EXHIBIT 4
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THE TRAVELERS INSURANCE COMPANY o ONE CITYPLACE o HARTFORD CT o 06103-3415
A STOCK COMPANY
WE ARE PLEASED TO PROVIDE YOU THE BENEFITS OF THIS ANNUITY CONTRACT.
PLEASE READ ALL ATTACHED FORMS CAREFULLY.
THE CONTRACT IS SUBJECT TO THE TERMS AND CONDITIONS STATED ON THE ATTACHED
PAGES, ALL OF WHICH ARE A PART OF IT. THE CONTRACT IS ISSUED IN CONSIDERATION OF
THE PURCHASE PAYMENTS.
EXECUTED AT HARTFORD, CONNECTICUT
PRESIDENT
THIS IS A LEGAL CONTRACT BETWEEN YOU AND US. PLEASE READ YOUR CONTRACT
CAREFULLY.
FLEXIBLE PREMIUM DEFERRED GROUP VARIABLE ANNUITY CONTRACT
TAX QUALIFIED
ELECTIVE OPTIONS NON-PARTICIPATING
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF THE UNDERLYING FUNDS, ARE VARIABLE AND MAY INCREASE OR
DECREASE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
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TABLE OF CONTENTS
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Contract Specifications Page 3-5
Definitions Page 6-7
Purchase Payments Page 8
General Contract Provisions Page 8
Valuation Information Page 10
Transfers Between Underlying Funds Page 10
Transfers from Underlying Funds to Contracts not Issued by Us Page 11
Transfers from Other Contracts Issued by Us Page 11
Transfers to Other Contracts Issued by Us Page 11
Transfers from Contracts not Issued by Us Page 11
Distributions from the Contract Page 11
Contract Charges Page 11
Contract Discontinuance Provisions Page 12
Settlement Provisions Page 12-15
Variable Xxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Options
Annuity Tables Page 16-18
Any Riders or Endorsements follow the Life Annuity Tables.
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CONTRACT SPECIFICATIONS
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CONTRACT OWNER TRUSTEES OF ABC COMPANY
PLAN NAME ABC COMPANY
CONTRACT NUMBER [SPECIMEN]
CONTRACT DATE [09/01/2004]
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PURCHASE PAYMENT/TERMINATION AMOUNTS
Minimum Average Purchase Payment Amount: [$10,000] per Contract Year
Maximum Purchase Payment Amount: [$3,000,000 ]without prior approval
by Our Office
Termination Amount: [$20,000]
AMOUNTS DEDUCTED ON SURRENDER:
For the purpose of determining the amounts deducted on Surrender, the surrender
charge is calculated as a percentage of the Cash Value being surrendered.
CONTRACT YEAR SURRENDER CHARGE
(ON AMOUNTS NOT PREVIOUSLY SURRENDERED)
[ 1 - 2 5%
3 - 4 4%
5 - 6 3%
7 - 8 2%
9 and thereafter 0% ]
ALLOWABLE DISTRIBUTIONS PRIOR TO CONTRACT DISCONTINUANCE NOT SUBJECT TO AMOUNTS
DEDUCTED ON SURRENDER:
Retirement, Separation from Service, loans, hardship
withdrawals (as defined by the Internal Revenue Code), death, disability (as
defined by the Internal Revenue Code section 72 [m] [7]), minimum distribution
(as defined by the Internal Revenue Code), return of Excess Plan Contributions,
certain Plan expenses as mutually agreed upon, transfers to an employer stock
fund, and annuitization under this contract to another contract issued by Us.
Distributions may be in the form of cash payments, Annuity Options or to a
deferred Annuity issued by Us.
For distributions subject to amounts deducted on Surrender, the applicable
portion of the Cash Surrender Value of Your Account will be paid to satisfy the
requested distribution. For allowable distributions not subject to amounts
deducted on Surrender, the applicable portion of the Cash Value of Your Account
will be paid to satisfy the requested distribution
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CONTRACT SPECIFICATIONS
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UNDERLYING FUND TRANSFER CHARGE: $0.00
We reserve the right to limit the number of transfers in an account between
Underlying Funds. The minimum number of transfers allowed would be one in any
six-month period.
GUARANTEED INTEREST PERIODS FOR THE FIXED ACCOUNT (IF APPLICABLE):
The initial interest rate for any Purchase Payment is declared each calendar
quarter and is guaranteed for twelve months. Each Purchase Payment is placed in
a "cell" for accounting purposes. At the end of the twelve month guarantee
period, a renewal interest rate will be determined that will not be lower than
the minimum interest rate guarantee of 3%. At the end of the initial guarantee
period, the first renewal rate will be guaranteed to the end of that calendar
year. The second and all future renewal rates will be declared each subsequent
January 1 and guaranteed through December 31 of each year.
[Transfers from the Fixed Account, either to the Underlying Funds or to
contracts not issued by Us, as described in the Fixed Account Rider (if
applicable), may not exceed [20%] per Contract Year of the Cash Value in the
Fixed Account valued on each Contract Year anniversary. We reserve the right to
modify the amount available for transfer from the Fixed Account to the
Underlying Funds available in this contract or to other contracts issued by Us.]
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CONTRACT SPECIFICATIONS
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THE TRAVELERS SEPARATE ACCOUNT QPN FOR VARIABLE ANNUITIES
UNDERLYING FUNDS
THE TRAVELERS SEPARATE ACCOUNT QPN FOR VARIABLE ANNUITIES
UNDERLYING FUNDS
Capital Appreciation Fund Xxxxx Xxxxxx Allocation Series Inc.
Money Market Portfolio ** Xxxxx Xxxxxx Balanced Portfolio - Class A *
Federated GNMA Trust - Institutional Service Shares ** Xxxxx Xxxxxx Conservative Portfolio - Class A **
Dreyfus A Bonds Plus, Inc. ** Xxxxx Xxxxxx High Growth Portfolio - Class A
Xxxxxxxxx Growth Fund, Inc. - Class A Xxxxx Xxxxxx Growth Portfolio
AIM Equity Funds, Inc. Xxxxx Xxxxxx Income Portfolio - Class A **
AIM Charter Fund Xxxxx Xxxxxx Equity Funds
AIM Constellation Fund Xxxxx Xxxxxx Social Awareness Fund - Class A
Alliance Variable Product Series Fund, Inc. Xxxxx Xxxxxx Funds, Inc.
Premier Growth Portfolio - Class B Short-Term High Grade Bond Fund - Class A **
Delaware Group Premium Fund U.S. Government Securities Fund - Class A **
Small Cap Value Series Xxxxx Xxxxxx Investment Funds Inc.
Dreyfus Founders Funds, Inc. Investment Grade Bond Fund - Class A **
Dreyfus Founders Growth Fund - Class F Xxxxx Xxxxxx S&P 500 Index Fund - SB Shares
Dreyfus Variable Investment Fund The PBHG Funds, Inc.
Appreciation Portfolio PBHG Growth Fund - Advisor Class
Small Cap Portfolio The Alliance Stock Funds
Fidelity Adviser Series I Alliance Growth and Income Fund - Class A
Advisors Growth Opportunities Fund - Class T The Dreyfus/Laurel Funds, Inc.
Greenwich Street Series Fund Xxxxxxx Disciplined Stock Fund
Appreciation Portfolio The Travelers Series Trust
Diversified Strategic Income Portfolio * Disciplined Mid Cap Stock Portfolio
Janus Aspen Series Disciplined Small Cap Stock Portfolio
Aggressive Growth Portfolio - Service Shares Equity Income Portfolio
Global Life Sciences Portfolio - Service Shares Large Cap Portfolio
Global Technology Portfolio - Service Shares Lazard International Stock Portfolio
Growth and Income Portfolio - Service Shares MFS Emerging Growth Portfolio
Worldwide Growth Portfolio - Service Shares MFS Research Portfolio
Xxxxxxxxx Xxxxxx Equity Assets Travelers Quality Bond Portfolio **
Guardian Assets Travelers Series Fund, Inc.
Partners Assets Alliance Growth Portfolio
Salomon Brothers Variable Series Fund Inc. MFS Total Return Portfolio *
Capital Fund Xxxxxx Diversified Income Portfolio **
High Yield Bond Fund ** Xxxxx Xxxxxx Aggressive Growth Portfolio
Investors Fund Xxxxx Xxxxxx International Equity Portfolio
Total Return Fund * Xxxxx Xxxxxx Large Cap Value Portfolio
OCC Accumulation Trust Xxxxx Xxxxxx Large Capitalization Growth Portfolio
Equity Portfolio Variable Insurance Products Fund II
Contrafund Portfolio - Service Class 2
Contrafund Portfolio - Service Class 2
There is a daily asset charge (also known as a mortality and expense risk
deduction) of [.00003562] per fund which amounts to an annual deduction of
[1.30%], assuming a 365-day year.
The Assumed Daily Net Investment Factor is 1.000081 for all Underlying Funds.
The Underlying Funds marked with an asterisk (*) are considered Competing Funds,
and are subject to transfer restrictions as described in the Fixed Account Rider
(if applicable). Those marked with two asterisks (**) are not currently
considered competing, but may be so in the future based on allowable changes in
the fund's investment strategy.
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DEFINITIONS
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(A) ACCUMULATION UNIT - An accounting unit of measure used to calculate the
value of this contract. An Accumulation Unit exists for each Underlying Fund.
The value of this measure is called the Accumulation Unit Value.
(B) ANNUITANT - The person on whose life the Annuity payments are made.
(C) ANNUITY - Payment of income for a stated period or amount.
(D) ANNUITY COMMENCEMENT DATE - The date on which Annuity payments begin.
(E) BENEFICIARY(IES) - The Beneficiary of this contract is the Plan Trustee. Any
Beneficiary designated by the Participant(s) or Annuitant(s) shall be maintained
by You under the provisions of the Plan.
(F) CASH SURRENDER VALUE - The Cash Value less any amounts deducted on Surrender
shown on the Contract Specifications page and any applicable Premium Tax.
(G) CASH VALUE - The value of the Accumulation Units in Your Account less any
reduction for administrative charges. Sometimes referred to as "Account Value."
(H) COMPETING FUND - Any investment option under the Plan which, in Our opinion,
consists primarily of fixed income securities and/or money market instruments.
Competing Funds included in this contract are indicated on the Contract
Specifications page.
(I) CONTRACT DATE - The date this contract is issued as shown on the Contract
Specifications page.
(J) CONTRACT DISCONTINUANCE - Termination of this contract by Us or by Your
Written Request.
(K) CONTRACT YEAR - The twelve-month period beginning with the Contract Date or
any anniversary thereof. This may or may not coincide with the Plan year.
(L) DUE PROOF OF DEATH - (i) A copy of a certified death certificate; (ii) a
copy of a certified decree of a court of competent jurisdiction as to the
finding of death; (iii) a written statement by a medical doctor who attended the
deceased; or (iv) any other proof satisfactory to Us.
(M) EXCESS PLAN CONTRIBUTIONS - Plan contributions including excess deferrals,
excess contributions, excess aggregate contributions, excess annual additions,
and excess nondeductible contributions that require correction by the Plan
Administrator, excluding reversions upon Plan Termination.
(N) FIXED ANNUITY - An Annuity with payments which remain fixed as to dollar
amount throughout the payment period.
(O) OUR OFFICE - The home office of the Travelers Insurance Company located at
Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000- 0000. All correspondence
concerning this contract should be sent to the attention of Xxxxxxx Services.
(P) PARTICIPANT- An eligible person who is a member in the Plan.
(Q) PLAN - The Plan designated on the Contract Specifications page. We are not a
party to the Plan. We do not assume the responsibilities of the Plan
Administrator, nor are we bound by the terms of the Plan. All records pertaining
to the Plan will be open for inspection by Us.
(R) PLAN ADMINISTRATOR - The corporation or other entity so specified on the
application or purchase order. If none is specified, the Plan Trustee is the
Plan Administrator.
(S) PLAN TERMINATION - Termination of Your Plan, including partial Plan
Termination., as determined by Us.
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(T) PREMIUM TAX - The amount of tax, if any, charged by the state or
municipality. We will deduct any applicable Premium Tax from the Cash Value
either upon Surrender, annuitization, death, or at the time Purchase Payments
are made, but no earlier than when We have a tax liability under state law.
(U) PURCHASE PAYMENTS - Payments You make to this contract.
(V) SEPARATE ACCOUNT - The Separate Account shown on the Contract Specifications
page which We established under Connecticut Insurance Laws and which purchases
shares of the Underlying Funds for this class of contracts and certain other
contracts.
(W) SEPARATION FROM SERVICE - The termination or permanent severance of the
Participant's employment with the employer for any reason that is a separation
from service within the meaning of the Plan. However, termination of a
Participant's employment with the employer as a result of the sale of all or
part of the employer's business (including divisions or subsidiaries of the
employer) will not be considered Separation from Service unless the Participant
actually loses his/her job or is not immediately included in a pension or profit
sharing plan of the successor employer.
(X) SURRENDER - Funds distributed from the contract for retirement, Separation
from Service, loans, hardship withdrawals, death, disability, return of Excess
Plan Contributions, payment of certain Plan expenses as mutually agreed upon,
Contract Discontinuance, or transfers to other Plan funding vehicles. Such
surrenders may or may not be subject to charges.
(Y) SURRENDER DATE - The date We receive Your Written Request for a Surrender.
(Z) UNDERLYING FUND - An open-ended diversified investment management company
indicated on the Contract Specifications page which is an underlying investment
for the Separate Account.
(AA) VALUATION DATE - The date on which the Separate Account is valued. The
Separate Account is generally valued at the close of business on each day that
the New York Stock Exchange is open for trading.
(BB) VALUATION PERIOD - The period between successive valuations.
(CC) VARIABLE ANNUITY - An Annuity with payments which vary with the net
investment results of the Separate Account.
(DD) WE, OUR, US - The Travelers Insurance Company.
(EE) WRITTEN REQUEST - A written form satisfactory to Us and received at Our
Office.
(FF) YOU, YOUR - The contract owner.
(GG) YOUR ACCOUNT - Accumulation Units credited to You under this contract.
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PURCHASE PAYMENTS
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PURCHASE PAYMENT
The Purchase Payments are the payments You make to this contract. An initial
lump sum Purchase Payment must be made to the contract and is due and payable
before the contract becomes effective. Each Purchase Payment is payable to Us at
Our Office. The minimum Purchase Payment is shown on the Contract Specifications
page. We reserve the right to limit the amount of the Purchase Payment which
will be accepted.
Net Purchase Payments are that part of the Purchase Payments applied to the
contract. The net Purchase Payment is equal to the Purchase Payment less any
applicable Premium Tax.
ALLOCATION OF PURCHASE PAYMENTS
The initial net Purchase Payment will be applied within two business days after
it is received in good order at Our office. Any subsequent net Purchase Payments
will be credited to Your Account using the Accumulation Unit Value determined
after We receive those payments at Our Office. Each net Purchase Payment will be
allocated to the Underlying Funds in the proportion specified by You for this
contract. By Written Request, You may change Your choice of Underlying Funds or
allocation percentages. The available Underlying Funds to which assets may be
allocated are shown on the Contract Specifications page; funds may be
subsequently added or deleted.
The net Purchase Payments will be allocated to an account established for You by
Us. At Your direction, We will deposit all net Purchase Payments to Your
Account, satisfy all distribution requests from this account, and provide
periodic reports to You as described in the "Required Reports" provision. You
may contact Us at Our Office for information about this contract or Your
Account. The Plan Administrator will be responsible for maintaining the
individual records for each Participant.
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GENERAL CONTRACT PROVISIONS
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GENERAL
This contract is issued in accordance with sections 401(a) and 401(k) of the
Internal Revenue Code.
OWNER
This contract belongs to You. You have sole power while the contract is in force
to exercise any rights given in the contract. In order to maintain tax
qualification, this contract may not be sold, assigned, transferred, discounted
or pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose except as may be required or permitted under
applicable sections of the Internal Revenue Code.
CREDITOR CLAIMS
No right or benefit to You, the Annuitant or Beneficiary under this contract
shall be subject to the claims of creditors or any legal process other than to
the extent permitted by law.
CONTROL OF THE CONTRACT
All rights in the contract rest with You, and You are entitled to all amounts
held under this contract. You may elect to exercise any options allowed by the
contract with respect to Your Account. Elections made under the contract must be
made by a Written Request, unless another manner is mutually agreed upon.
THE CONTRACT
The entire contract between You and Us consists of the contract and all attached
pages.
CONTRACT CHANGES
The only way this contract may be changed is by a written endorsement signed by
one of Our officers.
SUBSTITUTION OF UNDERLYING FUNDS
If it is not possible to continue to offer an Underlying Fund, or in Our
judgment becomes inappropriate for the purposes of this contract, we may
substitute another Underlying Fund without Your consent. Substitutions may be
made with respect to both existing investments and investment of future Purchase
Payments subject to applicable law.
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INCONTESTABILITY
We will not contest this contract from its Contract Date.
REQUIRED REPORTS
As often as required by law, but at least once in each Contract Year, we will
furnish a report to You which will show the number of Accumulation Units
credited to this contract in each Underlying Fund and the corresponding
Accumulation Unit Values as of the date of the report.
MORTALITY AND EXPENSES
Our actual mortality and expense experience will not affect the values or
amounts paid under this contract.
NON-PARTICIPATING
This contract does not share in Our surplus earnings, so You will receive no
dividends under it.
CONTRACT MODIFICATION
We reserve the right to modify this contract to qualify it under all related
laws and regulations which are in effect during the term of this contract. We
will obtain the approval of any regulatory authority needed for the
modifications.
STATE LAWS
This contract is governed by the law of the state in which it is issued for
delivery. We may, at any time, make any changes, including retroactive changes,
in this contract to the extent that the change is required to meet the
requirements of any law or regulation issued by any governmental agency to which
We or You are subject.
EMERGENCY PROCEDURE
We reserve the right to suspend or postpone the date of any payment of any
benefit or values for any Valuation Period (1) when the New York Stock Exchange
is closed; (2) when trading on the Exchange is restricted; (3) when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of the securities held in the Underlying Funds is not reasonably practicable or
it is not reasonably practicable to determine the value of the Underlying Fund's
net assets; or (4) during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of security holders. Any
provision of this contract which specifies a Valuation Date will be superseded
by this Emergency Procedure.
RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNT
We will have exclusive and absolute ownership and control of the assets of the
Separate Account. That portion of the assets of the Separate Account equal to
the reserves and other contract liabilities with respect to such Separate
Account shall not be chargeable with liabilities arising out of any other
business We conduct. Our determination of the value of an Accumulation Unit and
an Annuity Unit by the method described in this contract will be conclusive.
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VALUATION INFORMATION
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NUMBER OF ACCUMULATION UNITS
The number of Accumulation Units to be credited for each Underlying Fund once a
Purchase Payment has been received by Us will be determined by dividing the net
Purchase Payment allocated to each Underlying Fund by the corresponding
Accumulation Unit Value of that Underlying Fund.
ACCUMULATION UNIT VALUE
The initial value of an Accumulation Unit for each Underlying Fund is set at
$1.000000. We determine the value of an Accumulation Unit on each Valuation Date
by multiplying the value on the immediately preceding Valuation Date by the net
investment factor for that Underlying Fund for the Valuation Period just ended.
NET INVESTMENT FACTOR
The net investment factor is a factor applied to measure the investment
performance of an Underlying Fund from one Valuation Period to the next. The net
investment factor for an Underlying Fund for any Valuation Period is equal to
the sum of 1.000000 plus the net investment rate.
Each Underlying Fund's net investment rate for a Valuation Period is equal to
the gross investment rate for that Underlying Fund less the applicable daily
mortality and expense risk deduction. The mortality and expense risk deduction
is shown on the Contract Specifications page.
The gross investment rate of an Underlying Fund for a Valuation Period is equal
to (1) divided by (2) where
(1) is:
(a) investment income; plus
(b) capital gains and losses, whether realized or unrealized; less
(c) a deduction for any expenses levied against the Separate
Account and its Underlying Funds; and
(2) is the amount of the net assets at the beginning of the Valuation
Period.
The gross investment rate for an Underlying Fund may be either positive or
negative. Underlying Fund assets are based on the net assets held in the
Underlying Fund. Investment income includes any distribution whose ex-dividend
date occurs during the Valuation Period.
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TRANSFERS BETWEEN UNDERLYING FUNDS
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You may transfer all or any part of Your Cash Value, subject to the restrictions
as noted in the Fixed Account Rider (if applicable), from one Underlying Fund to
any other Underlying Fund available under Your Plan.
We reserve the right to limit the number of transfers in an account between
Underlying Funds. The minimum number of transfers allowed would be one in any
six-month period.
Transfers between Underlying Funds will result in the addition or deletion of
Accumulation Units having a total value equal to the dollar amount being
transferred to or from a particular Underlying Fund. The Number of Accumulation
Units will be determined by using the Accumulation Unit Value of the Underlying
Funds involved as of the next Valuation Date after We receive notification of
request for transfer. Transfers will be subject to any applicable Underlying
Fund Transfer Charge stated on the Contract Specifications page.
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TRANSFERS FROM UNDERLYING FUNDS TO CONTRACTS NOT ISSUED BY US
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You may transfer all or any part of Your Account's Cash Surrender Value, subject
to the restrictions as noted in the Fixed Account Rider (if applicable), to any
contract not issued by Us. Such transfers may be subject to amounts deducted on
Surrender as shown on the Contract Specifications page.
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TRANSFERS FROM OTHER CONTRACTS ISSUED BY US
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Under specific conditions, We may allow You to transfer funds held by You in
another group Annuity contract issued by Us to this contract without applying
deferred sales charges or surrender charges to the funds being transferred. Once
the transfer is complete and We have established an account for You at Your
direction, new deferred sales charge or surrender charges may apply to this
contract as shown on the Contract Specifications page.
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TRANSFERS TO OTHER CONTRACTS ISSUED BY US
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Under specific conditions, We may allow You to transfer funds held by You for a
Participant in this contract to another contract issued by Us without incurring
a deferred sales charge or surrender charge as shown on the Contract
Specifications page to the funds being transferred. Once the transfer is
complete and We have established a new account for the Participant at Your
direction, new deferred sales charges or surrender charges may apply to the new
contract in accordance with the provisions of such contract.
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TRANSFERS FROM CONTRACTS NOT ISSUED BY US
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Under specific conditions, when authorized by state insurance law, We may credit
a Plan up to 4% of the amount transferred to Us from another investment vehicle
as reimbursement to the Plan for any exit penalty assessed by the other
investment vehicle provider. We will recover this credit through reduced
compensation paid to the servicing agent or broker.
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DISTRIBUTIONS FROM THE CONTRACT
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CASH SURRENDER VALUE
The Cash Surrender Value will be determined as of the next Valuation Date
following receipt of Your Written Request. We may delay payment of the Cash
Surrender Value in the Underlying Funds for a period of not more than sevendays
after We receive the request. The payment of the Cash Surrender Value of the
Fixed Account, may be delayed as described in the Fixed Account Rider.
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CONTRACT CHARGES
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AMOUNTS DEDUCTED ON SURRENDER
The applicable amounts deducted on Surrender are shown on the Contract
Specifications page. These amounts as well as the mortality and expense risk
deduction may be reduced or eliminated to the extent that We anticipate lower
sales expenses or perform fewer sales services due to:
1. the size of the group participating in the contract;
2. an existing relationship to the contract owner;
3. use of mass enrollment procedures, or;
4. performance of sales functions by a third party, which We would
otherwise perform.
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CONTRACT DISCONTINUANCE PROVISIONS
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You may discontinue this contract by Written Request at any time for any reason.
We reserve the right to discontinue this contract if:
a) the Cash Value of the contract is less than the Termination Amount
shown on the Contract Specifications page; or
b) We determine within Our sole discretion and judgment that the Plan or
administration of the Plan is not in conformity with applicable law;
or
c) We receive notice that is satisfactory to Us of Plan Termination.
If we discontinue this contract or We receive Your Written Request to
discontinue the contract, We will, in Our sole discretion and judgment:
a) accept no further payments for this contract; and
b) pay You the Cash Surrender Value of the Underlying Funds; and
c) pay You any Fixed Account Cash Surrender Value , as described in the
Fixed Account Rider .
If this contract is discontinued, We will distribute the Cash Surrender Value to
You at the most current address available on Our records. Discontinuance of this
contract will not affect payments we are making under any Annuity options which
began before the date of discontinuance.
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SETTLEMENT PROVISIONS
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ELECTION OF SETTLEMENT OPTIONS
Any amount distributed from the contract may be applied to any one of the
Annuity options described below.
Election of any of these options must be made by Written Request to Our Office
at least 30 days prior to the date such election is to become effective. The
form of such Annuity option shall be determined by You. The following
information must be provided with any such request:
a) the Participant's name, address, date of birth, social security
number; and
b) the amount which is to be distributed in the form of an Annuity
option; and
c) the Annuity option which is to be purchased; and
d) the date the Annuity option payments are to begin; and
e) if the form of the Annuity provides a death benefit in the event of
the Participant's death, the name, relationship and address of the
Beneficiary as designated by You; and
f) any other data that We may require.
The Beneficiary, as specified in item (e) above, may be changed by You as long
as We are notified by Written Request while the Annuitant is alive. If the
Beneficiary designation is irrevocable, such designation cannot be changed or
revoked without the consent of the Beneficiary. After We receive the Written
Request and the written consent of the Beneficiary (if required), the new
Beneficiary designation will take effect as of the date the notice is signed. We
have no further responsibility for any payment We made before the Written
Request.
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MINIMUM AMOUNTS
The minimum amount that can be placed under an Annuity option is $2,000 unless
we consent to a lesser amount. If any periodic payments due are less than $100,
we reserve the right to make payments at less frequent intervals.
MISSTATEMENT
If an Xxxxxxxxx's sex or date of birth was misstated, all benefits of this
contract are what the Cash Value would have purchased at the correct sex and age
on the date of issue of the Annuity option elected.
RETIRED LIFE CERTIFICATE
We will issue to each person to whom Annuity benefits are being paid under this
contract, a certificate setting forth the benefits to which such person is
entitled under this contract.
ALLOCATION OF AN ANNUITY
When an Annuity option is elected, You may further elect to have the Cash Value
attributable to a Participant applied to provide a Variable Annuity, a Fixed
Annuity, or a combination of both.
If no election is made to the contrary, the value held in an Underlying Fund
will be applied to provide an Annuity which varies with the investment
experience of that same Underlying Fund. You may elect to transfer all or any
part of the Cash Value from one Underlying Fund to another, as described in the
provision "Transfer Between Underlying Funds," in order to reallocate the basis
on which Annuity payments will be determined. Once Annuity payments have begun,
no further transfers are allowed.
VARIABLE ANNUITY
AMOUNT OF FIRST PAYMENT
The LIFE ANNUITY TABLES are used to determine the first monthly Annuity payment.
They show the dollar amount of the first monthly Annuity payment which can be
purchased with each $1,000 applied. The amount applied to an Annuity will be the
Cash Value attributable to a Participant as of 14 days before the date Annuity
payments start. We reserve the right to require satisfactory proof of the age of
any person on whose life Annuity payments are based before making the first
payment under any of these options.
ANNUITY UNIT VALUE
The initial value of an Annuity Unit for each Underlying Fund was set at
$1.000000. On any Valuation Date, the Annuity Unit Value for an Underlying Fund
equals the Underlying Fund Annuity Unit Value on the immediately preceding
Valuation Date, multiplied by the net investment factor for that Underlying Fund
for the Valuation Period just ended, divided by the Assumed Daily Net Investment
Factor. The Assumed Daily Net Investment Factor is shown on the Contract
Specifications page.
The value of an Annuity Unit as of any date other than a Valuation Date will be
equal to its value as of the next Valuation Date.
NUMBER OF ANNUITY UNITS
We determine the number of Annuity Units credited to the Annuitant's account in
each Underlying Fund by dividing the basic first monthly Annuity payment
attributable to that Underlying Fund by the Underlying Fund's Annuity Unit Value
as of 14 days before the due date of the first Annuity payment.
AMOUNT OF SECOND AND SUBSEQUENT PAYMENTS
The dollar amount of any or all payments made to an Annuitant after the first
payment may change from month to month based on the net investment results of
the Underlying Fund(s). The total amount of each Annuity payment made to an
Annuitant will be equal to the sum of the payments in each Underlying Fund
allocated to that Annuitant's account.
The actual amount of the payments made to an Annuitant in each Underlying Fund
is found by multiplying the number of Annuity Units credited to the Annuitant's
account in that Underlying Fund by the applicable Annuity Unit Value of the
Underlying Fund as of the date 14 days prior to the date on which the payment is
due.
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FIXED ANNUITY
A Fixed Annuity is an Annuity with payments which remain fixed as to dollar
amount throughout the payment period. The dollar amount of the first Fixed
Annuity payment will be calculated as described above in the "Amount of First
Payment" provision. All subsequent payments will be in the same amount and that
amount will be assured throughout the payment period.
BETTERMENT OF RATES
The Cash Value applied to purchase an Annuity option will provide payments at
least equal to those provided if the same amount was applied to purchase a
single premium immediate Annuity offered by Us at that time for the same class
of contracts. If it would produce a larger payment, We agree that the Fixed
Annuity payment will be determined using the Life Annuity Tables in effect on
the Annuity Commencement Date.
ANNUITY OPTIONS
Subject to conditions stated in ELECTION OF SETTLEMENT OPTIONS and MINIMUM
AMOUNTS, all or any part of the Cash Value of this contract may be paid to the
Annuitant under one or more of the options below.
OPTION 1. LIFE ANNUITY - NO REFUND
We will make monthly Annuity payments during the lifetime of the person on whose
life the payments are based, ending with the last monthly payment preceding
death.
OPTION 2. LIFE ANNUITY WITH 120, 180, OR 240 MONTHLY PAYMENTS ASSURED
We will make monthly Annuity payments during the lifetime of the person on whose
life the payments are based and under the conditions stated below.
If at the death of the Annuitant, payments have been made for less than 120,
180, or 240 months, as elected, We will continue to make payments to the
designated Beneficiary during the remainder of the period.
OPTION 3. LIFE ANNUITY-CASH REFUND
We will make monthly Annuity payments during the lifetime of the Annuitant,
ceasing with the last payment due prior to the death of the Annuitant, provided
that, at the death of the Annuitant, the Beneficiary will receive an additional
payment equal to the dollar value of the excess, if any, of (a) over (b) where,
for a Variable Annuity:
(a) is the total amount applied under the option divided by the Annuity
Unit Value on the due date of the first Annuity payment; and
(b) is
(1) the number of Annuity Units represented by each payment;
times
(2) the number of payments made;
and for a Fixed Annuity:
(a) is the Cash Value applied on the Annuity Commencement Date under this
option; and
(b) is the dollar amount of Annuity payments already paid.
OPTION 4. JOINT AND LAST SURVIVOR LIFE ANNUITY
We will make monthly Annuity payments during the joint lifetime of the Annuitant
and a secondary payee, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
OPTION 5. JOINT AND LAST SURVIVOR LIFE ANNUITY - ANNUITY REDUCED ON DEATH OF
PRIMARY PAYEE
We will make monthly Annuity payments to the Annuitant during the joint lifetime
of two persons selected. One of the two persons will be designated as the
primary payee. The other will be designated as the secondary payee. On the death
of the secondary payee, if survived by the primary payee, We will continue to
make monthly Annuity payments to the primary payee in the same amount that would
have been payable during the joint lifetime of the two persons.
On the death of the primary payee, if survived by the secondary payee, We will
continue to make monthly Annuity payments to the secondary payee in an amount
equal to 50% of the payments which would have been made during the lifetime of
the primary payee.
No further payments will be made following the death of the survivor.
14
ANNUITY OPTIONS
OPTION 6. PAYMENTS FOR A FIXED PERIOD
We will make monthly payments for the period selected. If at the death of the
Annuitant, payments have been made for less than the period selected, We will
continue to make payments to the designated Beneficiary during the remainder of
that period.
OPTION 7. OTHER ANNUITY OPTIONS
We will make other arrangements for Annuity payments as may be mutually agreed
upon by You and Us.
15
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 APPLIED
OPTIONS 1, 2, AND 3 - SINGLE LIFE ANNUITIES
MALE AND
FEMALE
ADJUSTED NUMBER OF MONTHLY PAYMENTS GUARANTEED CASH
AGE NONE 120 180 240 REFUND
50 3.95 3.93 3.90 3.86 3.81
51 4.03 4.00 3.97 3.91 3.87
52 4.10 4.08 4.04 3.97 3.93
53 4.19 4.15 4.11 4.04 3.99
54 4.27 4.24 4.18 4.10 4.06
55 4.37 4.32 4.26 4.17 4.13
56 4.47 4.42 4.34 4.23 4.20
57 4.57 4.51 4.43 4.30 4.27
58 4.68 4.61 4.51 4.37 4.35
59 4.80 4.72 4.60 4.44 4.44
60 4.93 4.83 4.70 4.52 4.52
61 5.07 4.95 4.80 4.59 4.62
62 5.21 5.07 4.90 4.66 4.71
63 5.36 5.20 5.00 4.74 4.81
64 5.53 5.34 5.11 4.81 4.92
65 5.70 5.48 5.21 4.88 5.03
66 5.89 5.62 5.32 4.95 5.15
67 6.08 5.78 5.43 5.01 5.28
68 6.29 5.94 5.54 5.08 5.41
69 6.51 6.10 5.66 5.13 5.54
70 6.75 6.27 5.76 5.19 5.69
71 7.00 6.45 5.87 5.24 5.84
72 7.28 6.63 5.98 5.29 6.00
73 7.57 6.82 6.08 5.33 6.17
74 7.89 7.01 6.18 5.36 6.35
75 8.23 7.20 6.27 5.40 6.54
Dollar amounts of the life Annuity payments are based on the 1994 Group Annuity
Mortality Table for males projected with mortality improvement scale AA with
ages set back two years and a net investment rate of 3%. The adjusted age of the
person on whose life the Annuity is based is determined from the actual age last
birthday on the due date of the first Annuity payment in the following manner:
Calendar year in which
first payment is due 1996 - 2000 2001 - 2010 2011 - 2020 2021 - 2030 2031 and later
Adjusted age is actual age minus 0 minus 1 minus 2 minus 3 minus 4
16
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 APPLIED
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
MALE AND
FEMALE
ADJUSTED
AGES 50 55 60 65 70 75
50 3.53 3.65 3.74 3.81 3.87 3.90
55 3.65 3.81 3.97 4.09 4.19 4.26
60 3.74 3.97 4.19 4.40 4.57 4.70
65 3.81 4.09 4.40 4.71 4.99 5.23
70 3.87 4.19 4.57 4.99 5.42 5.82
75 3.90 4.26 4.70 5.23 5.82 6.43
OPTION 5 - JOINT AND LAST SURVIVOR LIFE ANNUITY -
ANNUITY REDUCED ON DEATH OF PRIMARY PAYEE
MALE AND
FEMALE
ADJUSTED
AGES 50 55 60 65 70 75
50 3.73 3.79 3.84 3.88 3.91 3.93
55 3.97 4.07 4.16 4.23 4.28 4.31
60 4.25 4.40 4.53 4.65 4.74 4.81
65 4.57 4.77 4.97 5.16 5.32 5.46
70 4.92 5.17 5.45 5.74 6.01 6.25
75 5.29 5.61 5.99 6.40 6.82 7.22
Dollar amounts of the life Annuity payments are based on the 1994 Group Annuity
Mortality Table for males projected with mortality improvement scale AA with
ages set back two years and a net investment rate of 3%. The adjusted age of the
person on whose life the Annuity is based is determined from the actual age last
birthday on the due date of the first Annuity payment in the following manner:
Calendar year in which
first payment is due 1996 - 2000 2001 - 2010 2011 - 2020 2021 - 2030 2031 and later
Adjusted age is actual age minus 0 minus 1 minus 2 minus 3 minus 4
17
ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 APPLIED
OPTION 6 - PAYMENTS FOR A DESIGNATED PERIOD
MONTHLY MONTHLY
NUMBER PAYMENT NUMBER PAYMENT
OF YEARS AMOUNT OF YEARS AMOUNT
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
The dollar amounts of the monthly Annuity payments for the Sixth Option are
based on a net investment rate of 3 % per annum.
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FLEXIBLE PREMIUM GROUP VARIABLE ANNUITY CONTRACT
TAX QUALIFIED NON-PARTICIPATING
RIDERS
ENDORSEMENTS
DEATH BENEFIT ENDORSEMENT
This Endorsement is effective on the Contract Date, unless another date is
specified.
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DEATH BENEFIT PROVISIONS
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A death benefit is payable to You in a single sum upon the death of a
Participant before the Annuity Commencement Date. A death benefit is also
payable under those Annuity Options which provide for death benefits. We will
pay the death benefit as described below upon receiving Due Proof of Death along
with a Written Request noting the Cash Value and total Purchase Payments
attributable to the Participant under the Contract. In addition, We will require
copies of records and any other reasonable proof We find necessary to verify the
Cash Value and total Purchase Payments attributable to the Participant under
this Contract. We must be notified of a Participant's death no later than six
months from the Participant's date of death in order for Us to make payment of
death proceeds as described below. If notification is received more than six
months after the Participant's death, We will make payment of death proceeds
equal to the Cash Value attributable to the Participant under this Contract. At
Your Written Request, We will pay the death benefit to the Participant's
Beneficiary.
DEATH PROCEEDS PRIOR TO THE ANNUITY COMMENCEMENT DATE
If the Participant dies before age 75 and before the Annuity Commencement Date,
We will pay the greater of a) or b) below, less any applicable Premium Tax,
prior surrender(s) not previously deducted and any outstanding loan balance (if
applicable) as of the date We receive Due Proof of Death:
a) the Cash Value attributable to the Participant under this Contract; or
b) the total net Purchase Payments attributable to the Participant under
this Contract.
If the Participant dies on or after age 75 and before the Annuity Commencement
Date, We will pay the Cash Value attributable to the Participant under this
Contract, less any applicable Premium Tax, prior surrender(s) not previously
deducted and any outstanding loan balance (if applicable) as of the date We
receive Due Proof of Death.
DEATH PROCEEDS AFTER THE ANNUITY COMMENCEMENT DATE
If the Annuitant dies on or after the Annuity Commencement Date, We will pay the
Beneficiary a death benefit consisting of any benefit remaining under the
Annuity Option then in effect.
THE TRAVELERS INSURANCE COMPANY
PRESIDENT
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FIXED ACCOUNT RIDER
This rider is made part of the basic contract to which it is attached. The date
of issue of the rider is the same as that of the basic contract unless a
different date is shown on the Contract Specifications page. Except as provided
in this rider, the Fixed Account is treated the same as an Underlying Fund.
When You, or the Participant if You so authorize, direct Us to do so, We will
apply all or any part of a Participant's Purchase Payments to the Fixed Account.
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PURCHASE PAYMENTS
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The Purchase Payments are the payments You and/or the Participants allocate to
the Fixed Account. No Purchase Payment after the first is required to keep the
Fixed Account in effect, as long as the basic contract is in effect.
We will apply the allocation of the first net Purchase Payment paid for the
Fixed Account to provide Accumulation Units to the Fixed Account within two
business days after it is received in good order at Our Office. We will apply
any allocation of the net Purchase Payments after the first net Purchase Payment
to the Fixed Account as of the day We receive it at Our Office.
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VALUATION INFORMATION
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For the purpose of this rider, for the Fixed Account only, the VALUATION
INFORMATION section of the basic contract is amended by deleting the following
provisions:
1. "Number of Accumulation Units;"
2. "Accumulation Unit Value;" and
3. "Net Investment Factor;" and the following provisions are added.
NUMBER OF ACCUMULATION UNITS
We will determine the number of Accumulation Units to be credited to the Fixed
Account by dividing the net Purchase Payment applied to the Fixed Account by the
applicable Accumulation Unit of the Fixed Account.
ACCUMULATION UNIT VALUE
We will determine the value of an Accumulation Unit for the Fixed Account on any
day by multiplying:
a) the value on the immediately preceding date; by
b) the net interest factor for the day on which the value is being
determined.
NET INTEREST FACTOR
The net interest factor for a day is:
1. the assured Net Interest Rate which is equivalent to an annual
interest rate of 3%, plus
2. any interest in excess of the assured Net Interest Rate (3%) credited
at Our discretion, plus
3. 1.000000.
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INTEREST CREDITED TO THE FIXED ACCOUNT
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Interest will be compounded and credited to the Fixed Account at a daily rate
equivalent to the effective annual interest rate as determined by Us. The rate
will never be less than the Net Interest Rate of 3%. Additional amounts may be
credited by Us for the guaranteed interest periods shown on the Contract
Specifications page.
From time to time, We may offer customers special interest rates.
20
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TRANSFERS BETWEEN THE UNDERLYING FUNDS AND THE FIXED ACCOUNT
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Amounts may generally be transferred from the Underlying Funds to the Fixed
Account at any time. Amounts may be transferred from the Fixed Account to the
Underlying Funds as described on the Contract Specifications page. No transfers
will be allowed between the Fixed Account and any Competing Fund in the Plan.
Amounts previously transferred from the Fixed Account to the Underlying Funds
may not be transferred back to the Fixed Account or any Competing Fund for a
period of at least 3 months from the date of transfer. We reserve the right to
limit the number of transfers and percentage of Cash Value, as shown on the
Contract Specifications page, to be transferred from the Fixed Account to the
Underlying Funds and to contracts not issued by Us. The minimum number of
transfers allowed would be one in any six-month period.
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TRANSFERS BETWEEN CONTRACTS NOT ISSUED BY US AND THE FIXED ACCOUNT
--------------------------------------------------------------------------------
At Your Written Request, We will make available the Cash Surrender Value of the
Fixed Account for transfer to contracts not issued by Us, subject to the
restrictions on the Contract Specifications page.
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TRANSFERS BETWEEN OTHER CONTRACTS ISSUED BY US AND THE FIXED ACCOUNT
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Under specific conditions, We may allow You to transfer funds held by You in
another group annuity contract issued by Us to the Fixed Account without
incurring deferred sales charges or surrender charges to the funds being
transferred. Once the transfer is complete and We have established an account
for You at Your direction, new deferred sales charges or surrender charges may
apply to the Fixed Account as shown on the Contract Specifications page.
We may also allow You, under specific conditions, to transfer funds held by You
for a Participant in the Fixed Account to another contract issued by Us without
incurring deferred sales charges or surrender charges shown on the Contract
Specifications page to the funds being transferred. Once the transfer is
complete and We have established a new account for the Participant at Your
direction, new deferred sales charges or surrender charges may apply to the new
contract in accordance with the provisions of such contract.
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DISTRIBUTION FROM THE FIXED ACCOUNT
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ALLOWABLE DISTRIBUTIONS
You may request allowable distributions shown on the Contract Specifications
page from the Fixed Account at any time. Upon receipt of Your Written Request,
We will pay You the Cash Value of the Fixed Account as applicable for those
allowable distributions.
SURRENDER FROM FIXED ACCOUNT CELLS
For the purpose of processing distributions from the Fixed Account, withdrawals
are taken from the most recent "cell" first, and each subsequent cell is
accessed for distributions in descending order on a Last-In, First-Out (LIFO)
basis.
The Cash Surrender Value will be determined as of the next valuation following
receipt of Your Written Request. We may defer payment of the Cash Surrender
Value in the Fixed Account for up to six months from the date of the Written
Request. If a payment is deferred more than 30 days from the date the request is
received, We will pay interest of 3% on the amount deferred.
21
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CONTRACT CHARGES
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No Semiannual Account Charge is applicable to the Fixed Account.
AMOUNTS DEDUCTED ON SURRENDER
The applicable amounts deducted on Surrender are shown on the Contract
Specifications page. These amounts may be reduced or eliminated to the extent
that We anticipate lower sales expenses or perform fewer sales services due to:
1. the size of the group participating in the contract;
2. an existing relationship to the contract owner;
3. use of mass enrollment procedures, or;
4. performance of sales functions by a third party, which We would
otherwise perform.
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CONTRACT DISCONTINUANCE PROVISIONS
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If the contract is discontinued, this rider will also be discontinued, and no
further Purchase Payments or transfers will be allowed.
On the date We receive Your Written Request to discontinue the contract, or
within 31 days after We notify You in writing of Our intent to discontinue the
contract, all Cash Values in the Individual Accounts will be transferred to Your
Account. Any amounts transferred from the Fixed Account to the Underlying Funds
during the previous 30 days from the date of discontinuance will be transferred
back to the Fixed Account. If these amounts are not available in the Individual
Accounts, the equivalent Cash Values will be transferred from Your Account.
If the contract is discontinued because of Plan Termination and the Plan
certifies to Us that the Plan Termination is the result of the dissolution or
liquidation of the employer under US Code Title 11 procedures, the Cash
Surrender Value will be distributed directly to the employees entitled to share
in such distributions in accordance with the Plan relating to Plan Termination.
Distribution may be in the form of cash payments, Annuity options, or deferred
annuities. This provision does not apply to 457 Deferred Compensation plans.
If the Plan is terminated or the contract discontinued for any other reason,
then upon discontinuance of this contract, We will determine the Market Adjusted
Value of the Fixed Account. The Market Adjusted Value is the current value as of
the date of discontinuance and reflects the relationship between the rate of
interest credited to funds on deposit under the Fixed Account at the time of
discontinuance to the rate of interest credited on new deposits for this class
of contracts at the time of discontinuance. The Market Adjusted Value may be
greater than or less than the Cash Value of the Fixed Account.
If the Market Adjusted Value is less than the Cash Value of the Fixed Account as
of the date of discontinuance, We will pay You Your choice of:
a) the Market Adjusted Value, less any amounts deducted on Surrender, in
one lump sum within 60 days of the date of discontinuance; or
b) the Cash Surrender Value of the Fixed Account in installments over a 5
year period. The amount deducted on Surrender, if any, are determined
as of the date of discontinuance and will apply to all installment
payments. Interest will be credited to the remaining Cash Value of the
Fixed Account during this installment period at a fixed effective
annual interest rate not less than 3%. The first payment will be made
no later than 60 days following Our mailing the written notice to You
at the most current address available on Our records. The remaining
payments will be mailed on each anniversary of the discontinuance date
for 4 years. Allowable distributions shown on the Contract
Specifications page are not allowed during the 5 year installment
period.
22
If the Market Adjusted Value is greater than the Cash Value of the Fixed Account
as of the date of discontinuance, We will pay You Your choice of:
a) the Cash Surrender Value of the Fixed Account within 60 days of the
date of discontinuance; or
b) the Cash Value of the Fixed Account in installments over a 5 year
period. Interest will be credited to the remaining Cash Value of the
Fixed Account during this installment period at a fixed effective
annual interest rate not less than 3%. The first payment will be made
no later than 60 days following Our mailing the written notice to You
at the most current address available on Our records. The remaining
payments will be mailed on each anniversary of the discontinuance date
for 4 years. Allowable distributions shown on the Contract
Specifications page are not allowed during the 5 year installment
period.
THE TRAVELERS INSURANCE COMPANY
President
23
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PENSION/PROFIT SHARING PLAN QUALIFICATION RIDER
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If the Contract/certificate owner (hereinafter referred to as "You" or "Your")
of this Contract/certificate (hereinafter referred to as "Contract") requested
that it be issued to comply with Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code"), the following conditions, restrictions and
limitations apply to this Contract. The Contract shall constitute an asset of
the qualified pension or profit-sharing plan established under Code Section
401(a) and the regulations thereunder and the Contract shall be subject to the
provisions, terms and conditions of such qualified plan. The amounts held under
this Contract will be used for the exclusive benefit of the employees and their
beneficiaries. The provisions in this rider supersede any contrary provisions in
the Contract.
The Plan is subject to the Employee Retirement Income Security Act (ERISA). We
are not a party to the Plan, nor are we the Plan Administrator. Any
responsibilities related to the appropriateness of any withdrawal, consents (or
revocation thereof), or any other fiduciary decision related to the
administration of the Plan is that of the employer or the Plan Administrator.
OWNER AND ANNUITANT
If the owner of this Contract is an employer, it represents that the plan meets
the requirements of Code Section 401(a). The term employee will mean the
individual for whose benefit the employer established an annuity program under
Code Section 401(a). This employee will be the Annuitant under this Contract.
The Annuitant is the individual on whose life the first Annuity payment is made.
A joint owner or a contingent Annuitant cannot be named under this Contract. The
Annuitant may not be changed after the Contract Date except as provided
hereunder.
TRANSFER OF OWNERSHIP/ASSIGNMENT
This Contract shall not be pledged or otherwise encumbered and it shall not be
sold, assigned, or otherwise transferred to any other person or entity other
than us.
CREDITOR CLAIMS
To the extent permitted by law, no right or benefit of the owner, Annuitant or
Beneficiary under this Contract shall be subject to the claims or creditors or
any legal process.
CONTRIBUTION LIMITS
Contributions may not exceed the limitations in effect under Code Section 402(g)
and 415(c).
ROLLOVERS
To the extent the Annuitant is eligible for a distribution under this Contract,
and provided the distribution is an eligible rollover distribution, the
distribution or a portion of it may be paid directly to an eligible retirement
plan. An eligible retirement plan includes an Individual Retirement Annuity or
Account described in Code Section 408; a Tax Sheltered Annuity plan or
arrangement under Code Section 403(b); a Defined Contribution plan qualified
under Code Section 401; and a governmental Deferred Compensation arrangement
under Code Section 457, as permitted by law. In the case of an eligible
distribution to the surviving spouse however, an eligible retirement plan is an
Individual Retirement Annuity or Account. You must specify the eligible
retirement plan to which such distribution is to be paid in a form and at such
time acceptable to us. Such distribution shall be made as a direct transfer to
the eligible retirement plan so specified. Surrender penalties under this
Contract may apply to all rollover distributions.
Previously taxed amounts in this Contract are not eligible for rollover. Amounts
that are rolled over are generally not taxed until later distributed. An
eligible rollover distribution generally includes any taxable distribution or
portion thereof from this Contract except:
(1) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or the life expectancy) of the Annuitant or the joint lives (or
joint and survivor expectances) of the Annuitant and the Annuitant's
designated beneficiary, or for a specified period of ten years or
more;
24
(2) any distribution to the extent such distribution is required under
Code Sections 401(a)(9) and 403(b)(10);
(3) the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities);
(4) any hardship distribution described in Code Section 403(b)(11) or Code
Section 403(b)(7)(A)(ii) made to the contract owner after 1998, and
(5) any other distribution(s) to the extent provided under the Code.
When an Annuitant receives a distribution directly by check that is eligible for
rollover, then mandatory income tax withholding will be taken from the
distribution. The Annuitant may roll over the balance to an Individual
Retirement Annuity or Account within 60 days of receipt of the check, and may
make up the amount withheld from other sources in the rollover in order to roll
over the maximum without possible early distribution tax penalty on the amount
of the tax withholding.
ELECTION OF SETTLEMENT OPTIONS
On the Maturity Date, or other agreed upon date, We will pay the amount payable
under this Contract in one lump sum or in accordance with the Option elected by
You. While the Annuitant is alive, You may change your Settlement Option
election by Written Request, but only before the Maturity Date. Once annuity
payments have commenced, no further election changes are allowed.
If no election has been made on the Maturity Date and if the Annuitant is living
and has a spouse, We will pay to You the first of a series of monthly annuity
payments based on the life of the Annuitant as primary payee and the Annuitant's
spouse as secondary payee in accordance with the Joint and Last Survivor Life
Annuity-Annuity Reduced on Death of Primary Payee Option. During the Annuitant's
lifetime, if no election has been made and the Annuitant has no spouse on the
Maturity Date, We will pay to You the first of a series of monthly annuity
payments based on the life of the Annuitant, in accordance with the Life Annuity
with Period Certain Annuity option, with 120 monthly payments assured.
REQUIRED MINIMUM DISTRIBUTIONS
Distributions During Annuitant's Lifetime
In order to meet the qualification requirements of Code Section 401(a), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).
Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee not later than
the "required beginning date" or over the life or life expectancy of such
employee or over the lives or joint life expectancy of such employee and a
designated beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the later of (1) the calendar year in which the
employee attains age 70 1/2, or (2) the calendar year in which the employee
retires, except that in the event that the employee is a 5% owner, the "required
beginning date" is April 1 of the calendar year in which the employee attains
age 70 1/2.
DISTRIBUTIONS UPON ANNUITANT'S DEATH
If the Annuitant dies on or after the Required Beginning Date (or after
distributions have begun under one of the settlement options under this
Contract), the remaining portion of the Annuitant's interest (if any) shall be
distributed at least as rapidly as the method of distribution in effect as of
the Annuitant's death.
If the Annuitant dies before distribution of his or her interest in the Contract
has begun and unless otherwise permitted under applicable law, the Annuitant's
entire interest will be distributed in accordance with one of the following
three provisions:
a. If the Annuitant's interest is payable to a designated beneficiary,
except as provided in (c) below, the designated beneficiary may elect
to receive the entire interest over the life expectancy of the
designated beneficiary or over a period not extending beyond 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 Annuitant died. Such election by the designated
beneficiary must be irrevocable and must be made no later than
September 30 of the calendar year immediately following the calendar
year in which the Annuitant died.
25
b. If there is no designated beneficiary, or if the beneficiary elects,
the Annuitant's entire interest in the Contract will be distributed by
December 31 of the calendar year containing the fifth anniversary of
the Annuitant's death.
c. If the designated beneficiary is the Annuitant's surviving spouse, the
surviving spouse may elect to receive the entire interest in equal or
substantially equal payments over the life expectancy of the surviving
spouse or over a period not extending beyond the life expectancy of
the surviving spouse, commencing at any date on or before the later
of:
(i) December 31 of the calendar year immediately following the
calendar year in which the Annuitant died; or
(ii) December 31 of the calendar year in which the Annuitant would
have attained age 70 1/2.. Such election by the surviving spouse
must be irrevocable and must be made no later than the earlier of
December 31 of the calendar year containing the fifth anniversary
of the Annuitant's death, or the date distributions are required
to begin pursuant to the preceding sentence.
If the surviving spouse dies before distributions begin, the limitations
described above in this section shall be applied as if the surviving spouse were
the Annuitant.
Life expectancies will be calculated in accordance with the applicable
requirements of Federal Law, including the Code and any applicable rules and
regulations.
ANNUITIES DISTRIBUTED UNDER QUALIFIED PLANS
If the applicant for this Contract requested that it be issued to comply with
Section 401(a) of the Code, and this Contract has subsequently been transferred
to the Annuitant, the following conditions, restrictions and limitations apply
to this Contract in addition to the above.
SPOUSAL CONSENT
DEATH BENEFIT - If the Annuitant dies while the Contract continues and the
Annuitant has a spouse at the time of the Annuitant's death, We will pay the
death benefit to a person other than the current spouse of the Annuitant only if
proof of spousal consent, which meets the requirements of Section 417 of the
Code, is furnished to us.
If the Beneficiary is not the current spouse and such spousal consent is not
furnished, We will pay 50% of the death benefit to the current spouse. We will
pay the balance of the death benefit to the Beneficiary.
CASH SURRENDER - Before the due date of the first annuity Payment, 1) if You do
not have a spouse and without the consent of any Beneficiary; or, 2) if You do
have a current spouse then only with the written consent of your spouse, as
required by Section 417 of the Code; We will pay to You all or any portion of
the cash surrender value of the Contract upon receipt of your Written Request
for it.
ADMINISTRATIVE COMPLIANCE/AMENDMENT
If changes in the Code and related law, regulations and rulings require a
distribution greater than described above in order to keep this Annuity
qualified under the Code, we will administer the Contract in accordance with
these laws, regulations and rulings. Notwithstanding any provision to the
contrary in this Contract or the qualified pension or profit-sharing plan of
which this Contract is a part, We reserve the right to amend or modify the
Contract or any rider or endorsement thereto, to the extent necessary to comply
with any law, regulation or other requirement in order to establish or maintain
the qualified status of the plan, following all necessary regulatory approvals.
Any such amendment or modification may be made retroactively effective if
necessary or appropriate to conform to the conditions imposed by such law,
regulation or other requirement.
THE TRAVELERS INSURANCE COMPANY
President
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