1
EXHIBIT 4(c)
[THE VARIABLE ANNUITY LIFE INSURANCE COMPANY LETTERHEAD]
Agrees to pay benefits as provided herein with respect to any person insured
hereunder as an employee of
This contract is issued to
(Herein called the Contract Owner)
In consideration of the application therefore and of the payment by the
Contract Owner of contributions as provided herein.
The Effective Date of this contract is .
This contract is delivered in and is subject to the laws of
that jurisdiction.
Provisions contained in subsequent pages hereof form a part of this contract as
fully as if recited in their entirety over the signature hereto affixed.
IN WITNESS WHEREOF, VALIC has caused this contract to be executed at its Home
Office in Houston, Texas, this day of 19 .
Countersigned
/s/ XXXXXXX X. XXXXX /s/ XXXXXX XXXX
----------------------------- ------------------------------
Secretary President
Group Unit Purchase Retirement Annuity Contract
Active Life Fund in Separate Account
and General Account
Individual Allocations
[SPECIMEN]
Group Annuity Contract No.
2
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I -- DEFINITION OF CERTAIN TERMS .................................... 2
ARTICLE II -- RETIREMENT ANNUITY PROVISIONS ................................. 3
2.01 Notice to Effect an Annuity ................................................. 3
2.02 Optional Annuity Forms ...................................................... 3
2.03 Allocation of Variable and Xxxxx Xxxxxxxxx .................................. 4
A. Variable Annuity ....................................................... 4
B. Fixed Dollar Annuity ................................................... 4
STANDARD TABLES
2.04 Description of Tables ....................................................... 5
Options A, B, C, D and E .................................................... 5
2.05 Frequency of Payments ....................................................... 5
ARTICLE III -- CONTRIBUTIONS, VALUATION AND DISCONTINUANCE OF CONTRIBUTIONS.. 6
CONTRIBUTIONS
3.01 Contributions ............................................................... 6
3.02 Application of Contributions ................................................ 6
3.03 Participant's Individual Accounts, Inactive Participants .................... 6
3.04 Active Life Fund ............................................................ 6
VALUATION
3.05 Net Investment Rate and Net Investment Factor ............................... 6
3.06 Accumulation Unit Value ..................................................... 6
3.07 Annuity Unit Value .......................................................... 7
3.08 Additional Units, Experience Rating ......................................... 7
DISCONTINUANCE OF CONTRIBUTIONS
3.09 Suspension .................................................................. 7
3.10 Transfer of Active Life Fund ................................................ 7
ARTICLE IV -- GENERAL PROVISIONS ............................................ 8
4.01 Change of Contract by VALIC ................................................. 8
4.02 Change of Contract by Mutual Agreement -- Retroactive Changes ............... 8
4.03 Contract .................................................................... 8
4.04 Individual Certificates ..................................................... 8
4.05 Designation of Beneficiary .................................................. 8
4.06 Facility of Payment ......................................................... 8
4.07 Evidence of Survival ........................................................ 9
4.08 Misstatements and Adjustments ............................................... 9
4.09 Assignments ................................................................. 9
4.10 Basis of Reserves ........................................................... 9
4.11 Termination of Contract ..................................................... 9
4.12 Data to be Furnished by VALIC ............................................... 9
4.13 Relation of this Contract to the Separate Account ........................... 9
ARTICLE V -- THE PLAN........................................................ 10
5.01 Plan Description ............................................................ 10
5.02 Eligibility ................................................................. 10
5.03 Annuity Commencement Date ................................................... 10
5.04 Xxxxxxx Xxxxxxxx, Election of Optional Annuities ............................ 10
5.05 Death Benefit ............................................................... 10
5.06 Termination Benefits ........................................................ 10
5.07 Contributions by Contract Owner ............................................. 11
5.08 Rates of Contribution ....................................................... 11
5.09 Allocation of Contributions ................................................. 11
5.10 Vesting ..................................................................... 11
5.11 Transfers ................................................................... 11
[SPECIMEN]
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ARTICLE I
DEFINITION OF CERTAIN TERMS
1. ACCUMULATION UNIT -- A measuring unit used to determine the value of a
Participant's account before annuity payments begin.
2. ACTIVE LIFE FUND -- The sum of all Participant's active and inactive,
fixed and variable, Individual Accounts maintained by VALIC with respect to
this Contract.
3. ANNUITANT -- A participant who is receiving retirement annuity payments
hereunder.
4. ANNUITY COMMENCEMENT DATE -- The date on which retirement annuity payments
commence under the terms of the Plan.
5. ANNUITY UNIT -- A measuring unit used in calculating the amount of annuity
payments.
6. ANNIVERSARY -- Any anniversary of the Effective Date of the Contract
and/or the Certificate, as appropriate.
7. CONTRACT OWNER -- The employer or other entity to which a Group Unit
Purchase Contract is issued. An employer which is a State, a political
subdivision of a State, or any agency, authority or instrumentality of
either of them, may purchase this Contract in connection with a deferred
compensation plan. In such case, all rights under the Contract are owned
exclusively by the Contract Owner and all funds becoming payable under the
terms of the Contract are payable to and the exclusive property of the
Contract Owner. No certificates are issued to any employee with whom the
Contract Owner has entered into a deferred compensation agreement, but
such an employee is referred to in such Contract as a Participant solely
for the purpose of maintaining individual records of the Contract Owner's
interest in the Contract with respect to each such employee.
8. CONTRACT YEAR -- The period of 12 months commencing with the Effective
Date hereof.
9. FIXED DOLLAR ANNUITY -- A series of periodic payments which remain fixed
throughout the payment period and which do not vary with investment
experience.
10. GENERAL ACCOUNT -- All assets of VALIC other than those in any Separate
Accounts of VALIC.
11. INACTIVE PARTICIPANT -- A participant for whom contributions have ceased
before his Annuity Commencement Date, but whose Individual Account is not
terminated at such time.
12. NET PURCHASE PAYMENT -- Purchase Payment less sales and administration
charges.
13. PARTICIPANT -- An eligible employee who makes purchase payments, or for
whom purchase payments are made, under a Group Unit Purchase Contract.
14. PARTICIPANT'S INDIVIDUAL ACCOUNT -- The sum of the accumulation units
credited to a Participant.
15. PLAN -- The retirement plan described or defined in Article V.
16. PURCHASE PAYMENTS -- Amounts paid to VALIC by or on behalf of a
Participant pursuant to a plan.
17. RETIREMENT ANNUITY -- A series of income payments purchased under this
Contract for a Participant by application of the dollar value of the
accumulation units in his Individual Account.
18. SEPARATE ACCOUNT -- Those assets of VALIC in the Separate Account
established by VALIC pursuant to Article 3.72 of the Insurance Code of the
State of Texas, for this class of contracts which provides variable
benefits.
19. VARIABLE ANNUITY -- A series of periodic payments, the amounts of which
will increase or decrease to reflect the investment experience of the
Separate Account.
[SPECIMEN]
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ARTICLE II
RETIREMENT ANNUITY PROVISIONS
SECTION 2.01 - NOTICE TO EFFECT AN ANNUITY. When a Participant becomes eligible
for Retirement Annuity payments in accordance with the Plan, the Contract Owner
shall notify VALIC to effect an annuity for such Participant, and on the date
such annuity is to commence, VALIC shall allocate all accumulation units in the
Participant's Individual Account, reduced by any applicable premium taxes, and
apply them to provide a Retirement Annuity on one of the Optional Annuity Forms
selected by the Participant. In the absence of written notice of election by
the Participant in accordance with the Plan, and given to VALIC at least 30
days prior to the date annuity payments are to commence, the Retirement Annuity
will be a Life Annuity with 120 Monthly Payments Guaranteed as described in
Option B of Section 2.02.
SECTION 2.02 - OPTIONAL ANNUITY FORMS
OPTION A -- LIFE ANNUITY -- An annuity payable monthly during the lifetime of
an Annuitant, ceasing with the last monthly payment due prior to the death of
the Annuitant.
OPTION B -- LIFE ANNUITY WITH 60, 120 OR 180 MONTHLY PAYMENTS GUARANTEED -- An
annuity payable monthly during the lifetime of an Annuitant, with a guarantee
that if, at the death of the Annuitant, payments have been made for less than
60, 120 or 180 months as selected, annuity payments will be continued
thereafter to a beneficiary designated by the Participant during the remainder
of said period. The beneficiary may receive monthly payments for the remainder
of the certain period and at any time during such period the beneficiary may
elect to receive in one sum the present value of the remaining payments,
calculated on the basis of an interest rate per annum equal to that rate used
to calculate the Annuitant's first annuity payment. If a beneficiary dies while
receiving annuity payments, the then present value of the current dollar amount
of the remaining guaranteed number of annuity payments, computed on the basis
of an interest rate compounded annually equal to that rate used to calculate
the Annuitant's first annuity payment, shall be paid in a lump sum to the
estate of the beneficiary.
OPTION C -- UNIT REFUND LIFE ANNUITY -- An annuity payable monthly during the
lifetime of the Annuitant, ceasing with the last monthly payment due prior to
the death of the Annuitant, provided that, at the death of the payee, the
beneficiary will receive an additional payment of the then dollar value of the
number of annuity units equal to the excess, if any, of (a) over (b) where (a)
is the total amount applied under the option divided by the annuity unit value
at the effective date of annuity payments and (b) is the number of annuity
units represented by each payment multiplied by the number of payments made.
OPTION D -- JOINT AND LAST SURVIVOR ANNUITY -- An annuity payable monthly
during the joint lifetime of the Annuitant and a designated second person and
thereafter during the remaining lifetime of the survivor.
The first payment under any of these options will be determined in accordance
with Section 2.04. No payments will be made under any of these options prior to
receipt by VALIC of satisfactory evidence of the date of birth of the Annuitant
and any joint annuitant.
LEVEL PAYMENTS VARYING ANNUALLY. An alternative mode of payment may be used in
combination with any one of the four variable annuity Options described above.
Fixed annuity payments will be made monthly during each annuity year at a level
determined for that year based on the investment performance of the Separate
Account.
The amount of the annual variable annuity payment shall be determined in the
same manner as monthly variable annuity payments except that annual rather than
monthly purchase rates are used. The amount of this first annual variable
annuity payment is divided by the then annuity unit value to determine the
number of annuity units in each subsequent annual variable annuity payment. In
any subsequent annuity year, the dollar amount of the annual variable annuity
payment is determined by multiplying this constant number of annuity units by
the then annuity unit value.
The amount of each certain monthly payment during a given annuity year shall be
no less than the annual variable annuity payment otherwise payable times
.084654, which includes an interest element of 3 1/2%. This factor may be
changed at the sole discretion of VALIC to reflect an interest rate greater
than 3 1/2%.
If an Annuitant dies prior to receiving all twelve payments during any one
annuity year, the payments remaining during that annuity year will be paid
either to his estate or to the named beneficiary.
OPTION E -- PAYMENTS FOR A DESIGNATED PERIOD -- Payments are paid monthly for a
selected number of years between one and fifteen. At any time during such period
the Annuitant may elect to receive in one sum the present value of the remaining
payments, calculated on the basis of an interest rate per annum equal to that
rate used to calculate the Annuitant's first annuity payment. Under the Federal
tax laws, the election of this Option may be treated in the same manner as a
surrender of the Participant's total account. If an employee's Individual
Account is surrendered, usually the full amount received would be includible in
income for that year, and, to the extent so included, would be taxed at ordinary
rates, subject to possible benefits of the income averaging provisions of the
Code.
[SPECIMEN]
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SECTION 2.03 -- ALLOCATION OF VARIABLE AND FIXED ANNUITIES. In the absence of
any notification of the Contract Owner to the contrary, when a Retirement
Annuity is effected for a Participant, General Account accumulation units in
the Participant's Individual Account will be used to provide a fixed dollar
annuity (annuity units in the General Account) and Separate Account accumulation
units will provide a variable annuity (annuity units in the Separate Account).
A. VARIABLE ANNUITY -- A variable annuity is an annuity with payments varying
in accordance with the net investment result of the Separate Account as
described in the Valuation Provision of Article III. After the first
monthly payment for a variable annuity has been determined in accordance
with the provisions of the Contract, a number of Separate Account annuity
units is determined by dividing that first monthly payment by the Separate
Account annuity unit value at the effective date of the annuity payments.
Once variable annuity payments have begun, the number of annuity units
remains fixed.
The dollar amount of the second and subsequent variable annuity payments is
not predetermined and may change from month to month. The actual amount of
each variable annuity payment after the first is determined by multiplying
the number of Separate Account annuity units by the Separate Account
annuity unit value as described in the Valuation Provisions for the
valuation period in which the payment is due.
VALIC guarantees that the dollar amount of variable annuity payments shall
not be affected by variation in the actual mortality experience of payees
from the mortality assumption, including any age adjustments, as used in
determining the first monthly payment.
B. FIXED DOLLAR ANNUITY -- A fixed dollar annuity is an annuity with payments
which remain fixed as to dollar amount throughout the payment period. As in
the case of the variable annuity, a number of annuity units is determined
when payments commence. Since the General Account annuity unit value is
always $1.00, payments after the first payment will never be less than the
first monthly payment.
VALIC may, from time to time, by action of its Board of Directors, increase
the value of General Account annuity units, to the extent that such units
are applicable to a guaranteed period of benefits.
[SPECIMEN]
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STANDARD TABLES
SECTION 2.04 -- DESCRIPTION OF TABLES. The Tables contained herein show the
dollar value of accumulation units required to purchase a first monthly payment
of $1.00, and the accumulation units applied to effect an annuity for an
Annuitant will be at the accumulation unit value on the tenth day immediately
proceeding the date annuity payments commence. Amounts shown in the Tables are
based on the Progressive Annuity Table with interest at the rate of 3 1/2% per
annum and assume births in the year 1900. The amount of each payment will depend
upon the sex of the Annuitant and the Annuitant's adjusted age at the time the
first payment is due, where adjusted age shall be determined in accordance with
the following:
Calendar Year of Birth Before 1901 1901-1915 1916-1935 1936-1955 1956-1975
Adjusted Age is Actual Age plus 1 minus 0 minus 1 minus 2 minus 3
Actual Age, as used above, shall mean the age at the nearest birthday at the
time the first payment is due.
If it would produce greater benefits, VALIC agrees that the first monthly
payment to an Annuitant will be determined on the same mortality and interest
basis used in determining rates for immediate annuities than being issued for
this class of Annuitant.
DOLLAR VALUE OF ACCUMULATED UNITS REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Options A, B and C -- Single Life Annuities
Adjusted Age Monthly Payments Guaranteed
--------------------------------------
Male Female None 60 120 180 Unit Refund
------ ------ ------- ------- ------- ------- -----------
50 54 $210.85 $211.36 $213.06 $216.23 $220.90
51 55 206.73 207.30 209.18 212.68 217.38
52 56 202.54 203.17 205.26 209.12 213.91
53 57 198.27 198.97 201.28 205.55 210.30
54 58 193.93 194.70 197.26 201.96 206.62
55 59 189.51 190.37 193.20 198.39 202.99
56 60 185.03 185.98 189.11 194.82 199.23
57 61 180.48 181.54 185.00 191.28 195.40
58 62 175.87 177.04 180.87 187.77 191.64
59 63 171.21 172.50 176.73 184.31 187.75
60 64 166.49 167.93 172.59 180.91 183.78
61 65 161.73 163.32 168.47 177.58 179.90
62 66 156.93 158.69 164.37 174.34 175.90
63 67 152.09 154.05 160.30 171.19 171.81
64 68 147.23 149.40 156.28 168.16 167.86
65 69 142.35 144.75 152.31 165.25 163.76
66 70 137.46 140.11 148.42 162.48 159.58
67 71 132.57 135.50 144.62 159.86 155.59
68 72 127.67 130.91 140.92 157.40 151.42
69 73 122.79 126.37 137.32 155.12 147.16
70 74 117.93 121.89 133.86 153.01 143.19
71 75 113.11 117.47 130.54 151.09 138.97
72 76 108.32 113.13 127.37 149.36 134.66
73 77 103.57 108.88 124.37 147.82 130.74
74 78 98.89 104.73 121.55 146.46 126.52
75 79 94.27 100.69 118.92 145.29 122.18
Option D -- Joint Last Survivor Annuity
Adjusted Age of Annuitant
Adjusted Age ----------------------------------------------------------------------
Secondary Annuitant M-51 M-56 M-58 M-61 M-63 M-66 M-71
Male Female F-55 F-60 F-62 F-65 F-67 F-70 F-75
------ ------ ------- ------- ------- ------- ------- ------- -------
50 54 $237.79 $229.86 $227.15 $223.59 $221.57 $219.92 $215.73
55 59 229.05 218.34 214.55 209.38 206.35 202.42 197.39
57 61 225.97 214.14 209.85 204.01 200.50 195.93 190.01
60 64 221.91 208.43 203.38 196.39 192.18 186.50 179.02
62 66 219.55 204.99 199.50 191.72 186.96 180.56 171.88
65 69 216.52 200.49 194.31 185.42 179.85 172.21 161.64
70 74 212.71 194.65 187.42 176.84 170.06 160.43 146.43
Option E -- Payment for a Designated Period
Years of Payment Years of Payment Years of Payment
---------------- ---------------- ----------------
1 $11.81 6 $ 65.15 11 $110.01
2 22.23 7 74.74 12 118.20
3 34.26 8 84.03 13 125.94
4 44.90 9 93.02 14 133.51
5 55.19 10 101.73 15 140.85
SECTION 2.05 -- FREQUENCY OF PAYMENTS. Annuity payments under this Contract
will be made monthly, except that, if such payments would amount to less than
$25 each, VALIC reserves the right to make payment at less frequent intervals;
provided, however, that if at any time the annual rate of payment to any payee
is less than $100, VALIC may make such settlement as may be equitable to the
Annuitant.
[SPECIMEN]
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ARTICLE III
CONTRIBUTIONS, VALUATION, AND DISCONTINUANCE OF CONTRIBUTIONS
CONTRIBUTIONS
SECTION 3.01 -- CONTRIBUTIONS. Each Contract Year VALIC shall receive such
contributions from the Contract Owner as are made in accordance with the
requirements of the Plan. Such contributions will be applied by VALIC to
provide accumulation units for each Participant in accordance with Section 3.02
and the instructions of the Contract Owner.
SECTION 3.02 -- APPLICATION OF CONTRIBUTIONS. The net contribution shall be
equal to the total contribution less 5% thereof. Additionally, premium taxes
may be deducted either from premium payments as received or from the value of
the account at retirement or surrender. The net contribution shall be applied
as of the end of the valuation period in which the payment is received by
VALIC, to provide accumulation units on the basis of the then current value of
such units, such application being made separately for net contributions
allocated to the General Account and the Separate Account.
The number of accumulation units provided in each Account and credited to a
Participant's Individual Account by any such application shall be determined by
dividing the net contribution for that Account applicable to that Participant
by the dollar value of one accumulation unit in that Account. The number of
accumulation units so determined will not be affected by any subsequent changes
in the dollar value of the accumulation units. The dollar value of an
accumulation unit in the General Account will increase uniformly each valuation
period; the value of an accumulation unit in the Separate Account may vary from
one valuation period to the next.
SECTION 3.03 -- PARTICIPANT'S INDIVIDUAL ACCOUNT, INACTIVE PARTICIPANTS. A
Participant's Individual Account under this Contract shall, at any time,
consist of a number of accumulation units equal to the number provided by the
application of the net contributions described in Section 3.02 in accordance
with the Plan, plus any additional units credited in accordance with Section
3.08.
If for any reason whatever, contributions cease for a Participant before this
Annuity Commencement Date, the Contract Owner will notify VALIC as to the
Participant's elections regarding the value of the Participant's Individual
Account pursuant to Section 5.06.
As of the day a Participant becomes an Inactive Participant, the number of
accumulation units to be continued in his Individual Account shall be
determined in accordance with instructions from the Contract Owner, and such
number will remain constant until an annuity is purchased for such Inactive
Participant on his Annuity Commencement Date, except for any additional units
credited in accordance with Section 3.08.
SECTION 3.04 -- ACTIVE LIFE FUND. The Active Life Fund under this Contract
shall, at any time, consist of the sum of all Participants' Individual
Accounts, plus all Inactive Participants' Individual Accounts. At lease once in
each Contract Year after the first, VALIC shall inform the Contract Owner of
the then dollar value of an accumulation unit and the number of such units in
the Active Life Fund.
VALUATION
SECTION 3.05 -- NET INVESTMENT RATE AND NET INVESTMENT FACTOR.
(a) The net investment rate for any period for the General Account is
guaranteed, and is equivalent to an investment rate of 4% compounded
annually for the first ten Contract Years and 3 1/2% thereafter.
(b) The net investment rate for any valuation period for the Separate Account is
equal to the gross investment rate for said period less a margin deduction
computed for the period at the rate of .0000394 per day of said period and
less any applicable income taxes. Such gross investment rate shall be
computed on each day during which the New York Stock Exchange is open for
trading, not less frequently than once daily as of the time of the close of
trading on such Exchange, and shall cover the valuation period since the
next prior computation. Such gross investment rate is equal to (i) the
investment income and capital gains and losses, both realized and
unrealized, on the assets of the Separate Account during said period,
divided by (ii) the amount of such assets at the beginning of said period.
Such gross investment rate may be either positive or negative.
SECTION 3.06 -- ACCUMULATION UNIT VALUE. The value of a Separate Account
accumulation unit on December 31, 1960 was fixed at $1.00. The value of a
General Account accumulation unit on July 31, 1969 was fixed at $1.00. The
value of an accumulation unit in each Account for any valuation period is
determined by multiplying such value for the immediately preceding valuation
period by the net investment factor for that Account for the current valuation
period.
[SPECIMEN]
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SECTION 3.07 -- ANNUITY UNIT VALUE. The value of the General Account annuity
unit is fixed at $1.00. The value of the Separate Account annuity unit for
February, 1961 was fixed at $1.00 and for any subsequent period is determined
by multiplying the value of the Separate Account Annuity Unit for the preceding
period by the product of (a) .999906 for an assumed investment rate of 3
1/2% (or those other assumed investment rates as may be permitted by state law
or regulation) and (b) the Net Investment Factor of the Separate Account for
the tenth day immediately preceding the period for which the value is being
calculated.
SECTION 3.08 -- ADDITIONAL UNITS, EXPERIENCE RATING. By action of its
Directors, VALIC may credit additional General Account accumulation units at
any time. This Contract is subject to experience rating by VALIC with respect
to any Participant's Individual Account.
DISCONTINUANCE OF CONTRIBUTIONS
SECTION 3.09 -- SUSPENSION. This contract may be suspended by VALIC on a
Contract Anniversary if:
(a) The Contract Owner fails to assent to any modification of this Contract
initiated by VALIC as provided in Section 4.01, which modification would
have been effective on that Contract Anniversary.
(b) The Contract Owner shall have failed to remit to VALIC contributions as
provided in the Plan.
This Contract may also be suspended, or terminated as to new Participants, upon
written notice by the Contract Owner given to VALIC at its Home Office 90 days
in advance of the effective date of such suspension.
Effective with such suspension, no new Participants may enter the Plan but
further contributions will be accepted by VALIC under the Contract as they are
applicable to Participants in the Plan prior to such suspension.
SECTION 3.10 -- TRANSFER OF ACTIVE LIFE FUND. This Contract may not be assigned
nor may the Active Life Fund be transferred.
[SPECIMEN]
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ARTICLE IV
GENERAL PROVISIONS
SECTION 4.01 -- CHANGE OF CONTRACT BY VALIC. On the first anniversary of the
Effective Date and the first day of any Contract Year thereafter, VALIC, upon
written notice given 90 days in advance to the Contract Owner, may, from time to
time, change any or all of the terms of this Contract, provided that (a) any
such change will not affect in any way the amount of terms of any Retirement
Annuity purchased prior to the effective date of such change and (b) any such
change shall not affect Sections 2.04, 3.02, 3.05, 3.06, 3.07 and 3.08 as they
apply to accumulation unit purchases by contributions made on behalf of
Participants who were in the Plan prior to the effective date of such change
to the extent that such contributions in any year are not in excess of twice
the first annual contributions made on behalf of such Participant.
SECTION 4.02 -- CHANGE OF CONTRACT BY MUTUAL AGREEMENT -- RETROACTIVE CHANGES
A. By agreement in writing, the Contract Owner and VALIC may change, from
time to time, any or all of the terms of this Contract provided that any
such change will not in any way affect the amount or terms of any
Retirement Annuity already purchased prior to the effective date of such
change.
B. Notwithstanding any of the terms of this Contract, the Contract Owner and
VALIC by an agreement in writing on any date agreed upon by the Contract
Owner and VALIC may change, from time to time, any or all terms of this
Contract if it is deemed advisable to do so in order to conform the
Contract to requirements of Section 403 of the Federal Internal Revenue
Code or such section or sections as may from time to time revise or replace
said Section 403.
C. Consent of any Participant or Beneficiary shall not be requisite to any
change in this Contract.
SECTION 4.03 -- CONTRACT. This Contract and the application of the Contract
Owner, a copy of which is attached hereto and made a part hereof, will
constitute the entire Contract. All statements made by the Contract Owner will
be deemed representations and not warranties, and no statement will void any
payment under this Contract or be used in defense of a claim unless it is
contained in the application of the Contract Owner. Only the President, a Vice
President, the Secretary or an Assistant Secretary has power on behalf of VALIC
to make or modify this Contract.
SECTION 4.04 -- INDIVIDUAL CERTIFICATES. VALIC shall issue a certificate to the
Contract Owner for delivery to each Participant. Each such certificate shall
set forth in substance the benefits to which such Participant is entitled under
this Contract. Certificates described in this section shall not constitute a
part of this Contract.
SECTION 4.05 -- DESIGNATION OF BENEFICIARY. Each Participant shall have the sole
right to designate the beneficiary to which any death benefit hereunder will be
payable and, from time to time, without the consent of such beneficiary, change
the beneficiary designated by filing written notice of such change with VALIC on
a written form satisfactory to VALIC. After such notice is so filed, the change
will relate back to and take effect as of the date the Participant signed such
written notice, whether or not the Participant is living on the date such notice
is received by VALIC, but without prejudice to VALIC on account of any payment
made by it before such notice. If at the death of a Participant there is more
than one beneficiary designated and in such designation the Participant has
failed to specify their respective interests, the beneficiaries will share
equally. If any designated beneficiary predeceases the Participant, the rights
and interests of such beneficiary will thereupon terminate.
In the event the designated beneficiary predeceases the Participant or if no
beneficiary has been named, the amount of any death benefit will be paid to the
executors or administrators of the Participant's estate except that VALIC may
in such case, at its option, pay such amount to the wife or the husband, if
living; if not living, in equal shares to the then living children of the
Participant; if none, to either parent of the Participant, or to both equally,
if both are living; if neither parent is living, equal shares to the then living
brothers and sisters of such Participant.
SECTION 4.06 -- FACILITY OF PAYMENT. If any payee under this Contract is, in
the opinion of VALIC, physically or mentally incapable of giving valid receipt
and discharge for any payment due under this Contract, then VALIC may, at its
option, make payment thereof in installments of not more than $50 per month to
the person or persons who, in its opinion, are caring for and supporting such
payee until claim is made by a duly appointed guardian or other legal
representative of such payee. Payment to such person or persons will constitute
a complete discharge of the liability of VALIC to the extent of such payments
and it will assume no responsibility for the proper application of the money
paid.
[SPECIMEN]
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SECTION 4.07 -- EVIDENCE OF SURVIVAL. VALIC will have the right to require of
any person entitled to a payment under this Contract, satisfactory evidence that
he is living on each and every date when such payment is due.
SECTION 4.08 -- MISSTATEMENTS AND ADJUSTMENTS. If the age, sex, or any other
relevant fact relating to any person is found to be misstated, the amount of
annuity payable by VALIC shall be that which is provided by the number of
accumulation units allocated to effect such annuity on the basis of the
corrected information without changing the date of the first payment of such
annuity, unless an equitable adjustment satisfactory to the Contract Owner and
VALIC is made with respect to such misstatement.
Any adjustment made in accordance with this Section shall be conclusive upon
any person affected thereby. The dollar amount of any underpayment made by
VALIC shall be paid in full on the next payment due such person. The dollar
amount of any overpayment by VALIC due to any misstatement shall be deducted
from amounts thereafter otherwise payable to such person. If there are no
further payments due such person, or if the total of such deductions made is
less than the overpayments, any remainder of such overpayments shall be charged
against the value of any experience credits becoming available thereafter.
SECTION 4.09 -- ASSIGNMENTS. Except insofar as may be contrary to any
applicable laws, all payments under this Contract of benefits arising under the
Plan are not assignable nor subject to any claims of any creditor.
No assignment of this Contract will be binding on VALIC unless and until such
assignment is accepted by VALIC at its Home Office.
SECTION 4.10 -- BASIS OF RESERVES. Reserves held under this Contract will be at
least equal to 100% of Active Life Fund, plus the reserve for such Retirement
Annuities as have been purchased under this Contract. The dollar amount of the
reserve held for the Active Life Fund shall be the dollar value, as of such
date, of the accumulation units then constituting the Active Life Fund. The
dollar amount of the reserves at the end of any valuation period for one unit
of annuity purchased under this Contract shall be at least equal to the reserve
for a similar fixed annuity of $1.00 payable at like time determined on the
same actuarial basis as the tables set forth in Article II hereof, multiplied
by the dollar value of an annuity unit for the second valuation period
following the date of determination.
SECTION 4.11 -- TERMINATION OF CONTRACT. This Contract will terminate at the
close of the first day upon which the performance and fulfillment by VALIC of
all its duties and obligations arising hereunder have been completed.
SECTION 4.12 -- DATA TO BE FURNISHED TO VALIC. The Contract Owner shall furnish
all information which VALIC may reasonably require for the administration of
this Contract. If the Contract Owner cannot furnish any required item of
information, VALIC may request the person concerned to furnish such
information. VALIC shall not be liable for the fulfillment of any obligations
in any way dependent on such information until it receives such information in
form satisfactory to VALIC.
Information furnished to VALIC may be corrected for demonstrated errors therein
unless VALIC has already acted to its prejudice by relying on such information.
Any records prepared by VALIC from information furnished to VALIC as described
above shall constitute prima facie evidence as to the truth of the information
recorded thereon.
SECTION 4.13 -- RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNT. VALIC shall
have exclusive and absolute ownership and control of the assets of both its
General Account and its Separate Account. Neither the Contract Owner nor any
Participant shall have any individual or equitable ownership of any investments
or other assets of either of said Accounts and the records and accounts kept by
VALIC in connection with this Contract shall not be deemed to constitute any
recognition of any ownership by the Contract Owner or any Participant of any
portion of any said Accounts. All funds attributable to this Contract and
becoming part of either Account shall be invested or reinvested by VALIC in
such class or classes of investments, and to such extent as VALIC may determine
with due regard for all applicable and/or statutory investment objectives and
restrictions. The method of determination by VALIC of the value of an
accumulation unit will be conclusive upon the Contract Owner and any
Participant.
[SPECIMEN]
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ARTICLE V
THE PLAN
SECTION 5.01 -- PLAN DESCRIPTION -- The Plan shall mean the Voluntary
Retirement Annuity Plan for Employees of
together with all amendments thereto, which Plan shall be a part of this
Contract and effective on the Effective Date of the Contract.
SECTION 5.02 -- ELIGIBILITY -- All full-time employees of
are eligible to become Participants in the Plan. After the first Contract Year,
any employee who does not enroll within 60 days of becoming eligible, may
enroll only on a subsequent Contract Anniversary.
SECTION 5.03 -- ANNUITY COMMENCEMENT DATE -- The date elected by the
Participant for the commencement of annuity payments. Such date may be the
first day of any calendar month following the Participant's 50th birthday but
may not be later than the Participant's 75th birthday.
SECTION 5.04 -- ANNUITY BENEFITS, ELECTION OF OPTIONAL ANNUITIES -- The
Retirement Annuity payments commencing on the Annuity Commencement Date will be
determined by applying the dollar value of a Participant's Individual Account
as of the applicable valuation period to the tables shown in Article II. A
Participant may elect to have his payments made under any of the optional
annuity forms. Such election must be received by VALIC at least 30 days prior
to the Annuity Commencement Date or the annuity will not commence until the
next following month.
A Participant or Beneficiary thereof, upon 30 days notice, may elect to have
any portion of his Individual Account applied to provide either a variable
annuity or a fixed dollar annuity or a combination of both. The amount of the
first payment must be at least $25.
SECTION 5.05 -- DEATH BENEFIT -- In the event of the death of a Participant
prior to the commencement of annuity payments, the Beneficiary of the
Participant will receive an amount payable upon such death equal to the greater
of:
(a) The termination value of the Participant's Individual Account at the date of
death; or
(b) 100% of all purchase payments made under the Contract by or on behalf of the
Participant, reduced by any withdrawals.
This death benefit may be taken in one lump sum or under any of the settlement
options available in VALIC's individual annuities then being issued or as
provided in Section 5.04 above.
SECTION 5.06 -- TERMINATION BENEFITS -- Upon termination of participation in
the Plan, at any time before annuity payments commence, the Participant:
(a) If he is at least 50 years of age, may elect to have his Individual Account
valued and, after deduction of any applicable premium taxes, apply that
value to provide fixed or variable annuity payments, or a combination
thereof, commencing immediately, according to a selected annuity option as
described in Article II;
(b) May elect to permanently withdraw and receive in cash all or part of the
termination value of his Individual Account by submission of a written
request for withdrawal together with his certificate to VALIC at its Home
Office. Such termination value will be equal to the value of the
accumulation units standing to the credit of the Participant computed as of
the next valuation of accumulation units following receipt by VALIC of the
withdrawal request;
(c) May elect to permit his Individual Account to remain in force under the
Contract, in which event the account will participate in the investment
results of the Separate and/or General Account, as appropriate;
(d) May elect to convert to an Individual Variable Annuity Contract of the form
then currently issued for this class of Annuitant, at a duration equivalent
to the number of full years he has been in the Plan. If the method of
determining accumulation unit values in the individual contract is the same
as set forth in Sections 3.05 and 3.06 of this Contract, then all
accumulation units in the Participant's Individual Account will be
transferred to the Contract and become the initial value thereunder. Any
accumulation units not transferred to the individual contract will be
retained in the existing Contract unless the Participant makes an election
to the contrary;
(e) May elect to have his Individual Account transferred to another contract if
he becomes an employee of another employer which is the owner of a similar
group unit purchase contract issued by VALIC;
(f) May surrender his certificate of participation provided the account
consists solely of General Account values which are not the result of a
transfer of Separate Account values. The amount payable upon such surrender
will be no less than 100% of all Purchase Payments made under the Contract
by or on behalf of the Participant, reduced by any withdrawals.
[SPECIMEN]
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SECTION 5.07 -- CONTRIBUTIONS BY CONTRACT OWNER -- The Contract Owner will
remit to VALIC all contributions required on behalf of the Participant in
accordance with the individual agreements between the Contract Owner and the
Individual Participants.
SECTION 5.08 -- RATES OF CONTRIBUTION -- The rate of contribution shall be
specified for each Participant by the Contract Owner and shall not be less than
$25 per month per Participant if the Purchase Payments are to be allocated
entirely to the Separate Account. If the Purchase Payments are in part for the
purchase of a fixed annuity, the minimum payment will be $30 with not less than
$12 allocated to the Separate Account. The Contract Owner may elect to modify
his rate of contribution with respect to any Participant on any Contract
Anniversary, and if contributions on behalf of a given Participant are
suspended and the Individual Account is not withdrawn, contributions may be
resumed on any Contract Anniversary following one full year of suspension of
contributions.
SECTION 5.09 -- ALLOCATION OF CONTRIBUTIONS -- The Contract Owner will specify
in the case of each Participant what portion of the contributions with respect
to that Participant will be allocated to the Separate Account and what portion
will be allocated to the General Account. A Participant may elect an allocation
of any whole per cent in either Account with the balance being allocated to the
other Account, but may not make an election which would result in an allocation
less than the rates of contribution set out in Section 5.08 above.
SECTION 5.10 -- VESTING -- While the Employer will hold the Contract, as
Contract Owner, each Participant will at all times have a 100% vested and
non-forfeitable interest in his individual Account as represented by his
certificate.
SECTION 5.11 -- TRANSFERS -- During the accumulation period, the Participant
shall have the right to change the funding media from a fixed dollar annuity to
a variable annuity or a variable annuity to a fixed dollar annuity or a
combination of both. No transfer is effective until a written notice in a form
acceptable to VALIC is submitted to VALIC at its Home Office. The transfer,
once accomplished by VALIC, shall remain in effect until further written notice
to the contrary is received from the Participant.
[SPECIMEN]
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