1
EXHIBIT 4(d)
The Variable Annuity Life Insurance Company
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
[VALIC LOGO]
-----------------------------
* An American General Company
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("VALIC") agrees to:
o allocate Purchase Payment(s) to the Participant's Account as
directed by the Contract Owner,
o pay annuity benefits as provided in this Certificate, and
o provide the Participant with the rights and benefits contained
in this Certificate.
These agreements are subject to the conditions and provisions on this and the
following pages. All conditions and provisions are subject to applicable state
laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ XXXXXXX X. XXXXX /S/ XXXXXX [ILLEGIBLE]
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT. VARIABLE PROVISIONS ARE DETAILED ON
PAGE 8.
ANNUITANT: Xxxx X. Xxx
GROUP ACCOUNT NUMBER: 12345 CERTIFICATE NUMBER: 0987654
DATE OF ISSUE: 2-1-96
PARTICIPANT CERTIFICATE
GROUP FIXED AND VARIABLE ANNUITY CONTRACT
INDIVIDUAL ALLOCATIONS
NON-PARTICIPATING
UITG-CB-585-96 QU1PXST1
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TABLE OF CONTENTS
Page Page
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SECTION 1 DEFINITIONS . . . . . . . . . . . . . . 4 5.08 Allocation of Variable and Fixed
SECTION 2 PURCHASE PAYMENTS AND THE Annuities . . . . . . . . . . . . . 9
ACCUMULATION PERIOD . . . . . . . . . . 5 5.09 Annuity Tables . . . . . . . . . . 9-11
2.01 Purchase Payments. . . . . . . . . . . . 5 SECTION 6 CODE REQUIREMENTS AND PROVISIONS
2.02 Allocation of Purchase Payments . . . . 5 FOR RETIREMENT PLAN CONTRACTS . . . . 12
2.03 Fixed Subaccount Value . . . . . . . . 5 6.01 Special Provisions Applicable . . . . 12
2.04 Variable Subaccount Value . . . . . . . 5 6.02 Qualified Retirement Plans and Tax . . 12
2.05 Minimum Contract Value . . . . . . . . 6 Sheltered Annuity Plans . . . . . . . 12
2.06 Suspension of Purchase Payments . . . . 6 6.03 Non-Qualified and Unfunded Deferred
SECTION 3 CHARGES UNDER THE CONTRACT . . . . . . 6 Compensation Plans . . . . . . . . . 12
3.01 Charge for Premium Taxes . . . . . . . 6 6.04 Direct Rollovers . . . . . . . . . . 12
3.02 Charge for Partial and Total . . . . . . 6.05 Limit on Purchase Payments for
Surrenders . . . . . . . . . . . . . . 6 Section 402(g) . . . . . . . . . . . 12
3.03 Charge for Annual Contract 6.06 Withdrawal Restrictions for Amounts
Maintenance . . . . . . . . . . . . . . 6 Transferred from a Section 403(b)(7)
3.04 Charge to the Separate Account . . . . 7 Custodial Account . . . . . . . . . . 12
SECTION 4 TRANSFERS AND SURRENDERS . . . . . . . 7 SECTION 7 GENERAL PROVISIONS . . . . . . . . . 12
4.01 Transfers . . . . . . . . . . . . . . . 7 7.01 Participant Certificates. . . . . . . 12
4.02 Surrenders . . . . . . . . . . . . . . 7 7.02 Incontestability . . . . . . . . . . 12
4.03 Minimum Surrender Value . . . . . . . . 7 7.03 Misstatement of Age . . . . . . . . . 13
SECTION 5 ANNUITY BENEFITS . . . . . . . . . . . 7 7.04 Proof of Survival . . . . . . . . . . 13
5.01 Annuity Date . . . . . . . . . . . . . 7 7.05 Assignment . . . . . . . . . . . . . 13
5.02 Election to Commence Annuity 7.06 Beneficiary . . . . . . . . . . . . . 13
Payments . . . . . . . . . . . . . . . 8 7.07 Death Payment Provisions . . . . . . 13
5.03 Annuity Unit Value . . . . . . . . . . 8 7.08 Suspension of Payments . . . . . . . 14
5.04 Annuity Options . . . . . . . . . . . . 8 7.09 Minimum Benefit . . . . . . . . . . . 14
5.05 Automatic Annuity Option . . . . . . . 8 7.10 Reports to Participants . . . . . . . 14
5.06 Minimum Annuity Payment . . . . . . . . 8 7.11 Voting Rights . . . . . . . . . . . . 14
5.07 Betterment of Rates . . . . . . . . . . 8 7.12 Substitution of Fund Shares . . . . . 14
7.13 Separate Account . . . . . . . . . . 14
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SECTION I
DEFINITIONS
1.01 ACCUMULATION PERIOD -- the time between the date of the first Purchase
Payment and the Annuity Date for a Participant.
1.02 ACCUMULATION UNIT ("UNIT") -- a unit of interest of a Participant in a
Separate Account Division which is accumulated in a Participant's Variable
Subaccount before annuity payments begin. The value of a Unit will vary with
the net investment return of the respective Separate Account Division.
1.03 ACCUMULATION VALUE -- the sum of the values of the Fixed Subaccounts
and the Variable Subaccounts allocated to a Participant Account.
1.04 ANNUITANT -- the Participant on whose life annuity payments will be
based. Annuity payments will be paid to the Annuitant. If the Participant
dies before the Annuity Date, the Beneficiary may receive payments.
1.05 ANNUITY DATE -- the date elected by the Participant on which annuity
payments start.
1.06 ANNUITY PERIOD -- the time during which annuity payments are made.
1.07 ANNUITY UNIT -- a measuring unit used in calculating the amount of a
Participant's annuity payments. The value of an Annuity Unit for a Variable
Subaccount will vary with the net investment return of the Separate Account
Division selected. The value will be adjusted according to the Assumed
Investment Rate chosen by the Participant.
1.08 ASSUMED INVESTMENT RATE -- the rate used to determine the first
monthly annuity payment per thousand dollars of Accumulation Value in the
Variable Subaccount(s).
1.09 BENEFICIARY -- the person who will receive payments, if any, on the
Annuitant's death.
1.10 CERTIFICATE YEAR -- a twelve month period starting with the issue date
of a Participant's certificate and each anniversary of that date.
1.11 CONTRACT OWNER -- the employer, or other organization, which makes
application for the Contract.
1.12 CONTRACT YEAR -- a twelve month period starting with the issue date of
the Contract and each anniversary of that date.
1.13 FIXED SUBACCOUNT -- a particular subaccount under a Participant
Account into which net Purchase Payments and accumulated value under a fixed
annuity contract may be allocated. Reserves for these allocations are held in
VALIC's General Account. The portion of Accumulation Value under Fixed
Subaccount One which may be transferred to another subaccount may be limited.
The timing of transfers from Fixed Subaccount Two to other subaccounts may be
limited. Fixed Subaccounts One and Two are discussed more fully in the Article
labelled "Transfers and Surrenders."
1.14 FUND -- an investment portfolio which is the underlying investment
medium for net Purchase Payments credited to a Separate Account Division.
1.15 GENERAL ACCOUNT -- the assets of VALIC other than those in the
Separate Account or any other separate account. Reserves for any fixed annuity
are maintained in the General Account.
1.16 HOME OFFICE -- the main office of VALIC at 0000 Xxxxx Xxxxxxx,
Xxxxxxx, Xxxxx 00000.
1.17 PARTICIPANT -- a person who makes Purchase Payments or for whom
Purchase Payments are made under the Contract.
1.18 PARTICIPANT ACCOUNT -- an individual account which is established for
a Participant to record the Accumulation Value for the Participant.
1.19 PURCHASE PAYMENT -- an amount paid to VALIC by, or on behalf of, a
Participant.
1.20 SEPARATE ACCOUNT -- the segregated asset account referred to as
Separate Account A. Separate Account A was established by VALIC under the Texas
Insurance Code to receive and invest the net Purchase Payments made under
variable annuity contracts.
1.21 SEPARATE ACCOUNT DIVISIONS ("DIVISIONS") -- subdivisions of the
Separate Account, each of which invest in a different variable investment with
a particular investment objective and strategy, and into which the net Purchase
Payments and accumulated value under a variable annuity contract may be
applied.
1.22 SURRENDER VALUE -- the Accumulation Value of a Participant Account
less the surrender charge, if any, which is the amount payable upon surrender
of a Participant Account.
1.23 VARIABLE SUBACCOUNT -- a particular subaccount under a Participant
Account into which net Purchase Payments and accumulated value under a variable
annuity contract may be allocated. Amounts in each Variable Subaccount are
invested in a Separate Account Division.
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SECTION 2
PURCHASE PAYMENTS AND THE ACCUMULATION PERIOD
2.01 PURCHASE PAYMENT(S)
Purchase Payments may be paid to VALIC at any time during the Accumulation
Period for credit to a Participant's Account. Purchase Payments may be subject
to the provisions of the Contract Owner's retirement plan.
When a Purchase Payment is received in the Home Office of VALIC, a
deduction will be made to cover any premium taxes due, resulting in a net
Purchase Payment.
Each net Purchase Payment is allocated by the Contract Owner to Fixed
and/or Variable Subaccounts. Each net Purchase Payment allocated to a Variable
Subaccount is applied separately to a Division to provide Units. The number of
Units is equal to the net Purchase Payment per Variable Subaccount divided by
the dollar value of one Unit for the respective Division for the valuation
period of receipt. The number of Units will not vary with changes in the dollar
value of a Unit. The value of a Unit in each Division may vary from one
valuation period to the next.
2.02 ALLOCATION OF PURCHASE PAYMENTS
When this Contract is used on a flexible payment basis, Purchase Payments
must be at least $30 per Variable Subaccount or Fixed Subaccount.
If no Purchase Payments will be made to a Participant's Account after the
first, the single Purchase Payment must be at least $1,000.
VALIC reserves the right to limit Purchase Payment allocations among
subaccounts to seven at any one time.
2.03 FIXED SUBACCOUNT VALUE
The Fixed Subaccount value of a Participant's Account shall include:
o Purchase Payments allocated to the Fixed Subaccount(s);
o amounts transferred from Variable Subaccounts;
o interest earned on either of the above; and
shall be reduced by:
o any transfers from the Fixed Subaccount(s);
o amounts deducted in connection with any partial surrenders; and
o annual account maintenance charges.
Prior to the Annuity Date the interest credited shall be at a rate
determined by VALIC. The interest rate shall not be less than an effective rate
of 4 1/2% per year.
2.04 VARIABLE SUBACCOUNT VALUE
The Variable Subaccount value of a Participant's Account for any valuation
period is equal to the value invested under Variable Subaccounts.
The value of each of a Participant's Variable Subaccounts is determined by
multiplying the Unit value for the Division underlying that subaccount on that
date by the number of Units owned by the Participant in the Division underlying
the Variable Subaccount. The value of a Unit may increase or decrease according
to the investment performance of the Division underlying the Variable
Subaccount.
The current value of a Unit is equal to the value of such Unit for the
immediately preceding valuation period times the Net Investment Factor for the
current period.
The Net Investment Factor for a Division is the sum of 1.000000 plus the
Net Investment Rate for that Division.
The Net Investment Rate for any valuation period for a Division is the
Gross Investment Rate for that Division for the valuation period less:
o the daily charge for the period at an annual rate of 1%; and
o charges for any taxes payable by the Separate Account or reserves held
for such taxes.
The Gross Investment Rate for a Division is computed on each day the New
York Stock Exchange is open for trading. It is computed at least once a day at
the time trading closes. It covers the valuation period since the last prior
computation. The Gross Investment Rate is equal to:
o the investment income and capital gains and losses, both realized and
unrealized, on the assets of that Division during such period,
divided by
o the amount of such assets at the beginning of the period.
The Gross Investment Rate may be dither positive or negative.
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2.05 MINIMUM CONTRACT VALUE
If the total Accumulation Value for a Participant's Account falls below
$300 during the Accumulation Period, the Participant's Account may be
automatically surrendered and the Surrender Value paid to the Participant.
2.06 SUSPENSION OF PURCHASE PAYMENTS
Purchase Payments to a Participant's Account may be suspended at any time
without penalty. If additional Purchase Payments are not made and the
Participant's Account is not surrendered, the Fixed Subaccount value will
continue to earn interest and the number of Units under Variable Subaccounts
will remain constant. The value of Units will continue to vary. The
Accumulation Value will continue to be subject to Contract charges during the
period of suspension. Purchase Payments may resume for the Participant at any
time prior to the Annuity Date so long as the Participant's Account has not
been surrendered and the Contract has not been terminated.
SECTION 3
CHARGES UNDER THE CONTRACT
3.01 CHARGE FOR PREMIUM TAXES
A deduction is made from each Purchase Payment to cover premium taxes, when
applicable. Any such deduction will be made either from Purchase Payments when
received, or from the amount applied to effect an annuity at the time annuity
payments commence, depending on applicable state law. If no amount for premium
tax was deducted, but tax later is found to be due, VALIC reserves the right to
reduce the Accumulation Value of the Participant's Account, the number of Units
under a Variable Annuity, or the amount of Fixed Annuity payments by the amount
of the tax due at the time such determination is made. If an amount for any
premium taxes was deducted but later is found not to be due, VALIC will apply
the amount deducted to increase the Accumulation Value of a Participant's
Account, the number of Units under a Variable Annuity, or the amount of Fixed
Annuity payments at the time such determination is made.
3.02 CHARGE FOR PARTIAL AND TOTAL SURRENDERS
A partial or total surrender of a Participant's Account may be subject to a
surrender charge. The surrender charge is equal to the lesser of 5% of (a) any
Purchase Payment received for the Participant's Account during the most recent
60 months prior to receipt of the surrender request by VALIC at its Home
Office, or (b) the amount of the surrender. It is always assumed that the most
recent Purchase Payments are withdrawn first, and no surrender charge is ever
imposed on any amount not actually withdrawn.
If no Purchase Payments have been received during the most recent 60 months
or if the Participant's Account has been in effect for 15 years or longer,
there will be no charge for partial or total surrenders under that account.
There is no surrender charge if the Participant Account has been in effect for
5 years or longer and the Participant has attained age 59 1/2.
Up to 10% of the Accumulation Value in any Certificate Year may be
withdrawn without a surrender charge. The surrender charge will be applicable
only to the amount withdrawn that exceeds 10%. The percentage withdrawn will be
calculated as the ratio of the amount withdrawn to the Accumulation Value
immediately prior to the withdrawal. If multiple withdrawals are made in a
Certificate Year, the percentage withdrawn for each withdrawal will be added
together to determine the 10% free withdrawal portion.
Once a surrender charge has been imposed on any Purchase Payment, that
payment or portion thereof will not thereafter be treated as a Purchase Payment
for purposes of the charge.
The surrender charge is not imposed upon annuitization at the Annuity Date
upon any payments received by an Annuitant or Beneficiary in lieu of annuity
payments during the Annuity Period, or upon payments to a Beneficiary when a
Participant dies during the Accumulation Period.
There is no surrender charge if the Participant is eligible for and has
qualified to receive Social Security disability benefits. VALIC may ask for
proof of disability. Proof of disability will be made by sending VALIC a
certified copy of a Social Security Administration determination of disability.
The amount payable upon full surrender in the case of disability will be the
Accumulation Value on the date VALIC receives due proof of disability.
VALIC may reduce the surrender charge under this Section.
3.03 CHARGE FOR ANNUAL ACCOUNT MAINTENANCE
An account maintenance charge of $20 will be assessed by VALIC for the
first Certificate Year. An annual account maintenance charge of $15 will be
assessed for the second and later Certificate Years during the Accumulation
Period. The charge is due in quarterly installments beginning on the first day
of the calendar quarter following the first date a Purchase Payment is credited
to the Participant's Account. The charge is assessed on the last day of the
calendar quarter in which it is due. VALIC will reduce the Accumulation Value
of the Participant Account to cover this charge.
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If the account is surrendered during a calendar quarter, the full
quarterly assessment will be made at the time of the surrender, and VALIC will
reduce the Surrender Value of the Participant Account to cover this charge.
A Participant may have another contract with VALIC or an account under
another annuity contract issued to the Contract Owner by VALIC. If so, the
total annual account charges or annual contract charges that apply to all his
or her contracts or accounts may be made against one contract or account as
agreed upon by VALIC and the Contract Owner.
The account maintenance charge is not guaranteed and may, with prior
regulatory approval if required, be changed.
3.04 CHARGE TO THE SEPARATE ACCOUNT
To cover other administrative expenses and mortality risks, VALIC will
assess the Separate Account a daily charge of.00274%. This charge equals an
annual rate of 1% of the average daily net asset value of the Separate Account
Divisions attributable to the Contract.
SECTION 4
TRANSFERS AND SURRENDERS
4.01 TRANSFERS
(a) Before annuity payments begin, a Participant may transfer
amounts held in the Participant Account among Variable Subaccounts or from
Variable Subaccounts to the Fixed Subaccount(s). VALIC reserves the right to
limit such transfers to intervals of not less than 30 days.
Up to 20% of the Accumulation Value under Fixed Subaccount One may be
transferred each Certificate Year. If multiple transfers are made in a
Certificate Year, the percentage of the Accumulation Value transferred each
time will be added together to determine the 20% transfer limit for that
Certificate Year. For each transfer, the percentage transferred is the ratio of
the amount transferred to the Fixed Subaccount One Accumulation Value
immediately prior to the transfer. However, if the Accumulation Value remaining
under Fixed Subaccount One would be less than $500, such value may be
transferred in full at that time.
After a Participant transfers amounts to Fixed Subaccount Two, no
further transfers from Fixed Subaccount Two may be made for 90 days. The 90 day
transfer period may be changed at any time. However, the transfer period may
not exceed 180 days.
(b) During the Annuity Period an Annuitant may transfer amounts
among Divisions underlying a Variable Annuity or from the Divisions underlying
a Variable Annuity to provide a Fixed Annuity. Transfers may not be made at
intervals of less than 365 days. Transfers of amounts providing a Fixed Annuity
may not be made to provide a Variable Annuity during the Annuity Period.
(c) Transfers will be made only when VALIC receives written
instructions at its Home Office. Instructions must be made on a form furnished
by VALIC.
(d) Transfers shall be made at the Unit value next determined after
receipt by VALIC of a valid, complete transfer request.
(e) Transfers may not be made if values under the Participant
Account will be accumulated in more than the maximum number of subaccounts
available at any one time. VALIC reserves the right to limit allocations among
subaccounts to seven at any one time.
4.02 SURRENDERS
A Participant may make partial or total surrenders of the Surrender
Value of the Participant Account at any time during the Accumulation Period.
The Accumulation Value for purposes of determining the surrender charge is that
next computed after the request for surrender is received at VALIC's Home
Office.
4.03 MINIMUM SURRENDER VALUE
In the case of a full surrender of a Participant's Account prior to
the Annuity Date, the value received under the Fixed Subaccounts shall never be
less than Purchase Payments allocated to the Fixed Subaccounts, less any
amounts transferred to Variable Subaccounts and less any previous partial
surrenders.
SECTION 5
ANNUITY BENEFITS
5.01 ANNUITY DATE
The Annuity Date shall be selected by the Participant. Such date may be
the first day of any calendar month following the Participant's 50th birthday
but may not be later than the Participant's 75th birthday if the Contract is
issued under a qualified plan and 85th birthday if the Contract is issued as a
non-qualified deferred annuity. In the absence of an election, the Annuity Date
shall be the first day of the month during which the Participant attains age 75
if the Contract is issued under a qualified plan and age 85 if the Contract is
issued as a non-qualified deferred annuity.
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5.02 ELECTION TO COMMENCE ANNUITY PAYMENTS
An election to commence Annuity Payments must be made in writing on a
form provided by VALIC. Payments will start on the first day of the month
following 30 days after the election is received at VALIC's Home Office.
5.03 ANNUITY UNIT VALUE
The value of a Fixed Annuity Unit is fixed at $1.00. The current value
of an Annuity Unit in a Division is equal to the value of such Annuity Unit for
the immediately preceding valuation period times the product of (a) 0.999906
per day of the current valuation period (if an Assumed Investment Rate of
3 1/2% has been chosen) and (b) the applicable Net Investment Factor for such
valuation period for the Division. The Annuitant may choose an Assumed
Investment Rate permitted by state law or regulations other than 3 1/2% as
follows: 4 1/2% or 5%. If the Annuitant chooses an Assumed Investment Rate
other than 3 1/2%, the 0.999906 factor above will be adjusted. The value of a
Unit may increase or decrease according to the investment performance of the
Division underlying the Variable Subaccount.
5.04 ANNUITY OPTIONS
The Participant may elect to have payments made under any of the
options below or any other option which is mutually agreeable. Payments may be
received on either a fixed or a variable basis, or both, except that payments
under the Fifth Option must be made on a fixed basis.
FIRST OPTION - LIFE ANNUITY - An annuity payable monthly during the
Annuitant's life. Payments shall cease with the last one due before
the Annuitant's death.
SECOND OPTION - LIFE ANNUITY WITH 60, 120, OR 180 MONTHLY PAYMENTS
GUARANTEED - An annuity payable monthly during the Annuitant's life.
If, at the death of the Annuitant, payments have been made for less
than the number of months selected, payments will be made to a
Beneficiary for the rest of the guaranteed period.
THIRD OPTION - UNIT REFUND LIFE ANNUITY - An annuity payable monthly
during the Annuitant's life. Payments cease with the last one due
before the Annuitant's death. At the Annuitant's death the Beneficiary
may receive an additional payment. The payment under a Fixed Annuity,
if any, is equal to the Fixed Annuity value of the Participant's
Account at the Annuity Date which has not previously been paid out in
the form of annuity payments. The payment under a Variable Annuity, if
any, is equal to the then current value of any Annuity Units which
have not been paid out in the form of annuity payments. The number of
Annuity Units at the Annuity Date is the total value applied to this
option divided by the Annuity Unit value used to calculate the first
annuity payment.
FOURTH OPTION - JOINT AND LAST SURVIVOR ANNUITY - An annuity payable
monthly during the joint lives of the Annuitant and a named second
person and thereafter during the life of the survivor.
FIFTH OPTION - PAYMENTS FOR A DESIGNATED PERIOD - An annuity payable
monthly for a selected number of years between three and thirty.
Any option chosen by the Participant must comply with applicable tax
laws and regulations.
5.05 Automatic Annuity Option
If the Annuitant does not elect one of the options prior to the
Annuity Date, annuity payments will be made in accordance with the Second
Option, with payments being guaranteed for a ten year period, unless this
option is contrary to applicable tax laws or regulations.
5.06 MINIMUM ANNUITY PAYMENT
An annuity option may not be elected under a Fixed or Variable Annuity
unless an annuity payment of at least $25 would be provided under that option.
If a combination of Fixed and Variable Annuities is elected, each Fixed Annuity
payment and each portion of a Variable Annuity payment based on Division must
equal at least $25.
5.07 BETTERMENT OF RATES
If greater benefits would result for a Fixed Annuity, the amount of
the Annuitant's monthly payment will be the monthly payment produced by the
then current settlement option rates, which will not be less than the rates
used for a currently issued immediate annuity of the same form. It shall have a
single stipulated payment equal to the Accumulation Value of the Participant
Account being applied to effect the annuity. Any commuted values allowed will
be determined based on the option elected and the Assumed Investment Rate used
to determine the purchase rate for such annuities.
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5.08 ALLOCATION OF VARIABLE AND FIXED ANNUITIES
In the absence of notification to the contrary, when an annuity is
effected for a Participant, Fixed Subaccount accumulations will provide a Fixed
Annuity and Variable Subaccount Units will provide a Variable Annuity (Annuity
Units in the Separate Account) based on the Divisions in which the Variable
Subaccounts were invested immediately prior thereto. If the Fifth Option is
elected, the Accumulation Value will provide a Fixed Annuity.
(a) Variable Annuity -- An annuity with payments varying according
to the net investment return of the Divisions selected. The
number of Annuity Units in each Variable Subaccount is
determined by dividing the first monthly payment by the
Annuity Unit value of the applicable Division as of the tenth
day before the Annuity Date.
Once variable payments have begun, the number of Annuity Units
per payment remain fixed. However, subsequent transfers among
the Divisions or from a Division to provide a Fixed Annuity
after annuity payments begin will result in a recalculation of
the number of Annuity Units.
The dollar amount of the second and later Variable Annuity
payments is not set and may change from month to month. The
actual amount of each Variable Annuity payment after the first
is equal to the number of Annuity Units under the Variable
Subaccounts times the Annuity Unit value of the applicable
Division as of the tenth day prior to the date the payment is
due.
VALIC guarantees that the dollar amount of each annuity
payment after the first shall not be adversely affected by
actual expenses or variations in mortality experience which
differ from those assumed for the first payment.
(b) Fixed Annuity -- An annuity with payments which remain fixed
as to dollar amount. Payments after the first will never be
less than the first monthly payment. Payments may be increased
at VALIC's discretion.
5.09 ANNUITY TABLES
The following tables show the amount required to purchase a first
monthly payment of $1.00. The tables are calculated using an Assumed Investment
Rate of 3 1/2% per year for Variable Annuities and a mortality table
constructed from the 1983 Table a. The amount applied to effect an annuity will
be the Accumulation Value on the tenth date preceding the date the first
payment is due. The amount of each payment will depend upon the Annuitant's age
at the birthday nearest to the time the first payment is due.
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DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Options 1, 2 and 3 -- Single Life Annuities
Monthly Payments Guaranteed
--------------------------------------------------
Age None 60 120 180 Cash Refund
50 $233.36 $233.71 $234.82 $236.75 $240.70
51 229.87 230.25 231.45 233.54 237.65
52 226.30 226.72 228.01 230.29 234.54
53 222.65 223.10 224.51 226.98 231.36
54 218.93 219.41 220.93 223.62 228.12
55 215.11 215.64 217.28 220.22 224.82
56 211.21 211.78 213.57 216.77 221.45
57 207.23 207.84 209.79 213.28 218.02
58 203.15 203.81 205.94 209.76 214.53
59 198.98 199.70 202.03 206.21 210.96
60 194.73 195.51 198.06 202.64 207.33
61 190.38 191.24 194.04 199.05 203.63
62 185.95 186.90 189.97 195.47 199.85
63 181.45 182.50 185.86 191.89 195.99
64 176.88 178.03 181.73 188.35 192.18
65 172.25 173.52 177.57 184.84 188.25
66 167.56 168.95 173.41 181.39 184.24
67 162.81 164.34 169.24 178.00 180.31
68 158.01 159.70 165.09 174.70 176.25
69 153.16 155.01 160.95 171.49 172.11
70 148.26 150.30 156.85 168.40 168.10
71 143.31 145.57 152.79 165.44 163.94
72 138.33 140.83 148.81 162.62 159.70
73 133.32 136.10 144.91 159.98 155.66
74 128.31 131.39 141.11 157.51 151.45
75 123.30 126.73 137.44 155.22 147.15
Option 4 -- Joint and Last Survivor Annuity
Xxxxxxx Xxxxxxxxx: Number of Years Younger Than Older Annuitant
Age of Older -----------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
50 $256.95 $258.82 $260.70 $262.61 $264.53 $266.46 $268.39 $270.33 $272.26 $274.19 $276.10
51 253.87 255.79 257.73 259.69 261.67 263.66 265.66 267.66 269.65 271.64 273.61
52 250.69 252.67 254.67 256.69 258.73 260.78 262.84 264.90 266.96 269.00 271.04
53 247.42 249.45 251.52 253.60 255.70 257.81 259.93 262.06 264.18 266.29 268.39
54 244.06 246-15 248.27 250.41 252.58 254.75 256.94 259.13 261.31 263.49 265.66
55 240.59 242.75 244.93 247.14 249.36 251.60 253.85 256.11 258.36 260.61 262.85
56 237.03 239.25 241.49 243.76 246.05 248.36 250.68 253.00 255.32 257.64 259.94
57 233.37 235.64 237.95 240.29 242.65 245.02 247.41 249.80 252.19 254.57 256.95
58 229.60 231.94 234.31 236.72 239.14 241.59 244.04 246.50 248.96 251.42 253.87
59 225.73 228-13 230.57 233.04 235.54 238.05 240.58 243.11 245.64 248.17 250.70
60 221.75 224.22 226.72 229.26 231.83 234.41 237.01 239.62 242.23 244.83 247.43
61 217.66 220.19 222.77 225.38 228.02 230.68 233.35 236.03 238.71 241.39 244.07
62 213.47 216.07 218.71 221.39 224.10 226.83 229.58 232.34 235.10 237.86 240.61
63 209-17 211.84 214.55 217.30 220.08 222.89 225.71 228.55 231.39 234.23 237.05
64 204.78 207.50 210.28 213.10 215.96 218.84 221.74 224.66 227.57 230.49 233.40
65 200.28 203.07 205.91 208.80 211.73 214.69 217.67 220.66 223.66 226.66 229.65
66 195.69 198.54 201.45 204.40 207.40 210.43 213.49 216.57 219.65 222.73 225.80
67 191.01 193.92 196.89 199.91 202.98 206.08 209.22 212.37 215.53 218.70 221.86
68 186.24 189.21 192.24 195.33 198.46 201.64 204.84 208.07 211.32 214.56 217.81
69 181.38 184.41 187.50 190.65 193.85 197.10 200.38 203.68 207.00 210.33 213.66
70 176.44 179.52 182.68 185.89 189.16 192.47 195.82 199.20 202.60 206.01 209.42
71 171.42 174.55 177.77 181.04 184.37 187.75 191.17 194.62 198.10 201.59 205.08
72 166.33 169.51 172.78 176.11 179.51 182.95 186.44 189.96 193.51 197.07 200.65
73 161.17 164.40 167.71 171.10 174.56 178.07 181.63 185.22 188.83 192.47 196.12
74 155.97 159.22 162.58 166.02 169.53 173.11 176.73 180.39 184.08 187.79 191.51
75 150.73 154.01 157.39 160.87 164.44 168.07 171.75 175.48 179.24 183.02 186.82
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Option 5 -- Payment for a Designated Period
Years of Payment Years of Payment
---------------- ----------------
3 $ 34.26 17 $154.56
4 44.90 18 161.29
5 55.19 19 167.50
6 65.15 20 173.91
7 74.74 21 179.86
8 84.03 22 185.53
9 93.02 23 190.84
10 101.73 24 196.46
11 110.01 25 201.61
12 118.20 26 206.61
13 125.94 27 211.42
14 133.51 28 215.98
15 140.85 29 220.75
16 147.93 30 224.72
FREQUENCY OF PAYMENTS. Annuity payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, VALIC reserves
the right to make less frequent payments. If at any time the annual rate of
payment to any payee is less than $100, VALIC may make a lump sum payment of
the remaining annuity value to the payee.
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SECTION 6
CODE REQUIREMENTS AND PROVISIONS FOR RETIREMENT PLAN CONTRACTS
6.01 SPECIAL PROVISIONS APPLICABLE
This Section will apply over contrary provisions if the Contract is
issued under one of the following tax deferred retirement programs.
6.02 QUALIFIED RETIREMENT PLANS (INCLUDING PLANS COVERING SELF-EMPLOYED
INDIVIDUALS) AND TAX SHELTERED ANNUITY PLANS
(a) The Participant shall always be the employee for whose benefit
Purchase Payments have been made.
(b) A person other than the Annuitant's spouse may not be the
designated second person under the Fourth Option unless, as of
the Annuity Date, the actuarially determined present value of
the payments to be made to the Annuitant is more than 50% of
the actuarially determined present value of the aggregate
payments to be made to the Annuitant and the survivor or
unless it is agreed that payments to the designated second
person will not extend beyond the life of the Annuitant's
spouse.
(c) A designated period under Option Five may not be chosen
unless, as of the Annuity Date, the actuarially determined
present value of the payments to be made to the Annuitant is
more than 50% of the actuarially determined present value of
the aggregate payments to be made to the Annuitant and the
Beneficiary. Tax laws and regulations may also require that
the designated period not extend beyond the life expectancy of
the Annuitant or the life expectancy of the Annuitant and the
Beneficiary.
(d) The Participant's rights under the Contract are subject to the
terms of the Contract Owner's plan.
6.03 NON-QUALIFIED AND UNFUNDED DEFERRED COMPENSATION PLANS
The Participant's employer shall be the Contract Owner. The Contract
Owner has all rights under the Contract. Participant Accounts are established
for bookkeeping reasons only.
If there is any conflict between the intent of this section and the
Contract, this section shall apply.
6.04 DIRECT ROLLOVERS
If any benefit payable under a Contract or Certificate constitutes an
"eligible rollover distribution" within the meaning section 402 of the Internal
Revenue Code of 1986, as amended ("the Code"), the Participant has the right to
elect to have such distribution paid directly to an "eligible retirement plan"
in a transaction designated under the Code as a "direct rollover." Before any
eligible rollover distribution is made to the Participant, we will provide the
Participant with a written explanation of the Participant's right to make a
direct rollover and the tax consequences of making or not making a direct
Rollover. No surrender, withdrawal, or other benefit distribution that
constitutes an eligible rollover distribution will be made to the Participant
under a Contract or Certificate, unless the Code's requirements applicable to
eligible rollover contributions have been satisfied. Except for eligible
rollover distributions, VALIC reserves the right to make payments only to the
Participant or the Participant's Beneficiary.
6.05 LIMIT ON PURCHASE PAYMENTS FOR SECTION 402(g)
A Participant's salary reduction Purchase Payments may not exceed the
limits of section 402(g) of the Code. VALIC reserves the right to refund excess
Purchase Payments.
6.06 WITHDRAWAL RESTRICTIONS FOR AMOUNTS TRANSFERRED FROM A SECTION
403(b)(7) CUSTODIAL ACCOUNT
Equivalent withdrawal restrictions as to those imposed upon a section
403(b) tax deferred annuity contract also apply any portion of the Accumulation
Value that is attributable to Purchase Payments representing amounts directly
transferred from a custodial account under section 403(b)(7) of the Code.
SECTION 7
GENERAL PROVISIONS
7.01 PARTICIPANT CERTIFICATES
VALIC shall issue certificates for delivery to each Participant. Each
certificate shall set forth the benefits to which a Participant is entitled
under the Contract and the Beneficiary entitled to receive payment on the
Participant's death. Certificates shall not constitute a part of the Contract
between the Contract Owner and VALIC.
7.02 INCONTESTABILITY
No statement made by any Annuitant shall be contested after two years
from the date the Annuitant was first covered under the Contract.
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7.03 MISSTATEMENT OF AGE
If an Annuitant's age has been misstated, or that of any Beneficiary
under a settlement option which conditions payment upon the Beneficiary's
survival, any amount payable by VALIC shall be such as would be provided an the
basis of the correct information. If a correction of age is made while payments
are being made hereunder, the amount of any underpayment shall be paid in full
with the next payment due. The amount of an overpayment shall be deducted from
amounts otherwise payable hereunder.
7.04 PROOF OF SURVIVAL
If any payment is conditioned upon a payee's survival, VALIC may ask
for proof that the payee is living. If proof is requested, payments will not be
made or considered due until VALIC receives proof.
7.05 ASSIGNMENT
The Participant's rights under the Contract cannot be sold, assigned,
discounted or pledged as collateral for a loan or as security for the
performance of an obligation. The Participant's vested rights under the
Contract are nonforfeitable and the Participant's rights under the Contract may
not be transferred to any person other than VALIC. Unless contrary to
applicable law, including federal tax law, the values under the Contract are
not subject to any creditor claims.
7.06 BENEFICIARY
The Annuitant may change any Beneficiary designation during the
Annuitant's life. An irrevocably named Beneficiary can be changed only with
that Beneficiary's written consent. Any new designation must be filed in
writing with VALIC at its Home Office. Upon receipt, the notice shall take
effect as of its signature date. It shall be subject to any action taken by
VALIC prior to receipt. An Annuitant's right to name or change a Beneficiary is
subject to any applicable tax laws and regulations.
Unless otherwise provided, proceeds will be distributed in accordance
with the following provisions. Two or more Beneficiaries living at the
Annuitant's death shall share the proceeds equally. If any or two or more
Beneficiaries die before the Annuitant, all proceeds shall be payable to any
surviving Beneficiary(ies). If no named Beneficiary is living at the
Annuitant's death, the proceeds shall be payable to the Annuitant's estate, If
the Beneficiary dies at the same time as the Annuitant, rights to the proceeds
shall be determined as though he or she died before the Annuitant. The
Beneficiary's death shall be deemed at the same time as the Annuitant's if it
occurs within 15 days of the Annuitant's death. VALIC may ask for proof of
survival from any person entitled to payment. If the Beneficiary dies while
receiving payments under the Second or Fifth Options, the value of remaining
payments, if any, shall be paid to the estate of said Beneficiary.
7.07 DEATH PAYMENT PROVISIONS
If a Participant dies before the Annuity Date, a death benefit is
payable. The death benefit is the greater of (a) the Accumulation Value on the
date VALIC receives proof of death or (b) 100% of Purchase Payments reduced by
amounts deducted in connection with any surrenders.
Proof of death may be made by sending VALIC a certified copy of the
death certificate, a certified copy of a decree of a court of competent
jurisdiction as to death, a written statement by an attending physician, or any
other proof satisfactory to VALIC.
The Beneficiary may elect within 60 days after it is payable to
receive the death payment as a lump sum or under an Annuity Option. The
Beneficiary will then be entitled to exercise the investment options and other
rights an Annuitant would have during the Annuity period, subject to the rules
below:
o Nonspouse Beneficiary -- Payments which start within 1 year of
death may be made for a period no longer than life expectancy.
Payments which do not start within 1 year of death must be
paid in full within 5 years of death.
o Spouse Beneficiary -- Payments may start at any time they
could have started to the Participant. If the spouse dies
before payments start, the Beneficiary will then be subject to
the rules above.
If an Annuitant dies after the Annuity Date, a death benefit may be
payable. The Beneficiary may elect within 60 days after it is payable to elect
one of the following alternatives unless the Annuitant elected the Fourth
Option:
(a) receive the death benefit in a lump sum;
(b) continue to receive annuity payments under the terms of the
Contract and receive remaining variable annuity payments in a
lump sum at any time thereafter; or
(c) elect to have the value of any annuity payments applied to the
Fifth Option on a fixed basis. The designated period chosen
may not be longer than the period remaining under the
Annuitant's option.
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If the Beneficiary elects (b) or (c) above, the Beneficiary is
entitled to exercise all the investment options and other rights under the
Contract. The lump sum under (a) and (b) is the present value of remaining
payments, discounted at the Assumed Investment Rate, and based on the current
Annuity Unit value for (a), or the value next determined after receipt of the
request at VALIC's Home Office for (b).
7.08 SUSPENSION OF PAYMENTS
VALIC reserves the right to suspend or postpone payments under the
Separate Account for any period when: (1) the New York Stock Exchange is closed
(other than customary weekend and holiday closings); (2) when trading on the
Exchange is restricted; (3) when an emergency prevents disposal of securities
held in the Separate Account or it is not reasonably practicable to determine
the value of the Separate Account'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. Securities and Exchange Commission rules shall
govern as to whether (2) and (3) exist.
7.09 MINIMUM BENEFIT
If amounts under the Participant Account are allocated to a Fixed
Subaccount, any paid up annuity, cash surrender or death payment available
shall not be less than the minimum benefits required by any statute of the
state in which the Contract is delivered.
7.10 REPORTS TO PARTICIPANTS
Participants with Variable Subaccount allocations and Annuitants with
Annuity Units will receive a Separate Account financial report twice a year.
This report, distributed pursuant to Section 30(d) of the Investment Company
Act of 1940, shows the number of Units and dollar value of a Unit for each
Division of the Separate Account as well as other comparative financial data.
All Participants will receive, at least annually, a statement showing
dollar amounts attributable to all his or her subaccounts, investment
performance in those subaccounts since the prior statement, and where
applicable, the number and value of any Units or Annuity Units attributable to
a subaccount. All statements will be mailed by VALIC within two months of the
date of the information contained therein.
7.11 VOTING RIGHTS
The Separate Account will vote Fund shares held in a Division which
correspond to this Contract's interest in such Divisions, in accordance with
instructions received from the Contract Owner. The Contract Owner shall
instruct the Separate Account to vote in accordance with instructions received
from the individuals having voting rights. If a Participant participates in the
investment experience of the Separate Account, the Participant will have the
voting rights under the Contract before: (a) total withdrawal; (b) the Annuity
Date, or (c) the Participant's death, whichever occurs first. If after the
Annuity Date the payee participates in the investment experience of the
Separate Account, the payee(s) shall have the voting rights.
7.12 SUBSTITUTION OF FUND SHARES
If Fund shares are not available, or if, in the judgment of VALIC,
such shares are no longer appropriate in view of the purposes of the Separate
Account, shares of another open-end investment company or a portfolio of same
may be substituted for Fund shares held in the Separate Account or to be
purchased by future Purchase Payments or transfers under this Contract. In the
event any substitution occurs, VALIC will notify the Contract Owner within five
days and will issue an endorsement to the Contract reflecting such changes.
7.13 SEPARATE ACCOUNT
That portion of the Separate Account assets equal to the reserves and
other contract liabilities with respect to the Separate Account are not
chargeable with liabilities arising out of any other business VALIC may
conduct. Income, gains, and losses, whether or not realized, from assets
allocable to the Separate Account, are credited to or charged against such
account without regard to VALIC's other income, gains, or losses.
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