IRA CONTRACT AMENDMENT
MADE A PART OF THE CONTRACT TO WHICH IT IS
ATTACHED ("THIS CONTRACT)
1. This amendment shall be controlling and overrides any contradictory
provision in the Contract.
2. If the Contract is a Single Premium Immediate Annuity (SPIA), certain
provisions of this IRA Contract Amendment may not apply because
distributions will have already commenced under the Contract.
3. The Contract will not be transferable except to the Company on
surrender or settlement. It may not be sold, assigned, discounted or
pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose.
4. The entire interest of the Owner/Annuitant in this Contract shall be
nonforfeitable.
5. The annual purchase payment under a periodic contract will not exceed the
lesser of.
100% of the Owner/Annuitant's gross compensation (earned income) for
the taxable year or $2,000 for an Owner/Annuitant under an Individual
Retirement Annuity (IRA).
15% of the Owner/Xxxxxxxxx's gross compensation for the taxable year
or $30,000 under a Simplified Employee Pension (SEP).
15% of the Owner/Xxxxxxxxx's gross compensation for the taxable year
or $7,000 (as adjusted) under a Salary Reduction SEP.
6. The minimum contribution under a single payment or SPIA contract is
determined under the Contract provisions and is generally only available
for rollovers and transfers equal to or greater than the minimum amount.
Except in the case of a rollover contribution (as permitted by section
402(c), 403(a)(4), 403(b)(8), or 408(d)(3)) or a contribution made in
accordance with the terms of a Simplified Employee Pension (SEP) as
described in section 408(k), no contributions will be accepted unless they
are in cash, and the total of such contributions shall not exceed $2,000
for any taxable year. This Contract may not require fixed premiums.
7. No contribution will be accepted under a SIMPLE plan established by any
employer pursuant to Code section 408(p). No transfer or rollover of funds
attributable to contributions made by a particular employer under its
SIMPLE plan will be accepted from a SIMPLE IRA, that is, an IRA used in
conjunction with a SIMPLE plan, prior to the expiration of the 2-year
period beginning on the date the individual first participated in that
employer's SIMPLE plan.
8. Purchase payments made pursuant to this Contract shall be from
"compensation" of the Owner/Annuitant. "Compensation" means wages,
salaries, professional fees, or other amounts derived from or received for
personal service actually rendered (including, but not limited to
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, and
bonuses) and includes earned income, as defined in section 401(c)(2)
(reduced by the deduction the self-employed individual takes for
contributions made to XXXXX plan). Compensation does not include amounts
derived from or received as earnings or profits from property (including,
but not limited to, interest and dividends) or amounts not includible in
gross income. Compensation also does not include any amount received as a
pension or annuity or as deferred compensation. The term "compensation"
shall include any amount includible in the individual's gross income under
section 71 with respect to a divorce or separation instrument described in
subparagraph (A) of section 71(b)(2). For purposes of this definition,
section 401(c)(2) shall be applied as if the term trade or business for
purposes of section 1402 included service described in subsection (c)(6).
9. The entire interest (value of the account or annuity) of the individual for
whose benefit the account (contract) is maintained (Owner/Annuitant) will
be distributed or commence to be distributed, no later than the first day
of April following the calendar year in which such individual attains age
70 1/2 (required beginning date), in equal or substantially equal amounts,
over (a) the life of the Owner/Annuitant, or the lives of such individual
(Owner/Annuitant) and his or her designated beneficiary, or (b) a period
not extending beyond the life expectancy of such individual
(Owner/Annuitant), or the joint and last survivor expectancy of such
individual (Owner/Annuitant) and his or her designated beneficiary.
Payments must be made in periodic payments at intervals of no longer than
one year. In addition, payments must be either nonincreasing or they may
increase only as provided in Q&A F-3 of section 1.401(a)(9)-l of the
Proposed Income Tax Regulations.
10. All distributions made hereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code, including the incidental
death benefit requirements of section 401(a)(9)(G) of the Code, and the
regulations thereunder, including the minimum distribution incidental
benefit requirement of section 1.401(a)(g)-2 of the Proposed Income Tax
Regulations.
11. Life expectancy is computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the Income Tax Regulations. Unless
otherwise elected by the individual by the time distributions are required
to begin, life expectancies shall be recalculated annually. Such election
shall be irrevocable by the individual and shall apply to all subsequent
years. The life expectancy of a non-spouse beneficiary may not be
recalculated. Instead, life expectancy will be calculated using the
attained age of such beneficiary during the calendar year in which the
individual attains ages 70 1/2, and payments for subsequent years shall be
calculated based on such life expectancy reduced by one for each calendar
year which has elapsed since the calendar year life expectancy was first
calculated.
12. At the time a distribution from the Contract is requested, the
Owner/Annuitant is advised to provide the Company with a declaration in
writing of the Owner/Xxxxxxxxx's intention as to the disposition of the
amount distributed, so that the Company may properly report the amount to
the Internal Revenue Service. Such declaration is not required, however, in
the case of the Owner/Xxxxxxxxx's death or disability or attainment of age
59 1/2.
13. With respect to any amount which becomes payable under this Contract, or
any supplementary contract is issued in exchange for this Contract during
the lifetime of the Owner/Annuitant, no provision of this Contract or such
supplementary contract shall be applicable to the extent that it permits or
provides for settlement of such amount in a manner other than as set forth
in a, b, c, or d below:
a. To the Owner/Annuitant in one sum;
b. To the Owner/Annuitant as a life annuity (which may provide for a
term certain not extending beyond the life expectancy of the
Owner/Annuitant);
c. To the Owner/Xxxxxxxxx and his/her designated beneficiary as a
joint and survivor annuity (which may provide for a term certain not
extending beyond the joint life and last survivor expectancy of the
Owner/Annuitant and his/her designated beneficiary);
d. To the Owner/Annuitant as an annuity certain not extending beyond
the life expectancy of the Owner/Annuitant, or, if the Owner/Xxxxxxxxx
has a living designated beneficiary, the joint life and last survivor
expectancy of the Owner/Annuitant and his/her designated beneficiary.
14. Any payment made under b, c, or d above shall be in equal or substantially
equal amounts or units except for joint and survivor annuities which
provide for reduced payments to a survivor.
15. If the Owner/Annuitant dies before the entire interest is distributed, the
following distributions provisions shall apply:
a. If the Owner/Xxxxxxxxx dies after distribution of his or her
interest has commenced, the remaining portion of such interest will
continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Owner/Xxxxxxxxx's death.
b. If the Owner/Annuitant dies before distribution of his or her
interest begins, distribution of the Owner/Xxxxxxxxx's entire interest
shall be completed by December 31 of the calendar year containing the
fifth anniversary of the Owner/Annuitant's death except to the extent
that an election is made to receive distributions in accordance with
1) or 2) below:
1) The Owner/Xxxxxxxxx's interest is payable to a designated
beneficiary, then the entire interest of the Owner/Annuitant may
be distributed over the life or over a period certain not greater
than the life expectancy of the designated beneficiary commencing
on or before December 31 of the calendar year immediately
following the calendar year in which the Owner/Annuitant died.
2) If the designated beneficiary is the Owner/Annuitant's surviving
spouse, the date distributions are required to begin in
accordance with 1) above shall not be earlier than the later of:
A) December 31 of the calendar year immediately following the
calendar year in which the Owner/Annuitant died or B) December 31
of the calendar year in which the Owner/Xxxxxxxxx would have
attained age 70 1/2.
c. If the designated beneficiary is the Owner/Annuitant"s surviving
spouse, the spouse may treat the Contract as his or her own individual
retirement arrangement (IRA). This election will be deemed to have
been made if such surviving spouse makes a regular IRA contribution to
the Contract, makes a rollover to or from such Contract, or fails to
elect any of the above provisions.
d. Life expectancy is computed by use of the expected return
multiples in Tables V and VI of section 1.72-9 of the Income Tax
Regulations. For purposes of distributions beginning after the
individual's death, unless otherwise elected by the surviving spouse
by the time distributions are required to begin, life expectancies
shall be recalculated annually. Such election shall be irrevocable by
the surviving spouse and shall apply to all subsequent years. In the
case of any other designated beneficiary, life expectancies shall be
calculated using the attained age of such beneficiary during the
calendar year in which distributions are required to begin pursuant to
this section, and payments for any subsequent calendar
year shall be calculated based on such life expectancy reduced by one
for each calendar year which has elapsed since the calendar year life
expectancy was first calculated.
e. Distributions under this section are considered to have begun if
distributions are made on account of the individual reaching his or
her required beginning date or if prior to the required beginning date
distributions irrevocably commence to an individual over a period
permitted and in an annuity form acceptable under section 1.401(a)(9)
of the Regulations.
16. If the Owner/Annuitant discontinues payments the Contract will remain in
full force and effect. Any accrued interest on Guaranteed Interest Accounts
will be applied to the Contract Value and any increases or decreases in the
value of units under variable Contracts will be applied to the Contract
Value. LNL does not impose a penalty upon the Owner/Annuitant if the
Owner/Annuitant resumes making purchase payments.
17. This Contract is for the exclusive benefit of the Owner/Annuitant and
his/her beneficiary.
18. This Contract shall be amended from time to time if required to reflect any
changes in the Internal Revenue Code, Internal Revenue Service regulations,
or published revenue rulings.
19. At least once each Contract Year, it is hereby agreed that LNL shall mail
to the Owner/Annuitant of this Contract a report which shall include a
statement of the dollar value of such Contract. The report shall be mailed
to the last address known to LNL. The information in the report shall be as
of a date not more than two months previous to the date of mailing the
report.
The Lincoln National Life Insurance Company
Xxxxxxx X. Xxxxxxx, President
