THE PRUDENTIAL
INSURANCE COMPANY
OF AMERICA
agrees to pay the benefits provided under this Contract in accordance with and
subject to its terms.
Contractholder:
Plan:
Effective Date:
Jurisdiction: Florida
Contract Number:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
-------------------------------- -------------------------------------
Title: Chairman of the Board and
Chief Executive Officer
Date: _________________________ _____________________________________
Secretary
Attest:________________________________
Date: _________________________________
You may call the Prudential toll-free telephone number to present inquiries or
obtain information about coverage and to provide assistance in resolving
complaints.
1-800-
GROUP ANNUITY CONTRACT
THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. THE APPLICATION OF
THIS FORMULA MAY RESULT IN A DOWNWARD ADJUSTMENT IN CASH VALUES. SECTIONS 6.2
AND 6.3 IDENTIFY WHEN CASH VALUES ARE AVAILABLE WITHOUT THE APPLICATION OF THE
MARKET VALUE ADJUSTMENT FORMULA.
CONTRIBUTIONS TO THIS GROUP ANNUITY CONTRACT MAY BE INVESTED IN SEPARATE
INVESTMENT ACCOUNTS. ALL BENEFIT PAYMENTS PROVIDED UNDER THIS CONTRACT THAT ARE
BASED ON THE INVESTMENT RESULTS OF A SEPARATE INVESTMENT ACCOUNT ARE VARIABLE,
SUBJECT TO GAIN OR LOSS, AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
THE INITIAL INTEREST RATE IS GUARANTEED ONLY FOR A LIMITED PERIOD OF TIME.
DC-403-97
DEFINITIONS Page WITHDRAWALS Page
----------- ---- ----------- ----
1.0 Annual Account Charge _____________1 6.1 Withdrawals ________________________________8
1.1 Beneficiary _______________________1 6.2 Withdrawals for Benefit Payments ___________9
1.2 Business Day ______________________1 6.3 Withdrawals at Termination
1.3 Code ______________________________1 of Contract ______________________________9
1.4 Competing Fund ____________________1 6.4 Participant Withdrawals Subject to a Market
1.5 Contractholder ____________________1 Value Adjustment _________________________10
1.6 Contractholder Account ____________1
1.7 Contractholder Fixed Account ______1 FORMS OF BENEFITS
-----------------
1.8 Contractholder Variable Account ___2
1.9 Contributions _____________________2 7.1 General ____________________________________11
1.10 Effective Annual Rate _____________2 7.2 Terms of Payment of Annuities ______________11
1.11 Good Order ________________________2 7.3 Certificates _______________________________11
1.12 Participant _______________________2 7.4 Minimum Death Benefit ______________________11
1.13 Participant Account _______________2
1.14 Plan ______________________________2 TERMINATION OF CONTRACT
-----------------------
1.15 Plan Investment Fund ______________2
1.16 Prudential ________________________2 8.1 Sixty Day Termination ______________________12
1.17 Rate Segment ______________________3 8.2 Termination for Cause ______________________12
1.18 Separate Account __________________3 8.3 Effect of Termination ______________________12
1.19 Subaccount ________________________3 8.4 Partial Contract Termination _______________13
1.20 Transfer Payments _________________3
1.21 Transfer Request __________________3 CHANGES
-------
1.22 Unit ______________________________3
1.23 Unit Value ________________________3 9.1 Changes by Agreement _______________________13
1.24 Withdrawal ________________________3 9.2 Changes by Prudential ______________________13
1.25 Withdrawal Date ___________________3 9.3 Persons Empowered to Act for Us ____________13
1.26 Withdrawal Value __________________4
GENERAL TERMS
-------------
RELATIONSHIP BETWEEN PLAN
AND CONTRACT 10.1 Communications ____________________________13
-------------------------
10.2 Place of Payment __________________________14
2.1 General Understanding _____________4 10.3 Information - Records _____________________14
2.2 Statutory Requirements ____________4 10.4 Misstatements _____________________________14
2.3 Conditions ________________________4 10.5 Beneficiary _______________________________14
10.6 Small Annuities and Amounts;
CONTRIBUTIONS AND CONTRACTHOLDER ACCOUNT Natural Persons _________________________14
----------------------------------------
10.7 Divisible Surplus _________________________14
3.1 Contributions _____________________4 10.8 Limit on Assignment _______________________15
3.2 Participant Account Segments ______4 10.9 Plan Changes ______________________________15
3.3 Contractholder Fixed Account 10.10 Entire Contract ___________________________15
Interest Rates __________________5 10.11 Governing Law _____________________________15
3.4 Contributions from Prior Prudential 10.12 Interest on Benefit Payments ______________15
Fixed Account Contracts _________5 10.13 Contractholder ____________________________15
3.5 Contractholder Variable
Account _________________________5 DEFERRED SALES CHARGES
----------------------
3.6 Reports ___________________________5
11.1 Deferred Sales Charges ____________________16
VARIABLE INVESTMENT OPTIONS
--------------------------- APPENDIX A - SEPARATE INVESTMENT ACCOUNTS
-----------------------------------------
4.1 Separate Accounts _________________6
4.2 Subaccounts _______________________6
4.3 Voting Rights _____________________6
4.4 Modification of Separate SCHEDULES
Accounts and Subaccounts ________7 ---------
TRANSFER PAYMENTS Schedule A. Forms of Annuity which may be
----------------- Purchased
Schedule B. Life - Payment Certain Annuity
Schedule C. Life - Contingent Annuity
5.1 Transfer Payments to Plan
Investment Funds ________________7 Schedule D. Payment Certain Annuity
5.2 Transfer Payment Terms ____________8
================================================================================
SECTION 1- DEFINITIONS
1.0 ANNUAL ACCOUNT CHARGE
If we provide services under an administrative services agreement, we
will assess an Annual Account Charge on or about the last day of each
calendar year for each Participant for whom an account is maintained in
connection with this Contract. This charge will not exceed $30 each
calendar year per Participant. This charge will be deducted directly
from funds maintained under this Contract, unless paid directly by the
Contractholder. The Annual Account Charge will be prorated for new
Participants on a monthly basis for their first year of participation.
1.1 BENEFICIARY
A person designated by a Participant to receive benefits from funds
held under this Contract.
1.2 BUSINESS DAY
A day on which the New York Stock Exchange and Prudential are open for
business.
1.3 CODE
The Internal Revenue Code of 1986, as amended, or any of the
corresponding provisions of prior or subsequent United States revenue
laws.
1.4 COMPETING FUND
An investment option available under the Plan that is primarily
comprised of high quality fixed income securities with an average
duration of less than or equal to 4.5 years. For purposes of the
Contract, Competing Funds include but are not limited to the
______________ Funds.
1.5 CONTRACTHOLDER
The holder of the Contract as shown on the cover page, its successors
and assigns. "You" or "your" means the Contractholder.
1.6 CONTRACTHOLDER ACCOUNT
An account that is equal to the sum of the Contractholder Fixed Account
and Contractholder Variable Account.
1.7 CONTRACTHOLDER FIXED ACCOUNT
An account that is equal to the sum of all Contributions earning a
guaranteed rate of interest under Section 3.3 of this Contract plus
interest credits, less all Withdrawals, Transfer Payments, fees and
charges. There are no required Contributions to the Contractholder
Fixed Account.
1
1.8 CONTRACTHOLDER VARIABLE ACCOUNT
An account that is equal to the dollar amount of all Units in the
separate accounts or Subaccounts in which you invest, less any fees or
charges.
1.9 CONTRIBUTIONS
Payments you make to us as described in Section 3.1. We will grant a
period of 31 days for the payment of any required Contributions under
this Contract.
1.10 EFFECTIVE ANNUAL RATE
A method of crediting interest where the annualized income is expressed
as a compound annual rate of interest. An amount invested for a full
year would increase by the Effective Annual Rate.
1.11 GOOD ORDER
An instruction received by us, utilizing such forms as we may require,
that is sufficiently complete and clear that we do not need to exercise
any discretion to follow such instruction.
1.12 PARTICIPANT
A natural person on whose behalf funds are contributed or maintained
under the Plan.
1.13 PARTICIPANT ACCOUNT
The dollar value of funds maintained for each person in accordance with
the terms of the Plan. The Participant Account may be invested in the
fixed interest option through the Contractholder Fixed Account, or the
variable separate account options through the Contractholder Variable
Account.
1.14 PLAN
A plan or program adopted by you that provides Participants with
coverage under an annuity contract intended to meet the requirements of
Section 403(b) of the Code. The program may be subject to the Employee
Retirement Income Security Act of 1974 (ERISA). The Plan is mentioned
for reference purposes only and is shown on the cover page. "Plan"
shall include such other plans of the Contractholder or plans
maintained for other companies as the parties agree. The terms of this
Contract shall apply separately with respect to each plan maintained
thereunder. We are not a party to the Plan.
1.15 PLAN INVESTMENT FUND
An investment fund available under the Plan as of the Effective Date or
of which we are later notified.
1.16 PRUDENTIAL
The Prudential Insurance Company of America. "We," "us," or "our" means
Prudential.
2
1.17 RATE SEGMENT
A section of the Contractholder Fixed Account that credits the same
rate of interest for the same time period for Contributions and
accumulated interest thereon.
1.18 SEPARATE ACCOUNT
An account established by Prudential and maintained primarily for one
or more group or individual annuity contracts.
1.19 SUBACCOUNT
A subdivision of a Separate Account, the assets of which are invested
in a corresponding portfolio of a fund or portfolio of securities.
1.20 TRANSFER PAYMENTS
An amount transferred by or on behalf of Participants between Plan
Investment Funds.
1.21 TRANSFER REQUEST
A request by you or your designee pursuant to elections by
Participants, received in Good Order to transfer amounts to or from a
Plan Investment Fund.
1.22 UNIT
You are credited with Units in each Separate Account or Subaccount in
which you invest. The number of Units credited to the account is
determined by dividing each Contribution made to a Separate Account or
Subaccount by the applicable Unit Value for the Business Day on which
the Contribution is received by us in Good Order.
1.23 UNIT VALUE
The dollar value of an interest in a Separate Account or Subaccount.
The Unit Value of each Separate Account or Subaccount will be
determined each Business Day, and will measure the value of the
Separate Account's or Subaccount's assets minus its outstanding
liabilities, fees and expenses. The Unit Value is determined before
giving effect to additions to and withdrawals or transfers from a
Separate Account or Subaccount for that day.
1.24 WITHDRAWAL
A payment from the Contractholder Account that is not a Transfer
Payment.
1.25 WITHDRAWAL DATE
The Business Day we receive written notice from you in Good Order to
make a Withdrawal as provided in Section 6.
3
1.26 WITHDRAWAL VALUE
The dollar value withdrawn from the account, less any charges or fees
incurred.
================================================================================
SECTION 2 - RELATIONSHIP BETWEEN PLAN AND CONTRACT
2.1 GENERAL UNDERSTANDING
You will make Contributions as provided in this Contract. However, the
existence of this Contract does not cause us to be a party to or a
fiduciary of the Plan. We make no representation and assume no
liability as to the sufficiency of Contributions or the Contractholder
Account for the benefits to be provided under the Plan. You are solely
responsible for the selection of this Contract as a suitable funding
vehicle for the Plan.
2.2 STATUTORY REQUIREMENTS
This Contract is issued in conjunction with a tax-deferred annuity
plan/program qualified under Section 403(b) of the Code. We reserve the
right to administer this Contract in accordance with the provisions of
Code Section 403(b), its regulations and rules, the eligible rollover
distribution rules of Code Section 401(a)(31), the minimum distribution
requirements of Code Section 403(b)(10), the elective deferral limits
of Code Section 402(g), the withdrawal restrictions imposed by Code
Section 403(b)(11), and other applicable provisions of the Code. This
Contract and any Participant Accounts are nonassignable and
nontransferable except in the event of a loan or Qualified Domestic
Relations Order.
2.3 CONDITIONS
The continuation of this Contract is conditioned upon there being no
change in the Plan or its investment policy that, in our judgment,
would materially disrupt the level of Contributions or increase
Withdrawals compared to prior periods.
================================================================================
SECTION 3 - CONTRIBUTIONS AND CONTRACTHOLDER ACCOUNT
3.1 CONTRIBUTIONS
You will remit as Contributions to this Contract all or a portion of
funds contributed to the Plan unless we agree otherwise in writing or
unless such remittance is to end according to the terms of this
Contract. Contributions may include rollovers of amounts held by
Participants under other tax-qualified retirement plans or funds
transferred from Plan Investment Funds. You may direct that
Contributions be allocated to the Contractholder Fixed Account and/or
the Contractholder Variable Account. Participant elective deferrals to
this Contract, for any tax year, may not exceed the limitations imposed
by Code Sections 401(a)(30) and 402(g).
3.2 PARTICIPANT ACCOUNT SEGMENTS
We may maintain the fixed interest portion of Participant Accounts in
two or more Rate Segments. The dollar value of any Segment is equal to
the sum of all Contributions and interest credited to it, less all
Withdrawals and Transfer Payments withdrawn from it.
4
3.3 CONTRACTHOLDER FIXED ACCOUNT INTEREST RATES
We will notify you in advance of each interest rate we set under this
Contract. Each interest rate is an Effective Annual Rate.
(a) CURRENT QUARTERLY INTEREST RATE
All Contributions received during the current calendar quarter will be
allocated to the same Rate Segment and will be credited with interest
at the current quarterly interest rate. This rate is set prior to the
beginning of each calendar quarter, and remains in effect on all
Contributions received during that quarter throughout the remainder of
the current calendar year and all of the following calendar year.
(b) RENEWAL INTEREST RATE
After the expiration of a current quarterly interest rate, we will set
a renewal interest rate for that Rate Segment to apply to Contributions
(and interest thereon) that previously were credited that current
quarterly interest rate. We may set one renewal interest rate to
replace each expiring current quarterly interest rate. The renewal
interest rate will be reset by us periodically.
(c) PORTFOLIO INTEREST RATE
As an alternative to the above Sections 3.3 (a) and (b), you may, prior
to the inception of the Contract, choose to have a single interest rate
apply to all amounts contributed to this Contract. This rate may be
changed quarterly or annually by mutual agreement.
(d) CONTRACTUAL ANNUAL MINIMUM INTEREST RATE
Each interest rate set under Section 3.3 for the years shown below will
not be less than the following:
Calendar Year Rate
------------- ----
1997 and each year thereafter 3.0%
3.4 CONTRIBUTIONS FROM PRIOR PRUDENTIAL FIXED ACCOUNT CONTRACTS
If you contribute amounts to the Contractholder Fixed Account from the
fixed rate investment of a predecessor Prudential group annuity
contract, such amounts will be invested within Rate Segments that
correspond to the investment segments or portions, if any, under the
prior contract.
3.5 CONTRACTHOLDER VARIABLE ACCOUNT
Contributions to the Contractholder Variable Account may be made to any
of the Separate Accounts or Subaccounts listed in Appendix A.
3.6 REPORTS
We will make a report to you of the financial activity within the
Contractholder Account on a quarterly basis or more frequently by
mutual agreement.
5
================================================================================
SECTION 4 - VARIABLE INVESTMENT OPTIONS
4.1 SEPARATE ACCOUNTS
The Separate Accounts in which this Contract participates, and their
primary investments, are described in Appendix A. Assets held in each
Separate Account, except assets representing Prudential surplus, if
any, are not chargeable with liabilities arising out of any other
business of Prudential. The total market value of the assets held in
each Separate Account at all times will be at least equal to the total
reserve liability required by law for all payments or values which vary
in dollar amount to reflect the investment results of each Separate
Account.
To the extent that applicable laws and regulations permit, investments
for each Separate Account will be free of all limitations applicable to
other investments by Prudential. Prudential restricts use of its
Separate Accounts to certain plans. These plans include those which
meet the requirements for qualification under Section 403(b) of the
Code. If, at any time, we are informed that your Plan does not meet
applicable requirements, we will (1) notify you and (2) cancel your
Contractholder Variable Account. The dollar value of your canceled
account will, within seven Business Days thereafter, be transferred to
you, your trustee, or the financial institution that you designate.
After that, no Contributions may be made to the Separate Account under
this Contract until the Plan again satisfies applicable qualification
requirements.
4.2 SUBACCOUNTS
A Separate Account may consist of Subaccounts. The income, gains and
losses, realized or unrealized, from the assets allocated to a
Subaccount are credited to or charged against each Subaccount, without
regard to other income, gains or losses of Prudential.
Those Subaccounts currently available under this Contract are listed in
Appendix A. Each Subaccount invests exclusively in shares of a
corresponding fund or a portfolio of securities. Shares of a fund are
purchased and redeemed for a Subaccount at their net asset value. Any
amounts of income, dividends and gains distributed from the shares of a
fund are reinvested in additional shares of that fund at net asset
value.
The dollar amounts of values and benefits of this Contract provided by
a Separate Account vary as a function of the investment performance of
the Subaccounts. You bear the investment risk for Subaccount value in
the selected Subaccounts.
4.3 VOTING RIGHTS
Certain Separate Accounts hold securities that have voting rights. We
normally exercise these rights. However, we reserve the right to
solicit Contractholders for instruction as to how to vote some or all
of the securities in these accounts.
6
4.4 MODIFICATION OF SEPARATE ACCOUNTS AND SUBACCOUNTS
We may from time to time change material features of, or close, certain
Separate Accounts or Subaccounts. Any changes will be made only if
permitted by applicable law and regulations. If any change may have a
material impact on Contractholders or Participants, we will obtain the
approval of Contractholders and Participants of the changes and the
approval of any appropriate regulatory authority.
Specifically, we may combine Separate Accounts or Subaccounts, provide
additional Subaccounts or substitute a Subaccount for another, change
the investment managers or management style of a Separate Account or
Subaccount, transfer part or all of the assets of a Separate Account or
Subaccount to another Separate Account or Subaccount, and make any
changes necessary to comply with, or obtain and continue any exemptions
from the Investment Company Act of 1940 (the 1940 Act).
================================================================================
SECTION 5 - TRANSFER PAYMENTS
5.1 TRANSFER PAYMENTS TO PLAN INVESTMENT FUNDS
You may, pursuant to elections by Participants, subject to any
restrictions in the Plan, direct us to make Transfer Payments among
Subaccounts or from the Contractholder Fixed Account or Contractholder
Variable Account to any Plan Investment Fund made available under the
Plan. Transfers will be made under the terms of Section 5.1(a), unless
you request, and we agree, to allow transfers under the terms of
Sections 5.1(b) and 5.1(c). If we are not provided sufficient
information to effectively administer transfers under Sections 5.1(b)
and 5.1(c), we will reinstate the terms of Section 5.1(a) upon written
notice.
Prudential may, upon notice to the Contractholder and Participants,
limit the frequency of transfers to at least one per month. The action
will take effect on the date of the notice.
(a) Transfers From Contractholder's Fixed Account
A Participant may transfer an amount from the Fixed Account to
another investment option made available under the Plan, subject
to the following conditions:
In any one year, a Participant may transfer 20% of his Fixed
Account balance, as measured as of the first day of the year,
without a market value adjustment. The amount transferred in
excess of 20% of such balance will be transferred subject to the
adjustment described in Section 6.4.
(b) DIRECT TRANSFERS TO A COMPETING FUND
Transfer Payments directly between the Contractholder Fixed
Account under this Contract and a Competing Fund as defined in
Section 1.4 may not be made without Prudential's consent.
7
(c) INDIRECT TRANSFERS TO A COMPETING FUND
Indirect transfers between the Contractholder Fixed Account under
this Contract and a Competing Fund may be made, provided the
amount to be transferred is first transferred to a fund which is
not a Competing Fund and such amount is held in a non-Competing
Fund for a period of at least 90 days before being transferred to
a Competing Fund. Amounts transferred from the Contractholder
Fixed Account to a non-Competing Fund may be transferred back into
the Contractholder Fixed Account after 90 days.
In the event of unusual volatility in the financial markets, Prudential
may, in its discretion, eliminate or reduce the 90-day restriction of
this Section 5.1(c) for all Contractholders within this class of
contracts. The 90-day provision may be prospectively reinstated by
Prudential upon written notice to the Contractholder.
We reserve the right, upon 30 days notice and in our sole discretion,
to determine whether any investment option under the Plan is or becomes
a Competing Fund as defined in Section 1.4 of the Contract. We also may
upon 30 days notice, in order to protect the financial interests of
other group annuity Contractholders with similar transfer rights,
require that transfers be made under Section 5.1(a) instead of 5.1(b)
and (c). We may also waive transfer restrictions to accommodate asset
allocation programs offered by Prudential. Any such action will be made
uniformly for all similarly situated Contractholders.
5.2 TRANSFER PAYMENT TERMS
Transfer Payments may be made from the Contractholder Fixed Account and
the Contractholder Variable Account. Transfer Payments from the
Contractholder Fixed Account will be made on a pro-rata basis from all
Rate Segments. Each payment will be in full settlement of our liability
for the Transfer Payment. Transfer Payments from the Contractholder
Fixed Account will be effective on the Business Day we receive the
Transfer Request in Good Order. Transfer Payments from the
Contractholder Variable Account will be at the Unit Value of the
applicable Separate Account or Subaccount(s) at the close of the
Business Day we receive the Transfer Request in Good Order.
You agree to provide for the recordkeeping of investment funds
available under the Plan on a Participant-level basis, and to furnish
us with such information as we may reasonably require in connection
with Transfer Requests. We reserve the right to monitor the
Participant-level investment activity in order to enforce these
transfer provisions. We will notify you immediately upon receipt of a
Transfer Request that is inconsistent with the Transfer Payment
conditions then in effect.
We may, upon notice to you, limit the frequency of Transfer Payments.
This action will take effect on the date of the notice. Any such limit
will allow transfers on a quarterly basis or more frequently by mutual
agreement.
8
================================================================================
SECTION 6 - WITHDRAWALS
6.1 WITHDRAWALS
You may make Withdrawals from the Contract. Withdrawals from the
Contractholder Fixed Account for purposes listed in Sections 6.2 and
6.3 will not be subject to the market value adjustment described in
Section 6.4. However, Withdrawals for these purposes may be subject to
a market value adjustment if, at the time you request the Withdrawal,
the terms of your Plan are materially different from the terms or
manner of administration in effect on this Contract's effective date,
and such amendment or change adversely affects our rights or
liabilities under this Contract. Withdrawals will be made on a pro-rata
basis from all Rate Segments.
If more than one employer participates in the Plan, and Contributions
are discontinued for one employer, Withdrawals of funds attributable to
that employer may be made under any option available within this
section.
You may make Withdrawals to pay expenses of the Plan. Such Withdrawals
will not be subject to any market value adjustment.
6.2 WITHDRAWALS FOR BENEFIT PAYMENTS
We will make payments to the Contractholder to provide benefits
permitted under the terms of the Plan. Such benefit payments may be
made for reasons of a Participant's retirement, termination of
employment, death, disability, hardship, loans (if applicable), or
in-service withdrawal after age 59 1/2. Benefits may also include such
other payments made pursuant to the Plan provisions as agreed to by us
in accordance with our existing administrative practices. The amount of
a benefit payment will be the amount certified by you as necessary to
fulfill a benefit payment request of a Participant. You agree to supply
us with documentation to support benefit payments on request. We will
also make minimum distribution payments to Participants consistent with
Section 401(a)(9) of the Code. Loans made available to a Participant
under this Contract will be made in accordance with the terms provided
in the Plan. Prudential will administer loans in conformity with the
Code and ERISA.
6.3 WITHDRAWALS AT TERMINATION OF CONTRACT
You may, in conjunction with a termination of the Contract as described
in Section 8, make a Withdrawal of the entire balance of the
Contractholder Fixed Account after the deduction of any applicable
Deferred Sales Charges over a five-year period. During the five-year
payout period, interest will be added to the Contractholder Fixed
Account at the end of each day on the amount of the Contractholder
Fixed Account at the end of the preceding day at an Effective Annual
Rate determined on the Withdrawal Date. This rate is determined by
multiplying the dollar amount of each Rate Segment by the interest rate
that applies to that segment, adding the products, dividing the sum by
the total dollar amount of all segments and subtracting 0.50%.
Alternatively, at your election, Prudential can reset the interest rate
annually throughout the payout period as provided under Section 3.3
with no 0.50% reduction. In no event will the interest paid under this
Section be less than 3.0% per annum.
We will pay one-fifth of the balance of the then-current Contractholder
Fixed Account on the first Business Day following the first anniversary
of the Withdrawal Date. We will pay one-fourth of the then-current
Contractholder Fixed Account as of the second anniversary of the
Withdrawal Date. We will pay one-third of the then-current
Contractholder Fixed Account as of the third anniversary of the
Withdrawal Date. We will pay one-half of the then-current
Contractholder Account as of the fourth anniversary of the Withdrawal
Date. We will pay the remainder of the then-current Contractholder
Account as of the fifth anniversary of the Withdrawal Date. We will
make all payments to you or to any institution or account you
9
designate. At your request, we may provide monthly payments or
quarterly payments in lieu of annual payments. Alternatively,
Prudential may pay the Withdrawal amount in 60 monthly or 20 quarterly
amounts.
We will make all payments from the Contractholder Variable Account to
you or to an institution or account you designate. We will usually pay
the entire balance of the Contractholder Variable Account within seven
Business Days after receipt of a Good Order request for a Withdrawal at
termination of the Contract. However, we can postpone such payments if:
1. the New York Stock Exchange is closed, other than customary
weekend and holiday closing, or trading on the exchange is
restricted as determined by the Securities and Exchange
Commission (SEC);
2. the SEC permits, by an order, the postponement for the
protection of Contractholders; or
3. the SEC determines that an emergency exists that would make
the disposal of securities held in the Contractholder Variable
Account, or the determination of their value, not reasonably
practicable.
6.4 PARTICIPANT WITHDRAWALS SUBJECT TO A MARKET VALUE ADJUSTMENT
Withdrawals by Participants from the Contractholder Fixed Account that
are not governed by the provisions of Section 6.2 may be made at any
time permitted under the Plan. These Withdrawals will be paid within 10
Business Days of our receipt of your written request in Good Order.
However, under certain emergency conditions, we may reserve the right
to defer payments under this Section for a period of up to 180 days (or
such shorter period as may be required by state law).
The amount withdrawn under this Section and paid to the Participant
shall be equal to the Withdrawal request increased or decreased by the
market value adjustment (MVA), reduced by any applicable deferred sales
charges as described in Section 11.
The market value of the amount withdrawn from the Contractholder Fixed
Account will be calculated using the formula described in this
paragraph. A separate market value adjustment is determined for each
Rate Segment. The interest rate applicable to each such Rate Segment is
compared to the interest rate credited for new Contributions in the
current quarter. If a Portfolio Interest Rate is in effect under
Section 3.3 of this Contract, the Portfolio Rate is compared to
Prudential's current quarterly new guaranteed interest rate. The market
value adjustment for a Rate Segment is calculated by subtracting the
interest rate for new Contributions from the interest rate credited to
that Rate Segment and multiplying that result by a factor of 3.0. In no
event will the market value adjustment exceed 0.00% unless Prudential
has notified the Contractholder prior to the inception of the Contract
that the market value adjustment may exceed 0.00%. In no event will the
application of the market value adjustment cause a Withdrawal from the
Contractholder Fixed Account to be less than the Contributions
withdrawn, accrued at an interest rate of 3.00%. Each market value
adjustment is then applied to the dollars withdrawn from the
corresponding Rate Segment. The market value of the amount withdrawn
from the Contractholder Fixed Account is equal to the sum of the market
values of the amount withdrawn from each Rate Segment. The market value
adjustment factor may be changed in accordance with Section 9.2.
10
In the event that a Participant Withdrawal is made as a result of a
communication of the Contractholder or Employer received by the
Participant, which communication in Prudential's reasonable judgment
advises Participants to transfer or withdraw their funds held under
this Contract, the Withdrawal will be treated as a Withdrawal at
Contract termination under Section 6.3. If a participant communication
is not provided to Prudential upon written request, Prudential reserves
the right to consider the communication as one which advises
Participants to transfer or withdraw their funds held under this
Contract.
================================================================================
SECTION 7 - FORMS OF BENEFITS
7.1 GENERAL
You may request that we pay amounts that are withdrawn for benefit
payments under Section 6.2 in any of the following forms, to the extent
not contrary to the terms of the Plan:
(a) a lump sum;
(b) any annuity form described in Schedule A; or
(c) any other settlement method or combination of methods to
which we consent.
Withdrawals must be made in accordance with Code Section 403(b)(10) and
the regulations thereunder. Any benefit payments made will meet the
requirements of Code Section 403(b)(10) and the Regulations issued
thereunder, unless the Plan provides otherwise.
7.2 TERMS OF PAYMENT OF ANNUITIES
If a Participant elects an annuity pursuant to Section 7.1(b), the
amount withdrawn will be applied to purchase an annuity in accordance
with Schedule A. The monthly amount of annuity is determined from the
schedule of purchase rates for that annuity. Any payments made in
annuity form will be governed by the terms of the annuity certificate.
7.3 CERTIFICATES
We will deliver to you for issuance to each Participant for whom an
annuity is purchased under this Contract, a certificate summarizing the
amount and terms of such annuity. Certificates are not a part of this
Contract.
7.4 MINIMUM DEATH BENEFIT
Any lump sum death payment from this Contract made to a Beneficiary
within one year of the Participant's death will be equal to the
greatest of : (1) the Participant's Account value as of the date
Prudential receives a death benefit payment request in Good Order; (2)
the sum of all contributions made to the Participant's Account less
withdrawals, transfers and charges; and (3) the greatest of the
Participant's Account value calculated on every third anniversary of
the first contribution made on behalf of the Participant less any
withdrawals, transfers and charges (accompanied by completed
documentation) under the Contract.
11
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SECTION 8 - TERMINATION OF CONTRACT
8.1 SIXTY DAY TERMINATION
This Contract may be terminated by either party by providing the other
party 60 days written notice. The Contract termination date will be
established as the first Business Day occurring 60 calendar days
following receipt of the notice of termination. The parties may agree
to a different termination date.
8.2 TERMINATION FOR CAUSE
We may terminate this Contract after a reason for termination occurs by
giving you 30 days written notice. Reasons for our termination are:
(a) You fail to meet any of your obligations under this
Contract or under any related agreement.
(b) The Plan is no longer a qualified plan under the Code.
(c) The Plan is terminated.
(d) You no longer have any obligations under the Plan.
(e) You, your agency, or your trustee take an action
which, in our reasonable determination, materially
and adversely affects our rights and obligations
under this Contract.
(f) You reject a change or an amendment to this Contract
proposed by us under Section 9.1 or 9.2.
8.3 EFFECT OF TERMINATION
You may make no further Contributions or Transfer Payments after a
contract termination date is established, unless we agree otherwise.
Death benefits and previously purchased annuities will continue to be
paid. Benefit Withdrawals, including the purchase of annuities if we
agree, may be made from the Contractholder Fixed Account after the
contract termination date. Benefit withdrawals from the Contractholder
Variable Account will continue to be made after the Contract
termination date. The Contractholder Fixed Account will be distributed
under the terms of Section 6.3 and will be subject to the Deferred
Sales Charges of Section 11.1.
Withdrawals upon termination are subject to any limitations or
restrictions that appear elsewhere in this Contract.
12
8.4 PARTIAL CONTRACT TERMINATION
If, through a divestiture or other corporate restructuring, employees
of an employer cease to be eligible to participate in the Plan, you may
partially terminate this Contract and request that we issue a new
contract to a successor plan. Any such contract is subject to any terms
and conditions mutually agreed to. Section 8.3 applies to amounts
subject to partial termination.
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SECTION 9 - CHANGES
9.1 CHANGES BY AGREEMENT
This Contract may be changed at any time by agreement between the
parties. The changes will be effective upon notice. Any change made to
this Contract will be consistent with applicable state and federal law.
No changes will be made that would adversely affect an annuity benefit
for a Participant which is attributable to contributions already made
to the Contract.
9.2 CHANGES BY PRUDENTIAL
We may change this Contract if we, in our discretion, deem it
appropriate to conform to the requirements of any law or regulation. We
reserve the right to periodically update the annuity purchase rates,
and, upon 30 days notice to you, to change the method for determining
the market value adjustment Any change to the market value adjustment
will apply only to contributions made on or after the age of the
change.
No modifications or amendments to this Contract may affect the terms of
any annuity purchased prior to the effective date of the modification
or amendment. The annuity purchase rates will not be modified or
amended (i) during the first year that the Contract is in effect, or
(ii) more than once in any 12 month period; and (iii) may not be less
favorable to you than the annuity purchase rates we offer to any other
Contractholder in the same class as this Contract.
9.3 PERSONS EMPOWERED TO ACT FOR US
No agent or other person except one of the following Prudential
officers may change this Contract or bind us.
Chairman of the Board and Actuary
Chief Executive Officer Associate Actuary
President Secretary
Vice President Assistant Secretary
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SECTION 10 - GENERAL TERMS
10.1 COMMUNICATIONS
All communications under this Contract shall be in writing. They will
be addressed to you at your principal office, or at such other address
as you may communicate to us. Communications to us should be addressed
to Prudential, c/o Prudential Investments, 30 Scranton Office Park,
Scranton, Pennsylvania 18507-1789, or at such other address as we may
communicate.
13
10.2 PLACE OF PAYMENT
All payments to us under this Contract shall be payable at our office
described above or at an address or to a representative we specify by
notice to you.
10.3 INFORMATION - RECORDS
You agree to furnish all information which we may reasonably require
for the administration of this Contract. You also agree to provide to
us any applicable administrative agreements pertaining to recordkeeping
or servicing of Participant Accounts. We will not be liable for the
fulfillment of any obligations in any way dependent upon information
unless and until we receive the information in a form satisfactory to
us, which includes receiving information in Good Order where
appropriate. Information furnished to us may be corrected for
demonstrated errors unless we have already acted to our prejudice by
relying on the information. Except for the corrections, information
furnished to us will be regarded as conclusive.
10.4 MISSTATEMENTS
If there has been a misstatement as to any annuitant, we will not pay
more than that which should be paid based on the correct information.
Any overpayment will, together with interest, be deducted from future
payments. Any underpayment will, together with interest, be paid
immediately upon receipt of the corrected information. The interest
rate credited or charged under this section will be 3.0%.
10.5 BENEFICIARY
You may, if permitted by law, direct that we pay any benefit under this
Contract directly to the Beneficiary of a Participant or other
designated payee. Payments in annuity form will be governed by the
annuity certificate.
10.6 SMALL ANNUITIES AND AMOUNTS; NATURAL PERSONS
To the extent consistent with the terms of the Plan and Code Section
411(a)(11) as applicable, if the total monthly amount of the annuity
that would otherwise be purchased on behalf of any person, or any
series of payments under this Contract, is less than $50, we may make a
single sum payment in lieu of purchasing such annuity or making such
series of payments. The single sum paid will be equal to the amount
that would otherwise be applied to purchase such annuity. The single
sum paid in lieu of a stream of payments will be equal to the value of
the series of payments discounted at interest from each payment due
date to the date of the single sum payment. The discount interest rate
will be the interest rate in the schedule of annuity purchase rates
used to establish the series of payments.
If the payee is not a natural person and a series of payments is
payable, we may choose to make a payment in one sum.
14
10.7 DIVISIBLE SURPLUS
The portion, if any, of our divisible surplus accruing under this
Contract will be determined annually by our Board of Directors and
credited to the Contractholder Accounts as determined by the Board. It
is unlikely that any divisible surplus will accrue upon this Contract.
No annuity under this Contract will be taken into account in the
determination of any divisible surplus to be credited to this Contract.
10.8 LIMIT ON ASSIGNMENT
Your rights and responsibilities under this Contract may not be
assigned without our written consent.
10.9 PLAN CHANGES
This Contract applies to the terms of the Plan in effect on the
Effective Date of this Contract. You shall furnish us a copy of the
Plan, any proposed amendment or any change to the Plan, its operation,
or its investment policy, and any communications by you to the
Participants concerning investments available through the Plan.
10.10 ENTIRE CONTRACT
This document constitutes the entire Contract between us.
10.11 GOVERNING LAW
This Contract will be construed according to the laws of the
jurisdiction set forth on the cover page.
10.12 INTEREST ON BENEFIT PAYMENTS
Any benefit payment we make under Section 6.2 that is not made within
10 Business Days of the receipt in Good Order of a request for such
payment will be credited with interest in the same rate and manner as
provided in Section 3.3, or as required by state insurance or Federal
securities law. We reserve the right to credit interest on benefit
payments paid within 10 Business Days for all Contractholders within
this class of contracts.
10.13 CONTRACTHOLDER
We will normally conduct business only with you. We will be entitled to
rely on any acts or omissions by you pursuant to the terms of this
Contract.
Either party may from time to time, delegate to an agency or trustee
certain administrative powers and responsibilities under this Contract.
No party is bound to recognize any such delegation until it has
received notice of it. The notice must specify those powers and
responsibilities and include evidence of acceptance by the agency. On
and after the date of receipt of the notice, the notified party will
deal with the agency with respect to those powers and responsibilities
and will be entitled to rely on any action taken or omitted by the
agency with respect thereto in the same manner as if dealing with the
party to the Contract. Either party may give notice to the other party
of a subsequent delegation to another agency of specified powers and
responsibilities.
15
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SECTION 11 - DEFERRED SALES CHARGES
11.1 DEFERRED SALES CHARGE
Transfers made to another Plan Investment Fund not available under this
Contract on behalf of Participants, if applicable, and Withdrawals made
under Section 6 on behalf of Participants (other than those made under
Section 6.2) are subject to Deferred Sales Charges. The amount of a
Transfer Payment or Withdrawal subject to a Deferred Sales Charge shall
be the amount requested less the Deferred Sales Charge determined from
the following table. However, if the entire dollar amount held on
behalf of a Participant under the Contractholder Fixed Account is
withdrawn, the amount paid will not be less than the Contributions made
into that option for the Participant reduced by previous Withdrawals
and transfers.
Withdrawals or Transfer Payments made in the years indicated, counting
from the first day an amount was contributed on behalf of a Participant
under this or a predecessor Prudential Contract, will have the
following Deferred Sales Charge, measured as a percentage of
Contributions withdrawn:
0 - 1 year 7%
1 - 2 years 6%
2 - 3 years 5%
3 - 4 years 4%
4 - 5 years 3%
5 - 6 years 2%
6 - 7 years 1%
After 7 years 0%
Deferred Sales Charges do not apply to amounts withdrawn in excess of
the Participant's Contributions under this Contract. No charge is
imposed upon rollover contributions, contributions withdrawn due to the
Participant's termination of employment, death, financial hardship or
disability retirement.
Withdrawals are deemed to be made first from contributions and then
earnings. Withdrawals from the Contractholder Fixed Account will be
made on a pro-rata basis from all Rate Segments applicable to a
Participant under the Contract.
Payment to the Participant ordinarily will be made within seven days of
our receipt of a properly completed payment request. If any Withdrawal
payment under this section is not made within 10 Business Days,
interest on the delayed payment will be credited (starting as of the
first day following receipt of the Withdrawal request) at the rate
applicable to new Contributions under Section 3.3 on the date the
Withdrawal request is received.
16
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APPENDIX A - SEPARATE INVESTMENT ACCOUNTS
Contributions paid to the Contractholder Variable Account may be invested in the
following Prudential Variable Separate Accounts: Prudential Variable Contract
Account 10 (VCA-10), Prudential Variable Contract Account 11 (VCA-11) and
Prudential Variable Contract Account 24 (VCA-24).
VCA-10, VCA-11, and VCA-24 are registered under the Investment Company Act of
1940. These three accounts are part of Prudential's MEDLEY Program. Participants
selecting these accounts must receive a MEDLEY Prospectus prior to investing.
The operations of VCA-10 and VCA-11 are supervised by the Prudential VCA-10 and
VCA-11 Committees, respectively. Committee members are elected by the persons
having VCA-10 and VCA-11 voting rights, as described in the Prospectus.
The investments held in VCA-10 are composed primarily of common stocks. The
investments held in VCA-11 are composed primarily of money market instruments.
Prudential invests and reinvests the assets held in VCA-10 and VCA-11 in
accordance with the investment objectives and policies established for those
accounts and described in the Prospectus.
The investments held in VCA-24 are composed primarily of shares of The
Prudential Series Fund, Inc. ("PSF"), an open-end management investment company
(commonly known as a "Mutual Fund") registered under the Investment Company Act
of 1940. VCA-24 is divided into subaccounts, each of which is invested only in a
corresponding portfolio of PSF. The portfolios of PSF in which the subaccounts
are currently invested are:
VCA-24 SUBACCOUNT PSF PORTFOLIO
VCA-24-B: Diversified Bond Subaccount Diversified Bond Portfolio
VCA-24-S: Equity Subaccount Equity Portfolio
VCA-24-AM: Flexible Managed Subaccount Flexible Managed Portfolio
VCA-24-CM: Conservative Balanced Subaccount Conservative Balanced
Portfolio
VCA-24-SI: Stock Index Subaccount Stock Index Portfolio
VCA-24-GE: Global Subaccount Global Portfolio
VCA-24-GS: Government Income Government Income
Subaccount Portfolio
17
The investment strategy and other features of each PSF portfolio in which these
VCA-24 subaccounts invest are as described in the Prospectus. The selection of
VCA-24 subaccounts and PSF portfolios may change. Any such change will be
described in the Prospectus.
TABLE OF MANAGEMENT FEES
----------------------------------------------------------------------
OPTION EFFECTIVE ANNUAL RATE
----------------------------------------------------------------------
VCA-10 0.25%
----------------------------------------------------------------------
VCA-11 0.25%
----------------------------------------------------------------------
VCA-24
----------------------------------------------------------------------
Diversified Bond Portfolio 0.40%
----------------------------------------------------------------------
Equity Portfolio 0.45%
----------------------------------------------------------------------
Flexible Managed Portfolio 0.60%
----------------------------------------------------------------------
Conservative Balanced Portfolio 0.55%
----------------------------------------------------------------------
Stock Index Portfolio 0.35%
----------------------------------------------------------------------
Global Portfolio 0.75%
----------------------------------------------------------------------
Government Income Portfolio 0.40%
----------------------------------------------------------------------
The administrative charge for each investment option listed above is the
equivalent of the effective annual rate of 0.75% of each corresponding
portfolio.
Prudential invests and reinvests the assets held in each Subaccount in
accordance with the investment objectives and policies established for it and
described in the Prospectus.
VCA-10, VCA-11 and VCA-24 were established pursuant to resolutions adopted by
Prudential's Board of Directors. The resolutions provide that these accounts are
to be used for contracts which state that certain payments and values under them
will vary to reflect the investment results of the accounts.
Contributions paid to the Contractholder Variable Account may be invested in the
Prudential Long Term Growth Account 2 (VCA-2). The VCA-2 Variable Account will
invest primarily in common stocks selected with the objective of long term
growth, taking into account both income and capital appreciation. The investment
management fee is at the annual rate of 0.125%. Mortality and expense charges
are at an annual rate of 0.375%. Participants selecting this account must
receive a Prospectus prior to investing.
18
Contributions paid to the Contractholder Variable Account may be invested in the
Subaccounts of the Prudential Discovery Select Group Variable Contract Account
("the Discovery Account"). This variable separate account, sponsored by
Prudential Insurance Company of America, is currently divided into 22
Subaccounts. Any income and realized or unrealized gains and losses in a
Subaccount are credited to or charged against that Subaccount without regard to
income, gains, or losses in other Subaccounts.
Eleven Subaccounts invest in portfolios of the Prudential Series Fund. These
portfolios include Money Market, Government Income, Diversified Bond, Equity,
High Yield Bond, Stock Index, Equity Income, Prudential Xxxxxxxx, Global,
Conservative Balanced and Flexible Managed Portfolios. The Subaccounts of the
Discovery Account also invest in other underlying Fund portfolios. These include
the AIM V.I. Growth and Income Fund, the AIM V.I. Value Fund, the Janus Aspen
Series Growth Portfolio, the Janus Aspen Series Growth Portfolio, the MFS
Emerging Growth Series, the MFS Research Series, the OCC Accumulation Managed
Portfolio, the OCC Accumulation Small Cap Portfolio, the X. Xxxx Price Equity
Income Portfolio, the X. Xxxx Price International Stock Portfolio, and the
Warburg Pincus Post-Venture Capital Portfolio.
The investment strategy of each Subaccount is described in the Prospectus. The
choice of Subaccounts may change. Any such change will be described in the
Prospectus.
The administrative charge for each Subaccount in the Discovery Account will not
exceed an effective annual rate of 1.10%. This charge is deducted daily from the
assets in each of the Subaccounts. This charge is for the issuing of the
Contract, establishing and maintaining records, and providing reports to the
Contractholder and the Participants. Prudential may impose a lower
administrative charge for certain classes of contractholders that meet minimum
size requirements (for example, assets exceeding $25 million or plans with 500
or more Participants). In addition, Prudential may impose a lower administrative
charge for any contractholder in Prudential's MEDLEY group annuity program for
whom Prudential is providing administrative services as of June 1, 1997 that
exchanges their MEDLEY contract(s) for a Discovery Select contract to reflect
the reduced set-up, recordkeeping and administrative costs incurred by
Prudential. Any reductions in administrative charges will be available on a
uniform basis to similarly-situated contractholders.
Mortality risk and expense charges are deducted daily at an effective annual
rate of not more than 0.15% of the assets held in the Subaccounts. Participants
selecting from any of the Subaccounts in the Discovery Account must receive a
Prospectus prior to investing.
19
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SCHEDULE A - FORMS OF ANNUITY WHICH MAY BE PURCHASED
Form of Payment Payable Applicable Schedule
----------------------- -------------------
1. Life - Payment Certain Annuity. Use Schedule B
2. Life - Contingent Annuity. Use Schedule C
3. Payment Certain Annuity. Use Schedule D
We may provide monthly amounts of annuity larger than those shown in the
following schedules for annuities purchased during any period we specify.
Annuity purchase rates for other forms of annuity to which we consent will be
furnished on request.
The annuity purchase rates under this contract will be no less favorable to a
Participant than used under other Prudential group annuity contracts of this
Class.
The forms of annuities which may be purchased are fixed dollar annuities which
are guaranteed by Prudential. The amount of fixed annuity payments depends only
on the form and duration of the annuity selected, the dollar amount applied to
purchase the form of annuity, the age of the Annuitant and the annuity purchase
rates in Schedules B, C and D. The amount of the fixed annuity payments does not
depend on the performance of the Discovery Account or any Subaccount.
AVAILABLE FORMS OF ANNUITIES
Life annuities and Payment Certain annuities are available under this Contract.
A Life form of annuity is one payable at least during the lifetime of the person
(referred to as the "Annuitant") for whom it was purchased. Depending on the
existence and nature of any payment payable after the death of the Annuitant, a
Life annuity will be either a Life-Payment Certain or a Life-Contingent annuity.
A Payment Certain form of annuity may be payable for a period less than the
lifetime of the Annuitant. The terms of payment for each form of annuity are
described below.
Life-Payment Certain Annuity:
The first monthly payment of a Life-Payment Certain annuity is payable
as of the date the annuity is purchased. Monthly payments are payable
on the first day of each month thereafter throughout the Annuitant's
remaining lifetime. If the Annuitant dies before the number of annuity
payments made equals the number of Payments Certain applicable to him,
monthly annuity payments will continue to be made to the Annuitant's
Beneficiary until the total number of payments is so equal. The number
of Payments Certain is established when the annuity is purchased and
may be 60, 120, 180, 240, or any other number accepted by Prudential.
20
Life-Contingent Annuity:
The first monthly payment of a Life-Contingent annuity is payable on
the date the annuity is purchased. Monthly payments are payable on the
first day of each month thereafter throughout the Annuitant's remaining
lifetime. If the Annuitant dies before the death of his Contingent
Annuitant, monthly payments will continue to the Contingent Annuitant
throughout the Contingent Xxxxxxxxx's remaining lifetime. The amount of
each monthly Contingent Annuity payment will be a percentage of the
monthly annuity payment payable before the Annuitant's death. The
percentage is established when the annuity is purchased and may be
33 1/3%, 50%, 66 2/3%, or 100%, or any other percentage we accept.
Payment Certain Annuity:
The first monthly payment of a Payment Certain annuity is payable on
the date the annuity is purchased. Monthly payments are payable on the
first day of each month thereafter until the total number of Payments
Certain specified when the annuity was purchased has been paid. The
number of payments may be 60, 120, 180, 240 or any other number we
accept. If the Annuitant dies before his Beneficiary, monthly annuity
payments will continue to be made to the Beneficiary until the number
of payments specified by the Annuitant has been made.
Other forms of annuity may be provided with our consent.
Variable Annuity (VCA-2 Only)
Assets in VCA-2 may also be used for the purchase of a variable
annuity. In electing to have a variable annuity effected, the
Participant may select from the available forms of annuity described in
the VCA-2 Prospectus. If a variable annuity is purchased, the annuitant
will receive the value of a fixed number of annuity units each month.
Changes in the value of such Units and thus the amounts of the monthly
annuity payments, will reflect investment gains and losses.
21
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ANNUITY SCHEDULES
The schedules show the monthly amount of annuity purchased per $10,000, after
deduction of any taxes on annuity premiums that may apply.
The amounts of annuity for other ages of the Annuitant or Contingent Annuitant
will be provided upon request.
The actuarial basis for the rates shown in Schedules B-D is:
Mortality: The Prudential Insurance Company of America 1950 Group Annuity
Valuation Table of Mortality with an enhanced rating in age
according to year of birth. The annual rate of mortality improvement
is a one-year reduction in age for each 5 years the person is alive
after 1895, measured on an annual basis. The Annuitant's age is
their age on the date of purchase.
Interest: The interest rate applicable on the date of purchase is 3.00%.
Loading: Loading in the rates is 8.00% of the gross purchase price shown for
each schedule.
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SCHEDULE B - LIFE - PAYMENT CERTAIN ANNUITY (120 PAYMENTS CERTAIN)
Monthly Amount
If the date the annuity is purchased is in:
AGE AT COMMENCEMENT
OF ANNUITY
1997 1998 2000 2005
---- ---- ---- ----
60 $40.29 $40.14 $39.85 $39.16
65 45.23 45.04 44.68 43.79
70 51.51 51.28 50.82 49.69
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22
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SCHEDULE C - LIFE - CONTINGENT ANNUITY
Monthly Amount
If Xxxxxxxxx and Contingent Annuitant have same date of
birth. If the date the annuity is purchased is in:
AGE AT
COMMENCEMENT
OF ANNUITY 1997 1998 2000 2005
---------- ---- ---- ---- ----
If specified percentage to Contingent Annuitant is 100%:
60 $35.09 $34.99 $34.78 $34.28
65 38.81 38.67 38.39 37.71
70 43.91 43.71 43.32 42.38
If specified percentage to Contingent Annuitant is 50%:
60 $37.73 $37.60 $37.34 $36.73
65 42.26 42.09 41.75 40.92
70 48.43 48.19 47.71 46.58
SCHEDULE D - PAYMENT CERTAIN ANNUITY
Monthly Amount
If the date the annuity is purchased is in:
NUMBER OF
PAYMENTS
CERTAIN 1997 1998 2000 2005
------- ---- ---- ---- ----
60 $164.73 $164.73 $164.73 $164.73
120 88.45 88.45 88.45 88.45
180 63.20 63.20 63.20 63.20
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23
