ENDORSEMENT
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XXXX XXX PROVISIONS
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XXXX XXX ENDORSEMENT
This Contract is established as a Xxxx XXX as defined in Section 408A of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor
provision, pursuant to the Owner's request in the Application. Accordingly, this
endorsement is attached to and made part of the Contract as of its Issue Date
or, if later, the date shown below. Notwithstanding any other provisions of the
Contract to the contrary, the following provisions shall apply.
RESTRICTIONS ON XXXX XXX
To ensure treatment as a Xxxx XXX, this Contract will be subject to the
requirements of Code Section 408A, which are briefly summarized below:
1. The Contract is established for the exclusive benefit of the Owner or his
or her beneficiaries. The Owner shall be the Annuitant.
2. The Contract shall be nontransferable and the entire interest of the
Owner in the Contract is nonforfeitable.
3. Notwithstanding any provision of the Contract to the contrary, on the
death of the Owner the distribution of the Owner's interest in the
Contract shall be made in accordance with the distribution requirements
of Section 401(a)(9)(B) of the Code and the regulations thereunder, all
of which are herein incorporated by reference, as follows:
a. If the Owner dies on or after distributions have begun to the Owner,
the entire remaining interest must be distributed at least as rapidly
as under the method of payment in effect at the Owner's death.
b. If the Owner dies before distributions have begun to the Owner, the
entire remaining interest must be distributed as elected by the Owner
or, if the Owner has not so elected, as elected by the Designated
Beneficiary or Beneficiaries as follows:
1) by December 31 of the year containing the fifth anniversary of the
Owner's death, or
2) in equal or substantially equal payments over the life or life
expectancy of the Designated Beneficiary or Beneficiaries starting
by December 31 of the year following the year of the Owner's
death. If, however, the Designated Beneficiary is the Owner's
surviving spouse, then this Distribution is not required to begin
until December 31 of the later of: (1) the calendar year
immediately following the calendar year in which the Owner died;
or (2) the calendar year in which the Owner would have attained
age 70 1/2.
4. Any refund of premiums (other than those attributable to excess
contributions) will be applied before the close of the calendar year
following the year of the refund toward the payment of future premiums or
the purchase of additional benefits.
5. The annual premium shall not exceed the lesser of $2,000 or 100 percent
of compensation ($4,000 or 100 percent of compensation for two Xxxx IRAs
owned by a married couple, however, no more than $2,000 can be
contributed to either spouse's Xxxx XXX). The maximum annual premium
shall be phased-out for single Owners with adjusted gross income between
$95,000 and $110,000, and for married Owners with adjusted gross income
between $150,000 and $160,000 in accordance with Section 408A(c)(3).
6. Other than qualified rollover contributions, as defined in Section
408A(e) of the Code, no rollover contributions may be made to the
Contract. Qualified rollover contributions are excluded from the annual
premium limit set forth in Section 5.
7. Notwithstanding any Contract provision to the contrary, no amount may be
borrowed under the Contract and no portion may be used as security for a
loan.
8. The portion of any Annuity Payments made from the Contract representing
earnings will be subject to a 10% penalty tax under Section 72(t) of the
Code if such amounts are paid before the Annuitant attains the age of
59-1/2, unless the payments meet one of the exceptions to the penalty tax
for distributions from individual retirement plans under Section 72(t) of
the Code.
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
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Endorsement Effective Date
(If Other Than Issue Date)
FSB206 (11-97) SP020611
