Exhibit 4(e)
2. ENDORSEMENT
A004077E
ENDORSEMENT - TAX DEFERRED ANNUITY - 403(b)
The following provisions are added to the contract:
1. NON-TRANSFERABLE
This contract is non-transferable in accordance with section 401(g) of the
Internal Revenue Code. 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, to any person other than the Company.
2. BENEFIT COMMENCEMENT DATE
On the Annuity Date or, if earlier, within 90 days following receipt of the
Contract Owner's written notice of intent to commence annuity benefit
payments, annuity benefit payments will commence. The form of such benefit
payments will be determined in accordance with the provisions of the
following paragraphs.
3. COMPENSATION
For purposes of determing the maximum annual contribution that can be made
under section 415 of the Internal Revenue Code, effective for contributions
made after December 31, 1997, the Contract Owner's compensation from the
employer for the year includes any elective deferrals made under a 401(k)
plan, 403(b) plan, employer contributions made to a SEP (simplified employer
pension), and any amount which is contributed or deferred by the employer at
the election of the Contract Owner under a plan described in section 125 of
the Internal Revenue Code (a "cafeteria plan") or section 457 of the Internal
Revenue Code.
4. LIMITS ON CONTRIBUTIONS
Contributions made in any calendar year cannot exceed the annual limit on
elective deferrals under section 402(g) of the Internal Revenue Code, i.e.
$9,500 as adjusted for inflation.
Solely for a Contract Owner who has completed 15 years of service with a
single qualified employer, this limit will be increased by the lesser of:
(A) $3,000,
(B) $15,000 reduced by amounts not included in gross income for prior
taxable years by reason of this rule, or
(C) the excess of $5,000 multiplied by the Contract Owner's
number of years of service with the qualified employer, over all prior
elective deferrals made on behalf of the Contract Owner by the
qualified employer in prior taxable years.
For this purpose, a qualified employer means any educational organization,
hospital, home health service agency, health and welfare service agency,
church, or convention or association of churches, including an exempt
organization controlled by or associated with a church.
5. MULTIPLE SALARY DEFERRALS
As permitted by the employer, a Contract Owner may enter into more than one
salary reduction agreement in any calendar year to defer compensation that
has not yet been paid or made available.
6. FORM OF BENEFIT - MARRIED OWNER
The term married owner shall mean a Contract Owner who has been married to
the same spouse for at least the twelve consecutive calendar months
immediately preceding the Benefit Commencement Date. Notwithstanding what is
stated in the Annuity Payments Section of the contract to the contrary, the
form of benefit for a Married Owner shall be a Qualified Joint and 50%
Survivor Annuity which is the actuarial equivalent of a single life annuity,
unless the Contract Owner elects an optional form of benefit in accordance
with Paragraph 9 below.
7. FORM OF BENEFIT - UNMARRIED OWNER
Notwithstanding what is stated in the Annuity Payments Section of the
contract to the contrary, the form of benefit for a Contract Owner who is not
a Married Owner shall be a single life annuity unless the Contract Owner
elects an optional form of benefit.
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A004078E
ENDORSEMENT - TAX DEFERRED ANNUITY (CONTINUED)
8. PAYMENT OF DEATH BENEFIT
If a married Contract Owner dies before the date benefits begin, the death
benefit will be paid to the Contract Owner's surviving spouse in the form of
a single life annuity, unless the Contract Owner has designated another form
of payment available under the contract, or the surviving spouse elects to
receive a lump sum payment or another form of payment available under the
contract.
9. NOTICE AND ELECTION
A. Notice
The Company must provide a Contract Owner written notice within the 30
to 90 day period before the date benefits are to begin. Such written notice
shall explain:
1. The terms and conditions of the automatic forms of benefits, the
alternative forms of benefits that the Contract Owner can choose, and
information about the relative values of each form of benefits;
2. The Contract Owner's right to waive the automatic form of benefit
and the effect of such waiver;
3. The rights of the Contract Owner's spouse regarding a waiver; and
4. The Contract Owner's right to revoke such waiver and the effect
of such revocation.
B. Election
A Contract Owner may elect a form of benefit other than the automatic form in
writing at any time during the 90 day period which ends on the date on which
payments are to begin; provided, however, that no election can be made
earlier than the date the Contract Owner receives the notice described in
Subsection A above.
If the married Contract Owner, after receiving the notice described above in
Subsection A, elects one of the available forms of distribution and the
Contract Owner's spouse consents
to the form of distribution (if necessary), payments may begin before the end
of the 30 day period after the notice was given to the Contract Owner, as
long as
(A) the Contract Owner has been advised of his right to a 30 day period to
consider whether to waive the automatic form of benefit and consent to a form
of distribution other than the automatic form of benefit;
(B) payments do not begin to be paid to the Contract Owner until after the
Contract Owner receives the notice;
(C) payments do not begin before 7 days have elapsed after the notice is
provided to the Contract Owner; and
(D) the Contract Owner may revoke the election of a form of payment until the
end of the 7 day period described in (C) or the date payments begin, if
later.
Spousal Consent Requirement
A Contract Owner will automatically receive a Qualified Joint and 50%
Survivor Annuity unless the Company is satisfied that he or she is not
married on the date benefit payments are to begin. The Contract Owner may
elect an alternate form of benefit only if:
(A) the Contract Owner's spouse (or the spouse's legal guardian) consents in
writing that he or she consents to the Contract Owner's election to waive the
Qualified Joint and 50% Survivor Annuity; to the specific alternative form
elected by the Contract Owner, or to the Contract Owner's right to choose any
alternative form without any further consent by the spouse. If a beneficiary
other than the spouse is selected, the spouse must also consent in writing to
either the specific Beneficiary or Beneficiaries designated by the Contract
Owner or to the Contract Owner's right to designate any Beneficiary or
Beneficiaries without any further consent by the spouse. The written consent
also must acknowledge the effect of the election and be witnessed by a notary
public; or
Endorsement No. 1542-97
ENDORSEMENT - TAX DEFERRED ANNUITY (CONTINUED)
A004079E
(B) the Contract Owner satisfies the Company that his or her spouse cannot be
located, or furnishes a court order establishing that the Contract Owner is
legally separated or has been abandoned (within the meaning of local law),
unless a qualified domestic relations order pertaining to the Contract Owner
provides that the spouse's consent must be obtained.
Spousal consent shall not be effective with respect to any other spouses of
the Contract Owner, and shall become void if the circumstances causing the
consent of the spouse not to be required cease to exist prior to the date
that the Contract Owner's payments commence.
Revocation of Election
A Contract Owner may revoke an election to waive the automatic form of
payment at any time during the election period. revocation shall not void any
prospectively effective consent given by his or her spouse in connection with
the revoked election.
10. OPTIONAL FORMS OF BENEFIT
Subject to the conditions and limitations in Paragraph 9 above, a Contract
Owner may elect any annuity payment option set forth in the Annuity Options
Section or Annuity Payments Section of the contract. The form of benefit
may not be changed after the Benefit Commencement Date.
11. BENEFIT RESTRICTIONS
Any benefits payable under the Annuity Payments Section, or the Withdrawal
Section are subject to the following added provisions:
A. Effective after December 31, 1988, withdrawals attributable to
contributions made pursuant to a salary reduction agreement may be made
only when the Contract Owner is over age 59 1/2, leaves the employment
of the employer who purchased the contract, dies, becomes disabled as
defined in section 72(m)(7) of the Code, or establishes hardship as
defined in the Code. In the case of hardship withdrawal, no income
attributable to such contributions may be withdrawn.
B. Notwithstanding any provisions of this contract to the contrary, the
distribution of an individual's interest shall be made in accordance
with the requirements of section 401(a)(31) of the Code and the minimum
distribution requirements of section 403(b)(10) of the Code and the
regulations thereunder, including the incidental death benefit
provisions of section 1.401(a)(9)-2 of the proposed regulations, all of
which are herein incorporated by reference.
C. The Contract Owner's entire interest in the contract must be
distributed, or begin to be distributed, by the Contract Owner's
required beginning date, which effective January 1, 1997, is the April 1
of the calendar year following the later of (i) the calendar year in
which the Contract Owner reaches age 70 1/2, or (ii) the calendar year
in which the Contract Owner retires. For a Contract Owner who is a 5%
owner of the employer in the plan year ending in the calendar year in
which the Contract Owner reaches age 70 1/2, such Contract Owner's
required beginning date is the April 1 following the calendar year in
which that Contract Owner reaches 70 1/2.
For each succeeding year, a distribution must be made on or before
December 31. By the required beginning date the Contract Owner may elect
to have the balance in the contract distributed in one of the following
forms:
a. a single sum payment;
b. equal or substantially equal periodic payments over the life of the
Contract Owner;
c. equal or substantially equal periodic payments over the lives of the
Contract Owner and his or her designated beneficiary;
d. equal or substantially equal periodic payments over a specified
period that may not be longer than the Contract Owner's life
expectancy ;
e. equal or substantially equal periodic payments over a specified
period that may not be longer than the joint life and last survivor
expectancy of the Contract Owner and his or her designated
beneficiary.
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A004080E
ENDORSEMENT - TAX DEFERRED ANNUITY (CONTINUED)
D. If the Contract Owner dies before his or her entire interest is
distributed, the entire remaining interest will be distributed as
follows:
a. If the Contract Owner dies when or after distributions have begun under
Paragraph 11.C of this endorsement, the entire remaining interest must
be distributed at least as rapidly as provided under Paragraph 11.C.
b. If the Contract Owner dies before distributions have begun under
Paragraph 11.C, the entire remaining interest must be distributed as
elected by the Contract Owner or, if the Contract Owner has not so
elected, as elected by the beneficiary or beneficiaries, as follows:
1) by December 31st of the year containing the fifth anniversary of the
Contract Owner's death; or
2) in equal or substantially equal periodic payments over the life or
life expectancy of the designated beneficiary or beneficiaries starting
by December 31st of the year following the year of the Contract Owner's
death. If, however, the beneficiary is the Contract Owner's surviving
spouse, then this distribution is not required to begin before December
31st of the year in which the Contract Owner would have turned 70 1/2.
Unless otherwise elected by the Contract Owner prior to the commencement
of distributions under Paragraph 11.B or, if applicable, by the
surviving spouse where the Contract Owner dies before distributions have
commenced, life expectancies of a Contract Owner or spouse beneficiary
shall be recalculated annually for purposes of distributions under
Paragraphs 11.B and 11.C. An election not to recalculate shall be
irrevocable and shall apply to all subsequent years. The life expectancy
of a non-spouse beneficiary shall not be recalculated.
An individual may satisfy the minimum distribution requirements under
sections 403(b)(10) of the Code by receiving a distribution from one TDA
that is equal to the amount required to satisfy the minimum distribution
requirements for two or more TDAs. For this purpose, the Contract Owner of
two or more TDAs may use the 'alternative method' described in Notice 88-
39, 1988-1 C.B. 525, to satisfy the minimum distribution requirements
described above.
12. EFFECTIVE DATE
The Effective Date of this endorsement is the Contract Date unless another
Effective Date is shown below.
Philadelphia, Pennsylvania The Penn Mutual Life Insurance Company
/s/ Xxxxx X. Xxxxxxx
Actuary
Endorsement No. 1542-97
