate), any periodic payments will be commuted and the commuted
value paid to the beneficiary in one sum. However, if the beneficiary is a trust
established for the benefit of a natural person and if the payment period is at
least 24 months and not more than 60 months, periodic payments may be continued
to such beneficiary.
SECTION 3--DIVIDENDS. Any portion of the divisible surplus that we determine to
accrue on this contract will be determined annually by us and will be credited
to this contract on each Yearly Date after the Contract Date. Any such dividend
will be applied as directed by you in accordance with Plan provisions. (Note:
Because of the direct crediting of investment return to Investment Accounts, it
is not anticipated that there will be any surplus accruing on this contract from
which dividends may be apportioned to this contract.)
SECTION 4--CONTRACT. This contract and your application, a copy of which is
attached to and made a part of this contract, are the entire contract between
the parties. We are obligated only as provided in this contract and are not a
party to nor bound by any trust or plan.
SECTION 5--PLAN AND PLAN AMENDMENTS. You agree to furnish us with a copy of the
Plan in effect on the Contract Date and any subsequent amendments to it. No
amendment to the Plan which affects our duties and obligations will be effective
under this contract if we notify you in writing that such change is unacceptable
to us. We agree to notify you within 60 days after we receive an amendment if it
is unacceptable.
SECTION 6--WAIVER AND MODIFICATION. Only our officers have authority to change
this contract or waive any of its provisions or requirements.
SECTION 7--MISSTATEMENTS. If the age or any other relevant fact of any Plan
Participant or contingent annuitant is found to have been misstated, the amount
of annuity payable by us will be that provided by the amount applied to purchase
such annuity, determined as of the date of purchase established by the misstated
information and on the basis of the correct information. Any overpayment by us
resulting from any misstatements will be deducted from amounts thereafter
payable to the Owner of Benefits, the contingent annuitant or the beneficiary.
Any underpayment by us resulting from any misstatements will be paid in full
with the next payment due the Owner of Benefits, the contingent annuitant or the
beneficiary.
SECTION 8--INFORMATION, PROOFS AND DETERMINATION OF FACTS. You agree to furnish
to us evidence of the age of each Plan Participant and each contingent
annuitant, if any, on or before his earliest Annuity Purchase Date and other
records, data, proofs or additional information which, in our opinion, is
necessary for the administration of this contract.
For the purposes of this contract, the determination by you as to any facts
(except age and sex) relating to any employee is, except for fraud or willful
misstatement of fact, conclusive.
7--2;TDSA-VA2;9203
SECTION 9--AMENDMENT. We reserve the right to amend or change this contract as
follows, subject to the limitations of item (f):
(a) Any or all of the contract provisions may be changed at any time, including
retroactive changes, to the extent necessary to meet the requirements of
any law or regulation issued by any governmental agency to which we are
subject.
(b) We may, as of any date after the Contract Date, amend or change (i) the
basis for determining Investment Account Values, Net Investment Factors and
Annuity Change Factors; (ii) Table 1, (iii) the provisions as to transfers
contained in Article VI, (iv) the charges for discontinuance of
participation under the Contract contained in Article VI, Section 2, and
(v) the expenses contained in Article III.
(c) We may, as of any date, add additional Divisions to Separate Account B.
(d) The percentage stated in Article II, Section 2B, may be changed at any
time; provided, however, that such rate will in no event exceed 1.25% and
will not be changed more frequently than once in any one-year period.
(e) By written agreement between you and us, this contract may be amended or
changed at any time as to any of its provisions, including those in regard
to coverage, benefits and the participation privileges, without the consent
of any Owner of Benefits, Plan Participant, beneficiary or contingent
annuitant.
(f) We will give you written notice of any change made because of item (a)
above. Any amendment or change under items (b), (c) or (d) will not become
effective unless we give you written notice at least 60 days before the
date the amendment or change is to take effect.
(g) Any amendment or change under this Section 9 is binding and conclusive on
each Owner of Benefits, Plan Participant, beneficiary, or contingent
annuitant, but is limited by the following:
(i) No amendment or change will apply to annuities purchased under Article
IVA before the effective date of the amendment or change except to the
extent necessary in making changes in accordance with item (a) above.
(ii) No amendment or change to Table 1 under (b)(ii) above or the charge
for discontinuance of participation under (b)(iv) above will be
effective for any current Plan Participant if the effect of such
amendment or change would be less favorable to the Owner of Benefits.
(iii)Any change in the contract administration expense/recordkeeping
charge referred to in Section 1, Article III, will not take effect as
to any Investment Accounts to be transferred to another Funding Agent,
if, prior to the date the amendment or change is to take effect, we
receive Notification from you for payment of all such Investment
Account Values to the Funding Agent in accordance with Article V,
Section 1, and such request is not revoked.
SECTION 10--CONTRIBUTIONS. We reserve the right to limit or refuse further
Contributions under this contract. We will give you written notice at least 60
days before the date after which further Contributions will be limited or
refused by us.
7--3;TDSA-VA2;9504
SECTION 11--MODIFICATION IN MODE OF PAYMENT OF ANNUITY. If, at any time on or
subsequent to an Annuity Commencement Date or election of the Flexible Income
Option, the monthly amount payable under this contract would be less than $20,
we may, at our option, pay in cash the Variable Annuity Reserve for the annuity
payments or, in the case of the Flexible Income Option, the Investment Account
Values which correlate to the Plan Participant in full settlement of all
benefits otherwise payable. The Variable Annuity Reserve will be determined by
us on the same mortality and interest basis as the annuity purchase rate which
was used to determine the amount of annuity payments.
If, after a Plan Participant's Termination of Employment has occurred, the total
value of the Investment Account Values which correlate to such Plan Participant
is less than $1,750, we may, at our option, pay the Owner of Benefits the amount
of such account in a single sum in lieu of any and all other benefits as to such
account.
SECTION 12--COMMUTATION OF PAYMENTS. If any periodic payments are to be
commuted, the commuted value of the payments will be determined by us, using the
interest rate which was used as a basis for calculating the amount of the
payment at the time the annuity was provided.
Neither the Owner of Benefits, the Plan Participant, the contingent annuitant
nor any beneficiary who is a natural person taking in his own right has the
right to commute any annuity payments under this contract which are based upon
life contingencies.
SECTION 13--FACILITY OF PAYMENT. If any Owner of Benefits, contingent annuitant,
or beneficiary is legally incapable of giving a valid receipt for any payment
due him and no legal representative has been appointed for him, we may, at our
option, make such payment to the person or persons as have, in our opinion,
assumed the care and principal support of the Owner of Benefits, contingent
annuitant, or beneficiary.
If the payment is due a minor, we will hold all payments until a legal
representative has been appointed for him or he is no longer a minor. However,
if the payment due is an amount that would not exceed the maximum amount allowed
under applicable law of the state in which the minor resides, we may, at our
option, make any such payment to the minor.
Any payment made by us pursuant to this Section will fully discharge us to the
extent of such payment.
SECTION 14--PRONOUNS. Masculine pronouns used in this contract include both
masculine and feminine gender unless the context indicates otherwise.
SECTION 15--ASSIGNMENT. No benefits in the course of payment under this contract
may be assigned by any Owner of Benefits, Plan Participant, beneficiary or
contingent annuitant and all such benefits are exempt from the claims of the
creditors to the maximum extent permitted by law.
SECTION 16--INVESTMENT MANAGER. As set out in Article II, Sections 1, 5 and 7,
the right to direct the split of Contributions among Investment Accounts and to
direct any transfer out of these accounts is reserved to you and/or the Owner of
Benefits, all in accordance with the provisions of the Plan.
7--4;TDSA-VA2;9203
SECTION 17--BASIS OF RESERVE. The reserve of any annuity income under this
contract will be determined by us on the same interest and mortality assumptions
as were used to calculate the amount of each payment.
SECTION 18--SUBSTITUTED SECURITIES. If shares of the Mutual Funds should not be
available or if, in our judgment, investment in such shares is no longer
appropriate, we may substitute for such shares or apply Contributions received
after a date specified by us to the purchase of (i) shares of another registered
open-end investment company or (ii) securities or other property as we in our
discretion will select. In the event of any investment pursuant to clause (ii)
above, we may make such changes as in our judgment are necessary or appropriate
in the frequency and methods of determination of Unit Values, Net Investment
Factors, Annuity Change Factors, and Investment Account Values, including any
changes in the foregoing which will provide for the payment of an investment
advisory fee; provided, however, that any such changes will be made only after
approval by the Insurance Department of the State of Iowa. We will give written
notice to each Owner of Benefits of any substitution or change pursuant to this
Section.
Any substitution under this Section 18 is subject to the rules and regulations
of the Securities and Exchange Commission.
-7--5;TDSA-VA2;9203
OPTION 1 - MONTHLY LIFE ANNUITY PER $1, 000 APPLIED
FIXED BENEFITS - AMOUNT OF PAYMENT EACH MONTH
AGE OF STRAIGHT INSTALLMENT
PAYEE LIFE REFUND
------ -------- -----------
50 3.48 3.37
51 3.53 3.42
52 3.59 3.46
53 3.65 3.51
54 3.72 3.57
55 3.78 3.62
56 3.85 3.68
57 3.92 3.74
58 4.00 3.80
59 4.08 3.86
60 4.17 3.93
61 4.26 4.00
62 4.35 4.07
63 4.45 4.15
64 4.56 4.23
65 4.68 4.31
66 4.80 4.40
67 4.93 4.50
68 5.07 4.59
69 5.22 4.70
70 5.38 4.80
71 5.55 4.92
72 5.73 5.04
73 5.92 5.16
74 6.13 5.29
75 6.35 5.43
RATES FOR OTHER AGES WILL BE DETERMINED ON THE SAME ACTUARIAL BASIS AS THE ABOVE
RATES.
TABLE 1
STRAIGHT LIFE
INSTALLMENT REFUND
TDSA - VARIABLE
GP - 34043-1
OPTION 1 - MONTHLY LIFE ANNUITY PER $1, 000 APPLIED
FIXED BENEFITS - AMOUNT OF PAYMENT EACH MONTH
AGE OF 5 10 15 20
PAYEE YEARS YEARS YEARS YEARS
------ ----- ----- ----- -----
50 3.48 3.47 3.44 3.41
51 3.53 3.52 3.49 3.46
52 3.59 3.57 3.55 3.51
53 3.65 3.63 3.60 3.56
54 3.71 3.69 3.66 3.61
55 3.78 3.76 3.72 3.66
56 3.84 3.82 3.78 3.72
57 3.92 3.89 3.85 3.78
58 3.99 3.96 3.91 3.84
59 4.07 4.04 3.98 3.90
60 4.16 4.12 4.06 3.96
61 4.25 4.20 4.13 4.02
62 4.34 4.29 4.21 4.09
63 4.44 4.39 4.29 4.15
64 4.54 4.49 4.38 4.22
65 4.66 4.59 4.47 4.29
66 4.78 4.70 4.56 4.35
67 4.90 4.82 4.65 4.42
68 5.04 4.94 4.75 4.49
69 5.18 5.06 4.85 4.55
70 5.34 5.20 4.95 4.62
71 5.50 5.33 5.05 4.68
72 5.67 5.48 5.16 4.74
73 5.85 5.63 5.26 4.80
74 6.05 5.78 5.36 4.86
75 6.25 5.94 5.47 4.91
RATES FOR OTHER AGES WILL BE DETERMINED ON THE SAME ACTUARIAL BASIS AS THE ABOVE
RATES.
TABLE 1
5-10-15-20 CC
TDSA - VARIABLE
GP - 34043-2
OPTION 2 - MONTHLY JOINT AND SURVIVOR LIFE ANNUITY
WITH 10 YEAR MINIMUM PERIOD PER $1,000 APPLIED
FIXED BENEFITS - AMOUNT OF PAYMENT EACH MONTH
AGE OF PARTICIPANT
--------------------------------------------------------------------
CONTINGENT 50 55 60 65 70 75
ANNUITANT --------------------------------------------------------------------
AGE
50 3.11 3.19 3.27 3.33 3.38 3.41
51 3.12 3.22 3.30 3.36 3.42 3.46
52 3.14 3.24 3.33 3.40 3.46 3.51
53 3.16 3.27 3.36 3.44 3.51 3.56
54 3.18 3.29 3.39 3.48 3.55 3.61
55 3.19 3.31 3.42 3.52 3.60 3.66
56 3.21 3.34 3.45 3.56 3.65 3.72
57 3.23 3.36 3.48 3.60 3.69 3.77
58 3.24 3.38 3.52 3.64 3.74 3.83
59 3.25 3.40 3.55 3.68 3.79 3.89
60 3.27 3.42 3.57 3.72 3.85 3.95
61 3.28 3.44 3.60 3.76 3.90 4.02
62 3.29 3.46 3.63 3.80 3.95 4.08
63 3.31 3.48 3.66 3.84 4.01 4.15
64 3.32 3.50 3.69 3.88 4.06 4.22
65 3.33 3.52 3.72 3.92 4.12 4.29
66 3.34 3.54 3.71 3.96 4.17 4.36
67 3.35 3.55 3.77 4.00 4.23 4.44
68 3.36 3.57 3.80 4.04 4.29 4.51
69 3.37 3.58 3.82 4.08 4.34 4.59
70 3.38 3.60 3.85 4.12 4.40 4.67
71 3.38 3.61 3.87 4.15 4.46 4.74
72 3.39 3.63 3.89 4.19 4.51 4.82
73 3.40 3.64 3.91 4.22 4.56 4.90
74 3.41 3.65 3.93 4.26 4.62 4.97
75 3.41 3.66 3.95 4.29 4.67 5.05
RATES FOR OTHER AGES WILL BE DETERMINED ON THE SAME ACTUARIAL BASIS AS THE
ABOVE RATES.
TABLE 1
JOINT & SURVIVOR WITH 10 CC
FRACTION OF 1
TDSA - VARIABLE
GP - 34043-3
OPTION 3 - MONTHLY JOINT AND TWO-THIRDS SURVIVOR
LIFE ANNUITY PER $1,000 APPLIED
FIXED BENEFITS - AMOUNT OF PAYMENT EACH MONTH
AGE OF PARTICIPANT
--------------------------------------------------------------------
CONTINGENT 50 55 60 65 70 75
ANNUITANT --------------------------------------------------------------------
AGE
50 3.35 3.47 3.60 3.74 3.90 4.07
51 3.37 3.50 3.63 3.78 3.94 4.11
52 3.39 3.53 3.67 3.82 3.98 4.16
53 3.42 3.56 3.70 3.86 4.03 4 21
54 3.44 3.58 3.73 3.90 4.07 4.26
55 3.47 3.61 3.77 3.94 4.12 4.32
56 3.50 3.64 3.80 3.98 4.17 4.37
57 3.52 3.67 3.84 4.02 4.22 4.43
58 3.55 3.71 3.88 4.06 4.27 4.49
59 3.57 3.74 3.91 4.11 4.32 4.55
60 3.60 3.77 3.95 4.15 4.37 4.61
61 3.63 3.80 3.99 4.20 4.43 4.68
62 3.66 3.83 4.03 4.24 4.49 4.75
63 3.68 3.87 4.07 4.29 4.54 4.82
64 3.71 3.90 4.11 4.34 4.60 4.89
65 3.74 3.94 4.15 4.39 4.67 4.96
66 3.77 3.97 4.19 4.44 4.73 5.04
67 3.80 4.01 4.24 4.50 4.80 5.12
68 3.84 4.04 4.28 4.55 4.86 5.21
69 3.87 4.08 4.33 4.61 4.93 5.29
70 3.90 4.12 4.37 4.67 5.00 5.38
71 3.93 4.16 4.42 4.72 5.08 5.47
72 3.97 4.20 4.47 4.78 5.15 5.57
73 4.00 4.24 4.52 4.84 5.23 5.66
74 4.03 4.28 4.56 4.90 5.30 5.76
75 4.07 4.32 4.61 4.96 5.38 5.86
RATES FOR OTHER AGES WILL BE DETERMINED ON THE SAME ACTUARIAL BASIS AS THE ABOVE
RATES.
TABLE 1
JOINT & SURVIVOR
FRACTION OF 2/3
TDSA - VARIABLE
GP - 34043-4
OPTION 4- LIFE ANNUITY WITH 1/2 SURVIVORSHIP PER $1,000 APPLIED
FIXED BENEFITS - AMOUNT OF PAYMENT EACH MONTH
AGE OF PARTICIPANT
-----------------------------------------------------------------
CONTINGENT 50 55 60 65 70 75
ANNUITANT -----------------------------------------------------------------
AGE
50 3.28 3.46 3.67 3.89 4.15 4.44
51 3.29 3.48 3.69 3.92 4.18 4.48
52 3.30 3.49 3.71 3.94 4.21 4.52
53 3.31 3.51 3.72 3.97 4.25 4.56
54 3.32 3.52 3.74 3.99 4.28 4.60
55 3.33 3.54 3.76 4.02 4.31 4.65
56 3.34 3.55 3.78 4.04 4.35 4.69
57 3.35 3.56 3.80 4.07 4.38 4.74
58 3.36 3.57 3.82 4.09 4.42 4.78
59 3.37 3.59 3.83 4.12 4.45 4.83
60 3.37 3.60 3.85 4.14 4.48 4.87
61 3.38 3.61 3.87 4.17 4.52 4.92
62 3.39 3.62 3.88 4.19 4.55 4.97
63 3.39 3.63 3.90 4.22 4.59 5.02
64 3.40 3.64 3.92 4.24 4.62 5.07
65 3.40 3.65 3.93 4.26 4.66 5.12
66 3.41 3.66 3.95 4.29 4.70 5.17
67 3.41 3.66 3.96 4.31 4.73 5.22
68 3.42 3.67 3.97 4.33 4.77 5.28
69 3.42 3.68 3.99 4.35 4.80 5.33
70 3.43 3.69 4.00 4.38 4.84 5.38
71 3.43 3.70 4.01 4.40 4.87 5.43
72 3.44 3.70 4.02 4.42 4.90 5.49
73 3.44 3.71 4.04 4.44 4.94 5.54
74 3.44 3.72 4.05 4.46 4.97 5.59
75 3.45 3.72 4.06 4.47 5.00 5.64
RATES FOR OTHER AGES WILL BE DETERMINED ON THE SAME ACTUARIAL BASIS AS THE ABOVE
RATES.
TABLE 1
SURVIVORSHIP
FRACTION OF 1/2
TDSA - VARIABLE
GP - 34043-5
