EQUITABLE LIFE INSURANCE
COMPANY OF IOWA 403(b) RIDER
A Stock Company Domiciled in Iowa
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The following language amends and takes precedence over contrary language in the
Contract to which it is attached. The Effective Date of this Rider shall be the
later of January 1, 2002, or the Contract Date.
On the basis of the application for which this Contract is issued and to which
this Rider is attached, the Contract is intended to qualify under Section 403(b)
of the Internal Revenue Code. In the event of any conflict between the
provisions of this Rider and the Contract, the provisions of this Rider will
control.
1. All references in this Rider to:
(a) "IRC" means the Internal Revenue Code of 1986, as amended from
time to time.
(b) "Contract" means the Contract or Certificate to which this Rider
is attached.
(c) "Employee or Owner" means the Owner of the Contract to which this
Rider is attached.
(d) "Designated Beneficiary" means the beneficiary named by the Owner
in the Contract.
(e) "We", "our", and "us" means Equitable Life Insurance Company of
Iowa.
2. This Contract is nontransferable. Other than to us, it may not be sold,
assigned, discounted or pledged as collateral for a loan or as security for
the performance of an obligation or for any other purpose.
3. This Contract is valid only if it is purchased:
(a) for an Employee by an employer as described in IRC Section
501(c)(3) which is exempt from income tax under IRC Section
501(a); or
(b) for an Employee who performs services for an educational
organization described in IRC Section 170(b)(1)(A)(ii), by an
employer which is a state, a political subdivision of a state, or
an agency or instrumentality of a state or political subdivision
thereof; or
(c) by an individual in a rollover as permitted by IRC Sections
402(c)(1), 403(b)(8), 403(b)(10) and 408(d)(3); or
(d) by an individual in a direct transfer meeting the requirements of
Internal Revenue Service Rev. Rul. 90-24.
4. The premium payments applicable to this contract must be attributable to
the Employee's salary reduction agreement, or to permitted employer
contributions, except in the case of a rollover contribution or direct
transfer. The premium payments must be in cash. Except as provided in
Paragraph 5 below, the total of applicable premium payments made pursuant
to a salary reduction agreement for any tax year shall not exceed the
lesser of:
(a) $11,000 (or such higher amount as may be permitted under IRC
Section 402(g)(1) in effect for such tax year, except to the
extent of any alternative limitation permitted under IRC Section
402(g)(7)); or
(b) the applicable limit described in IRC Section 415.
Except as provided in Paragraph 5 below or in the case of a rollover
contribution or direct transfer, total premium payments in any tax year,
whether attributable to the Employee's salary reduction agreement, or to
permitted employer contributions, shall not exceed the applicable limit
described in IRC Section 415.
In addition, premium payments under this Contract may not exceed those
permitted under the incidental death benefit rules of Treasury Regulations
Section 1.401-1(b)(1)(i), as interpreted by applicable Revenue Rulings.
Accordingly, in no event shall the aggregate amount of premiums under this
Contract, at any time, exceed fifty percent (50%) of the aggregate amount
of the cumulative
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employer contributions (including salary reduction contributions) allocated
to the Employee under the tax sheltered annuity program with respect to
which this Contract is purchased.
We reserve the right to refund premiums when necessary to comply with the
foregoing limits.
5. An Employee who is eligible to make contributions to this Contract pursuant
to a salary reduction agreement for any year and who has attained age 50
before the close of the year shall be eligible to make catch-up
contributions in accordance with, and subject to the limitations of, IRC
Section 414(v). Such catch-up contributions shall not be taken into account
for purposes of the provisions of the Contract implementing the required
limitations of IRC Sections 402(g), 403(b) and 415. The Contract shall not
be treated as failing to satisfy the requirements of IRC Section 403(b)(12)
by reason of the making of such catch-up contributions.
6. To the extent attributable to contributions made pursuant to salary
reduction agreements, distribution of the assets of this Contract may not
be made before the Owner:
(a) attains age 59 1/2;
(b) has a severance from employment;
(c) dies;
(d) becomes disabled; or
(e) incurs a financial hardship (limited to contributions only, not
earnings).
The above restrictions do not apply with respect to that portion of the
value of the Contract that is equal to the value of the Contract as of
December 31, 1988.
7. (a) Notwithstanding any provision of this Contract to the
contrary, the distribution of the Owner's interest in the
Contract shall be made in accordance with the requirements of IRC
Sections 403(b)(10) and 401(a)(9) and the regulations there
under, the provisions of which are herein incorporated by
reference, including Section 1.403(b)-3 of the Income Tax
Regulations. The portion of this Contract that is equal to the
undistributed value of the Contract as of December 31, 1986,
shall be distributed in accordance with the incidental benefit
requirements described in Q&A-3 of Section 1.403(b)-3 of the
Income Tax Regulations. The required minimum distributions for
this Contract may be withdrawn from another IRC 403(b) contract
of the Owner in accordance with Q&A-4 of Section 1.403(b)-3 of
the Income Tax Regulations.
(b) If distributions are made in the form of an annuity on an
irrevocable basis (except for acceleration), then distributions
must satisfy the requirements of Q&A-4 of Section 1.401(a)(9)-6T
of the Temporary Income Tax Regulations, rather than Paragraphs
7(c), 7(d), 7(e), and 8 below.
(c) The Owner's entire interest in the Contract will commence to be
distributed no later than the Owner's "required beginning date."
The Owner's "required beginning date" will be the first day of
April following the later of: (i) the calendar year in which the
Owner attains age 70 1/2, or (ii) the calendar year in which the
Owner retires from employment with the employer maintaining the
plan applicable to this Contract. The Owner's "first distribution
calendar year" will be the calendar year immediately preceding
the Owner's required beginning date.
(d) The amount to be distributed each year, beginning with the
Owner's first distribution calendar year and continuing through
the year of death, shall not be less than the quotient obtained
by dividing the value of the Contract as of the end of the
preceding year by the distribution period in the Uniform Lifetime
Table in Q&A-2 of Section 1.401(a)(9)-9 of the Income Tax
Regulations, using the Owner's age as of his or her birthday in
the year. However, if the Owner's sole designated beneficiary is
his or her spouse and such spouse is more than 10 years younger
than the Owner, then the distribution period is determined under
the Joint and Last Survivor Table in Q&A-3 of Section
1.401(a)(9)-9 of the Income Tax Regulations, using the ages as of
the Owner's and spouse's birthdays in the year.
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(e) The required minimum distribution for the first distribution
calendar year can be made as late as the Owner's required
beginning date. The required minimum distribution for any other
year must be made by the end of such year.
8. (a) Death On or After Required Distributions Commence. If the Owner
dies on or after the required beginning date, the remaining portion of his
or her interest will be distributed at least as rapidly as follows:
(i) If the designated beneficiary is someone other than the
Owner's surviving spouse, the remaining interest will be
distributed over the remaining life expectancy of the
designated beneficiary, with such life expectancy determined
using the age of the beneficiary as of his or her birthday
in the year following the year of the Owner's death, or over
the period described in Paragraph 8(a)(iii) if longer.
(ii) If the Owner's sole designated beneficiary is the Owner's
surviving spouse, the remaining interest will be distributed
over such spouse's life or over the period described in
Paragraph 8(a)(iii) if longer. Any interest remaining after
such spouse's death will be distributed over such spouse's
remaining life expectancy determined using the spouse's age
as of his or her birthday in the year of the spouse's death,
or, if the distributions are being made over the period
described in Paragraph 8(a)(iii), over such period.
(iii)If there is no designated beneficiary, or if applicable by
operation of Paragraph 8(a)(i) or 8(a)(ii), the remaining
interest will be distributed over the Owner's remaining life
expectancy determined in the year of the Owner's death.
(iv) The amount to be distributed each year under Paragraph
8(a)(i), 8(a)(ii) or 8(a)(iii), beginning with the calendar
year following the calendar year of the Owner's death, is
the quotient obtained by dividing the value of the Contract
as of the end of the preceding year by the remaining life
expectancy specified in such paragraph. Life expectancy is
determined using the Single Life Table in Q&A-1 of Section
1.401(a)(9)-9 of the Income Tax Regulations. If
distributions are being made to a surviving spouse as the
sole designated beneficiary, such spouse's remaining life
expectancy for a year is the number in the Single Life Table
corresponding to such spouse's age in the year. In all other
cases, remaining life expectancy for a year is the number in
the Single Life Table corresponding to the beneficiary's or
Owner's age, as the case may be, in the year specified in
Paragraph 8(a)(i), 8(a)(ii) or 8(a)(iii) and reduced by 1
for each subsequent year.
(b) Death Before Required Beginning Date. If the Owner dies before
the required beginning date, his or her entire interest will be
distributed at least as rapidly as follows:
(i) If the designated beneficiary is someone other than the
Owner's surviving spouse, the entire interest will be
distributed, starting by the end of the calendar year
following the calendar year of the Owner's death, over the
remaining life expectancy of the designated beneficiary,
with such life expectancy determined using the age of the
beneficiary as of his or her birthday in the year following
the year of the Owner's death, or, if elected, in accordance
with Paragraph 8(b)(iii).
(ii) If the Owner's sole designated beneficiary is the Owner's
surviving spouse, the entire interest will be distributed,
starting by the end of the calendar year following the
calendar year of the Owner's death (or by the end of the
calendar year in which the Owner would have attained age 70
1/2, if later), over such spouse's life, or, if elected, in
accordance with Paragraph 8(b)(iii). If the surviving spouse
dies before distributions are required to begin, the
remaining interest will be distributed, starting by the end
of the Calendar year following the calendar year of the
spouse's death, over the spouse's designated beneficiary's
remaining life expectancy determined using such
beneficiary's age as of his or her birthday in the year
following the death of the spouse, or, if elected, will be
distributed in accordance with Paragraph 8(b)(iii). If the
surviving spouse dies after the distributions are required
to begin, any remaining interest will continue to be
distributed over the spouse's remaining life expectancy
determined using the spouse's age as of his or her birthday
in the year of the spouse's death.
(iii)If there is no designated beneficiary, or if applicable by
operation of Paragraph 8(b)(i) or 8(b)(ii), the entire
interest will be distributed by the end of the calendar year
containing the fifth anniversary of the Owner's death (or of
the spouse's death in the case of the surviving spouse's
death before distributions are required to begin under
Paragraph 8(b)(ii)).
(iv) The amount to be distributed each year under Paragraph
8(b)(i) or 8(b)(ii) is the quotient obtained by dividing the
value of the Contract as of the end of the preceding year by
the remaining life expectancy specified in such paragraph.
Life expectancy is determined using the Single Life Table in
Q&A-1 of Section 1.401(a)(9)-9 of the Income Tax
Regulations. If distributions are being made to a surviving
spouse as the sole designated beneficiary, such spouse's
remaining life expectancy for a year is the number in the
Single Life Table corresponding to such spouse's age in the
year. In all other cases, remaining life expectancy for a
year is the number in the Single Life Table corresponding to
the beneficiary's age in the year specified in Paragraph
8(b)(i) or 8(b)(ii) and reduced by 1 for each subsequent
year.
(c) The "value" of the Contract includes the amount of any
outstanding rollover and transfer under Q&As-7 and -8 of Section
1.408-8 of the Income Tax Regulations.
9. Notwithstanding any provision of this Contract to the contrary that would
otherwise limit an Owner's election under this Contract, an Owner may
elect, at any time and in the manner prescribed by us, to have any portion
of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Owner in a Direct Rollover.
For the purpose of this paragraph, the following definitions apply:
(a) ELIGIBLE ROLLOVER DISTRIBUTION is any distribution of all or any
portion of the assets of the Contract, not including:
(i) any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Owner or the
joint lives (or joint life expectances) of the Owner and the
Owner's designated beneficiary, or for a specified period of
ten years or more;
(ii) any distribution to the extent such distribution is required
under IRC Sections 401(a)(9) or 403(b)(10); and
(iii) any amount that is distributed on account of hardship.
In addition, the portion of any distribution that is not
includible in the gross income of the Owner may be considered
part of an Eligible Rollover Distribution; provided, however,
such portion may be transferred only to an individual
retirement account or annuity described in IRC Section 408(a)
or (b), or to another annuity described in Section 403(b) that
agrees to separately account for amounts so transferred,
including separately accounting for the portion of such
distribution which is includible in gross income and the
portion of such distribution which is not so includible.
(b) ELIGIBLE RETIREMENT PLAN IS:
(i) an annuity described in IRC Section 403(b);
(ii) an individual retirement account described in IRC Section 408(a);
(iii)an individual retirement annuity described in IRC Section
408(b);
(iv) an employee's qualified trust described in IRC Section 401(a)
which is exempt from tax under IRC Section 501(a);
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(v) an annuity plan described in IRC Section 403(a); or
(vi) an eligible deferred compensation plan under IRC Section 457(b)
which is maintained by a state, political subdivision of a state,
or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for
amounts transferred into such plan from this Contract.
(c) DIRECT ROLLOVER is a payment by us to the Eligible Retirement Plan
specified by the Owner.
(d) Owner, for the purposes of this paragraph, includes the Owner's
surviving spouse and the Owner's spouse or former spouse who is an
alternate payee under a qualified domestic relations order, as defined
in IRC Section 414(p).
10. This Contract shall be for the exclusive benefit of the Owner or his or her
beneficiary. The Owner's rights under this Contract will be
non-forfeitable.
11. We reserve the right to amend or administer the Contract and Rider as
necessary to comply with the provisions of the IRC, Internal Revenue
Service Regulations or published Internal Revenue Service Rulings. We will
send a copy of such amendment to the Owner. It will be mailed to the last
post office address known to us. Any such changes will apply uniformly to
all Policies that are affected and the Owner will have the right to accept
or reject such changes.
12. Except in the case of a Contract purchased by a church, no premium payments
applicable to this Contract can be made unless all employees of the
employer may elect to have the employer make contributions of more than
$200 under a salary reduction agreement. For purposes of this paragraph any
Employee who is a participant in (a), (b) or (c) below may be excluded.
(a) an eligible deferred compensation plan under IRC Section 457(b);
(b) a qualified cash or deferred arrangement; or
(c) another IRC Section 403(b) annuity.
In addition, any non-resident aliens and students who normally work less
than twenty (20) hours per week may be excluded.
13. The Annuitant may make a cash loan using the value of the Contract as
security for the loan subject to the limits and conditions stated below and
the limits defined under IRC regulations.
(a) The loan must be taken prior to the Maturity Date;
(b) The Annuitant must complete an application, on a form acceptable to
us, for each loan;
(c) A loan must be for a minimum of $1000.00;
(d) The Annuitant has not attained age 70 1/2;
(e) The Annuitant may not have more than 2 loans outstanding on the
Contract at any time;
(f) We may charge a fee for each loan, such fee not to exceed $75.00;
(g) No loan value is available prior to the end of the Right to Examine
Contract provision; and
(h) Loans are not available on Contracts under ERISA plans.
We may, at our discretion, waive in whole or in part any of the above stated
limits or conditions, subject to IRC requirements. Any such waiver will be
applied to all Contracts having the same Contract Issue Date on a uniform basis.
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Loan Security
A portion of the Contract Value will be transferred to the Fixed Account as
security for a loan. Unless directed otherwise by the Annuitant, such amount
will be transferred from the Contract's Subaccounts on a prorata basis, based on
the Annuitant's investments in the Subaccounts at the time of the loan. Should
the Contract Value in the Subaccounts be less than the amount of the loan, the
remaining security balance will be taken from the amounts then allocated to the
Fixed Account, using oldest Purchase Payments and earnings thereon first. The
amount of the Contract Value held in the Fixed Account as security for loans
will equal the total loan balance when a loan is taken. Periodically, the amount
held in the Fixed Account as security for the loan is readjusted to equal the
then current loan balance. Total loan balance includes accrued interest on the
loan amount.
Loan Interest
We charge loan interest on the outstanding loan balance at 6% interest in
arrears. Interest not paid when due shall be added to the loan balance. Interest
on the loan is included with each repayment. If the Contract terminates,
interest will be due based on the interest accrued to date.
The portion of the Contract Value which is security for the loans may earn less
interest than is credited to the unloaned portion. Interest credited to the
Fixed Account will not be less than 3%.
Loan Repayment
Loans shall be repaid in substantially equal payments over a period not to
exceed 5 years. If a loan is used to purchase the Annuitant's principal
residence, the Annuitant may take up to a maximum of 30 years to repay the loan.
We may, by rule, limit the repayment term to a period of years less than the
maximum number of years. The loan period may not extend beyond the Maturity
Date. Xxxxxxx transferred that were securing a loan in the Fixed Account as a
result of loan repayments will be allocated prorata to the Annuitant's current
allocation among the Subaccounts. Should there be no current allocations to a
Subaccount, such repayment will be allocated to the Liquid Asset Division.
At the end of each calendar quarter we will check loan repayments. If at that
time the cumulative loan repayments are less than the cumulative repayments
scheduled to be paid up to that due date, and if the difference is greater than
repayments scheduled in such quarter, then the loan will default. In the event
of default:
(a) The entire balance of the loan will be treated as a distribution; and
(b) The value of the Contract will be reduced by the loan balance, to the
extent permitted by law.
In the event such a distribution is prohibited, we will treat the loan balance
as permitted by federal tax law. Any surrender charges will apply.
Any outstanding loan balance, whether or not in default, will be deducted from
the amount under the Contract payable upon death of the Annuitant, or surrender.
Effect Of Loans On Withdrawals Under The Contract
(a) Partial withdrawals based on a percentage of the Contract Value without
surrender charge will be based on the Contract Value minus any outstanding
loans at the time of withdrawal.
(b) Partial withdrawals without surrender charge based on earnings will have
earnings eligible for withdrawal reduced by any outstanding loans at time
of withdrawal.
(c) Systematic withdrawal limits based on a percent of the Contract Value will
be based on the Contract Value minus outstanding loans.
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The maximum withdrawal amount available will be based on cash surrender value
less loan balance on the date of withdrawal. Any test to determine whether an
administrative fee is due will use the Contract Value net of outstanding loan.
If at any time, the loan balance equals or exceeds the cash surrender value, the
Contract may terminate without value. The Contract's cash surrender value will
be used to repay the loan balance. The Contract is assigned to us as security
for any loan. Our interest is superior to the claim of any assignee or other
person.
SIGNED FOR EQUITABLE LIFE INSURANCE COMPANY OF IOWA:
President
/s/Xxxxx Xxxxxx
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