As filed with the Securities and Exchange Registration No. 333-01107*
Commission on February 16, 2000 Registration No. 811-2513
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
- --------------------------------------------------------------------------------
Post-Effective Amendment No. 19 To
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and Amendment to
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
- --------------------------------------------------------------------------------
Variable Annuity Account C of Aetna Life Insurance and Annuity Company
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, TS31, Hartford, Connecticut 06156
Depositor's Telephone Number, including Area Code: (860) 273-4686
Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, TS31, Hartford, Connecticut 06156
(Name and Address of Agent for Service)
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It is proposed that this filing will become effective:
60 days after filing pursuant to paragraph (a)(1) of Rule 485
--------
X on May 1, 2000 pursuant to paragraph (a)(1) of Rule 485
--------
*Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has
included a combined prospectus under this Registration Statement which includes
all the information which would currently be required in a prospectus relating
to the securities covered by the following earlier Registration Statements:
33-88720; 33-75964 (which had included a combined prospectus for earlier
Registration Statements: 33-75958, 33-75960, and 33-75994); 33-75986 (which had
included a combined prospectus for earlier Registration Statements: 33-75970,
33-75954, and 33-75956); 33-75982 (which had included a combined prospectus for
earlier Registration Statements: 33-75968, 33-75966, 33-75990, and the
individual deferred compensation contracts covered by Registration Statement No.
33-75992); and 33-91846 (which had included a combined prospectus for earlier
Registration Statement: 33-75976).
<PAGE>
VARIABLE ANNUITY ACCOUNT C
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
FORM N-4 LOCATION - PROSPECTUS DATED
ITEM NO. PART A (PROSPECTUS) MAY 1, 2000
<S> <C> <C>
1 Cover Page........................................ Cover Page
2 Definitions....................................... Not Applicable
3 Synopsis.......................................... Contract Overview; Fee Tables
4 Condensed Financial Information................... Condensed Financial Information; Appendix VI -
Condensed Financial Information
5 General Description of Registrant, Depositor, and
Portfolio Companies............................... Other Topics - The Company, Variable Annuity Account
C; Appendix V - Fund Descriptions
6 Deductions and Expenses........................... Fees
7 General Description of Variable
Annuity Contracts................................. Contract Overview; Other Topics
8 Annuity Period.................................... The Income Phase
9 Death Benefit..................................... Death Benefit
10 Purchases and Contract Value...................... Contract Purchase and Participation; Your Account
Value
11 Redemptions....................................... Right to Cancel; Withdrawals; Systematic Distribution
Options
12 Taxes............................................. Taxation
13 Legal Proceedings................................. Other Topics - Legal Matters and Proceedings
14 Table of Contents of the Statement of Additional
Information....................................... Statement of Additional Information - Table of
Contents
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FORM N-4 PART B (STATEMENT OF LOCATION - STATEMENT OF ADDITIONAL INFORMATION
ITEM NO. ADDITIONAL INFORMATION) DATED MAY 1, 2000
<S> <C> <C>
15 Cover Page........................................... Cover page
16 Table of Contents.................................... Table of Contents
17 General Information and History...................... General Information and History
18 Services............................................. General Information and History; Independent
Auditors
19 Purchase of Securities Being Offered................. Offering and Purchase of Contracts
20 Underwriters......................................... Offering and Purchase of Contracts
21 Calculation of Performance Data...................... Performance Data; Average Annual Total Return
Quotations
22 Annuity Payments..................................... Income Phase Payments
23 Financial Statements................................. Financial Statements
</TABLE>
Part C (Other Information)
--------------------------
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.
<PAGE>
VARIABLE ANNUITY ACCOUNT C
May 1, 2000 Supplement to May 1, 2000 Prospectus or Contract Prospectus Summary
Minnesota State Colleges and Universities Voluntary 403(b) Tax-Deferred Annuity
Your plan is administered in part by a third party. Such arrangements are
mentioned under the heading "Third Party Compensation Arrangements" in the
"Other Topics" section in the prospectus and the Contract Prospectus Summary.
In your case, Norwest Bank Minnesota is responsible for handling a portion of
administration and service for the contract in which you participate. In
exchange for the services provided, we compensate Norwest Bank Minnesota an
amount equal to 0.25% of the assets related to the plan on an annual basis
(0.0625% is paid quarterly). This is not an additional charge to you, but is
part of the charges for the contract.
Form No. XCS.01107-00MN May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
May 1, 2000 Supplement to May 1, 2000 Prospectus or Contract Prospectus Summary
St. John's Regional Health Center
The following is a negotiated provision concerning the early withdrawal charge
applicable to the Suburban Hospital tax-deferred annuity plan. (See "Fees--Early
Withdrawal Charge" in the prospectus or the Contract Prospectus Summary):
You may withdraw up to 10% of your current account each year without incurring
an early withdrawal charge. This applies only to the first partial withdrawal in
each calendar year. The amount eligible will be determined using the account
value on the date we receive the withdrawal request. This provision is available
to anyone up to age 70-1/2 (instead of between the ages of 59-1/2 and 70-1/2).
Outstanding loan amounts on 403(b) accounts are not included in the account
value for the purpose of calculating the eligible partial withdrawal. This
provision does not apply to full withdrawals or to partial withdrawals due to
loan default.
Form No. XCS.01107-00SJ May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
May 1, 2000 Supplement to May 1, 2000 Prospectus or Contract Prospectus Summary
Pennsylvania State Association of Boroughs (the "Association")
Under a signed agreement, the Association endorses our variable annuity for sale
to its employees under the group's Deferred Compensation Plan. We have agreed to
compensate the Association $3.50 per year for each participant for which
contributions are made under the contract. (See "Other Topics--Third Party
Compensation Arrangements" in the prospectus or the Contract Prospectus
Summary).
Form No. XCS.01107-PA00 May 2000
<PAGE>
Prospectus - May 1, 2000
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The Funds
Aetna Ascent VP
Aetna Balanced VP, Inc.
Aetna Income Shares d/b/a Aetna Bond VP
Aetna Crossroads VP
Aetna Growth VP
Aetna Variable Fund d/b/a Aetna Growth and Income VP
Aetna High Yield VP(1)
Aetna Index Plus Large Cap VP
Aetna Index Plus Mid Cap VP
Aetna Index Plus Small Cap VP
Aetna International VP
Aetna Legacy VP
Aetna Variable Encore Fund d/b/a Aetna Money Market VP
Aetna Real Estate Securities VP(1)
Aetna Small Company VP
Aetna Technology VP
Aetna Value Opportunity VP
AIM V.I. Capital Appreciation Fund
AIM V.I. Growth Fund
AIM V.I. Growth and Income Fund
AIM V.I. Value Fund
Calvert Social Balanced Portfolio
DEM Equity Fund (Institutional Shares)(2)
Fidelity Variable Insurance Products Fund (VIP) Equity-Income Portfolio
Fidelity Variable Insurance Products Fund (VIP) Growth Portfolio
Fidelity Variable Insurance Products Fund (VIP) Overseas Portfolio
Fidelity Variable Insurance Products Fund II (VIP II) Contrafund Portfolio
Janus Twenty Fund(2)
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Flexible Income Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Lexington Natural Resources Trust(3)
Oppenheimer Global Securities Fund/VA
Oppenheimer Strategic Bond Fund/VA
Portfolio Partners, Inc. (PPI) MFS Capital Opportunities Portfolio (formerly
known as PPI MFS Value Equity Portfolio)
Portfolio Partners, Inc. (PPI) MFS Emerging Equities Portfolio
Portfolio Partners, Inc. (PPI) MFS Research Growth Portfolio
Portfolio Partners, Inc. (PPI) Scudder International Growth Portfolio
Portfolio Partners, Inc. (PPI) T. Rowe Price Growth Equity Portfolio
The Contracts. The contracts described in this prospectus are group or
individual deferred variable annuity contracts issued by Aetna Life Insurance
and Annuity Company (the Company). They are intended to be used as funding
vehicles for certain types of retirement plans and to qualify for beneficial
tax treatment and/or to provide current income reduction under certain sections
of the Internal Revenue Code of 1986, as amended (Tax Code).
- --------------------------------------------------------------------------------
Why reading this Prospectus is Important. Before you participate in the
contract through your retirement plan, you should read this prospectus. It
provides facts about the contract and its investment options. Plan sponsors
(generally your employer or a trust) should read this prospectus to help
determine if the contract is appropriate for their plan. Keep this document for
future reference.
Table of Contents . . . . page 4
- --------------------------------------------------------------------------------
Investment Options. The contracts offer variable investment options and fixed
interest options. When we establish your account(s), the contract holder, or
you if permitted by the plan, instructs us to direct account dollars to any of
the available options. Some investment options may be unavailable through
certain contracts and plans, or in some states.
Variable Investment Options. These options are called subaccounts. The
subaccounts are within Variable Annuity Account C (the separate account), a
separate account of the Company. Each subaccount invests in one of the mutual
funds (funds) listed on this page. Earnings on amounts invested in a subaccount
will vary depending upon the performance and fees of its underlying fund. You
do not invest directly in or hold shares of the funds.
Risks Associated with Investing in the Funds. Information about the risks of
investing in the funds is located in the "Investment Option" section of this
prospectus at page 11 and in each fund prospectus. Read this prospectus in
conjunction with the fund prospectus, and retain the prospectus for future
reference.
Getting Additional Information. You may obtain the May 1, 2000, Statement of
Additional Information (SAI) by indicating your request on your enrollment
materials or calling the Company at 1-800-262-3862. You may also obtain an SAI
for any of the funds by calling that number. This prospectus, the SAI and other
information about the separate account are posted on the Securities and
Exchange Commission (SEC) web site, www.sec.gov and may also be obtained, free
of charge, by contacting the SEC Public Reference Room at 202-942-8090. The SAI
table of contents is listed on page 47 of this prospectus. The SAI is
incorporated into this prospectus by reference.
- -------------------------
(1) Effective July 15, 2000, transfers or deposits are not allowed into the
subaccount investing in this fund except from customers with outstanding
instructions (e.g., payroll deduction allocations, dollar cost averaging)
in effect prior to this date. See "Important Information Regarding Aetna
High Yield VP and Aetna Real Estate Securities VP Subaccounts".
(2) This fund is available to the general public. See "Additional Risks of
Investing in the Funds."
(3) Transfers or deposits are not allowed into the subaccount investing in this
fund, except from accounts established under the contract before May 1,
1998. As soon as all those who have current allocations to the subaccount
under the contract have redirected their allocations to other investment
options, we will close the subaccount to all investments (except loan
repayments that we automatically deposit into the subaccount according to
our loan repayment procedures).
<PAGE>
Prospectus - May 1, 2000 (continued)
- --------------------------------------------------------------------------------
Additional Disclosure Information. Neither the SEC, nor any state securities
commission, has approved or disapproved the securities offered through this
prospectus or passed on the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense. This prospectus is valid
only when accompanied by current prospectuses of the funds and the Guaranteed
Accumulation Account. We do not intend for this prospectus to be an offer to
sell or a solicitation of an offer to buy these securities in any state that
does not permit their sale. We have not authorized anyone to provide you with
information that is different from that contained in this prospectus.
Fixed Interest Options.
> Guaranteed Accumulation Account
> Fixed Plus Account
> Fixed Account
Except as specifically mentioned, this prospectus describes only the variable
investment options. However, we describe the fixed interest options in the
appendices to this prospectus. There is also a separate prospectus for the
Guaranteed Accumulation Account.
Important Information Regarding Aetna High Yield VP and Aetna Real Estate
Securities VP Subaccounts
Subaccounts to be Closed to New Investments
Effective July 15, 2000, the Aetna High Yield VP and Aetna Real Estate
Securities VP subaccounts will no longer be available for new investment. After
that date, the Company will only accept deposits into those subaccounts that
are made pursuant to standing customer instructions (e.g. payroll deduction
allocations, dollar cost averaging, etc.) in effect before the close of
business on July 14, 2000.
Fund Shares to be Substituted with Shares of Aetna Money Market VP.
Plan of Substitution. On or about October 1, 2000, subject to applicable
regulatory approvals and the requisite vote of shareholders of the applicable
fund, all existing balances in Aetna High Yield VP and Aetna Real Estate
Securities VP will be invested in (substituted with) shares of Aetna Money
Market VP. Contract owners or participants will not incur any fees or charges
as a result of the substitution. In addition, on and after October 1, 2000, all
investment allocations then being directed to the Aetna High Yield VP and Aetna
Real Estate Securities VP subaccounts will be redirected to the Aetna Money
Market VP subaccount. The Company believes that the substitution will not
create any tax liability for contract owners or participants.
Transfer Rights. At any time prior to the date of substitution, contract owners
or participants may transfer their accumulation values from the subaccounts
investing in substituted funds into any other investment options available under
the contract, and no transfer fees or other charges will be imposed. From and
after the
<PAGE>
Prospectus - May 1, 2000 (continued)
- --------------------------------------------------------------------------------
date of substitution, contract owners or participants who had values transferred
from a subaccount as a result of a substitution may transfer among any of the
remaining investment options in accordance with the terms of the contract, also
free of any transfer fees and charges.
Surrender Rights. If a contract owner or participant whose shares are
substituted elects to make a surrender under the contract (if permitted by the
plan and applicable tax law) within 30 days after the date of the substitution,
the Company will waive any early withdrawal charge on amounts transferred as a
result of the substitution. This offer to waive the early withdrawal charge
will not apply to amounts transferred after February 16, 2000 from the other
investment options to the Aetna High Yield VP or Aetna Real Estate Securities
VP subaccounts. A contract owner or participant who exercises this surrender
right may incur income tax liability and a tax penalty. See the "Taxation"
section of this prospectus for a discussion of tax consequences resulting from
surrender. Contract owners or participants should seek qualified tax advice
before exercising their surrender rights.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Contract Overview ............................................ 5
The Contract and Your Retirement Plan (sidebar)
Retirement Plan (sidebar)
Plan Type (sidebar)
Contract Rights (sidebar)
Who's Who
Contract Facts
Contract Phases: Accumulation Phase, The Income Phase ........ 6
Questions: Contacting the Company (sidebar)
Sending forms and written requests in good order (sidebar)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Fee Table ..................................................... 7
Condensed Financial Information ............................... 11
Investment Options ............................................ 11
Transfers ..................................................... 13
Contract Purchase and Participation ........................... 14
Contract Ownership and Rights ................................. 15
Right to Cancel ............................................... 16
Fees .......................................................... 17
Your Account Value ............................................ 23
Withdrawals ................................................... 25
Loans ......................................................... 27
Systematic Distribution Options ............................... 27
Death Benefit ................................................. 28
The Income Phase .............................................. 30
Taxation ...................................................... 34
Other Topics .................................................. 41
</TABLE>
The Company - Variable Annuity Account C - Performance Reporting - Voting
Rights - Contract Distribution - Contract Modification - Legal Matters and
Proceedings - Payment Delay or Suspension - Transfer of Ownership; Assignment -
Account Termination
<TABLE>
<S> <C>
Contents of the Statement of Additional Information ........... 47
Appendix I - Guaranteed Accumulation Account .................. 48
Appendix II - Fixed Account ................................... 50
Appendix III - Fixed Plus Account ............................. 52
Appendix IV - Employee Appointment of Employer as
Agent Under an Annuity Contract ....... ....................... 56
Appendix V - Fund Descriptions ................................ 57
Appendix VI - Condensed Financial Information ................. 60
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
The Contract and Your Retirement Plan
Retirement Plan (plan): A plan sponsor has established a plan for you. This
contract is offered as a funding option for that plan. We are not a party to
the plan.
Plan Type: We refer to the plan by the Tax Code section under which it
qualifies. For example: a "457 plan" is a plan that qualifies for tax treatment
under code section 457. To learn which code section applies to your plan,
contact your plan sponsor, your Aetna representative or the Company.
Contract Rights: Rights under the contract and who may exercise those rights,
may vary by plan type. Also, while the contract may reserve certain rights for
the contract holder, the contract holder may permit you to exercise those
rights through the plan.
- --------------------------------------------------------------------------------
Contract Overview
- --------------------------------------------------------------------------------
The following is a summary. Please read each section of this prospectus for
additional information.
- --------------------------------------------------------------------------------
Who's Who
- --------------------------------------------------------------------------------
You (the participant)*: The individual who participates in the contract through
a retirement plan.
Plan Sponsor: The sponsor of your retirement plan. Generally, your employer or
a trust.
Contract Holder*: The person to whom we issue the contract. Generally, the plan
sponsor.
We (the Company): Aetna Life Insurance and Annuity Company. We issue the
contract.
For greater detail please review "Contract Ownership and Rights" and "Contract
Purchase and Participation."
- -------------------------
* Certain contracts are purchased by and issued directly to persons
participating in certain plans. The words "you" and "participant" apply to
these individuals, except that these individuals have all rights under the
contract. The word "contract holder" also applies to these individuals,
except that these individuals have no responsibilities to other participants
or beneficiaries.
- --------------------------------------------------------------------------------
Contract Facts
- --------------------------------------------------------------------------------
Free Look/Right to Cancel: Contract holders may cancel the contract no later
than 10 days after they receive the contract. Participants in 403(b) plans or
in some plans under 401(a)/401(k) or 403(a) may cancel their participation in
the contract no later than 10 days after they receive evidence of participation
in the contract. See "Right to Cancel."
Death Benefit: A beneficiary may receive a benefit in the event of your death
prior to the income phase. Death benefits during the income phase depend upon
the payment option selected. See "Death Benefit" and "The Income Phase."
Withdrawals: During the accumulation phase, you may, under some plans, withdraw
all or part of your account value. Amounts withdrawn may be subject to an early
withdrawal charge, other deductions, tax withholding and taxation. See
"Withdrawals" and "Taxation."
Systematic Distribution Options: These allow you to receive regular payments
from your account, while retaining the account in the accumulation phase. See
"Systematic Distribution Options."
Fees: Certain fees are deducted from your account value. See "Fee Table" and
"Fees."
Taxation: You will not generally pay taxes on any earnings from the annuity
contract described in this prospectus until they are withdrawn (or in the case
of a 457 plan, paid or made available to you or a beneficiary). Tax-qualified
retirement arrangements (e.g. 401(a), 401(k) 403(a), 403(b) or 457 plans) also
defer payment of taxes on earnings until they are withdrawn (or in the case of
a 457 plan, paid or made available to you or a beneficiary). When an annuity
contract is used to fund a tax-qualified retirement arrangement, you should
know that the annuity contract does not provide any additional tax deferral of
earnings beyond the tax deferral provided by the tax-qualified retirement
arrangement. However, annuities do provide other features and benefits which
may be valuable to you. You should discuss your alternatives with your
financial representative.
Amounts you receive as a distribution will be generally included in your gross
income and will be subject to taxation. Tax penalties may apply in some
circumstances. See "Taxation."
5
<PAGE>
- --------------------------------------------------------------------------------
Questions: Contacting the Company. Contact your local representative or write
or call the Home Office:
Aetna Financial Services
Annuity Services
151 Farmington Avenue
Hartford, CT 06156-1277
1-800-262-3862
Sending forms and written requests in good order
If you are writing to change your beneficiary, request a withdrawal, or for any
other purpose, contact your local representative or the Company to learn what
information is required in order for the request to be in "good order." We can
only act upon written requests that are received in good order.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Contract Phases
- --------------------------------------------------------------------------------
I. The Accumulation Phase (accumulating retirement benefits)
STEP 1: You or the contract holder provide Aetna Life Insurance and Annuity
Company with your completed enrollment materials.
According to the plan, we set up one or more accounts for you. We may set up
account(s) for employer contributions and/or for contributions from your
salary.
STEP 2: The contract holder, or you if permitted by your plan, directs us to
invest your account dollars in any of the:
(a) Fixed Interest Options: and/or
(b) Variable Investment Options. (The variable investment options are the
subaccounts of Variable Annuity Account C. Each one invests in a specific
mutual fund.)
STEP 2(b), continued: The subaccount(s) selected purchases shares of its
corresponding fund.
-----------------
Payments to
Your Account
-----------------
Step 1 [arrow down]
---------------------------------------------
Aetna Life Insurance and Annuity Company
---------------------------------------------
(a) Step 2 (b) [arrow down]
----------- ------------------------------
Variable Annuity
Fixed Account C
Interest
Options
Variable Investment Options
------------------------------
The Subaccounts
------------------------------
A B Etc.
------------------------------
[arrow Step 2(b) [arrow
down] down]
------------------------------
Mutual Mutual Etc.
Fund A Fund B
------------------------------
II. The Income Phase
The contract offers several payment options. See "The Income Phase." In
general, you may:
> Receive income phase payments over a lifetime or a specified period;
> Receive income phase payments monthly, quarterly, semi-annually or annually;
> Select an option that provides a death benefit to beneficiaries; or
> Select fixed income phase payments or payments that vary based on the
performance of the variable investment options you select.
6
<PAGE>
- --------------------------------------------------------------------------------
In This Section:
> Maximum Transaction Fees
> Maximum Fees deducted from investments in the Subaccounts
> Fund Fees
> Examples of Fee Deductions
Also, see the "Fees" section for:
> Early Withdrawal Charge Schedules;
> How, When and Why Fees are Deducted;
> Reduction, Waiver and/or Elimination of Certain Fees; and
> Premium and
Other Taxes.
See "The Income Phase" for:
> Fees during the income phase.
- --------------------------------------------------------------------------------
Fee Table
- --------------------------------------------------------------------------------
The tables and examples in this section show the fees your account may incur
while accumulating dollars under the contract (the Accumulation Phase). See
"The Income Phase" for fees that may apply after you begin receiving payments
under the contract. The fees shown below do not include premium taxes that may
be applicable.
Transaction Fees
Maximum Early Withdrawal Charge1.......................5% of amount withdrawn
This is a deferred sales charge. It is a percentage of the amount withdrawn.
The percentage will be determined by the applicable early withdrawal charge
schedule in the "Fees" section. In certain cases, this charge may not apply to
a portion or all of your withdrawal. The early withdrawal charge reduces over
time.
Maximum Annual Maintenance Fee1........................................$30.00
Fees Deducted From the Subaccounts
Maximum Amounts(1)
(Daily deductions equal to the given percentage on an annual basis)
Mortality and Expense Risk Charge.......................................1.50%
Administrative Expense
Charge(2)............................................................. 0.25%
-----
Total Separate
Account Expenses....................................................... 1.75%
=====
- -------------------------
(1) These fees may be waived, reduced or eliminated in certain circumstances.
See "Fees."
(2) We only impose this charge under some contracts. See "Fees."
7
<PAGE>
Fees Deducted by the Funds [To be updated by amendment]
Using this Information. The following table shows the investment advisory fees
and other expenses charged annually by each fund. Fund fees are one factor that
impacts the value of a fund share. To learn about additional factors, refer to
the fund prospectus.
How Fees are Deducted. Fund fees are not deducted from account values. Instead,
fees are deducted from the value of the fund shares on a daily basis, which in
turn will affect the value of each subaccount on a daily basis. Except as noted
below, the following figures are a percentage of the average net assets of each
fund, and are based on figures for the year ended December 31, 1999.
<TABLE>
<CAPTION>
Total Fund Net Fund
Annual Annual
Fund Expense Table Expenses Expenses
Investment Without Total After
Advisory Other Waivers or Waivers and Waivers or
Fees(1) Expenses Reductions Reductions Reductions
------------------- ---------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Aetna Ascent VP(2)(3) % % % % %
Aetna Balanced VP, Inc.(3) % % % -- %
Aetna Bond VP(3) % % % -- %
Aetna Crossroads VP(2)(3) % % % % %
Aetna Growth VP(2)(3) % % % % %
Aetna Growth and Income VP(3) % % % -- %
Aetna High Yield VP(2)(3) % % % % %
Aetna Index Plus Large Cap VP(2)(3) % % % % %
Aetna Index Plus Mid Cap VP(2)(3) % % % % %
Aetna Index Plus Small Cap VP(2)(3) % % % % %
Aetna International VP(2)(3) % % % % %
Aetna Legacy VP(2)(3) % % % % %
Aetna Money Market VP(3) % % % -- %
Aetna Real Estate Securities VP(2)(3) % % % % %
Aetna Small Company VP(2)(3) % % % % %
Aetna Technology VP
Aetna Value Opportunity VP(2)(3) % % % % %
AIM V.I. Capital Appreciation Fund(4) % % % -- %
AIM V.I. Growth Fund(4) % % % -- %
AIM V.I. Growth and Income Fund(4) % % % -- %
AIM V.I. Value Fund(4) % % % -- %
Calvert Social Balanced Portfolio(5) % % % % %
DEM Equity Fund (Institutional Shares) % % % % %
Fidelity VIP Equity-Income Portfolio(6) % % % % %
Fidelity VIP Growth Portfolio(6) % % % % %
Fidelity VIP Overseas Portfolio(6) % % % % %
Fidelity VIP II Contrafund Portfolio(6) % % % % %
Janus Twenty Fund % % % % %
Janus Aspen Aggressive Growth Portfolio(7) % % % % %
Janus Aspen Balanced Portfolio(7) % % % % %
Janus Aspen Flexible Income Portfolio(7) % % % % %
Janus Aspen Growth Portfolio(7) % % % % %
Janus Aspen Worldwide Growth Portfolio(7) % % % % %
Lexington Natural Resources Trust(8) % % % % %
Oppenheimer Global Securities Fund/VA(4) % % % %
Oppenheimer Strategic Bond Fund/VA(4) % % % %
PPI MFS Capital Opportunities Portfolio(9) % % % -- %
PPI MFS Emerging Equities Portfolio (9) % % % % %
PPI MFS Research Growth Portfolio (9) % % % -- %
PPI Scudder International Growth Portfolio(9) % % % -- %
PPI T. Rowe Price Growth Equity Portfolio(9) % % % -- %
</TABLE>
8
<PAGE>
Footnotes to the "Fund Expense Table" [Updated footnotes will be filed by
amendment]
(1) Certain of the fund advisers reimburse the Company for administrative
costs incurred in connection with administering the funds as variable
funding options under the contract. These reimbursements are generally
paid out of the management fees and are not charged to investors. For the
AIM Funds, the reimbursements may be paid out of fund assets in an amount
up to 0.25% annually. Any such reimbursements paid from the AIM Funds'
assets are included in the "Other Expenses" column.
(2) The investment adviser is contractually obligated through December 31,
1999 to waive all or a portion of its investment advisory fee and/or its
administrative services fee and/or to reimburse a portion of other
expenses in order to ensure that the portfolio's Total Fund Annual
Expenses do not exceed the percentage reflected under Net fund Annual
Expenses After Waivers or Reductions.
(3) The portfolio's investment adviser provides administrative services but
does not assume all of the portfolio's ordinary recurring direct costs
under an administrative services agreement. The administrative fee is
% on the first $5 billion in assets and % on all assets over $5
billion.
(4) Fee waiver/expense reimbursement obligations do not apply to these
portfolios.
(5) The figures above are based on expenses for fiscal year 1999, and have
been restated to reflect the elimination of a performance adjustment. The
restatement includes an addition of % to the portfolio management fee.
Other Expenses reflect an indirect fee of % relating to an expense
offset arrangement with the portfolio's custodian. Amount shown under
Total Waivers and Reductions does not reflect a voluntary reduction of
fees paid indirectly. If this voluntary reduction of fees paid indirectly
was reflected, the amount shown under Net Fund Annual Expenses After
Waivers and Reductions would be 0.86%.
(6) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds, or the investment
adviser on behalf of certain funds, have entered into arrangements with
their custodian whereby credits realized as a result of uninvested cash
balances were used to reduce custodian expenses. These credits are not
included under Total Waivers and Reductions. If these credits had been
included, the amounts shown under Net Fund Annual Expenses After Waivers
and Reductions would be as follows: Fidelity VIP Equity-Income Portfolio
-- %; Fidelity VIP Growth Portfolio -- %; Fidelity VIP Overseas
Portfolio -- % Fidelity VIP II Contrafund Portfolio -- %.
(7) All expenses are stated both with and without contractual waivers and fee
reductions by Janus Capital. Fee reductions for the Aggressive Growth,
Balanced, Growth and Worldwide Growth Portfolios reduce the Management fee
to the level of the corresponding Janus retail fund. Other waivers, if
applicable, are first applied against the Management Fee and then against
Other Expenses. Janus Capital has agreed to continue other waivers and fee
reduction until at least the next annual renewal of the advisory
agreement.
(8) For 2000, the fund's investment adviser voluntarily agreed to limit the
total expenses of the fund (excluding interest, taxes, brokerage
commissions, and extraordinary expense, but including management fees and
operating expenses) to an annual rate of % of the fund's average daily
net assets. This voluntary agreement will remain in effect through
December 31, 2000.
(9) The investment adviser has agreed to reimburse the portfolios for
expenses and/or waive its fees, so that, through at least April 30, 2000,
the aggregate of each portfolio's expenses will not exceed the combined
investment advisory fees and other expenses shown under the Net Fund
Annual Expenses After Waivers or Reductions column above. For the
Portfolio Partners MFS Emerging Equities Portfolio, the Total Fund Annual
Expenses Without Waivers or Reductions for 1998 were less than the
percentage reflected under the Net Fund Annual Expenses After Waivers or
Reductions column. Nevertheless, the investment adviser will waive fees
and/or reimburse expenses if that portfolio's Total Fund Annual Expenses
Without Waivers or Reductions for 2000 exceed the percentage reflected
under the Net Fund Annual Expenses After Waivers or Reductions column.
9
<PAGE>
Hypothetical Examples [Will be updated by amendment]
Account Fees Incurred Over Time. The following hypothetical examples show the
fees paid over time if $1,000 is invested in a subaccount, assuming a 5% annual
return on the investment. For the purpose of these examples, we deducted the
maximum allowed under the contract for the following fees: mortality and
expense risk charge of 1.50% annually, an administrative expense charge of
0.25% annually, and a maintenance fee of $30.00 (converted to a percentage of
assets equal to %). The total annual fund expenses used are those shown in
the column "Total Annual Expenses Without Waivers or Reductions" in the Fund
Expense Table.
<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
- ------------------------------------------- --------------------------------------- -----------------------------------------
> These examples are purely hypothetical. If you withdraw your entire account If you leave your entire account
> They should not be considered a value at the end of the periods shown, value invested or if you select an income
representation of past or future fees or you would pay the following fees, phase payment option at the end of the
expected returns. including any applicable early periods shown, you would pay the
> Actual fees and/or returns may be more or withdrawal charge assessed:* following fees (no early withdrawal
less than those shown in these examples. charge is reflected):**
- ------------------------------------------- 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
-------- --------- --------- ---------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP $ $ $ $ $ $ $ $
Aetna Balanced VP, Inc. $ $ $ $ $ $ $ $
Aetna Bond VP $ $ $ $ $ $ $ $
Aetna Crossroads VP $ $ $ $ $ $ $ $
Aetna Growth VP $ $ $ $ $ $ $ $
Aetna Growth and Income VP $ $ $ $ $ $ $ $
Aetna High Yield VP $ $ $ $ $ $ $ $
Aetna Index Plus Large Cap VP $ $ $ $ $ $ $ $
Aetna Index Plus Mid Cap VP $ $ $ $ $ $ $ $
Aetna Index Plus Small Cap VP $ $ $ $ $ $ $ $
Aetna International VP $ $ $ $ $ $ $ $
Aetna Legacy VP $ $ $ $ $ $ $ $
Aetna Money Market VP $ $ $ $ $ $ $ $
Aetna Real Estate Securities VP $ $ $ $ $ $ $ $
Aetna Small Company VP $ $ $ $ $ $ $ $
Aetna Technology VP
Aetna Value Opportunity VP $ $ $ $ $ $ $ $
AIM V.I. Capital Appreciation Fund $ $ $ $ $ $ $ $
AIM V.I. Growth Fund $ $ $ $ $ $ $ $
AIM V.I. Growth and Income Fund $ $ $ $ $ $ $ $
AIM V.I. Value Fund $ $ $ $ $ $ $ $
DEM Equity Fund (Institutional Shares) $ $ $ $ $ $ $ $
Calvert Social Balanced Portfolio $ $ $ $ $ $ $ $
Fidelity VIP Equity-Income Portfolio $ $ $ $ $ $ $ $
Fidelity VIP Growth Portfolio $ $ $ $ $ $ $ $
Fidelity VIP II Contrafund Portfolio $ $ $ $ $ $ $ $
Fidelity VIP Overseas Portfolio $ $ $ $ $ $ $ $
Janus Twenty Fund $ $ $ $ $ $ $ $
Janus Aspen Aggressive Growth Portfolio $ $ $ $ $ $ $ $
Janus Aspen Balanced Portfolio $ $ $ $ $ $ $ $
Janus Aspen Flexible Income Portfolio $ $ $ $ $ $ $ $
Janus Aspen Growth Portfolio $ $ $ $ $ $ $ $
Janus Aspen Worldwide Growth Portfolio $ $ $ $ $ $ $ $
Lexington Natural Resources Trust $ $ $ $ $ $ $ $
Oppenheimer Global Securities Fund/VA $ $ $ $ $ $ $ $
Oppenheimer Strategic Bond Fund/VA $ $ $ $ $ $ $ $
PPI MFS Capital Opportunities Portfolio $ $ $ $ $ $ $ $
PPI Scudder International Growth Portfolio $ $ $ $ $ $ $ $
PPI MFS Emerging Equities Portfolio $ $ $ $ $ $ $ $
PPI MFS Research Growth Portfolio $ $ $ $ $ $ $ $
PPI T. Rowe Price Growth Equity Portfolio $ $ $ $ $ $ $ $
</TABLE>
- -----------------
* This example reflects deduction of an early withdrawal charge calculated
using Early Withdrawal Charge Schedule I (based on completed purchase
payment periods.) Schedule I is listed in "Fees." Under that schedule, if
only one $1,000 payment was made as described above, fewer than 5 purchase
payments would have been completed at the end of years 1, 3 and 5, and the
5% charge would apply. At the end of the tenth account year, the early
withdrawal charge is waived regardless of the number of purchase payment
periods completed, and no early withdrawal charge would apply.
** Example B will not apply if during the income phase a nonlifetime payment
option is elected with variable payments and a lump-sum payment is
requested within a certain number of years as specified in the contract. In
that case, the lump-sum payment is treated as a withdrawal during the
accumulation phase and may be subject to an early withdrawal charge. (Refer
to Example A.)
10
<PAGE>
Condensed Financial Information
- --------------------------------------------------------------------------------
Understanding Condensed Financial Information. In Appendix VI, we provide
condensed financial information about the Variable Annuity Account C (the
separate account) subaccounts available under the contracts. These tables show
the values of the subaccounts over the past 10 years. For subaccounts that were
not available 10 years ago, we give a history from the date of first
availability.
Investment Options
- --------------------------------------------------------------------------------
The contract offers variable investment options and fixed interest options.
When we establish your account(s), the contract holder, or you if permitted by
the plan, instructs us to direct account dollars to any of the available
options.
Variable Investment Options. These options are called subaccounts. The
subaccounts are within Variable Annuity Account C (the separate account), a
separate account of the Company. Earnings on amounts invested in a subaccount
will vary depending upon the performance and fees of its underlying fund. You
do not invest directly in or hold shares of the funds.
> Fund Descriptions. We provide brief descriptions of the funds in Appendix V.
Please refer to the fund prospectuses for additional information. Fund
prospectuses may be obtained, free of charge, from our Home Office at the
address and telephone number listed in "Contract Overview", by accessing the
SEC's web site or by contacting the SEC's Public Reference Room.
Fixed Interest Options. For descriptions of the fixed interest options, see
Appendices I, II and III and the Guaranteed Accumulation Account prospectus.
- --------------------------------------------------------------------------------
Selecting Investment Options
o Choose options appropriate for you. Your Aetna representative can help you
evaluate which subaccounts or fixed interest options may be appropriate for
your financial goals.
o Understand the risks associated with the options you choose. Some
subaccounts invest in funds that are considered riskier than others. Funds
with additional risks are expected to have a value that rises and falls
more rapidly and to a greater degree than other funds. For example, funds
investing in foreign or international securities are subject to additional
risks not associated with domestic investments, and their performance may
vary accordingly. Also, funds using derivatives in their investment
strategy may be subject to additional risks.
o Be informed. Read this prospectus, the fund prospectuses, fixed interest
option appendices and the Guaranteed Accumulation Account prospectus.
- --------------------------------------------------------------------------------
Limits on Option Availability. Some subaccounts and fixed interest options may
not be available through certain contracts and plans or in some states. We may
add, withdraw or substitute investment options subject to the conditions in the
contract and in compliance with regulatory requirements.
11
<PAGE>
Limits on Number of Options Selected. Generally, the contract holder, or you if
permitted by the plan, may select no more than 18 investment options at one
time during the accumulation phase of your account. If you have an outstanding
loan (403(b) and some 401 or 403(a) plans only), you may currently make a total
of 18 cumulative selections over the life of the account. Each subaccount, the
Fixed Account, Fixed Plus Account, and each classification of the Guaranteed
Accumulation Account selected counts toward these limits. If you have a loan on
the account, each option counts toward the limit, even after the full value is
transferred to other options.
Limits Imposed by the Underlying Fund. Orders for the purchase of fund shares
may be subject to acceptance by the fund. We reserve the right to reject,
without prior notice, any allocation of purchase payment to a subaccount if the
subaccount's investment in the corresponding fund is not accepted by the fund
for any reason.
Additional Risks of Investing in the Funds.
Variable Funds. (Mixed and Shared Funding) Most of the funds described in this
prospectus are available only to insurance companies for their variable
contracts. Such funds are often referred to as "variable funds," and are used
for "mixed" and "shared" funding.
"Mixed funding" occurs when shares of a fund, which the subaccounts buy for
variable annuity contracts, are bought for variable life insurance contracts
issued by us or other insurance companies.
"Shared funding" occurs when shares of a fund, which the subaccounts buy for
variable annuity contracts, are also bought by other insurance companies for
their variable annuity contracts.
> Mixed--bought for annuities and life insurance
> Shared--bought by more than one company
Public Funds. The following funds, which the subaccounts buy for variable
annuity contracts, are also available to the general public:
> DEM Equity Fund (Institutional Shares)
> Janus Twenty Fund
See "Taxation--403(b) Plans" for a discussion of investing in one of the public
funds under a 403(b) annuity contract.
Possible Conflicts of Interest. With respect to the variable funds and the
public funds, it is possible that a conflict of interest may arise due to mixed
and shared funding, a change in law affecting the operations of variable
annuity separate accounts, differences in the voting instructions of the
contract holder and others maintaining a voting interest in the funds, or some
other reason. Such a conflict could adversely impact the value of a fund. For
example, if a conflict of interest occurred and one of the subaccounts withdrew
its investment in a fund, the fund may be forced to sell its securities at
disadvantageous prices, causing its share value to decrease. Each variable
fund's board of directors or trustees will monitor events in order to identify
any conflicts which may arise and to determine what action, if any, should be
taken to address such conflicts. With respect to both the public funds and the
variable funds, in the event of a conflict, the Company will take any steps
necessary to protect contract holders and annuitants maintaining a voting
interest in the funds, including the withdrawal of Variable Annuity Account C
from participation in the funds which are involved in the conflict.
12
<PAGE>
Transfers
- --------------------------------------------------------------------------------
Transfers Among Investment Options. During the accumulation phase and under
some contracts, the income phase, the contract holder, or you if permitted by
the plan, may transfer amounts among investment options. Transfers from fixed
interest options are restricted as outlined in Appendices I, II and III.
Transfers may be requested in writing, by telephone or, where available,
electronically. Transfers must be made in accordance with the terms of the
contract.
Value of Transferred Dollars. The value of amounts transferred in or out of
subaccounts will be based on the subaccount unit values next determined after
we receive your request in good order at our Home Office, or if you are
participating in the dollar cost averaging program, after your scheduled
transfer.
Telephone and Electronic Transfers: Security Measures. To prevent fraudulent
use of telephone or electronic transactions (including, but not limited to,
internet transactions), we have established security procedures. These include
recording calls on our toll-free telephone lines and requiring use of a
personal identification number (PIN) to execute transactions. You are
responsible for keeping your PIN and account information confidential. If we
fail to follow reasonable security procedures, we may be liable for losses due
to unauthorized or fraudulent telephone or other electronic transactions. We
are not liable for losses resulting from following telephone or electronic
instructions we believe to be genuine. If a loss occurs when we rely on such
instructions, you will bear the loss.
Limits on Frequent Transfers. The contracts are not designed to serve as
vehicles for frequent trading in response to short-term fluctuations in the
market. Such frequent trading can disrupt management of a fund and raise its
expenses. This in turn can have an adverse effect on fund performance.
Accordingly, organizations or individuals that use market-timing investment
strategies and make frequent transfers should not purchase the contracts.
We reserve the right to restrict, in our sole discretion and without prior
notice, transfers initiated by a market-timing organization or individual or
other party authorized to give transfer instructions on behalf of multiple
contract holders or participants. Such restrictions could include:
(1) Not accepting transfer instructions from an agent acting on behalf of more
than one contract holder or participant; and
(2) Not accepting preauthorized transfer forms from market timers or other
entities acting on behalf of more than one contract holder or participant
at a time.
We further reserve the right to impose, without prior notice, restrictions on
any transfers that we determine, in our sole discretion, will disadvantage or
potentially hurt the rights or interests of other contract holders or
participants.
The Dollar Cost Averaging Program. Certain contracts allow you to participate
in our Dollar Cost Averaging Program. There is no additional charge for this
service. Dollar cost averaging is a system for investing that buys fixed dollar
amounts of an investment at regular intervals, regardless of price. Our program
transfers, at regular intervals, a fixed dollar amount to one or more
subaccounts that you select. Dollar cost averaging is not permitted into the
Lexington Natural Resources Trust subaccount. Dollar cost averaging neither
ensures a profit nor guarantees against loss in a declining market. You should
consider your financial ability to continue purchases through periods of low
price levels. For additional information about this program, contact your local
representative or call the Company at the number listed in "Contract
Overview--Questions."
13
<PAGE>
Contract Purchase and Participation
- --------------------------------------------------------------------------------
Contracts Available for Purchase. The contracts available for purchase are
group or individual deferred annuity contracts that the Company offers in
connection with plans established by eligible organizations under Tax Code
sections 401(a), 401(k), 403(a), 403(b) and 457.
ERISA Notification. Some plans under Sections 401, 403(a) and 403(b) are
subject to Title I of the Employee Retirement Income Security Act of 1974
(ERISA), as amended. The contract holder must notify the Company whether Title
I of ERISA applies to the plan.
Purchasing the Contract.
1. The contract holder submits the required forms and application to the
Company.
2. We approve the forms and issue a contract to the contract holder.
Participating in the Contract.
1. We provide you with enrollment materials for completion and return to us
(occasionally enrollment is conducted by someone unaffiliated with us who
is assisting the contract holder).
2. If your enrollment materials are complete and in good order, we establish
one or more accounts for you. Under certain plans we establish an employee
account for contributions from your salary and an employer account for
employer contributions.
Acceptance or Rejection. We must accept or reject an application or your
enrollment materials within two business days of receipt. If the forms are
incomplete, we may hold any forms and accompanying purchase payments for five
business days, unless you consent to our holding them longer. Under limited
circumstances, we may also agree, for a particular plan, to hold purchase
payments for longer periods with the permission of the contract holder. If we
agree to do this, we will deposit the payments in the Aetna Money Market VP
subaccount until the forms are completed (or for a maximum of 105 days). If we
reject the application or enrollment, we will return the forms and any
payments.
14
<PAGE>
Methods of Purchase Payment. The contract may allow one or more of the
following purchase payment methods:
> Lump-sum payments--A one-time payment to your account in the form of a
transfer from a previous plan
> Installment payments--More than one payment made over time to your account
The plan and the contract may have certain rules or restrictions that apply to
use of these two methods. For example, we may require that installment payments
meet certain minimums. Under some contracts, we will place the different types
of payments in distinct accounts, where each account will have its own early
withdrawal charge schedule. See "Fees--Early Withdrawal Charge Schedules."
Allocation of Purchase Payments. The contract holder or you, if the contract
holder permits, directs us to allocate initial contributions to the investment
options available under the plan. Generally, you will specify this information
on your enrollment materials. After your enrollment, changes to allocations for
future purchase payments or transfer of existing balances among investment
options may be requested in writing and, where available, by telephone or
electronically. Allocations must be in whole percentages, and there may be
limitations on the number of investment options that can be selected. See
"Investment Options" and "Transfers."
Transfer Credits. The Company provides a transfer credit in some cases on
transferred assets, as defined by the Company, subject to certain conditions
and state approvals. This benefit is provided on a nondiscriminatory basis. If
a transfer credit is due under the contract, you will be provided with
additional information specific to the contract.
Tax Code Restrictions. The Tax Code places some limitations on contributions to
your account. See "Taxation."
Contract Ownership and Rights
- --------------------------------------------------------------------------------
Who Owns the Contract? The contract holder. This is the person or entity to
whom we issue the contract.
Who Owns Money Accumulated Under the Contract?
> Under 457 Plans. The Tax Code requires that 457 plan assets of governmental
employers be held in trust for the exclusive benefit of you and your
beneficiaries. An annuity contract satisfies the trust requirement of the Tax
Code.
> Under 403(b) Plans. Under the contract we may establish one or more accounts
for you. Generally we establish an employee account to receive salary
reduction and rollover amounts and an employer account to receive employer
contributions. You have the right to the value of your employee account and
any employer account to the extent you are vested as interpreted by the
contract holder.
15
<PAGE>
> Under 401(a)/401(k) or 403(a) Plans. Under the contract, we may establish one
or more accounts for you. Generally, we establish an employee account to
receive salary reduction and rollover amounts and an employer account to
receive employer contributions. You have the right to the value of your
employee account and any employer account to the extent that you are vested
under the plan as interpreted by the contract holder.
Who Holds Rights under the Contract?
> Under all contracts, except group contracts issued through a voluntary 403(b)
plan, the contract holder holds all rights under the contract. The contract
holder may permit you to exercise some of those rights. For example, the
contract holder may allow you to choose investment options.
> If you participate in a group or individual contract through a voluntary
403(b) plan, you hold all rights under the contract.
Right to Cancel
- --------------------------------------------------------------------------------
When and How to Cancel. If the contract holder chooses to cancel a contract, we
must receive the contract and a written notice of cancellation within 10 days
(or a longer period if required by state law) after the contract holder's
receipt of the contract.
If you wish to cancel participation in the contract and are allowed to do so
under the contract and the plan, you must send the document evidencing your
participation and a written notice of cancellation to the Company within 10
days after you receive confirmation of your participation in the contract.
Refunds. We will produce a refund not later than seven days after we receive
the required documents and written notice in good order at our Home Office. The
refund will equal amounts contributed to the contract or account(s), as
applicable, plus any earnings or less any losses attributable to the investment
options in which amounts were invested. In certain states, we are required to
refund contributions. When a refund of contributions is not required, the
investor bears any investment risk.
16
<PAGE>
- --------------------------------------------------------------------------------
Types of Fees
There are three types of fees which you may incur under the contract:
> Transaction Fees
o Early Withdrawal Charge
o Annual Maintenance Fee
> Fees Deducted from the Subaccounts
o Mortality and Expense Risk Charge
o Administrative Expense Charge
> Fees Deducted by the Funds
o Investment Advisory Fees
o Other Expenses
Terms to Understand in
Schedules I and II
> Account Year--a 12-month period measured from the date we establish your
account, or measured from any anniversary of that date.
> Contract Year--a 12-month period measured from the date we establish the
contract, or measured from any anniversary of that date.
> Purchase Payment Period (also called Contribution Period under some contracts)
(for installment payments under some contracts)--the period of time it takes
to complete the number of installment payments expected to be made to your
account over a year. For example, if your payment frequency is monthly, a
payment period is completed after 12 payments are made. If only 11 payments
are made, the payment period is not completed until the twelfth payment is
made. At any given time, the number of payment periods completed cannot exceed
the number of account years completed, regardless of the number of payments
made.
Fees
- --------------------------------------------------------------------------------
The following repeats and adds to information provided in the "Fee Table"
section. Please review both this section and the "Fee Table" section for
information on fees.
I. Transaction Fees
Early Withdrawal Charge
Withdrawals of all or a portion of your account value may be subject to a
charge.
Purpose: This is a deferred sales charge. It reimburses us for some of the
sales and administrative expenses associated with the contract. Our remaining
sales and administrative expenses will be covered by our general assets which
are attributable in part to the mortality and expense risk charge described in
this section.
Amount: This charge is a percentage of the amount that you withdraw from the
subaccounts, the Fixed Account and the Guaranteed Accumulation Account. We do
not deduct an early withdrawal charge from amounts that you withdraw from the
Fixed Plus Account. The percentage is determined by the early withdrawal charge
schedule that applies to your account. Some of these schedules are listed
below. The charge will never be more than 8.5% of your total purchase payments
to the account, or under some contracts, the maximum permitted by the rules of
the National Association of Securities Dealers.
Early Withdrawal Charge Schedules. You may determine which schedule applies to
you by consulting your certificate, or the contract (held by the contract
holder).
Schedule I. This is the maximum early withdrawal charge schedule under the
contracts. It grades down to zero over a 10-year period, as shown below. Some
contracts have schedules that grade down to zero over fewer than 10 years.
Each contract will specify whether a schedule is based on one of the following:
(1) The number of years since the account was established; (2) the number of
years since the contract was established; or (3) the number of completed
purchase payment periods.
Unless the contract provides otherwise, the same schedule applies to
installment purchase payments (ongoing contributions) and to single purchase
payments (rollovers, exchanges or other one-time contributions).
Schedule I
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Purchase Payment or Contribution
Periods or, Contract Years or Account
Years Completed (depending upon
the contract) Early Withdrawal Charge
- --------------------------------------------- ------------------------
Fewer than 5 5%
5 or more but fewer than 7 4%
7 or more but fewer than 9 3%
9 or more but fewer than 10 2%
more than 10 0%
</TABLE>
- --------------------------------------------------------------------------------
17
<PAGE>
Schedule II. For contracts where we establish distinct accounts for installment
purchase payments and single purchase payments (defined above), Schedule I
applies to installment payment accounts and Schedule II applies to single
payment accounts. As shown below, Schedule II grades down to zero over a
nine-year period as account years are completed.
Schedule II
<TABLE>
<CAPTION>
------------------------------------------------------------------
Account Years Completed Early Withdrawal Charge
------------------------------------------------------------------
<S> <C>
Fewer than 5 5%
5 or more but fewer than 6 4%
6 or more but fewer than 7 3%
7 or more but fewer than 8 2%
8 or more but fewer than 9 1%
9 or more 0%
------------------------------------------------------------------
</TABLE>
Early Withdrawal Charge Waivers under all Contracts. These apply to all
contracts. Also read the following two subsections regarding additional
waivers, reduction or elimination of the charge.
This charge is waived for portions of a withdrawal that are:
> Used to provide income payments during the income phase;
> Paid because of your death before income payments begin;
> Paid where your account value is $5,000 or less ($3,500 under some contracts
and $1,999 for some contracts issued in New York), (or, if applicable, as
otherwise allowed by the plan for lump-sum cashout without participant's
consent) and no part of the account has been taken as a withdrawal, used to
provide income payments or taken as a loan within the prior 12 months;
> Taken because of the election of a systematic distribution option. See
"Systematic Distribution Options"; or
> Taken on or after the tenth anniversary of the effective date of the account.
Early Withdrawal Charge Waivers under Certain Contracts. To find out which
waivers apply to the contract issued in connection with your plan, consult the
certificate or the contract (held by the contract holder).
This charge is waived for portions of a withdrawal that are:
> Taken under accounts with an early withdrawal charge schedule based on
completed purchase payment periods when you are at least age 59-1/2 and have
completed at least nine purchase payment periods; or
> Taken after you have separated from service with your employer. (Under certain
contracts, the employer must provide documentation of separation to the
Company);
> Used to purchase an Aetna single premium immediate annuity or other contracts
allowed by the Company, under the condition that you do not cancel the new
contract and obtain a refund during the cancellation period. (If you cancel
the new contract, we will reinstate the account under the old contract. The
amount returned to the account from the new contract may then be withdrawn,
subject to any early withdrawal charge that would have applied at the time the
new contract was established);
> Depending upon the plan, due to financial hardship or hardship resulting from
an unforeseeable emergency, as defined by the Tax Code and
18
<PAGE>
regulations thereunder or an in-service distribution permitted by the plan
when certified by the employer;
> From contracts used with plans under section 401(a)/401(k), section 403(a) or
section 403(b) of the Tax Code, if the withdrawal is not more than 10% of your
account value and is the first partial withdrawal in a calendar year. To
qualify for this waiver you must be between the ages of 59-1/2 and 70-1/2 and
cannot have elected the systematic withdrawal option. Any outstanding loans
are not included in the account value when calculating the 10% amount. This
waiver does not apply to full withdrawals or to a withdrawal due to a loan
default;
> Withdrawn due to the transfer of your account value to another of the
retirement products the Company offers under the contract holder's plan,
subject to various conditions agreed to by the contract holder and the Company
in writing;
> Made because the Company terminated the account under the circumstances
described in "Other Topics--Account Termination"; or
> Withdrawn for a transfer as provided under Internal Revenue Service Ruling
90-24 to a Code section 403(b)(7) custodial account sponsored by the Company.
Reduction, Waiver or Elimination. In addition to the specific waivers described
above, we may reduce, waive or eliminate the early withdrawal charge for a
particular plan. Any such reduction will reflect the differences we expect in
distribution costs or services meant to be defrayed by this charge. Factors we
consider for a reduction include, but are not limited to, the following:
> The number of participants under the plan;
> The expected level of assets or cash flow under the plan;
> Our agent's involvement in sales activities;
> Our sales-related expenses;
> Distribution provisions under the plan;
> The plan's purchase of one or more other variable annuity contracts from us
and the features of those contracts;
> The level of employer involvement in determining eligibility for distributions
under the contract;
> Our assessment of financial risk to the Company relating to withdrawals; and
> Whether the contract results from the exchange of another contract issued by
the Company to the same plan sponsor.
We will not reduce the early withdrawal charge in a manner that is unfairly
discriminatory against any person.
We may also apply different early withdrawal charge provisions in contracts
issued to certain employer groups or associations which have negotiated the
contract terms on behalf of their employees. We will offer any resulting early
withdrawal charge uniformly to all employees in the group.
19
<PAGE>
Reduction for Certain New York Contracts. For master 403(b) plan contracts
issued after July 29, 1993 in New York, in addition to waivers or reductions
that we grant, the state of New York requires a reduced early withdrawal charge
schedule for withdrawals from the Guaranteed Accumulation Account. The schedule
grades down over a seven-year period as account years are completed, as shown
in the table below. This same schedule is used for withdrawals from the
subaccounts, Fixed Account or the Guaranteed Accumulation Account for contracts
issued in New York on or after 2000 under contract form G-CDA-99(NY).
<TABLE>
<CAPTION>
----------------------------------------------------------------
Completed Account Years Early Withdrawal Charge
----------------------------------------------------------------
<S> <C>
Fewer than 3 5%
3 or more but fewer than 4 4%
4 or more but fewer than 5 3%
5 or more but fewer than 6 2%
6 or more but fewer than 7 1%
7 or more 0%
----------------------------------------------------------------
</TABLE>
Maintenance Fee
Maximum Amount. $30.00
When/How. For those plans that have a maintenance fee, each year during the
accumulation phase we deduct this fee on your account anniversary and, in some
cases, at the time of full withdrawal. It is deducted on a pro rata basis from
your account value invested in the subaccounts and the fixed interest options.
We do not deduct this fee from a single purchase payment account. Under some
plans we deduct the maintenance fee from both employer and employee accounts.
Under some installment plans, your employer elects whether the fee is deducted
from the employee account, employer account, or a portion from each. The
Company may send a bill to your employer at or prior to such deduction.
Purpose. This fee helps defray the administrative expenses we incur in
establishing and maintaining your account.
Reduction or elimination. When a plan meets certain criteria, we may reduce,
waive or eliminate the maintenance fee. Factors we consider reflect differences
in our level of administrative costs and services, such as:
> The size, type and nature of the group to which a contract is issued;
> The expected level of assets under the plan. (Under some contracts, we may
aggregate accounts under different contracts issued by the Company to the same
contract holder);
> The anticipated level of administrative expenses, such as billing for
payments, producing periodic reports, providing for the direct payment of
account charges rather than having them deducted from account values, and any
other factors pertaining to the level and expense of administrative services
we will provide; and
> The number of eligible participants and the program's participation rate.
Due to factors on which the maintenance fee is based, it is possible that it
may increase or decrease from year to year as the characteristics of the group
changes.
We will not unfairly discriminate against any group if we reduce or eliminate
the maintenance fee. We will make any reduction according to our own rules in
effect at the time we approve the application for a contract. We reserve the
right to change these rules from time to time.
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<PAGE>
II. Fees Deducted from the Subaccounts
Mortality and Expense Risk Charge
Maximum Amount. 1.50% annually of your account value invested in the
subaccounts during the accumulation phase; 1.25% annually during the income
phase. We may charge a different fee for different funds (but not beyond the
maximum amount).
When/How. This fee is deducted daily from the subaccounts. We do not deduct
this from any fixed interest option. This fee may be assessed during the
accumulation phase and/or the income phase.
Purpose. This fee compensates us for the mortality and expense risks we assume
under the contracts.
> The mortality risks are those risks associated with our promise to make
lifetime payments based on annuity rates specified in the contracts and our
funding of the death benefits and other payments we make to owners or
beneficiaries of the accounts.
> The expense risk is the risk that the actual expenses we incur under the
contracts will exceed the maximum costs that we can charge.
If the amount we deduct for this fee is not enough to cover our mortality costs
and expenses under the contracts, we will bear the loss. We may use any excess
to recover distribution costs relating to the contract and as a source of
profit. We expect to make a profit from this fee.
Reduction. We may reduce the mortality and expense risk charge from the maximum
when the plan meets certain criteria and we agree to the reduction with the
contract holder in writing. Some contracts have a reduced mortality and expense
risk charge only during the accumulation phase of the account which then
increases during the income phase (but not beyond the maximum amount). Any
reduction will reflect differences in expenses for administration based on such
factors as:
> The expected level of assets under the plan. (Under some contracts, we may
aggregate accounts under different contracts issued by the Company to the same
contract holder);
> The size of the prospective group, projected annual number of eligible
participants and the program's participation rate;
> The plan design (for example, the plan may favor stability of invested assets
and limit the conditions for withdrawals, loans and available investment
options, which in turn lowers administrative expenses);
> The frequency, consistency and method of submitting payments and loan
repayments;
> The method and extent of onsite services we provide and the contract holder's
involvement in services such as enrollment and ongoing participant services;
> The contract holder's support and involvement in the communication,
enrollment, participant education and other administrative services;
> The projected frequency of distributions; and
> The type and level of other factors that affect the overall administrative
expense.
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<PAGE>
We will determine any reduction of mortality and expense risk on a basis that
is not unfairly discriminatory according to our rules in effect at the time a
contract application is approved. We reserve the right to change these rules
from time to time. Under some contracts we will reassess and increase or
decrease this fee each year on the anniversary of the date the contract was
established. However, the charge that may apply to a given participant upon
entry into the income phase will remain fixed while the participant remains in
that phase.
Administrative Expense Charge
Maximum Amount. 0.25% annually of your account value invested in the
subaccounts.
When/How. For all participants who became covered under a contract on or after
November 5, 1984, we reserve the right to charge an administrative expense
charge of up to 0.25% annually. We are currently deducting this charge under
the contracts issued to some plans. If charged, this fee is deducted daily from
the subaccounts. We do not deduct this from any fixed interest option. This fee
may be assessed during the accumulation phase and/
or the income phase. If we are currently imposing this fee under the contract
issued in connection with your plan when you enter the income phase, the fee
will apply to you during the entire income phase.
Purpose. This fee helps defray our administrative expenses that cannot be
covered by the mortality and expense charge described above. The fee is not
intended to exceed our average expected cost of administering the contracts. We
do not expect to make a profit from this fee.
Reduction. Under some contracts, if we charge the administrative expense
charge, we may reduce it from the maximum when the plan meets certain criteria
and we agree to the reduction with the contract holder, in writing. The level
of the fee may be reassessed and increased or decreased at each contract
anniversary as the characteristics of the group change.
III. Fund Expenses
Maximum Amount. Each fund determines its own advisory fees and expenses. For a
list of fund fees see "Fee Table." The fees are described in more detail in
each fund prospectus.
When/How. Fund fees are not deducted from your account. Fund advisory fees and
expenses are reflected in the daily value of the fund shares, which will in
turn affect the daily value of each subaccount.
Purpose. These amounts help to pay the fund's investment advisor and operating
expenses.
IV. Premium and Other Taxes
Maximum Amount. Some states and municipalities charge a premium tax on
annuities. These taxes currently range from 0% to 4%, depending upon the
jurisdiction.
When/How. We reserve the right to deduct premium taxes from your account value
or from payments to the account at any time, but not before there is a tax
liability under state law. Our current practice is to deduct premium taxes at
the time of a full withdrawal or the commencement of income phase payments.
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<PAGE>
We will not deduct any municipal premium tax of 1% or less, but we reserve the
right to reflect such an expense in our annuity purchase rates.
In addition, the Company reserves the right to assess a charge for any federal
taxes due against the separate account. See "Taxation."
Your Account Value
- --------------------------------------------------------------------------------
During the accumulation phase, your account value at any given time equals:
> Account dollars directed to the fixed interest options, including interest
earnings to date
> Less any deductions from the fixed interest options (e.g. withdrawals, fees)
> Plus the current dollar value of amounts invested in the subaccounts.
Subaccount Accumulation Units. When a fund is selected as an investment option,
your account dollars invest in "accumulation units" of the Variable Annuity
Account C subaccount corresponding to that fund. The subaccount invests
directly in the fund shares. The value of your interests in a subaccount is
expressed as the number of accumulation units you hold multiplied by an
"Accumulation Unit Value," as described below, for each unit.
Accumulation Unit Value (AUV). The value of each accumulation unit in a
subaccount is called the accumulation unit value or AUV. The value of
accumulation units vary daily in relation to the underlying fund's investment
performance. The value also reflects deductions for fund fees and expenses, the
mortality and expense risk charge, and the administrative expense charge (if
any). We discuss these deductions in more detail in "Fee Table" and "Fees."
Valuation. We determine the AUV every business day after the close of the New
York Stock Exchange. At that time, we calculate the current AUV by multiplying
the AUV last calculated by the "net investment factor" of the subaccount. The
net investment factor measures the investment performance of the subaccount
from one valuation to the next.
Current AUV = Prior AUV x Net Investment Factor
Net Investment Factor. The net investment factor for a subaccount between two
consecutive valuations equals the sum of 1.0000 plus the net investment rate.
Net Investment Rate. The net investment rate is computed according to a formula
that is equivalent to the following:
> The net assets of the fund held by the subaccount as of the current valuation,
minus;
> The net assets of the fund held by the subaccount at the preceding valuation,
plus or minus;
> Taxes or provisions for taxes, if any, due to subaccount operations (with any
federal income tax liability offset by foreign tax credits to the extent
allowed);
> Divided by the total value of the subaccount's units at the preceding
valuation;
> Minus a daily deduction for the mortality and expense risk charge and the
administrative expense charge, if any, and any other fees deducted from
investments in the separate account. See "Fees".
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<PAGE>
The net investment rate may be either positive or negative.
Hypothetical Illustration. As a hypothetical illustration, assume that an
investor contributes $5,000 to his account and directs us to invest $3,000 in
Fund A and $2,000 in Fund B. After receiving the contribution and following the
next close of business of the New York Stock Exchange, the applicable AUV's are
$10 for Subaccount A, and $25 for Subaccount B. The investor's account is
credited with 300 accumulation units of subaccount A, and 80 accumulation units
of subaccount B.
Step 1: An Investor contributes $5000
------------------------
$5,000 contribution
------------------------
Step 1 [arrow down] Step 2:
- -------------------------------------------- A. He directs us to invest $3,000
in Fund A. His dollars purchase
Aetna Life Insurance and Annuity Company 300 accumulation units of
Subaccount A ($3,000 divided by
- -------------------------------------------- the current
$10 AUV).
Step 2 [arrow down] B. He directs us to invest $2,000
------------------------------------------- in Fund B. His dollars purchase
80 accumulation units of
Variable Annuity Account C Subaccount B ($2,000 divided by
the current
- -------------------------------------------- $25 AUV).
Subaccount A Subaccount B Etc. Step 3: The separate account then
300 80 purchases shares of the applicable
accumulation accumulation funds at the current market value
units units (net asset value or NAV).
Step 3 [arrow down] The fund's subsequent investment
performance, expenses and charges,
and the daily charges deducted
---------------- ---------------- from the subaccount, will cause
the AUV to move up or down on a
Fund A Fund B daily basis.
---------------- ----------------
24
<PAGE>
- --------------------------------------------------------------------------------
Taxes, Fees and Deductions
Amounts withdrawn may be subject to one or more of the following:
> Early Withdrawal Charge. See "Fees--Early Withdrawal Charge";
> Maintenance Fee. See "Fees--Maintenance Fee";
> Market Value Adjustment. See Appendix I;
> Tax Penalty. See "Taxation"; and/or
> Tax Withholding. See "Taxation".
To determine which may apply, refer to the appropriate sections of this
prospectus, contact your Aetna representative or call the Company at the number
listed in "Contract Overview--
Questions."
- --------------------------------------------------------------------------------
Purchase Payments to Your Account. If all or a portion of initial purchase
payments are directed to the subaccounts, they will purchase subaccount
accumulation units at the AUV next computed after our acceptance of the
applicable application or enrollment forms, as described in "Contract Purchase
and Participation." Subsequent purchase payments or transfers directed to the
subaccounts that we receive by the close of business of the New York Stock
Exchange (Exchange) will purchase subaccount accumulation units at the AUV
computed after the close of the Exchange on that day. The value of subaccounts
may vary day to day.
Withdrawals
- --------------------------------------------------------------------------------
Making a Withdrawal. Subject to limitations on withdrawals from the fixed
interest options and other restrictions. See "Withdrawal Restrictions" below.
The contract holder, or you if permitted by the plan, may withdraw all or a
portion of your account value at any time during the accumulation phase.
Steps for Making a Withdrawal. The contract holder, or you if permitted by the
plan, must:
> Select the withdrawal amount
o Full Withdrawal: You will receive, reduced by any required withholding
tax, your account value allocated to the subaccounts, the Guaranteed
Accumulation Account (plus or minus any applicable market value
adjustment) and the Fixed Account, minus any applicable early withdrawal
charge, plus the amount available for withdrawal from the Fixed Plus
Account.
o Partial Withdrawal (Percentage or Specified Dollar Amount): You will
receive, reduced by any required withholding tax, the amount you specify,
subject to the value available in your account. However, the amount
actually withdrawn from your account will be adjusted by any applicable
early withdrawal charge for amounts withdrawn from the subaccounts, the
Guaranteed Accumulation Account or the Fixed Account, and any positive or
negative market value adjustments for amounts withdrawn from the
Guaranteed Accumulation Account. The amount available from the Fixed Plus
Account may be limited.
For a description of limitations on withdrawals from the Fixed Plus
Account, see Appendix III.
> Select investment options. If this is not specified, we will withdraw dollars
proportionally from each investment option in which you have an account value.
> Properly complete a disbursement form and submit it to the Home Office.
Calculation of Your Withdrawal. We determine your account value every normal
business day after the close of the New York Stock Exchange. We pay withdrawal
amounts based on your account value either:
(1) As of the next valuation after we receive a request for withdrawal in good
order at our Home Office, or
(2) On such later date as specified on the disbursement form.
Delivery of Payment. Payments for withdrawal requests will be made in
accordance with SEC requirements. Normally, we will send your payment not later
than seven calendar days following our receipt of your disbursement form in
good order.
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<PAGE>
Reinvestment Privilege, (not applicable to contracts under 457 plans). Some
contracts allow one-time use of a reinvestment privilege. Within 30 days after
a full withdrawal, if allowed by law and the contract, you may elect to
reinvest all or a portion of the proceeds. We must receive reinvested amounts
within 60 days of the withdrawal. We will credit the account for the amount
reinvested based on the subaccount values next computed following our receipt
of your request and the amount to be reinvested. We will credit the amount
reinvested proportionally for maintenance fees and early withdrawal charges
imposed at the time of withdrawal. We will deduct from the amounts reinvested
any maintenance fee which fell due after the withdrawal and before the
reinvestment. We will reinvest in the same investment options and proportions
in place at the time of withdrawal. If you withdraw amounts from a series of
the Aetna GET Fund and then elect to reinvest them, we will reinvest them in a
GET Fund series that is then accepting deposits, if one is available. If one is
not available, we will reallocate your GET amounts among other investment
options in which you invested, on a pro rata basis. Special rules apply to
reinvestments of amounts withdrawn from the Guaranteed Accumulation Account.
See Appendix I. Seek competent advice regarding the tax consequences associated
with reinvestment.
Withdrawal Restrictions. Some plans may have other limits on withdrawals, other
than or in addition to those listed below.
> Section 403(b)(11) of the Tax Code generally prohibits withdrawal under 403(b)
contracts prior to your death, disability, attainment of age 59-1/2,
separation from service, or financial hardship of the following:
(1) Salary reduction contributions made after December 31, 1988; and
(2) Earnings on those contributions and earnings on amounts held before
1989 and credited after December 31, 1988.
> 401(k) plans generally prohibit withdrawal of salary reduction contributions
and associated earnings prior to your death, disability, attainment of age
59-1/2, separation from service, or financial hardship. Income attributable to
salary reduction contributions and credited on or after January 1, 1989 may
not be distributed in the case of hardship.
> The contract may require that the contract holder certify that you are
eligible for the distribution.
> If you are married and covered by an ERISA plan, the contract holder must
provide certification that Retirement Equity Act requirements have been met.
> Participants in Ball State University Alternate Pension Plan--The portion of
your account value attributable to employer contributions and applicable
earnings may not be withdrawn unless your employment is terminated with Ball
State University or you have died, retired or separated from service. The
contract holder may withdraw the employer account value, and you may transfer
employer account values pursuant to an IRS Revenue Ruling 90-24 transfer,
without regard to this restriction. No early withdrawal charge will apply to
the first 20% of the employer account value transferred via a 90-24 transfer
in a calendar year. This waiver does not apply to a 90-24 transfer of the full
employer account value.
> Participants in Texas Optional Retirement Program--You may not receive any
distribution before retirement, except upon becoming disabled, as defined in
the Tax Code or terminating employment with Texas public institutions of
higher learning. Conditions under which you may exercise the right to withdraw
and the right to advance the date on which an income phase payment option is
to begin are limited. These restrictions are imposed by reason of the Texas
Attorney General's interpretation of Texas law.
26
<PAGE>
- --------------------------------------------------------------------------------
Features of a Systematic Distribution Option
If available under your plan, a Systematic Distribution Option allows you to
receive regular payments from your account without moving into the income
phase. By remaining in the accumulation phase, you retain certain rights and
investment flexibility not available during the income phase. Because the
account remains in the accumulation phase, all accumulation phase charges
continue to apply.
- --------------------------------------------------------------------------------
Loans
- --------------------------------------------------------------------------------
Availability. If allowed by the contract and the plan, you may take out a loan
from your account value during the accumulation phase. Some contracts restrict
loans from your employer account. Loans are only allowed from amounts allocated
to certain subaccounts and fixed interest options. Additional restrictions may
apply under the Tax Code or due to our administrative practices.
Requests. If you are eligible to obtain a loan, you may request one by properly
completing the loan request form and submitting it to our Home Office. Read the
terms of the loan agreement before submitting any request.
Systematic Distribution Options
- --------------------------------------------------------------------------------
Availability of Systematic Distribution Options. To exercise one of these
options, the account value must meet any minimum dollar amount and age criteria
applicable to that option. To determine what Systematic Distribution Options
are available, check with the contract holder or the Company. The Company
reserves the right to discontinue the availability of one or all of the
Systematic Distribution Options at any time, and/or to change the terms for
future elections.
Systematic Distribution Options currently available under the contract include
the following:
> SWO--Systematic Withdrawal Option. SWO is a series of partial withdrawals from
your account based on a payment method you select. It is designed for those
who want a periodic income while retaining accumulation phase investment
flexibility for amounts accumulated under the account. (This option may not be
available if you have an outstanding loan.)
> ECO--Estate Conservation Option. ECO also allows you to maintain the account
in the accumulation phase and provides periodic payments designed to meet the
Tax Code's minimum distribution requirement.
Under ECO, the Company calculates the minimum distribution amount required
by law at age 70-1/2 (for certain plans, 70-1/2 or retirement, if later) and
pays you that amount once a year.
For certain contracts issued in the state of New York, no market value
adjustment is imposed on ECO withdrawals from the Guaranteed Accumulation
Account.
> Other Systematic Distribution Options. Other Systematic Distribution Options
may be available from time to time. Additional information relating to any of
the Systematic Distribution Options may be obtained from your local
representative or from the Company's Home Office.
Electing a Systematic Distribution Option. The contract holder, or you if
permitted by the plan, makes the election of a Systematic Distribution Option.
For some contracts, the contract holder must provide the Company with
certification that the distribution is in accordance with the terms of the
plan.
27
<PAGE>
- --------------------------------------------------------------------------------
During the Income Phase
This section provides information about the accumulation phase. For death
benefit information applicable to the income phase. See The Income Phase."
- --------------------------------------------------------------------------------
Terminating a Systematic Distribution Option. Once you elect a Systematic
Distribution Option, except for accounts that are part of 457 plan contracts,
you may revoke it at any time through a written request to our Home Office.
Once revoked, an option may not be elected again, nor may any other Systematic
Distribution Option be elected, unless the Tax Code permits it.
Tax Consequences. Withdrawals received through these options and revocations of
elections may have tax consequences. See "Taxation."
Death Benefit
- --------------------------------------------------------------------------------
The contract provides a death benefit in the event of your death, which is
payable to the beneficiary named under the contract (contract beneficiary).
> Under contracts issued in connection with most types of plans except voluntary
403(b) plans, the contract holder must be named as the contract beneficiary,
but may direct that we make any payments to the beneficiary you name under the
plan (plan beneficiary).
> Under contracts issued in connection with voluntary 403(b) plans, you may
generally designate your own contract beneficiary who will normally be your
plan beneficiary, as well.
During the Accumulation Phase
Payment Process
1. Following your death, the contract beneficiary (on behalf of the plan
beneficiary, if applicable), must provide the Company with proof of death
acceptable to us and a payment request in good order.
2. The payment request should include selection of a benefit payment option.
3. Within seven days after we receive proof of death acceptable to us and
payment request in good order at our Home Office, we will mail payment,
unless otherwise requested.
Until a payment option is selected, account dollars will remain invested as at
the time of your death, and no distributions will be made.
Benefit Payment Options. The following payment options are available, if
allowed by the Tax Code:
> Lump-sum payment;
> Payment under an available income phase payment option. See "The Income
Phase--Payment Options"; and
> If the contract beneficiary or plan beneficiary is your spouse, payment under
an available Systematic Distribution Option (may not be available under all
plans). See "Systematic Distribution Options."
The following options are also available under some contracts, however, the Tax
Code limits how long the death benefit proceeds may be left in these options:
> Leaving the account value invested in the contract;
> Under some contracts, leaving your account value on deposit in the Company's
general account and receiving monthly, quarterly, semi-annual or annual
interest payments at the interest rate currently credited on such
28
<PAGE>
deposits. The balance on deposit can be withdrawn at any time or paid in
accordance with any of the available income phase payment options. See The
Income Phase--Payment Options"
Death Benefit Calculation. For most contracts, the death benefit will be based
on your account value. For amounts held in the Guaranteed Accumulation Account
(GAA), any positive aggregate market value adjustment (the sum of all market
value adjustments calculated due to a withdrawal) will be included in your
account value. If a negative market value adjustment applies, it would be
deducted only if the death benefit is withdrawn more than six months after your
death. We describe the market value adjustment in Appendix I and in the GAA
prospectus.
The death benefit is calculated as of the next time we value your account
following the date on which we receive proof of death and payment request in
good order. In addition to this amount, some states require we pay interest
calculated from date of death at a rate specified by state law.
Some contracts provide a guaranteed death benefit if the contract beneficiary
(on behalf of the plan beneficiary, if applicable) elects a lump-sum
distribution or an income phase payment option within six months of your death.
For those contracts, the guaranteed death benefit is the greater of :
(a) Your account value on the day that notice of death and request for payment
are received in good order at our Home Office, plus any positive aggregate
market value adjustment that applies to amounts allocated to the GAA; or
(b) The sum of payments (minus any applicable premium tax) made to your
account, minus withdrawals made from your account and any outstanding loan
amount.
Tax Code Requirements. The Tax Code requires distribution of death benefit
proceeds within a certain period of time. Failure to begin receiving death
benefit payments within those time periods can result in tax penalties.
Regardless of the method of payment, death benefit proceeds will generally be
taxed to the beneficiary in the same manner as if you had received those
payments. See "Taxation" for additional information.
29
<PAGE>
- --------------------------------------------------------------------------------
We may have used the following terms in prior prospectuses:
Annuity Phase--Income Phase
Annuity Option--Income Phase Payment Option
Annuity Payment--Income Phase Payment
Annuitization--Initiating Income Phase Payments
- --------------------------------------------------------------------------------
The Income Phase
- --------------------------------------------------------------------------------
During the income phase you receive payments from your accumulated account
value.
Initiating Income Phase Payments. At least 30 days prior to the date you want
to start receiving income phase payments, the contract holder, or you if
permitted by the plan, must notify us in writing of the following:
> Start date;
> Income Phase Payment option (see the income phase payment options table in
this section);
> Income Phase Payment frequency (i.e., monthly, quarterly, semi-annually or
annually);
> Choice of fixed or variable payments;
> Selection of an assumed net investment rate (only if variable payments are
elected); and
> Under some plans, certification from your employer and/or submission of the
appropriate forms is also required.
The account will continue in the accumulation phase until the contract holder
or you, as applicable, properly initiate income phase payments. Once an income
phase payment option is selected, it may not be changed; however, certain
options allow you to withdraw a lump sum.
What Affects Income Phase Payments? Some of the factors that may affect income
phase payments include: your age, your account value, the income phase payment
option selected, number of guaranteed payments (if any) selected, and whether
you select variable or fixed payments.
Fixed Payments. Amounts funding fixed income phase payments will be held in the
Company's general account. Fixed payments will remain the same over time.
Variable Payments. Amounts funding your variable income phase payments will be
held in the subaccount(s) selected, or a combination of subaccounts and fixed
interest options. The contracts may restrict the subaccounts available, the
number of investment options to be selected and how many transfers, if any, are
allowed among options during the income phase. For variable payments, an
assumed net investment rate must be selected.
Payments from the Fixed Plus Account. Under some contracts, if a nonlifetime
income phase payment option is selected, payments from the Fixed Plus Account
may only be made on a fixed basis.
Assumed Net Investment Rate. If you select variable income phase payments, an
assumed net investment rate must also be selected. If you select a 5% rate,
your first payment will be higher, but subsequent payments will increase only
if the investment performance of the subaccounts you selected is greater than
5% annually, after deduction of fees. Payment amounts will decline if the
investment performance is less than 5%, after deduction of fees.
If you select a 3-1/2% rate, your first income phase payment will be lower and
subsequent payments will increase more rapidly or decline more slowly depending
upon the investment performance of the subaccounts you selected. For more
information about selecting an assumed net investment rate, request a copy of
the Statement of Additional Information by calling us. See "Contract
30
Overview--Questions?"
<PAGE>
Selecting an Increasing Payment. Under certain income phase payment options, if
you select fixed payments, some contracts will allow you to elect an increase
of one, two, or three percent, compounded annually. The higher your percentage,
the lower your initial payment will be, while future payments will increase
each year at a greater rate. Generally, this feature is not available with cash
refund payment options and nonlifetime options.
Charges Deducted
> If variable income phase payments are selected, we make a daily deduction for
mortality and expense risks from any amounts held in the subaccounts. The
maximum mortality and expense risk charge during the income phase is 1.25% on
an annual basis. Under some contracts, we may reduce this fee based on certain
factors. However, the charge that may apply to a given participant upon entry
into the income phase will remain fixed while the participant remains in that
phase. See "Fees--Mortality and Expense Risk Charge."
> We may also deduct a daily administrative charge from amounts held in the
subaccounts. We currently charge this under some contracts and reserve the
right to charge it under all others. The maximum amount is 0.25% on an annual
basis. If we are currently imposing this fee under the contract issued in
connection with your plan when you enter the income phase, the fee will apply
throughout the entire income phase.
Required Minimum Payment Amounts. The initial income phase payment or the
annual income phase payment total must meet the minimums stated in the
contract. If your account value is too low to meet these minimum payment
amounts, you will receive one lump-sum payment.
Death Benefit During the Income Phase. The death benefits that may be available
to a beneficiary are outlined in the income phase payment option table below.
If a lump-sum payment is due as a death benefit, we will make payment within
seven calendar days after we receive proof of death acceptable to us in good
order and the payment request at our Home Office.
Taxation. To avoid certain tax penalties, you and any beneficiary must meet the
distribution rules imposed by the Tax Code. See "Taxation."
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<PAGE>
Income Phase Payment Options
The following tables list the income phase payment options and accompanying
death benefits which may be available under the contracts. Some contracts
restrict the options and the terms available. Refer to your certificate or
check with your contract holder for details. We may offer additional income
phase payment options under the contract from time to time.
Terms used in the Tables:
Annuitant: The person(s) on whose life expectancy the income phase payments are
calculated.
Beneficiary: The person designated to receive the death benefit payable under
the contract.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Lifetime Income Phase Payment Options
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Length of Payments: For as long as the annuitant lives. It is possible that only one payment will
Life Income be made should the annuitant die prior to the second payment's due date.
Death Benefit--None: All payments end upon the annuitant's death.
- ------------------------------------------------------------------------------------------------------------------------------
Length of Payments: For as long as the annuitant lives, with payments guaranteed for your
Life Income-- choice of 5-30 years or as otherwise specified in the contract.
Guaranteed Pay- Death Benefit--Payment to the Beneficiary: If the annuitant dies before we have made all the
ments guaranteed payments, we will continue to pay the beneficiary the remaining payments. Unless
prohibited by a prior election of the contract holder, the beneficiary may elect to receive a
lump-sum payment equal to the present value of the remaining guaranteed payments.
Length of Payments: For as long as either annuitant lives. It is possible that only one payment
will be made should both annuitants die before the second payment's due date.
Continuing Payments:
- ------------------------------------------------------------------------------------------------------------------------------
Life Income--Two (a) When you select this option, you choose for 100%, 662/3% or 50% of the payment to con-
Lives tinue after the first death; or
(b) 100% of the payment to continue on the second annuitant's death, and 50% of the payment
to continue on the annuitant's death.
Death Benefit--None: All payments end after the death of both annuitants.
Length of Payments: For as long as either annuitant lives, with payments guaranteed from 5 to
30 years, or as otherwise specified in the contract.
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Life Income--Two Continuing Payments: 100% of the payment to continue after the first death.
Lives--Guaranteed Death Benefit--Payment to the Beneficiary: If both annuitants die before the guaranteed pay-
Payments ments have all been paid, we will continue to pay the beneficiary the remaining payments.
Unless prohibited by a prior election of the contract holder, the beneficiary may elect to receive
a lump-sum payment equal to the present value of the remaining guaranteed payments.
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Life Income--Cash Length of Payments: For as long as the annuitant lives.
Refund Option Death Benefit--Payment to the Beneficiary: Following the annuitant's death, we will pay a lump-
(limited sum payment equal to the amount originally applied to the payment option (less any premium
availability-- tax) and less the total amount of fixed income payments paid.
fixed payment
only)
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Life Income--Two Length of Payments: For as long as either annuitant lives.
Lives--Cash Continuing Payment: 100% of the payment to continue after the first death.
Refund Option Death Benefit--Payment to the Beneficiary: When both annuitants die, we will pay a lump-sum
(limited payment equal to the amount applied to the income phase payment option (less any premium
availability--fixed tax) and less the total amount of fixed income payments paid.
payment only)
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</TABLE>
Table continued [right arrow]
32
<PAGE>
Income phase payment options continued
<TABLE>
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Nonlifetime Income Phase Payment Options (1)
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<S> <C>
Length of Payments: Payments will continue for the number of years you choose, based on what is
available under the contract. Under some contracts, for amounts held in the Fixed Plus Account
during the accumulation phase, the payment must be on a fixed basis and must be for at least 5
Nonlifetime-- years. In certain cases a lump-sum payment may be requested at any time (see below).
Guaranteed Death Benefit--Payment to the Beneficiary: If the annuitant dies before we make all the
Payments guaranteed payments, we will continue to pay the beneficiary the remaining payments. Unless
prohibited by a prior election of the contract holder, the beneficiary may elect to receive a lump-
sum payment equal to the present value of the remaining guaranteed payments. We will not
impose any early withdrawal charge.
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Lump-sum Payment: If the Nonlifetime--Guaranteed Payments option is elected with variable payments, you may request at
any time that all or a portion of the present value of the remaining payments be paid in one lump sum. A lump sum
elected before three or five years of income phase payments have been completed as specified by the contract will be
treated as a withdrawal during the accumulation phase and we will charge any applicable early withdrawal charge. If the
early withdrawal charge is based on completed purchase payment periods, each year that passes after income payments begin
will be treated as a completed purchase payment period, even if no additional payments are made. See "Fees--Early Withdrawal
Charge." Lump-sum payments will be sent within seven calendar days after we receive the request for payment in good order at
the Home Office.
Calculation of Lump-sum Payments: If a lump-sum payment is available to a beneficiary or to you in the income phase payment
options above, the rate we use to calculate the present value of the remaining guaranteed payments is the same rate we use
to calculate the income phase payments (i.e., the actual fixed rate used for the fixed payments or the 3-1/2% or 5% assumed
net investment rate for variable payments).
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</TABLE>
(1) For contracts issued to the State of Montana and Board of Trustees,
University of Illinois, the nonlifetime option is available only with fixed
income phase payments.
33
<PAGE>
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In This Section
I. Introduction
II. Your Retirement Plan
III. Withdrawals and other Distributions
o Taxation of Distributions
o 10% Penalty Tax
o Withholding
IV. Minimum Distribution Requirements
o 50% Excise Tax
V. Rules Specific to Certain Plans
o 457 Plans
o 403(b) Plans
o 401(a), 401(k) and 403(a) Plans
o 415(m) Arrangements
o Bona Fide Severance Pay Plans
VI. Taxation of the Company
When consulting a tax adviser, be certain that he or she has expertise in the
Tax Code sections applicable to your tax concerns.
- --------------------------------------------------------------------------------
Taxation
- --------------------------------------------------------------------------------
I. Introduction
This section discusses our understanding of current federal income tax laws
affecting the contract. You should keep the following in mind when reading it:
> Your tax position (or the tax position of the beneficiary, as applicable)
determines federal taxation of amounts held or paid out under the contract.
> Tax laws change. It is possible that a change in the future could affect
contracts issued in the past.
> This section addresses federal income tax rules and does not discuss federal
estate and gift tax implications, state and local taxes or any other tax
provisions.
> We do not make any guarantee about the tax treatment of the contract or
transactions involving the contract.
- --------------------------------------------------------------------------------
We do not intend this information to be tax advice. For advice about the effect
of federal income taxes or any other taxes on amounts held or paid out under
the contract, consult a tax adviser. For more comprehensive information contact
the Internal Revenue Service.
- --------------------------------------------------------------------------------
II. Your Retirement Plan
The tax rules applicable to retirement plans vary according to plan type, and
terms and conditions of the plan. To understand what tax rules apply, you need
to know the code section under which your plan qualifies. Contact your plan
sponsor, local representative or the Company to learn which code section
applies to your plan.
Plan Types. The contract is designed for use with retirement plans that qualify
under code sections 401(a), 401(k), 403(a), 403(b) or 457. A code section 457
plan may be either a 457(b) (eligible) plan or a 457 (f) (ineligible) plan. The
contract may also be used with code section 415(m) arrangements. You will not
generally pay taxes on earnings from the annuity contract described in this
prospectus until they are withdrawn (or in the case of a 457 plan, paid or made
available to you or a beneficiary). Tax-qualified retirement arrangements under
Tax Code sections 401(a), 401(k), 403(a), 403(b) or 457 also generally defer
payment of taxes on earnings until they are withdrawn (or in the case of a 457
plan, paid or made available to you or a beneficiary). (See "Taxation of
Distributions" later in this "Taxation" section for a discussion of how
distributions under the various types of plans are taxed.) When an annuity
contract is used to fund one of these tax-qualified retirement arrangements, you
should know that the annuity contract does not provide any additional tax
deferral of earnings beyond the tax deferral provided by the tax-qualified
retirement arrangement. However, annuities do provide other features and
benefits which may be valuable to you. You should discuss your alternatives
with your financial representative.
The Contract and Retirement Plans. Contract holders and contract participants
are responsible for determining that contributions, distributions and other
transactions satisfy applicable laws. Legal counsel and a tax adviser should be
consulted regarding the suitability of the contract.
Because the plan is not part of the contract, we are not bound by any plan's
terms or conditions.
34
<PAGE>
III. Withdrawals and Other Distributions
Certain tax rules apply to distributions from the contract. A distribution is
any amount taken from the contract including withdrawals, income phase
payments, rollovers and any death benefit.
We report the taxable portion of all distributions to the IRS.
Taxation of Distributions.
457(b) Plans. All amounts received under a 457(b) plan are includible in gross
income when paid or otherwise made available to you or your beneficiary.
457(f) Plans. Compensation deferred under a 457(f) plan is includible in gross
income in the first year when it is no longer subject to a "substantial risk of
forfeiture" as defined by the Tax Code.
401(a), 401(k), 403(a) or 403(b) Plans. All distributions from these plans are
taxed as received unless:
> The distribution is rolled over to another plan of the same type or to a
traditional individual retirement annuity/account (IRA) in accordance with the
Tax Code, or
> You made after-tax contributions to the plan. In this case, depending upon the
type of distribution, a portion may be excluded from gross income according to
rules detailed in the Tax Code.
Taxation of Death Benefits
In general, payments received by your beneficiaries after your death are taxed
in the same manner as if you had received those payments.
10% Penalty Tax
The Tax Code imposes a 10% penalty tax on the taxable portion of any
distribution from a 401(a), 401(k), 403(a) or 403(b) plan, unless certain
exceptions, including one or more of the following have occurred:
(a) You have attained age 59-1/2;
(b) You have become disabled, as defined in the Tax Code;
(c) You have died;
(d) You have separated from service with the plan sponsor at or after age 55;
(e) The distribution amount is rolled over into another plan of the same type
or to an IRA in accordance with the terms of the Tax Code;
(f) The distribution amount is made in substantially equal periodic payments
(at least annually) over your life or life expectancy or the joint lives
or joint life expectancies of you and your beneficiary. Also, you must
have separated from service with the plan sponsor; or
(g) The distribution is made due to an IRS levy upon your account.
In addition, the penalty tax does not apply for the amount of a distribution
equal to unreimbursed medical expenses incurred by you that qualify for
deduction as specified in the Tax Code. The Tax Code may impose other penalty
taxes in other circumstances.
Withholding for Federal Income Tax Liability
Any distributions under the contracts are generally subject to withholding.
Federal income tax liability rates vary according to the type of distribution
and the recipient's tax status.
35
<PAGE>
401(a), 401(k), 403(a) or 403(b) Plans. Generally, under these plans you or a
beneficiary may elect not to have tax withheld from distributions. However,
certain distributions from these plans are subject to a mandatory 20% federal
income tax withholding.
457 Plans. All distributions from a 457 plan, except death benefits, are
subject to mandatory federal income tax withholding as wages. No withholding is
required on payments to beneficiaries.
Non-resident Aliens. If you or a beneficiary is a non-resident alien and you
participate in other than a 457 plan, then any withholding is governed by code
section 1441 based on the individual's citizenship, the country of domicile and
treaty status.
IV. Minimum Distribution Requirements
To avoid certain tax penalties, you and any beneficiary must meet the minimum
distribution requirements imposed by the Tax Code. These requirements do not
apply to 457(f) plans. These rules may dictate one or more of the following:
> Start date for distributions;
> The time period in which all amounts in your account(s) must be distributed;
or
> Distribution amounts.
Start Date. Generally, you must begin receiving distributions by April 1 of the
calendar year following the calendar year in which you attain age 70-1/2 or
retire, whichever occurs later, unless:
> You are a 5% owner, in which case such distributions must begin by April 1st
of the calendar year following the calendar year in which you attain age
70-1/2; or
> Under 403(b) plans, you had amounts under the contract as of December 31,
1986. In this case, distribution of these amounts generally must begin by the
end of the calendar year in which you attain age 75 or retire, if later.
However, if you take any distributions in excess of the minimum required
amount, then special rules require that some or all of the December 31, 1986
balance be distributed earlier.
Time Period. We must pay out distributions from the contract over one of the
following time periods:
> Over your life or the joint lives of you and your beneficiary, or
> Over a period not greater than your life expectancy or the joint life
expectancies of you and your beneficiary.
Amount (457(b) Plans Only). Any distribution from a 457(b) plan, payable over a
period of more than one year, must be made in substantially non-increasing
amounts.
50% Excise Tax. If you fail to receive the minimum required distribution for
any tax year, a 50% excise tax is imposed on the required amount that was not
distributed.
Minimum Distribution of Death Benefits. The following applies to all plans
except 457(f) plans. Different distribution requirements apply if your death
occurs:
> After you begin receiving minimum distributions under the contract, or
> Before you begin receiving such distributions.
36
<PAGE>
If your death occurs after you begin receiving minimum distributions under the
contract, distributions must be made at least as rapidly as under the method in
effect at the time of your death. Code section 401(a)(9) provides specific
rules for calculating the minimum required distributions at your death. The
rules differ, depending upon:
> Whether your minimum required distribution was calculated each year based on
your single life expectancy or the joint life expectancies of you and your
beneficiary, and
> Whether life expectancy was recalculated.
The rules are complex and any beneficiary should consult with a tax adviser
before electing the method of calculation to satisfy the minimum distribution
requirements.
Should you die before you begin receiving minimum distributions under the
contract, your entire balance must be distributed by December 31 of the
calendar year containing the fifth anniversary of the date of your death. For
example, if you die on September 1, 2000, your entire balance must be
distributed to the beneficiary by December 31, 2005. However, if the
distribution begins by December 31 of the calendar year following the calendar
year of your death, then payments may be made in one of the following
time-frames:
> Over the life of the beneficiary; or
> Over a period not extending beyond the life expectancy of the beneficiary.
For 457(b) plans, if the beneficiary is not your spouse, the time-frame may not
exceed fifteen years.
Start Dates for Spousal Beneficiaries. If the beneficiary is your spouse, the
distribution must begin on or before the later of the following:
> December 31 of the calendar year following the calendar year of your death; or
> December 31 of the calendar year in which you would have attained age 70-1/2.
V. Rules Specific to Certain Plans
457 Plans
Code section 457 provides for certain deferred compensation plans. These plans
may be offered by state governments, local governments, political subdivisions,
agencies, instrumentalities and certain affiliates of such entities, and
non-governmental tax exempt organizations. The plan may either be a 457(b)
(eligible) plan or a 457(f) (ineligible) plan. Either type of plan may permit
participants to specify the form of investment for their deferred compensation
account.
457(b) Plan. A 457(b) plan is subject to restrictions on contributions and
distributions.
457(f) Plan. A 457(f) plan is not subject to restrictions on contributions or
distributions, but must contain a "substantial risk of forfeiture" as defined
by the Tax Code. Generally, substantial risk of forfeiture means that your
right to receive deferred compensation is dependent upon your performance of
future services to an employer or other entity.
37
<PAGE>
The Contract. We make this contract available to plans subject to code section
457 only if a governmental employer sponsors the plan.
Trust Requirement. 457(b) plans maintained by state or local governments, their
political subdivisions, agencies, instrumentalities and certain affiliates are
required to hold all assets and income of the plan in trust for the exclusive
benefit of plan participants and their beneficiaries. For purposes of meeting
this requirement, custodial accounts and annuity contracts are treated as
trusts.
Contributions Excluded from Gross Income. If your employer's plan is a 457(b)
plan, the Tax Code imposes a maximum limit on annual contributions to your
account(s) that may be excluded from your gross income. For Section 457(b) plan
participants, such limit is generally the lesser of $8,000, as adjusted to
reflect changes in the cost of living, or 33% of your includible compensation
(25% of gross compensation).
Restrictions on Distributions. Under a 457(b) plan, amounts may not be made
available to you earlier than (1) the calendar year you attain age 70-1/2, (2)
when you separate from service with the employer or (3) when you are faced with
an unforeseeable emergency. A 457(b) plan may permit a one-time in-service
distribution if the total amount payable to the participant does not exceed
$5,000 and no amounts have been deferred by the participant during the 2-year
period ending on the date of distribution.
403(b) Plans
Shares of certain of the Funds (DEM Equity Fund and Janus 20 Fund) are also
offered for sale to the general public. In order to qualify for favorable tax
treatment under Section 403(b), a contract must be considered an "annuity". In
Revenue Procedure 99-44, the Internal Revenue Service concluded that it will
treat a contract as an "annuity contract" under Section 403(b) notwithstanding
that contract premiums are invested at the contract holder's direction in
publicly available securities. This treatment will be available provided no
additional federal tax liability would have been incurred if the employer of
the contract holder had instead paid amounts into a qualifying Section
403(b)(7)(A) custodial account rather than an annuity. You should consult with
a tax adviser before electing to invest in one of the Funds that are offered
for sale to the general public.
Under code section 403(b), contributions made by public school systems or
nonprofit healthcare organizations and other section 501(c)(3) tax exempt
organizations to purchase annuity contracts for their employees are generally
excludable from the gross income of the employee. Adverse tax consequences to
the plan and/or to you may result if your beneficial interest in the contract
is assigned or transferred to any person except to an alternate payee under a
qualified domestic relations order in accordance with code section 414(p) or to
the Company as collateral for a loan.
Exclusions from Gross Income. In order to be excludable from gross income,
total annual contributions made by you and your employer cannot exceed the
lesser of the following limits set by the Tax Code.
> The first limit, under code section 415, is generally the lesser of 25% of
your compensation or $30,000. Compensation means your compensation from the
employer sponsoring the plan and, for years beginning after December 31, 1997,
includes any elective deferrals under code section 402(g) and any amounts not
includible in gross income under code sections 125 or 457.
38
<PAGE>
> The second limit, which is the exclusion allowance under code section 403(b),
is usually calculated according to a formula that takes into account your
length of employment, any pretax contributions you and your employer have
already made under the plan, and any pretax contributions to certain other
retirement plans.
These two limits apply to your contributions as well as to any contributions
made by your employer on your behalf.
> An additional limit specifically limits your salary reduction contributions to
generally no more than $10,500 annually (subject to indexing). Your own limit
may be higher or lower, depending upon certain conditions.
Payments to your account(s) will be excluded from your gross income only if the
plan meets certain nondiscrimination requirements.
Restrictions on Distributions. Code section 403(b)(11) restricts the
distribution under Section 403(b) contracts of:
> Salary reduction contributions made after December 31, 1988;
> Earnings on those contributions; and
> Earnings during such period on amounts held as of December 31, 1988.
Distribution of those amounts may only occur upon your death, attainment of age
59-1/2, separation from service, disability, or financial hardship. Income
attributable to salary reduction contributions and credited on or after January
1, 1989 may not be distributed in the case of hardship.
Transfers from 403(b)(7) Custodial Accounts. If, pursuant to Revenue Ruling
90-24, the Company agrees to accept, under any of the contracts, amounts
transferred from a code section 403(b)(7) custodial account, such amounts will
be subject to the withdrawal restrictions set forth in code section
403(b)(7)(A)(ii).
Taxation of Gains Prior to Distribution. Generally no amounts accumulated under
the contract will be taxable prior to the time of actual distribution.
However, the IRS has stated in published rulings that a variable contract
owner, including participants under code section 403(b) plans, will be
considered the owner of separate account assets if the contract owner possesses
incidents of investment control over the assets. In these circumstances, income
and gains from the separate account assets would be currently includible in the
variable contract owner's gross income.
The Treasury announced that it will issue guidance regarding the extent to
which owners could direct their investments among subaccounts without being
treated as owners of the underlying assets of the separate account. It is
possible that the Treasury's position, when announced, may adversely affect the
tax treatment of existing contracts. The Company therefore reserves the right
to modify the contract as necessary to attempt to prevent the owner from being
considered the federal tax owner of a pro rata share of the assets of the
separate account.
401(a), 401(k) and 403(a) Plans
Code sections 401(a), 401(k) and 403(a) permit certain employers to establish
various types of retirement plans for employees, and permit self-employed
individuals to establish various types of retirement plans for themselves and
for their employees. These retirement plans may permit the purchase of the
contracts to accumulate retirement savings under the plans.
39
<PAGE>
Assignment or Transfer of Contracts. Adverse tax consequences to the plan
and/or to you may result if your beneficial interest in the contract is
assigned or transferred to persons other than: a plan participant as a means to
provide benefit payments; an alternate payee under a qualified domestic
relations order in accordance with code section 414(p); or to the Company as
collateral for a loan.
Exclusion From Gross Income. The Tax Code imposes a maximum limit on annual
payments to your account(s) that may be excluded from gross income. The
employer must calculate this limit under the plan in accordance with code
section 415. This limit is generally the lesser of 25% of your compensation or
$30,000. Compensation means your compensation from the employer sponsoring the
plan and, for years beginning after December 31, 1997, includes any elective
deferrals under code section 402(g) and any amounts not includible in gross
income under code sections 125 or 457. The limit applies to your contributions
as well as any contributions made by your employer on your behalf. There is an
additional limit that specifically limits your salary reduction contributions
under a 401(k) plan to generally no more than $10,500 annually (subject to
indexing). Your own limits may be higher or lower, depending upon certain
conditions. In addition, payments to your account(s) will be excluded from your
gross income only if the plan meets certain nondiscrimination requirements.
Restrictions on Distributions. Code section 401(k) restricts distribution from
your 401(k) employee account, and possibly all or a portion of your 401(k)
employer account if such amounts are included in determining compliance with
certain nondiscrimination requirements under the Tax Code.
Subject to the terms of the 401(k) plan, distribution of these restricted
amounts may only occur upon: retirement, death, attainment of age 59-1/2,
disability, separation from service, financial hardship, termination of the
plan in certain circumstances, or, generally, if your employer is a corporation
and disposes of substantially all of its assets or disposes of a subsidiary. In
addition, income attributable to salary reduction contributions and credited on
or after January 1, 1989, may not be distributed in the case of hardship.
415(m) Arrangements
If you participate in the contract through a qualified governmental excess
benefit arrangement, defined in code section 415(m), the amounts provided under
the contract may be subject to the same requirements as those applied to code
section 457(b) plans described above, except that the limits described in
"Contributions Excluded from Taxable Income" do not apply. If the code section
415(m) arrangement is not designed to meet the requirements of code section
457(b), then the amounts provided under the contract are taxed in accordance
with code section 451 and are generally taxable when paid or made available to
you.
Bona Fide Severance Pay Plans
If you participate in the contract through certain bona fide severance pay
plans, described in code section 457(e)(11), amounts provided under the
contract are not generally taxable until paid or made available to you.
However, because these plans are not clearly defined in the Code, it may be
determined that your plan does not qualify as a bona fide severance pay plan.
If the plan does not qualify, then amounts provided under the contract are
taxable in the year in which they are deferred. Because of this lack of
clarity, it is imperative that you consult your tax adviser for guidance
regarding taxation.
40
<PAGE>
VI. Taxation of the Company
We are taxed as a life insurance company under the Tax Code. Variable Annuity
Separate Account C is not a separate entity from us. Therefore, it is not taxed
separately as a "regulated investment company," but is taxed as part of the
Company.
We automatically apply investment income and capital gains attributable to the
separate account to increase reserves under the contracts. Because of this,
under existing federal tax law we believe that any such income and gains will
not be taxed to the extent that such income and gains are applied to increase
reserves under the contracts. In addition, any foreign tax credits attributable
to the separate account will be first used to reduce any income taxes imposed
on the separate account before being used by the Company.
In summary, we do not expect that we will incur any federal income tax
liability attributable to the separate account and we do not intend to make any
provision for such taxes. However, changes in federal tax laws and/or their
interpretation may result in our being taxed on income or gains attributable to
the separate account. In this case, we may impose a charge against the separate
account (with respect to some or all of the contracts) to set aside provisions
to pay such taxes. We may deduct this amount from the separate account,
including from your account value invested in the subaccounts.
Other Topics
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The Company
Aetna Life Insurance and Annuity Company (the Company, we, us, our) issues the
contracts described in this prospectus and is responsible for providing each
contract's insurance and annuity benefits.
We are a stock life insurance company organized under the insurance laws of the
State of Connecticut in 1976 and an indirect wholly owned subsidiary of Aetna
Inc. Through a merger, our operations include the business of Aetna Variable
Annuity Insurance Company (formerly known as Participating Annuity Life
Insurance Company, an Arkansas life insurance company organized in 1954).
We are engaged in the business of issuing life insurance and annuities.
Our principal executive offices are located at:
151 Farmington Avenue
Hartford, Connecticut 06156
Variable Annuity Account C
We established Variable Annuity Account C (the "separate account") in 1976 as a
segregated asset account to fund our variable annuity contracts. The separate
account is registered as a unit investment trust under the Investment Company
Act of 1940 (the "40 Act"). It also meets the definition of "separate account"
under the federal securities laws.
The separate account is divided into "subaccounts." These subaccounts invest
directly in shares of a corresponding fund.
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<PAGE>
Although we hold title to the assets of the separate account, such assets are
not chargeable with the liabilities of any other business that we conduct.
Income, gains or losses of the separate account are credited to or charged
against the assets of the separate account without regard to other income,
gains or losses of the Company. All obligations arising under the contracts are
obligations of the Company.
Performance Reporting
We may advertise different types of historical performance for the subaccounts
including
> Standardized average annual total returns; and
> Non-standardized average annual total returns.
We may also advertise certain ratings, rankings or other information related to
the Company, the subaccounts or the funds. For further details regarding
performance reporting and advertising, request a Statement of Additional
Information at the number listed in "Contract Overview--Questions."
Standardized Average Annual Total Returns. We calculate standardized average
annual total returns according to a formula prescribed by the SEC. This shows
the percentage return applicable to $1,000 invested in the subaccount over the
most recent one, five and 10-year periods. If the investment option was not
available for the full period, we give a history from the date money was first
received in that option under the separate account.
We include all recurring charges during each period (e.g., mortality and
expense risk charges, annual maintenance fees, administrative expense charges
(if any) and any applicable early withdrawal charges).
Non-Standardized Average Annual Total Returns. We calculate non-standardized
average annual total returns in a similar manner as that stated above, except
we do not include the deduction of any applicable early withdrawal charge. Some
non-standardized returns may also exclude the effect of a maintenance fee. If
we reflected these charges in the calculation, they would decrease the level of
performance reflected by the calculation. Non-standardized returns may also
include performance from the fund's inception date, if that date is earlier
than the one we use for standardized returns.
Voting Rights
Each of the subaccounts holds shares in a fund and each is entitled to vote at
regular and special meetings of that fund. Under our current view of applicable
law, we will vote the shares for each subaccount as instructed by persons
having a voting interest in the subaccount. Generally, under contracts issued
in connection with section 403(b), 401 or 403(a) plans, you have a fully vested
interest in the value of your employee account, and in your employer account to
the extent of your vested percentage in the plan. Therefore, under such plans
you generally have the right to instruct the contract holder how to direct us
to vote shares attributable to your account. Under contracts issued in
connection with section 457 plans, the contract holder retains all voting
rights. We will vote shares for which instructions have not been received in
the same proportion as those for which we received instructions. Each person
who has a voting interest in the separate account will receive periodic reports
relating to the funds in which he or she has an interest, as well as any proxy
materials and a form on which to give voting instructions.
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<PAGE>
Voting instructions will be solicited by a written communicationat least 14 days
before the meeting.
The number of votes, whole and fractional, any person is entitled to direct
will be determined as of the record date set by any fund in which that person
invests through the subaccounts.
> During the accumulation phase the number of votes is equal to the portion of
your account value invested in the fund, divided by the net asset value of one
share of that fund.
> During the income phase the number of votes is equal to the portion of
reserves set aside for the contract's share of the fund, divided by the net
asset value of one share of that fund.
Contract Distribution
The Company will serve as the principal underwriter for the securities sold
under this prospectus. The Company is registered as a broker-dealer with the
SEC and is a member of the National Association of Securities Dealers, Inc.
As principal underwriter, the Company will enter into arrangements with one or
more registered broker-dealers, including at least one affiliate of the
Company, to offer and sell the contracts described in this prospectus. We call
these entities "distributors."
We and one or more of our affiliates may also sell the contracts directly. All
individuals offering and selling the contracts must be registered
representatives of a broker-dealer and must be licensed as insurance agents to
sell variable annuity contracts
Commission Payments. We may pay commissions to persons who offer and sell the
contracts. The maximum percentage amount we ever pay with respect to a given
purchase payment is the first-year percentage which ranges from 1% to a maximum
of 7% of the first year of payments to an account. We may also pay renewal
commissions on payments made after the first year and, under group contracts,
asset-based service fees. The average of all commissions and asset-based
service fees paid is estimated to equal approximately 3% of the total payments
made over the life of an average contract. Some sales personnel may receive
various types of non-cash compensation as special sales incentives, including
trips and educational and/or business seminars. However, any such compensation
will be paid in accordance with NASD rules. In addition, we may provide
additional compensation to the Company's supervisory and other management
personnel if the overall amount of investments in funds advised by the Company
or its affiliates increases over time.
We may reimburse the distributor for certain expenses. The names of the
distributor and the registered representative responsible for your account are
stated in your enrollment materials. Commissions and sales related expenses are
paid by us and are not deducted from payments to your account.
Third Party Compensation Arrangements. Occasionally, we may:
> Pay commissions and fees to distributors affiliated or associated with the
contract holder, you and/or other contract participants; and/or
> Enter into agreements with entities associated with the contract holder, you
and/or other participants. Through such agreements, we may pay the entities
for certain services in connection with administering the contract.
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In both these circumstances there may be an understanding that the distributor
or entities would endorse us as a provider of the contract. You will be
notified if you are purchasing a contract that is subject to these
arrangements.
Contract Modification
We may change the contract as required by federal or state law. In addition, we
may, upon 30 days' written notice to the contract holder, make other changes to
group contracts that would apply only to individuals who become participants
under that contract after the effective date of such changes. If the group
contract holder does not agree to a change, we reserve the right to refuse to
establish new accounts under the contract, and under some contracts, to
discontinue accepting payments to existing accounts. Certain changes will
require the approval of appropriate state or federal regulatory authorities.
In addition, under some contracts we reserve the right, without contract holder
consent, to change the tables for determining the amount of income phase
payments or the income phase payment options available. Such a change would
only apply to income phase payments attributable to contributions accepted
after the date of change.
Legal Matters and Proceedings
We are aware of no material legal proceedings pending which involve the
separate account or the Company as a party or which would materially affect the
separate account. The validity of the securities offered by this prospectus has
been passed upon by Counsel to the Company.
Payment Delay or Suspension
We reserve the right to suspend or postpone the date of any payment of benefits
or values under the following circumstances:
(a) On any valuation date when the New York Stock Exchange is closed (except
customary weekend and holiday closings), or when trading on the Exchange
is restricted;
(b) When an emergency exists as determined by the SEC so that disposal of
securities held in the subaccounts is not reasonably practicable or it is
not reasonably practicable for us fairly to determine the value of the
subaccount's assets; or
(c) During any other periods the SEC may by order permit for the protection of
investors.
The conditions under which restricted trading or an emergency exists shall be
determined by the rules and regulations of the SEC.
Transfer of Ownership; Assignment
An assignment of a contract will only be binding on us if it is made in writing
and sent to us at our Home Office. We will use reasonable procedures to confirm
that the assignment is authentic, including verification of signature. If we
fail to follow our own procedures, we will be liable for any losses to you
directly resulting from the failure. Otherwise, we are not responsible for the
validity of any assignment. The rights of the contract holder and the interest
of the annuitant and any beneficiary will be subject to the rights of any
assignee we have on our records.
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Account Termination
Under some contracts, where allowed by state law, we reserve the right to
terminate an individual account if the account value is less than $5,000
($3,500 under some contracts and $1,999 for some contracts issued in New York),
this value is not due to negative investment performance, and if no purchase
payments have been received within the previous twelve months (thirty-six
months under some contracts issued in New York). We will notify you or the
contract holder 90 days prior to terminating the account. If we exercise this
right we will not deduct an early withdrawal charge.
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[OREGON EDUCATION ASSOCIATION CHOICE PERSONAL BENEFIT TRUST ("OEA TRUST")
AND THE COMPANY'S AGREEMENT
Under past and current agreements, the OEA Trust exclusively endorses our tax
deferred variable annuity and other related investment products for sale to its
members. Under the current agreement the OEA Trust agrees to:
> Facilitate Oregon Education Association ("OEA") members' access to the
variable annuity and other related investment products; and
> Assist us by providing services such as office space and secretarial/clerical
support.
The OEA Trust will provide an employee who:
> Is a registered representative of one of our affiliates;
> Advertises the Company in OEA's newsletter;
> Facilitates and coordinates meetings and workshops where registered
representatives of the Company's affiliate present the annuity to OEA members;
and
> Acts as a liaison between the Company and OEA members.
In return the Company agrees to:
> Compensate OEA Trust to help it defray the costs incurred in providing the
administrative and other support; and
> Reimburse OEA Trust for out-of-pocket travel and meeting expenses of an OEA
Trust employee who is also a registered representative of the Company's
affiliate.
During 1999, the Company paid OEA Trust $300,000 as reimbursement for the costs
and services described above. Effective January 1, 2000, the Company will pay
the OEA Trust $27,500 each month as reimbursement for the costs and services
described above.]
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Contents of the Statement of Additional Information
- --------------------------------------------------------------------------------
The Statement of Additional Information (SAI) contains more specific
information on the Separate Account and the contract, as well as the financial
statements of the Separate Account and the Company. A list of the contents of
the SAI is set forth below:
General Information and History
Variable Annuity Account C
Offering and Purchase of Contracts
Performance Data
General
Average Annual Total Return Quotations
Income Phase Payments
Sales Material and Advertising
Independent Auditors
Financial Statements of the Separate Account
Financial Statements of the Company
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Appendix I
Guaranteed Accumulation Account
- --------------------------------------------------------------------------------
The Guaranteed Accumulation Account (GAA) is a fixed interest option that may
be available during the accumulation phase. This appendix is only a summary of
certain facts about the GAA. Please read the GAA prospectus before investing in
this option.
In General. Amounts that you invest in GAA will earn a guaranteed interest rate
if amounts are left in GAA for the specified period of time. If you withdraw or
transfer those amounts before the specified period of time has elapsed, we may
apply a "market value adjustment," which may be positive or negative.
When you decide to invest money in GAA, you will want to contact your
representative or the Company to learn:
> The interest rate we will apply to the amounts that you invest in GAA. We
change this rate periodically, so be certain that you know what rate we
guarantee on the day your account dollars are invested into GAA.
> The period of time your account dollars need to remain in GAA in order to earn
that rate. You are required to leave your account dollars in GAA for a
specified period of time (guaranteed term), in order to earn the guaranteed
interest rate.
Deposit Periods. A deposit period is the time during which we offer a specific
interest rate if you deposit dollars for a certain guaranteed term. For a
particular interest rate and guaranteed term to apply to your account dollars,
you must invest them during the deposit period during which that rate and term
are offered.
Interest Rates. We guarantee different interest rates, depending upon when
account dollars are invested in GAA. The interest rate we guarantee is an
annual effective yield; that means that the rate reflects a full year's
interest. We credit interest daily at a rate that will provide the guaranteed
annual effective yield over one year. The guaranteed interest rate will never
be less than the rate stated in the contract.
Fees and Other Deductions.
> If all or a portion of your account value in GAA is withdrawn, you may incur
the following:
Market Value Adjustment (MVA)--as described in this appendix and in the GAA
prospectus
Tax Penalties and/or Tax withholding--See "Taxation"
Early Withdrawal Charge--See "Fees"
Maintenance Fee--"See Fees"
> We do not make deductions from amounts in the GAA to cover mortality and
expense risks. Rather, we consider these risks when determining the credited
rate.
Market Value Adjustment (MVA). If you withdraw or transfer your account value
from GAA before the guaranteed term is completed, an MVA may apply. The MVA
reflects the change in the value of the investment due to changes in interest
rates since the date of deposit. The MVA may be positive or negative.
> If interest rates at the time of withdrawal have increased since the date of
deposit, the value of the investment decreases and the MVA will be negative.
This could result in your receiving less than the amount you paid into GAA.
> If interest rates at the time of withdrawal have decreased since the date of
deposit, the value of the investment increases and the MVA will be positive.
Under some contracts issued in New York, if you have elected ECO as described
in "Systematic Distribution Options," no MVA applies to amounts withdrawn from
GAA.
Guaranteed Terms. The guaranteed term is the period of time account dollars
must be left in GAA in order to earn the interest rate specified for that
guaranteed term. We offer different guaranteed terms at different times. Check
with your representative or the Company to learn the details about the
guaranteed term(s) currently being offered.
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In general we offer the following guaranteed terms:
> short-term--three years or less; and
> long-term--ten years or less, but greater than three years.
At the end of a guaranteed term, your contract holder or you if permitted may:
> transfer dollars to a new guaranteed term;
> transfer dollars to other available investment options; or
> withdraw dollars.
Deductions may apply to withdrawals. See "Fees and Other Deductions" in this
section.
Transfer of Account Dollars. Generally, account dollars invested in GAA may be
transferred among guaranteed terms offered through GAA, and/or to other
investment options offered through the contract. However, transfers may not be
made during the deposit period in which your account dollars are invested in
GAA or for 90 days after the close of that deposit period. We will apply an MVA
to transfers made before the end of a guaranteed term.
Income Phase. GAA cannot be used as an investment option during the income
phase. The contract holder or you, if permitted, may notify us at least 30 days
in advance to elect a variable payment option and to transfer your GAA account
dollars to any of the subaccounts available during the income phase.
Loans. You cannot take a loan from your account value in GAA. However, we
include your account value in GAA when determining the amount of your account
value we may distribute as a loan.
Reinvesting amounts withdrawn from GAA. If amounts are withdrawn from GAA and
then reinvested in GAA, we will apply the reinvested amount to the current
deposit period. The guaranteed annual interest rate, and guaranteed terms
available on the date of reinvestment will apply. Amounts will be reinvested
proportionately in the same way as they were allocated before withdrawal.
Your account value will not be credited for any negative MVA that was deducted
at the time of withdrawal.
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Appendix II
Fixed Account
- --------------------------------------------------------------------------------
The Fixed Account is an investment option available during the accumulation
phase under some contracts. Under some contracts, this option is available to
installment purchase plans only. This option is not available in the state of
New York under some contracts.
- --------------------------------------------------------------------------------
Additional information about this option may be found in the contract.
- --------------------------------------------------------------------------------
Amounts allocated to the Fixed Account are held in the Company's general
account which supports insurance and annuity obligations.
General Disclosure. Interests in the Fixed Account have not been registered
with the SEC in reliance upon exemptions under the Securities Act of 1933, as
amended. Disclosure in this prospectus regarding the Fixed Account may be
subject to certain generally applicable provisions of the federal securities
laws relating to the accuracy and completeness of the statements. Disclosure in
this Appendix regarding the Fixed Account has not been reviewed by the SEC.
Interest Rates. The Fixed Account guarantees that amounts allocated to this
option will earn the minimum interest rate specified in the contract. We may
credit a higher interest rate from time to time, but the rate we credit will
never fall below the guaranteed minimum specified in the contract. Interest
rate guarantees are based on the claims paying ability of the Company. Amounts
applied to the Fixed Account will earn the interest rate in effect at the time
money is applied. Amounts in the Fixed Account will reflect a compound interest
rate as credited by us. The rate we quote is an annual effective yield.
Our determination of interest rates reflects the investment income earned on
invested assets and the amortization of any capital gains and/or losses
realized on the sale of invested assets. Under this option, we assume the risk
of investment gain or loss by guaranteeing the amounts you allocate to this
option and promising a minimum interest rate and income phase payment.
Withdrawals. Under certain emergency conditions, some contracts allow us to
defer payment of any withdrawal for a period of up to 6 months or as provided
by federal law. Additionally, if allowed by state law, some contracts provide
that we may pay withdrawals in equal payments with interest, over a period not
to exceed 60 months when:
(a) The Fixed Account withdrawal value exceeds $250,000 on the day before
withdrawal; and
(b) The sum of the current Fixed Account withdrawal and total of all Fixed
Account withdrawals within the past 12 calendar months exceeds 20% of the
amount in the Fixed Account on the day before the current withdrawal.
The contract describes how we will determine the interest rate credited to
amounts held in the Fixed Account during the payment period, including the
minimum interest rate.
Charges. We do not make deductions from amounts in the Fixed Account to cover
mortality and expense risks. We consider these risks when determining the
credited rate.
If you make a withdrawal from amounts in the Fixed Account, an early withdrawal
charge may apply. See "Fees--
Early Withdrawal Charge."
Transfers. During the accumulation phase, you may transfer account dollars from
the Fixed Account to any other available investment option. We may vary the
dollar amount that you are allowed to transfer, but it will never be less than
10% of your account value held in the Fixed Account each calendar year or each
12-month period, depending upon the contract. We determine the amount available
for transfer based on your Fixed Account value either (1) on the January 1st
preceding the transfer request or (2) as of the date we receive the transfer
request in good order at our Home Office. The 10% limit does not apply to
amounts being transferred into the Fixed Plus Account (if available under the
contract).
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By notifying the Home Office at least 30 days before income payments begin you,
or the contract holder on your behalf, may elect to have amounts transferred to
one or more of the funds available during the income phase to provide variable
payments.
Contract Loans. If available under your plan, contract loans may be made from
account values held in the Fixed Account.
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Appendix III
Fixed Plus Account
- --------------------------------------------------------------------------------
The Fixed Plus Account is an investment option available during the
accumulation phase under some contracts.
Amounts allocated to the Fixed Plus Account are held in the Company's general
account which supports insurance and annuity obligations.
- --------------------------------------------------------------------------------
Additional information about this option may be found in the contract.
- --------------------------------------------------------------------------------
General Disclosure. Interests in the Fixed Plus Account have not been
registered with the SEC in reliance upon exemptions under the Securities Act of
1933, as amended. Disclosure in this prospectus regarding the Fixed Plus
Account may be subject to certain generally applicable provisions of the
federal securities laws relating to the accuracy and completeness of the
statements. Disclosure in this Appendix regarding the Fixed Plus Account has
not been reviewed by the SEC.
Certain Restrictions. This option is not available in the state of New York
under some contracts. We reserve the right to limit investments in or transfers
to the Fixed Plus Account. Under most contracts, you may not elect certain
withdrawal options including, under most contracts, the systematic distribution
option, if you have requested a Fixed Plus Account transfer or withdrawal in
the prior 12-month period. For some contracts, under certain emergency
conditions, we may defer payment of a withdrawal from the Fixed Plus Account
for a period of up to six months or as provided by federal law.
Interest Rates. The Fixed Plus Account guarantees that amounts allocated to
this option will earn the minimum interest rate specified in the contract. We
may credit a higher interest rate from time to time, but the rate we credit
will never fall below the guaranteed minimum specified in the contract.
Interest rate guarantees are based on the claims paying ability of the Company.
Under some contracts, we credit amounts held in the Fixed Plus Account with a
rate 0.25% higher than the then-declared rate beginning in the tenth year after
your account was established. Amounts applied to the Fixed Plus Account will
earn the interest rate in effect at the time money is applied. Amounts in the
Fixed Plus Account will reflect a compound interest rate as credited by us. The
rate we quote is an annual effective yield.
Our determination of interest rates reflects the investment income earned on
invested assets and the amortization of any capital gains and/or losses
realized on the sale of invested assets. Under this option, we assume the risk
of investment gain or loss by guaranteeing the amounts you allocate to this
option and promising a minimum interest rate and income phase payment.
Requests for Partial Withdrawals. The contract holder or you, if permitted by
the plan, may take up to 20% of the Fixed Plus Account value as a partial
withdrawal in each twelve (12) month period, or under some contracts, in each
calendar year. We determine the amount eligible for partial withdrawal as of
the date we receive a request for partial withdrawal in good order at our Home
Office or as of the January 1st preceding the partial withdrawal request,
depending upon the terms of the contract. The amount allowed for partial
withdrawal is reduced by any Fixed Plus Account withdrawals, transfers, loans
or amounts applied to income phase payment options made in the prior 12 months
(or, under some contracts, the prior calendar year). Under most contracts, in
calculating the 20% limit, we reserve the right to include payments made due to
the election of a systematic distribution option.
Waiver of Partial Withdrawal Limits. We generally waive the 20% limit if the
partial withdrawal is due to the election of an income phase payment option
(under some contracts, the waiver does not apply to the election of a
nonlifetime payment option with variable payments). We also waive the 20% limit
for withdrawals due to your death. Under most contracts, the waiver upon death
may only be exercised once, must occur within six months after your date of
death and must be made proportionally from all subaccounts and fixed interest
options in which the account was invested.
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Also, under some contracts the 20% limit is waived if the withdrawal is due to
financial hardship or hardship resulting from an unforeseeable emergency, as
defined by the Tax Code and regulations thereunder (under some contracts it
must be for an unforeseeable emergency), and the following requirements are
satisfied:
> The hardship is certified (required under most contracts);
> The partial withdrawal is taken proportionally from each investment option in
which the your account invests;
> The amount is paid directly to you; and
> The amount paid for all withdrawals due to hardship during the previous
12-month period does not exceed 10% (20% under some contracts) of the average
value of your account(s) and all other accounts under the relevant contracts
during that same period.
Under some contracts, the percentage limit is also waived if the partial
withdrawal is due to separation from service and the following conditions are
met:
> The employer certifies you have separated from service;
> The amount withdrawn is paid directly to you; and
> The amount paid for all partial and full withdrawals due to separation from
service during the previous 12-month period does not exceed 20% of the
average value of your account(s) and all other accounts under the relevant
contracts providing this waiver during that same period.
Additionally, we may allow other waivers of the percentage limit on partial
withdrawals to participants in certain plans. You can determine what additional
waivers, if any, apply to you by referring to the contract or certificate.
Requests for Full Withdrawals. If the contract holder or you, if allowed by the
plan, request a full withdrawal of your Fixed Plus Account value, we will pay
any amounts held in the Fixed Plus Account, with interest, in five annual
payments that will be equal to:
> One-fifth of the Fixed Plus Account value on the day the request is received,
reduced by any Fixed Plus Account withdrawals, transfers, amounts used to fund
income phase payments, or loans made during the prior 12 months (or, under
some contracts, during the prior calendar year);
> One-fourth of the remaining Fixed Plus Account value 12 months later;
> One-third of the remaining Fixed Plus Account value 12 months later;
> One-half of the remaining Fixed Plus Account value 12 months later; and
> The balance of the Fixed Plus Account value 12 months later.
Under some contracts, there is a different method of calculating the amount
available each year. The full withdrawal will be paid in installments of 20% of
your account value held in the Fixed Plus Account, reduced by any Fixed Plus
Account withdrawals, transfers, amounts used to fund income phase payments, or
loans made during the prior 12 months in each of four consecutive 12-month
periods. Under this provision, the remaining Fixed Plus Account balance in the
account may be withdrawn any time after the end of the fourth 12-month period.
Once we receive a request for a full withdrawal, no further withdrawals, loans
or transfers will be permitted from the Fixed Plus Account. A full withdrawal
from the Fixed Plus Account may be canceled at any time before the end of the
five-payment period.
Waiver of Full Withdrawal Provisions. We will waive the Fixed Plus Account
five-installment payout for full withdrawals made due to one or more of the
following:
(a) Due to the election of an income phase payment option (under some contracts
this waiver does not apply to the election of a nonlifetime payment option
with variable payments);
(b) Due to your death during the accumulation phase. Some contracts require
that we be notified of your death, or that the withdrawal be taken, within
six months of the death); and/or
(c) When the Fixed Plus Account value is $5,000 or less (lower amounts may
apply under some contracts). Most contracts also require that no
withdrawals, transfers, loans or elections of income phase payment options
have been made from the account within the prior 12 months (or, under some
contracts, within the prior calendar year).
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Additionally, under certain contracts, we will waive the five-payment full
withdrawal provision due to one or more of the following:
1. Due to financial hardship or hardship resulting from an unforeseeable
emergency, as defined by the Tax Code and regulations thereunder if all of
the following conditions are met:
> The hardship is certified by the employer, and, under some contracts;
> The amount is paid directly to you; and
> The amount paid for all withdrawals due to hardship during the previous
12-month period does not exceed 10% (20% under some contracts) of the average
value of your account(s) and all other accounts under the relevant contract
during that same period.
2. For any in-service distributions permitted by the plan and the following
conditions are met:
> The distribution has been certified by the employer;
> The amount distributed is paid directly to you; and
> The amount paid for all such withdrawals during the previous 12-months does
not exceed a given percentage (stated in the contract) of the average value of
all your accounts and all other accounts under the relevant contract during
the same period.
3. Due to your separation from service with the employer, provided that all the
following apply*:
> The employer certifies that you have separated from service;
> The amount withdrawn is paid directly to you (under some contracts it must be
paid directly to you only if you withdraw the amounts more than one year after
separation); and
> Under most contracts, if the amount paid for all partial and full withdrawals
due to separation from service during the previous 12-month period does not
exceed 20% of the average value of all your account(s) and all other accounts
under the relevant contract during that same period.
4. If you are at least age 59-1/2 and have completed nine payment periods
5. If we terminate your account based on our right to do so for accounts below
a certain value (usually $5,000 or less; lower amounts may apply under some
contracts).
6. Additionally, we may allow other waivers of the five installment payout for
full withdrawals to participants in certain plans. You can determine what
additional waivers, if any, apply to you by referring to the contract or
certificate.
Charges. We do not make deductions from amounts in the Fixed Plus Account to
cover mortality and expense risks. We consider these risks when determining the
credited rate.
Transfers. The contract holder or you, if allowed by the plan, may transfer 20%
of your account value held in the Fixed Plus Account in each 12-month period or
during each calendar year, depending upon the terms of the contract. We
determine the amount eligible for transfer on the day we receive a transfer
request in good order at our Home Office, or under some contracts, as of the
January 1st preceding the transfer request. We will reduce amounts allowed for
transfer by any Fixed Plus Account withdrawals, transfers, loans or amounts
applied to income phase payment options during the prior 12 months (or, under
some contracts, during the prior calendar year). Under most contracts, in
calculating the percentage limit on transfers, we reserve the right to include
payments made due to the election of any of the systematic distribution
options. We will waive the percentage limit on transfers when the value in the
Fixed Plus Account is $1,000 or less ($2,000 or less under some contracts).
Under some contracts, if you transfer 20% of your account value held in the
Fixed Plus Account in each of four consecutive 12-month periods, you may
transfer the remaining balance in the succeeding 12-month period provided you
do not allocate any amount to or transfer any other amount from the Fixed Plus
Account during
- -----------------
* Instead of the provisions under number 3 above, some contracts waive the
five-payment full withdrawal provision for separation from service if all of
the following apply:
> The hardship is certified by the employer;
> We receive the withdrawal request within 60 days of the date of separation;
and
> You pay a 3% charge based on the entire Fixed Plus Account value.
If you instead choose to have your payout in five annual installments as
described above, then we will not assess the charge.
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<PAGE>
the five-year period. The 20% amount available to transfer under this provision
will be reduced by any amount transferred, taken as a loan or applied to income
phase payment options within the 12-month period preceding the first 20%
transfer. Also, we may reduce it for payments we made from your Fixed Plus
Account value under any systematic distribution option.
Income Phase. Amounts accumulating under the Fixed Plus Account can be
transferred to subaccounts to fund variable payments during the income phase.
Availability of subaccounts may vary during the income phase. Some contracts do
not permit Fixed Plus Account values to fund nonlifetime income options with
variable payments.
Contract Loans. If permitted under the plan, loans may be made from account
values held in the Fixed Plus Account. See the loan agreement for a description
of the amount available and possible consequences upon loan default if Fixed
Plus Account values are used for a loan.
Transfer Credits. The Company provides a transfer credit in certain
circumstances. See "Purchase--Transfer Credits." The transfer credit is a
specified percentage of the assets transferred to the Company under a contract
that remain in the accounts for the period of time specified by the Company,
plus the interest that would have been credited had that amount been deposited
in the Fixed Plus Account on the first business day of the calendar month
following its calculation. We apply the transfer credit to the current value
held in the Fixed Plus Account.
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Appendix IV
Employee Appointment of Employer as Agent
Under an Annuity Contract
- --------------------------------------------------------------------------------
For Plans under Section 403(b), 401 or 403(a) of the Code (except voluntary
Section 403(b) Plans)
================================================================================
My employer has adopted a plan under Internal Revenue Code Sections 403(b),
401(a)/401(k) or 403(a) ("Plan") and has purchased an Aetna Life Insurance and
Annuity Company ("Company") group variable annuity contract ("Contract") as the
funding vehicle. Contributions under this Plan will be made by me through
salary reduction to an Employee Account, and by my employer to an Employer
Account.
By electing to participate in my employer's Plan, I voluntarily appoint my
employer, who is the Contract Holder, as my agent for the purposes of all
transactions under the Contract in accordance with the terms of the Plan. The
Company is not a party to the Plan and does not interpret the Plan provisions.
As a Participant in the Plan, I understand and agree to the following terms and
conditions:
> I own the value of my Employee Account subject to the restrictions of Sections
403(b), 401(a)/401(k) or 403(a) and the terms of the Plan. Subject to the
terms of the vesting schedule in the Plan and the restrictions of Sections
403(b), 401(a)/401(k) or 403(a), I have ownership in the value of my Employer
Account.
> I understand that the Company will process transactions only with my
employer's written direction to the Company. I agree to be bound by my
employer's interpretation of the Plan provisions and its written direction to
the Company.
> My employer may permit me to make investment selections under the Employee
Account and/or the Employer Account directly with the Company under the terms
of the Contract. Without my employer's written permission, I will be unable to
make any investment selections under the Contract.
> On my behalf, my employer may request a loan in accordance with the terms of
the Contract and the provisions of the Plan. The Company will make payment of
the loan amount directly to me. I will be responsible for making repayments
directly to the Company in a timely manner.
> In the event of my death, my employer is the named Beneficiary under the terms
of the Contract. I have the right to name a personal Beneficiary as determined
under the terms of the Plan and file that Beneficiary election with my
employer. It is my employer's responsibility to direct the Company to properly
pay any death benefits.
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Appendix V
Fund Descriptions
[Will be updated by amendment]
- --------------------------------------------------------------------------------
The investment results of the mutual funds (funds) are likely to differ
significantly and there is no assurance that any of the funds will achieve
their respective investment objectives. Shares of the funds will rise and fall
in value and you could lose money by investing in the funds. Shares of the
funds are not bank deposits and are not guaranteed, endorsed or insured by any
financial institution, the Federal Deposit Insurance Corporation or any other
government agency. Except as noted, all funds are diversified, as defined under
the Investment Company Act of 1940.
> Aetna Balanced VP, Inc. seeks to maximize investment return, consistent with
reasonable safety of principal by investing in a diversified portfolio of one
or more of the following asset classes: stocks, bonds, and cash equivalents,
based on the investment adviser's judgment of which of those sectors or mix
thereof offers the best investment prospects.(1)
> Aetna Income Shares d/b/a Aetna Bond VP seeks to maximize total return,
consistent with reasonable risk, through investments in a diversified
portfolio consisting primarily of debt securities. It is anticipated that
capital appreciation and investment income will both be major factors in
achieving total return.(1)
> Aetna Variable Fund d/b/a Aetna Growth and Income VP seeks to maximize total
return through investments in a diversified portfolio of common stocks and
securities convertible into common stock. It is anticipated that capital
appreciation and investment income will both be major factors in achieving
total return.(1)
> Aetna Variable Encore Fund d/b/a Aetna Money Market VP seeks to provide high
current return, consistent with preservation of capital and liquidity, through
investment in high-quality money market instruments. An investment in the fund
is neither insured nor guaranteed by the U.S. Government.(1)
> Aetna Generation Portfolios, Inc.--Aetna Ascent VP seeks to provide capital
appreciation. The Portfolio is designed for investors who generally have an
investment horizon exceeding 15 years and who have a high level of risk
tolerance.(1)
> Aetna Generation Portfolios, Inc.--Aetna Crossroads VP seeks to provide total
return (i.e., income and capital appreciation, both realized and unrealized).
The Portfolio is designed for investors who generally have an investment
horizon exceeding 10 years and who have a moderate level of risk tolerance.(1)
> Aetna Generation Portfolios, Inc.--Aetna Legacy VP seeks to provide total
return consistent with preservation of capital. The Portfolio is designed for
investors who generally have an investment horizon exceeding five years and
who have a low level of risk tolerance.(1)
> Aetna Variable Portfolios, Inc.--Aetna Growth VP seeks growth of capital
through investment in a diversified portfolio of common stocks and securities
convertible into common stocks believed to offer growth potential.(1)
> Aetna Variable Portfolios, Inc.--Aetna High Yield VP seeks high current income
and growth of capital primarily through investment in a diversified portfolio
of fixed-income securities rated lower than BBB- by Standard and Poor's
Corporation or lower than Baa3 by Moody's Investors Service, Inc.(1)
> Aetna Variable Portfolios, Inc.--Aetna Index Plus Large Cap VP seeks to
outperform the total return performance of the Standard & Poor's 500 Composite
Index (S&P 500), while maintaining a market level of risk.(1)
> Aetna Variable Portfolios, Inc.--Aetna Index Plus Mid Cap VP seeks to
outperform the total return performance of the Standard & Poor's MidCap 400
Index (S&P 400), while maintaining a market level of risk.(1)
> Aetna Variable Portfolios, Inc.--Aetna Index Plus Small Cap VP seeks to
outperform the total return performance of the Standard & Poor's SmallCap 600
Index (S&P 600), while maintaining a market level of risk.(1)
> Aetna Variable Portfolios, Inc.--Aetna International VP seeks long-term
capital growth primarily through investment in a diversified portfolio of
common stocks principally traded in countries outside of the U.S. Aetna
International VP will not target any given level of current income.(1)
> Aetna Variable Portfolios, Inc.--Aetna Real Estate Securities VP seeks maximum
total return primarily through investment in a diversified
57
<PAGE>
portfolio of equity securities issued by real estate companies, the
majority of which are real estate investment trusts (REITs).(1)
> Aetna Variable Portfolios, Inc.--Aetna Small Company VP seeks growth of
capital primarily through investment in a diversified portfolio of common
stocks and securities convertible into common stocks of companies with smaller
market capitalizations.(1)
> Aetna Variable Portfolios, Inc.--Aetna Technology VP
> Aetna Variable Portfolios, Inc.--Aetna Value Opportunity VP seeks growth of
capital primarily through investment in a diversified portfolio of common
stocks and securities convertible into common stocks.(1)
> AIM V.I. Capital Appreciation Fund seeks growth of capital through investment
in common stocks, with emphasis on medium- and small-sized growth
companies.(2)
> AIM V.I. Growth Fund seeks growth of capital primarily by investing in
seasoned and better capitalized companies considered to have strong earnings
momentum.(2)
> AIM V.I. Growth and Income Fund seeks growth of capital with a secondary
objective of current income.(2)
> AIM V.I. Value Fund seeks to achieve long-term growth of capital by investing
primarily in equity securities judged by the fund's investment advisor to be
undervalued relative to the investment advisor's appraisal of the current or
projected earnings of the companies issuing the securities, or relative to
current market values of assets owned by the companies issuing the securities
or relative to the equity market generally. Income is a secondary
objective.(2)
> Calvert Social Balanced Portfolio is a nondiversified portfolio that seeks to
achieve a competitive total return through an actively managed, nondiversified
portfolio of stocks, bonds, and money market instruments which offer income
and capital growth opportunity and which satisfy the investment and social
criteria established for the Portfolio.(3)
> DEM Equity Fund (Institutional Shares)Equity-Income Portfolio
> Fidelity Variable Insurance Products Fund (VIP)--
Equity-Income Portfolio seeks reasonable income. The fund will also
consider the potential for capital appreciation. The fund seeks a yield
which exceeds the composite yield on the securities comprising the S&P
500.(4)
> Fidelity Variable Insurance Products Fund (VIP)--
Growth Portfolio seeks capital appreciation by investing primarily in
common stocks of companies the investment adviser believes have
above-average growth potential.(4)
> Fidelity Variable Insurance Products Fund (VIP)--
Overseas Portfolio seeks long-term growth of capital by investing in
foreign securities, primarily in common stocks.(4)
> Fidelity Variable Insurance Products Fund II (VIP II)--Contrafund Portfolio
seeks long term capital appreciation by investing primarily in common stocks
of companies whose value the investment adviser believes is not fully
recognized by the public.(4)
> Janus Twenty Fund
> Janus Aspen Series--Aggressive Growth Portfolio is a nondiversified portfolio
that seeks long-term growth of capital. The Portfolio pursues its investment
objective by investing primarily in common stocks selected for their growth
potential, and normally invests at least 50% of its equity assets in
medium-sized companies. Medium-sized companies are those whose market
capitalizations at the time of investment fall within the range of companies
in the S&P MidCap 400 Index. Market capitalization is a commonly used measure
of the size and value of a company. The market capitalizations within the
Index will vary, but as of December 31, 1999, they ranged from approximately
$ million to $ billion.(5)
> Janus Aspen Series--Balanced Portfolio seeks long-term capital growth,
consistent with preservation of capital and balanced by current income. The
Portfolio pursues its investment objective by normally investing 40%-60% of
its assets in securities selected primarily for their growth potential and
40%-60% of its assets in securities selected primarily for their income
potential. This Portfolio normally invests at least 25% of its assets in
fixed-income securities.(5)
> Janus Aspen Series--Flexible Income Portfolio seeks to obtain maximum total
return, consistent with preservation of capital. The Portfolio pursues its
investment objective by primarily investing in a wide variety of
income-producing securities such as corporate bonds and notes, government
securities and preferred stock. As a fundamental policy, the
58
<PAGE>
Portfolio will invest at least 80% of its assets in income-producing
securities. The Portfolio may own an unlimited amount of
high-yield/high-risk securities, and these may be a big part of the portfolio.
This Portfolio generates total return from a combination of current income and
capital appreciation, but income is usually the dominant portion.(5)
> Janus Aspen Series--Growth Portfolio seeks long-term growth of capital in
a manner consistent with the preservation of capital. The Portfolio
pursues its investment objective by investing primarily in common stocks
selected for their growth potential. Although the Portfolio can invest in
companies of any size, it generally invests in larger, more established
issuers.(5)
> Janus Aspen Series--Worldwide Growth Portfolio seeks long-term growth of
capital in a manner consistent with the preservation of capital. The Portfolio
pursues its investment objective by investing primarily in common stocks of
companies of any size throughout the world. The Portfolio normally invests in
issuers from at least five different countries, including the United States.
The Portfolio may at times invest in fewer than five countries or even a
single country.(5)
> Lexington Natural Resources Trust is a nondiversified portfolio that seeks
long-term growth of capital through investment primarily in common stocks of
companies which own or develop natural resources and other basic commodities
or supply goods and services to such companies.(6)
> Oppenheimer Global Securities Fund/VA seeks long-term capital appreciation by
investing a substantial portion of its assets in securities of foreign
issuers, "growth-type" companies, cyclical industries and special situations
which are considered to have appreciation possibilities.(7)
> Oppenheimer Strategic Bond Fund/VA seeks a high level of current income
principally derived from interest on debt securities and seeks to enhance such
income by writing covered call options on debt securities.(7)
> Portfolio Partners, Inc.--MFS Capital Opportunities Portfolio (formerly known
as Portfolio Partners MFS Value Equity Portfolio) seeks capital
appreciation.(8)(a)
> Portfolio Partners, Inc.--MFS Emerging Equities Portfolio seeks long-term
growth of capital.(8)(a)
> Portfolio Partners, Inc.--MFS Research Growth Portfolio seeks long-term growth
of capital and future income.(8)(a)
> Portfolio Partners, Inc.--Scudder International Growth Portfolio seeks
long-term growth of capital.(8)(b)
> Portfolio Partners, Inc.--T. Rowe Price Growth Equity Portfolio seeks
long-term capital growth, and, secondarily, increasing dividend income.(8)(c)
Investment Advisers for each of the Funds:
(1) Aeltus Investment Management, Inc.
(2) AIM Advisors, Inc.
(3) Calvert Asset Management Company, Inc.
(4) Fidelity Management & Research Company (adviser)
(5) Janus Capital Corporation
(6) Lexington Management Corporation
(adviser); Market Systems Research Advisors, Inc. (subadviser)
(7) OppenheimerFunds, Inc.
(8) Aetna Life Insurance and Annuity Company (adviser);
(a) Massachusetts Financial Services Company (subadviser)
(b) Scudder Kemper Investments, Inc. (subadviser)
(c) T. Rowe Price Associates, Inc. (subadviser)
59
<PAGE>
Updated Condensed Financial Information will be filed by Amendment
Appendix VI
Condensed Financial Information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Table I--For Contracts Issued Under 403(b), 401(a)
and 401(k) Plans with Total Separate Account Charges of
0.40%, 0.45%, and 0.50% .................................... 59
Table II--For Contracts Issued Under 403(b), 401(a)
and 401(k) Plans with Total Separate Account Charges of
0.75%, 0.80%, and 0.85% .................................... 62
Table III--For Contracts Issued Under 403(b), 401(a)
and 401(k) Plans with Total Separate Account Charges of
0.90% and 0.95% ............................................ 65
Table IV--For Contracts Issued Under 403(b), 401(a)
and 401(k) Plans with Total Separate Account Charges of
1.00% and 1.05% ............................................ 68
Table V--For Contracts Issued Under 403(b), 401(a)
and 401(k) Plans with Total Separate Account Charges of
1.10% and 1.15% ............................................ 72
Table VI--For Contracts Issued Under 403(b), 401(a)
and 401(k) Plans with Total Separate Account Charges of
1.20% and Those Issued Since 1996 with Total Separate
Account Charges of 1.25% ................................... 76
Table VII--For Contracts Issued Under 403(b), 401(a)
and 401(k) Plans with Total Separate Account Charges of
1.30% and 1.40% ............................................ 79
Table VIII--For Contracts Issued Since 1996 Under 403(b),
401(a) and 401(k) Plans with Total Separate Account Charges
of 1.50% ................................................... 82
Table IX--For Contracts Issued Under 403(b) Plans and
Deferred Compensation Plans with Total Separate Account
Charges of 1.25% ........................................... 85
Table X--For Multiple Option Contracts Issued to
San Bernardino County and Macomb County with Total
Separate Account Charges of 1.25% .......................... 89
Table XI--For Contracts Issued Under 403(b) Plans and
Deferred Compensation Plans with Total Separate Account
Charges of 1.50% (including a 0.25% Administrative Expense
Charge Beginning April 7, 1997) ............................ 92
Table XII--For Contracts Containing Limits on Fees Issued
Under 403(b) Plans and Deferred Compensation Plans ......... 95
Table XIII--For Deferred Compensation Contracts with
Total Separate Account Charges of 0.95% Effective
On January 15, 1996 ........................................ 97
Table XIV--For Deferred Compensation Contracts with
Total Separate Account Charges of 0.95% Effective
On May 25, 1996 ............................................ 101
Table XV--For Deferred Compensation Contracts with
Total Separate Account Charges of 0.95% Effective
On or After December 16, 1996 .............................. 105
</TABLE>
60
<PAGE>
For Master Applications Only
- --------------------------------------------------------------------------------
I hereby acknowledge receipt of an Account C prospectus dated May 1, 2000, as
well as all current prospectuses for the funds available under the Contracts.
- --- Please send an Account C Statement of Additional Information (Form No.
SAI.01107-00) dated May 1, 2000.
- --------------------------------------------------------------------------------
CONTRACT HOLDER'S SIGNATURE
- --------------------------------------------------------------------------------
DATE
PROS.01107-00
111
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT C
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
- --------------------------------------------------------------------------------
Statement of Additional Information dated May 1, 2000
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the current prospectus dated May 1, 2000. The contracts
offered in connection with the prospectus are group or individual deferred
variable annuity contracts funded through Variable Annuity Account C (the
"separate account").
A free prospectus is available upon request from the local Aetna Life Insurance
and Annuity Company office or by writing to or calling:
Aetna Life Insurance and Annuity Company
Customer Service
151 Farmington Avenue
Hartford, Connecticut 06156
1-800-262-3862
Read the prospectus before you invest. Unless otherwise indicated, terms used in
this Statement of Additional Information shall have the same meaning as in the
prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
General Information and History...........................................
Variable Annuity Account C................................................
Offering and Purchase of Contracts........................................
Performance Data..........................................................
General..............................................................
Average Annual Total Return Quotations...............................
Income Phase Payments.....................................................
Sales Material and Advertising............................................
Independent Auditors......................................................
Financial Statements of the Separate Account.............................. S-1
Financial Statements of Aetna Life Insurance and Annuity Company ......... F-1
</TABLE>
<PAGE>
GENERAL INFORMATION AND HISTORY
Aetna Life Insurance and Annuity Company (the "Company," we, us, our) is a stock
life insurance company which was organized under the insurance laws of the State
of Connecticut in 1976. Through a merger, it succeeded to the business of Aetna
Variable Annuity Life Insurance Company (formerly Participating Annuity Life
Insurance Company organized in 1954). As of December 31, 1999, the Company and
its subsidiary life company had $__ billion invested through its products,
including $__ billion in its separate accounts (of which the Company or its
subsidiary, Aeltus Investment Management, Inc. oversees the management of $__
billion). The Company is ranked based on assets among the top __% of all U.S.
life insurance companies rated by A.M. Best Company as of December 31, 199_. The
Company is an indirect wholly owned subsidiary of Aetna Inc. The Company is
engaged in the business of issuing life insurance policies and annuity
contracts. Our Home Office is located at 151 Farmington Avenue, Hartford,
Connecticut 06156.
In addition to serving as the principal underwriter and the depositor for the
separate account, the Company is a registered investment adviser under the
Investment Advisers Act of 1940, and a registered broker-dealer under the
Securities Exchange Act of 1934. We provide investment advice to several of the
registered management investment companies offered as variable investment
options under the contracts funded by the separate account (see "Variable
Annuity Account C" below).
Other than the mortality and expense risk charge and administrative expense
charge described in the prospectus, all expenses incurred in the operations of
the separate account are borne by the Company. (See "Fees" in the prospectus.)
We receive reimbursement for certain administrative costs from some advisers of
the funds used as funding options under the contract. These fees generally range
up to 0.475%.
The assets of the separate account are held by the Company. The separate account
has no custodian. However, the funds in whose shares the assets of the separate
account are invested each have custodians, as discussed in their respective
prospectuses.
From this point forward, the term "contract(s)" refers only to those offered
through the prospectus.
VARIABLE ANNUITY ACCOUNT C
Variable Annuity Account C is a separate account established by the Company for
the purpose of funding variable annuity contracts issued by the Company. The
separate account is registered with the Securities and Exchange Commission as a
unit investment trust under the Investment Company Act of 1940, as amended.
Purchase payments to accounts under the contract may be allocated to one or more
of the subaccounts. Each subaccount invests in the shares of only one of the
funds listed below. We may make additions to, deletions from or substitutions of
available investment options as permitted by law and subject to the conditions
of the contract. The availability of the funds is subject to applicable
regulatory authorization. Not all funds are available in all jurisdictions,
under all contracts, or under all plans.
<PAGE>
The funds currently available under the contract are as follows:
<TABLE>
<S> <C>
o Aetna Ascent VP o Fidelity Variable Insurance Products Fund (VIP) Growth Portfolio
o Aetna Balanced VP, Inc. o Fidelity Variable Insurance Products Fund (VIP) Overseas Portfolio
o Aetna Income Shares d/b/a Aetna Bond VP o Fidelity Variable Insurance Products Fund (VIP II) Contrafund Portfolio
o Aetna Crossroads VP o Janus Twenty Fund(2)
o Aetna Growth VP o Janus Aspen Aggressive Growth Portfolio
o Aetna Variable Fund d/b/a Aetna Growth and Income VP o Janus Aspen Balanced Portfolio
o Aetna High Yield VP(1) o Janus Aspen Flexible Income Portfolio
o Aetna Index Plus Large Cap VP o Janus Aspen Growth Portfolio
o Aetna Index Plus Mid Cap VP o Janus Aspen Worldwide Growth Portfolio
o Aetna Index Plus Small Cap VP o Lexington Natural Resources Trust(3)
o Aetna International VP o Oppenheimer Global Securities Fund
o Aetna Legacy VP o Oppenheimer Strategic Bond Fund
o Aetna Variable Encore Fund d/b/a Aetna Money Market VP o Portfolio Partners Inc. (PPI) MFS Capital Opportunities Portfolio
o Aetna Real Estate Securities VP(1) formerly known as Value Equity Portfolio
o Aetna Small Company VP o Portfolio Partners Inc. (PPI) MFS Emerging Equities Portfolio
o Aetna Technology VP o Portfolio Partners Inc. (PPI) MFS Research Growth Portfolio
o Aetna Value Opportunity VP o Portfolio Partners Inc. (PPI) Scudder International Growth Portfolio
o AIM V.I. Capital Appreciation Fund o Portfolio Partners Inc. (PPI) T. Rowe Price Growth Equity Portfolio
o AIM V.I. Growth Fund
o AIM V.I. Growth and Income Fund
o AIM V.I. Value Fund
o Calvert Social Balanced Portfolio
o DEM Equity Fund (Institutional Shares)(2)
o Fidelity Variable Insurance Products Fund (VIP)
Equity-Income Portfolio
</TABLE>
(1) Effective July 15, 2000, transfers or deposits are not allowed into the
subaccount investing in this fund, except from customers whom standing
instructions (e.g., payroll deduction allocations, dollar cost averaging)
in effect prior to this date.
(2) This fund is available to the general public.
(3) Transfers or deposits are not allowed into the subaccount investing in this
fund, except from accounts established under the contract before May 1,
1998. As soon as all those who have current allocations to the subaccount
under the contract have redirected their allocations to other investment
options, we will close the subaccount to all investments (except loan
repayments that we automatically deposit into the subaccount according to
our loan repayment procedures).
A complete description of each of the funds, including their investment
objectives, policies, risks and fees and expenses, is contained in the
prospectus and statement of additional information for each of the funds.
OFFERING AND PURCHASE OF CONTRACTS
The Company is both the depositor and the principal underwriter for the
securities sold under the prospectus. We offer the contracts through life
insurance agents licensed to sell variable annuities who are registered
representatives of the Company or of other registered broker-dealers who have
sales agreements with the Company. The offering of the contracts is continuous.
A description of the manner in which contracts are purchased may be found in the
prospectus under the sections entitled "Contract Ownership and Rights" and "Your
Account Value."
<PAGE>
PERFORMANCE DATA
General
From time to time, we may advertise different types of historical performance
for the subaccounts of the separate account available under the contracts. We
may advertise the "standardized average annual total returns," calculated in a
manner prescribed by the Securities and Exchange Commission (the "standardized
total return"), as well as the "non-standardized total return," both of which
are described below.
The standardized and non-standardized total return figures are computed
according to a formula in which a hypothetical initial purchase payment of
$1,000 is applied to the various subaccounts under the contract, and then
related to the ending redeemable values over one, five and ten year periods (or
fractional periods thereof). The redeemable value is then divided by the initial
investment and this quotient is taken to the Nth root (N represents the number
of years in the period) and 1 is subtracted from the result which is then
expressed as a percentage, carried to at least the nearest hundredth of a
percent. The standardized figures use the actual returns of the fund since the
date contributions were first received in the corresponding subaccount of the
separate account and then adjust them to reflect the deduction of all recurring
charges under the contracts during each period (e.g., mortality and expense risk
charges, administrative expense charges, maintenance fees and early withdrawal
charges). These charges will be deducted on a pro rata basis in the case of
fractional periods. The maintenance fee is converted to a percentage of assets
based on the average account size under the contracts described in the
prospectus. The total return figures shown below may be different from the
actual historical total return under your contract because for periods prior to
1994, the subaccount's investment performance reflected the investment
performance of the underlying fund plus any cash held by the subaccount.
The non-standardized total return figures will be calculated in a similar
manner, except that they will not reflect the deduction of any applicable early
withdrawal charge, and in some advertisements will also exclude the effect of
any applicable maintenance fee. The deduction of the early withdrawal charge and
the maintenance fee would decrease the level of performance shown if reflected
in these calculations. The non-standardized figures may also include monthly,
quarterly, year-to-date and three year periods, and may include returns
calculated from the fund's inception date and/or the date contributions were
first received in the corresponding subaccount of the separate account. The
non-standardized returns shown in the tables below reflect the deduction of all
charges under the contract except the early withdrawal charge. The maximum
maintenance fee has been deducted for the purposes of calculating the returns.
Investment results of the funds will fluctuate over time, and any presentation
of the subaccounts' total return quotations for any prior period should not be
considered as a representation of how the subaccounts will perform in any future
period. Additionally, the contract value and/or account value upon redemption
may be more or less than your original cost.
Average Annual Total Return Quotations - Standardized and Non-Standardized
The tables below reflect the average annual standardized and non-standardized
total return quotation figures for the periods ended December 31, 1999 for the
subaccounts under the contracts. The standardized returns (Table A) assume the
maximum mortality and expense risk charge of 1.50%, administrative expense
charge of 0.25%, maximum maintenance fee of $30 and early withdrawal charges
corresponding to Schedule I in the prospectus that is based on completed payment
periods. The non-standardized returns (Table B) assume the same charges but do
not include the early withdrawal charges. We may also advertise returns based on
other fee schedules that apply to a particular contract. These fee schedules may
result in higher returns than those shown.
For the subaccounts funded by the Portfolio Partners portfolios, two sets of
performance returns are shown for each subaccount: one showing performance based
solely on the performance of the Portfolio Partners portfolio from November 28,
1997, the date the Portfolio commenced operations; and one quotation based on
(a)
<PAGE>
performance through November 26, 1997 of the fund it replaced under many
contracts and; (b) after November 26, 1997, based on the performance of the
Portfolio Partners portfolio.
For those subaccounts where results are not available for the full calendar
period indicated, performance for such partial periods is shown in the column
labeled "Since Inception." For standardized performance, the "Since Inception"
column shows the average annual return since the date contributions were first
received in the fund under the separate account. For non-standardized
performance, the "Since Inception" column shows average annual total return
since the fund's inception date.
TABLE A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Date
SUBACCOUNT Contributions
STANDARIZED First
Received
Under the
Separate
Account
- -------------------------------------------------------------------------------------------------------------------------------
Since
1 Year 5 Year 10 Year Inception*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Aetna Ascent VP 07/05/1995
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc. 04/03/1989
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP(1)
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 07/05/1995
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 05/30/1997
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1)
- -------------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP 05/04/1998
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 10/31/1996
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 05/04/1998
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 05/04/1998
- -------------------------------------------------------------------------------------------------------------------------------
Aetna International VP 05/04/1998
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 07/05/1995
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1) (2)
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP 05/04/1998
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 05/30/1997
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 05/30/1997
- -------------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio 05/31/1989
- -------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio 05/31/1994
- -------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 05/31/1994
- -------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio 05/31/1994
- -------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund Portfolio 05/31/1995
- -------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 06/30/1994
- -------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 06/30/1995
- -------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Income Portfolio 10/31/1994
- -------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 06/30/1995
- -------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 05/31/1995
- -------------------------------------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust 10/14/1991
- -------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 05/04/1998
- -------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 05/07/1998
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
PPI MFS Capital Opportunities Portfolio 11/28/1997
- -------------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital Opportunities Portfolio(3) 05/31/1989
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
PPI MFS Emerging Equity Portfolio 11/28/1997
- -------------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3) 09/30/1993
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio 11/28/1997
- -------------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS Research Growth(3) 08/31/1992
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio 11/28/1997
- -------------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(3) 07/31/1989
- -------------------------------------------------------------------------------------------------------------------------------
PPI T Rowe Price Growth Equity Portfolio 11/28/1997
- -------------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(3) 10/31/1994
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding Table A for an explanation of the
charges included and methodology used in the standardized and non-standardized
figures. These figures represent historical performance and should not be
considered a projection of future performance.
* Reflects performance from the date contributions were first received in the
corresponding subaccount of the separate account.
(1) These funds have been available through the separate account for more than
ten years.
(2) The current yield for the subaccount for the 7-day period ended December 31,
1999 (on an annualized basis) was ____%. Current yield more closely reflects
current earnings than does total return. The current yield reflects the
deduction of all charges under the contract that are deducted from the total
return quotations shown above except the maximum 5% early withdrawal charge.
(3) The fund first listed was replaced with the applicable Portfolio Partners
Portfolio after the close of business on November 26, 1997. The performance
shown is based on the performance of the replaced fund until November 26,
1997, and the performance of the applicable Portfolio Partners Portfolio
after that date. The replaced fund may not have been available under all
contracts. The "Date Contributions First Received Under the Separate
Account" refers to the applicable date for the replaced fund.
<PAGE>
TABLE B
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
SUBACCOUNT Fund
Inception
NON-STANDARIZED Date
- ----------------------------------------------------------------------------------------------------------------------------
Since
1 Year 3 Years 5 Years 10 Years Inception**
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Aetna Ascent VP 07/05/1995
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Balanced VP, Inc. 04/03/1989
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Bond VP (1)
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads VP 07/05/1995
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Growth VP 12/13/1996
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Growth and Income VP(1)
- ----------------------------------------------------------------------------------------------------------------------------
Aetna High Yield VP 12/10/1997
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Large Cap VP 09/16/1996
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Mid Cap VP 12/16/1997
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Index Plus Small Cap VP 12/19/1997
- ----------------------------------------------------------------------------------------------------------------------------
Aetna International VP 12/22/1997
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Legacy VP 07/05/1995
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Money Market VP(1) (2)
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Real Estate Securities VP 12/15/1997
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Small Company VP 12/27/1996
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Technology VP
- ----------------------------------------------------------------------------------------------------------------------------
Aetna Value Opportunity VP 12/13/1996
- ----------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 05/05/1993
- ----------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 0505/1993
- ----------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 05/02/1994
- ----------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 05/03/1993
- ----------------------------------------------------------------------------------------------------------------------------
Calvert Social Balanced Portfolio(1)
- ----------------------------------------------------------------------------------------------------------------------------
DEM Equity Fund (Institutional Funds)(3)
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio(1)
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio(1)
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio(1)
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund Portfolio 01/03/1995
- ----------------------------------------------------------------------------------------------------------------------------
Janus Twenty Fund(3)
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Growth Portfolio 09/13/1993
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Balanced Portfolio 09/13/1993
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Flexible Incomes Portfolio 09/13/1993
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Portfolio 09/13/1993
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Growth Portfolio 09/13/1993
- ----------------------------------------------------------------------------------------------------------------------------
Lexington Natural Resources Trust 10/14/1991
- ----------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 11/12/1990
- ----------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 05/03/1993
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PPI MFS Capital Opportunities Portfolio 11/27/1997
- ----------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Growth/PPI MFS Capital
Opportunities Portfolio(4)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PPI MFS Emerging Equity Portfolio 11/27/1997
- ----------------------------------------------------------------------------------------------------------------------------
Alger American Small Cap/PPI MFS Emerging Equities(3)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PPI MFS Research Growth Portfolio 11/27/1997
- ----------------------------------------------------------------------------------------------------------------------------
American Century VP Capital Appreciation/PPI MFS
Research Growth(4)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PPI Scudder International Growth Portfolio 11/27/1997
- ----------------------------------------------------------------------------------------------------------------------------
Scudder International Portfolio Class A/PPI Scudder
International Growth(4)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PPI T. Rowe Price Growth Equity Portfolio 11/27/1997
- ----------------------------------------------------------------------------------------------------------------------------
Alger American Growth/PPI T. Rowe Price Growth Equity(4) 01/09/1998
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please refer to the discussion preceding the tables for an explanation of the
charges included and methodology used in the standardized and non-standardized
figures. These figures represent historical performance and should not be
considered a projection of future performance.
** Reflects performance from the fund's inception date.
(1) These funds have been in operation for more than ten years.
(2) The current yield for the subaccount for the 7-day period ended December 31,
1999 (on an annualized basis) was ____%. Current yield more closely reflects
current earnings than does total return. The current yield reflects the
deduction of all charges under the contract that are deducted from the total
return quotations shown above. As in the table above the maximum 5% early
withdrawal charge is not reflected.
(3) This fund is available to the general public.
(4) The fund first listed was replaced with the applicable Portfolio Partners
Portfolio after the close of business on November 26, 1997. The performance
shown is based on the performance of the replaced fund until November 26,
1997, and the performance of the applicable Portfolio Partners Portfolio
after that date. The replaced fund may not have been available under all
contracts. The "Fund Inception Date" refers to the applicable date for the
replaced fund. If no date is shown, the replaced fund has been in operation
for more than ten years.
<PAGE>
INCOME PHASE PAYMENTS
When you begin receiving payments under the contract during the income phase
(see "The Income Phase" in the prospectus), the value of your account is
determined using accumulation unit values as of the tenth valuation before the
first income phase payment is due. Such value (less any applicable premium tax)
is applied to provide income phase payments to you in accordance with the
payment option and investment options elected.
The Annuity option tables found in the contract show, for each option, the
amount of the first income phase payment for each $1,000 of value applied.
Thereafter, variable payments fluctuate as the Annuity Unit value(s) fluctuates
with the investment experience of the selected investment option(s). The first
income phase payment and subsequent income phase payments also vary depending on
the assumed net investment rate selected (3.5% or 5% per annum). Selection of a
5% rate causes a higher first income phase payment, but income phase payments
will increase thereafter only to the extent that the net investment rate
increases by more than 5% on an annual basis.
Income phase payments would decline if the rate failed to increase by 5%. Use of
the 3.5% assumed rate causes a lower first income phase payment, but subsequent
income phase payments would increase more rapidly or decline more slowly as
changes occur in the net investment rate.
When the income phase begins, the annuitant is credited with a fixed number of
Annuity Units (which does not change thereafter) in each of the designated
investment options. This number is calculated by dividing (a) by (b), where (a)
is the amount of the first income phase payment based upon a particular
investment option, and (b) is the then current Annuity Unit value for that
investment option. As noted, Annuity Unit values fluctuate from one valuation to
the next (see "Your Account Value" in the prospectus); such fluctuations reflect
changes in the net investment factor for the appropriate subaccount(s) (with a
ten valuation lag which gives the Company time to process payments) and a
mathematical adjustment which offsets the assumed net investment rate of 3.5% or
5% per annum.
The operation of all these factors can be illustrated by the following
hypothetical example. These procedures will be performed separately for the
investment options selected during the income phase.
EXAMPLE:
Assume that, at the date income phase payments are to begin, there are 3,000
accumulation units credited under a particular contract or account and that the
value of an accumulation unit for the tenth valuation prior to retirement was
$13.650000. This produces a total value of $40,950.
Assume also that no premium tax is payable and that the annuity table in the
contract provides, for the income phase payment option elected, a first monthly
variable income phase payment of $6.68 per $1000 of value applied; the
annuitant's first monthly income phase payment would thus be 40.950 multiplied
by $6.68, or $273.55.
Assume then that the value of an Annuity Unit upon the valuation on which the
first income phase payment was due was $13.400000. When this value is divided
into the first monthly income phase payment, the number of Annuity Units is
determined to be 20.414. The value of this number of Annuity Units will be paid
in each subsequent month.
If the net investment factor with respect to the appropriate subaccount is
1.0015000 as of the tenth valuation preceding the due date of the second monthly
income phase payment, multiplying this factor by .9999058* (to neutralize the
assumed net investment rate of 3.5% per annum built into the number of Annuity
Units determined above) produces a result of 1.0014057. This is then multiplied
by the Annuity Unit value for the
*If an assumed net investment rate of 5% is elected, the appropriate factor to
neutralize such assumed rate would be .9998663.
<PAGE>
prior valuation (assume such value to be $13.504376) to produce an Annuity Unit
value of $13.523359 for the valuation occurring when the second income phase
payment is due.
The second monthly income phase payment is then determined by multiplying the
number of Annuity Units by the current Annuity Unit value, or 20.414 times
$13.523359, which produces a payment of $276.07.
SALES MATERIAL AND ADVERTISING
We may include hypothetical illustrations in our sales literature that explain
the mathematical principles of dollar cost averaging, compounded interest, tax
deferred accumulation, and the mechanics of variable annuity contracts. We may
also discuss the difference between variable annuity contracts and other types
of savings or investment products such as personal savings accounts and
certificates of deposit.
We may distribute sales literature that compares the percentage change in
accumulation unit values for any of the subaccounts to established market
indices such as the Standard & Poor's 500 Stock Index and the Dow Jones
Industrial Average or to the percentage change in values of other management
investment companies that have investment objectives similar to the subaccount
being compared.
We may publish in advertisements and reports, the ratings and other information
assigned to us by one or more independent rating organizations such as A.M. Best
Company, Duff & Phelps, Standard & Poor's Corporation and Moody's Investors
Service, Inc. The purpose of the ratings is to reflect our financial strength
and/or claims-paying ability. We may also quote ranking services such as
Morningstar's Variable Annuity/Life Performance Report and Lipper's Variable
Insurance Products Performance Analysis Service (VIPPAS), which rank variable
annuity or life subaccounts or their underlying funds by performance and/or
investment objective. We may categorize the underlying funds in terms of the
asset classes they represent and use such categories in marketing materials for
the contracts. We may illustrate in advertisements the performance of the
underlying funds, if accompanied by performance which also shows the performance
of such funds reduced by applicable charges under the separate account. We may
also show in advertisements the portfolio holdings of the underlying funds,
updated at various intervals. From time to time, we will quote articles from
newspapers and magazines or other publications or reports such as The Wall
Street Journal, Money magazine, USA Today and The VARDS Report.
We may provide in advertising, sales literature, periodic publications or other
materials information on various topics of interest to current and prospective
contract holders or participants. These topics may include the relationship
between sectors of the economy and the economy as a whole and its effect on
various securities markets, investment strategies and techniques (such as value
investing, market timing, dollar cost averaging, asset allocation, constant
ratio transfer and account rebalancing), the advantages and disadvantages of
investing in tax-deferred and taxable investments, customer profiles and
hypothetical purchase and investment scenarios, financial management and tax and
retirement planning, and investment alternatives to certificates of deposit and
other financial instruments, including comparison between the contracts and the
characteristics of and market for such financial instruments.
INDEPENDENT AUDITORS
___________________, CityPlace II, Hartford, Connecticut 06103-4103, are the
independent auditors for the separate account and for the Company. The services
provided to the separate account include primarily the examination of the
separate account's financial statements and review of filings made with the SEC.
<PAGE>
FINANCIAL STATEMENTS
[To be filed by Amendment]
<PAGE>
Form No. SAI.01107-00 ALIAC Ed. May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- ------------------------------------------
(a) Financial Statements:
(1) Included in Part A: *
Condensed Financial Information
(2) Included in Part B: *
Financial Statements of Variable Annuity Account C:
- Statement of Assets and Liabilities as of December 31,
1999
- Statements of Operations and Changes in Net Assets for the
years ended December 31, 1999 and 1998
- Condensed Financial Information for the year ended
December 31, 1999
- Notes to Financial Statements
- Independent Auditors' Report
Financial Statements of the Depositor:
- Independent Auditors' Report
- Consolidated Statements of Income for the years ended
December 31, 1999, 1998 and 1997
- Consolidated Balance Sheets as of December 31, 1999 and
1998
- Consolidated Statements of Changes in Shareholder's Equity
for the years ended December 31, 1999, 1998 and 1997
- Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
- Notes to Consolidated Financial Statements
*To be filed by amendment.
(b) Exhibits
(1) Resolution of the Board of Directors of Aetna Life Insurance
and Annuity Company establishing Variable Annuity Account C(1)
(2) Not applicable
(3.1) Broker-Dealer Agreement(2)
(3.2) Alternative Form of Wholesaling Agreement and Related Selling
Agreement(3)
(4.1) Variable Annuity Contract (G-CDA(12/99))
(4.2) Variable Annuity Contract Certificate (C-CDA(12/99))
(4.3) Endorsement (E-MMLOAN(12/99)) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99)
(4.4) Endorsement (E-MMFPEX-99R) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99)
(4.5) Endorsement (E-MMGDB(12/99)) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99)
<PAGE>
(4.6) Endorsement (E-MMLSWC(12/99)) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99)
(4.7) Endorsement (E-MMTC(12/99)) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99)
(4.8) Variable Annuity Contract (G-CDA-99(NY))
(4.9) Variable Annuity Contract Certificate (C-CDA-99(NY))
(4.10) Endorsement (E-MMGDB-99(NY)) to Contract G-CDA-99(NY) and
Contract Certificate C-CDA-99(NY)
(4.11) Endorsement (E-MMLOAN-99(NY)) to Contract G-CDA-99(NY) and
Contract Certificate C-CDA-99(NY)
(4.12) Variable Annuity Contract (G-CDA(99))
(4.13) Variable Annuity Contract Certificate (C-CDA(99))
(4.14) Group Combination Annuity Contract (Nonparticipating)
(A001RP95)(4)
(4.15) Group Combination Annuity Certificate (Nonparticipating)
(A007RC95)(4)
(4.16) Group Combination Annuity Contract (Nonparticipating)
(A020RV95)(4)
(4.17) Group Combination Annuity Certificate (Nonparticipating)
(A027RV95)(4)
(4.18) Variable Annuity Contract (G-CDA-IA(RP))(3)
(4.19) Variable Annuity Contract Certificate (GTCC-IA(RP))(5)
(4.20) Variable Annuity Contract (G-CDA-IA(RPM/XC))(3)
(4.21) Variable Annuity Contract (G-CDA-HF)(6)
(4.22) Variable Annuity Contract Certificate (GTCC-HF)(7)
(4.23) Variable Annuity Contract Certificate (GDCC-HF)
(4.24) Variable Annuity Contract (G-CDA-HD)(8)
(4.25) Variable Annuity Contract Certificate (GTCC-HD)(5)
(4.26) Variable Annuity Contract Certificate (GDCC-HD)
(4.27) Variable Annuity Contract (GID-CDA-HO)(9)
(4.28) Variable Annuity Contract (GLID-CDA-HO)(9)
(4.29) Variable Annuity Contract (GSD-CDA-HO)(9)
(4.30) Variable Annuity Contract (G-CDA-HD(XC))
(4.31) Variable Annuity Contract Certificate (GDCC-HO)
(4.32) Variable Annuity Contract Certificate (GDCC-HD(XC))
(4.33) Variable Annuity Contract Certificate (GTCC-HD(XC))
(4.34) Variable Annuity Contract Certificate (GTCC-HO)
(4.35) Variable Annuity Contract Certificate (GTCC-96(ORP))
(4.36) Variable Annuity Contract (G-CDA-96(ORP))
(4.37) Variable Annuity Contract Certificate (GTCC-96(TORP))
(4.38) Variable Annuity Contract Certificate (GTCC-IB(ATORP))
(4.39) Variable Annuity Contract Certificate (GTCC-IB(AORP))
(4.40) Variable Annuity Contract (GST-CDA-HO)(10)
(4.41) Variable Annuity Contract (I-CDA-HD)(10)
(4.42) Variable Annuity Contract (G-CDA-IB(ATORP))(11)
<PAGE>
(4.43) Variable Annuity Contract (G-CDA-95(TORP)) and Contract
Certificate (GTCC-95(TORP))(11)
(4.44) Variable Annuity Contract (G-CDA-IB(AORP))(11)
(4.45) Variable Annuity Contract (G-CDA-95(ORP)) and Contract
Certificate (GTCC-95(ORP))(11)
(4.46) Variable Annuity Contracts (G-CDA-IB(ORP),
(G-CDA-IB(TORP))(11)
(4.47) Variable Annuity Contract (G-CDA-96(TORP))(12)
(4.48) Variable Annuity Contract (IA-CDA-IA)(13)
(4.49) Variable Annuity Contract (GIT-CDA-HO)(10)
(4.50) Variable Annuity Contract (GLIT-CDA-HO)(10)
(4.51) Variable Annuity Contract (I-CDA-98(ORP))(6)
(4.52) Endorsement for Exchanged Contract (EINRP95) to Contract
A001RP95(4)
(4.53) Endorsement for Exchanged Contract (EINRV95) to Contract
A020RV95(4)
(4.54) Endorsement (GET 9/96) to Contracts A001RP95 and A020RV95(12)
(4.55) Endorsement (GET-1 (9/96)) to Contracts A001RP95 and
A020RV95(14)
(4.56) Endorsement (E1OMNI97) to Contract A001RP95(15)
(4.57) Endorsement (E2OMNI97) to Contract A001RP95(15)
(4.58) Endorsement (E1FXPL97) to Contract A001RP95(15)
(4.59) Endorsement (E3FXPL97) to Contracts A001RP95 and A020RV95(6)
(4.60) Endorsement (EINRP97) to Contract A001RP95(6)
(4.61) Endorsement (EINRV97) to Contract A020RV95(6)
(4.62) Endorsement (E1PAY97) to Contracts A001RP95 and A020RV95(6)
(4.63) Endorsement (E4OMNI98) to Contracts A001RP95 and A020RV95(16)
(4.64) Endorsement (EINRV98) to Contract A020RV95(6)
(4.65) Endorsement (EINRP98) to Contract A001RP95(6)
(4.66) Endorsement (EGET-IC(R)) to Contracts G-CDA-IA(RP), G-CDA-HF,
G-CDA-IB(ATORP), G-CDA-IB(AORP) and G-CDA-HD(3)
(4.67) Endorsement (EGETE-IC(R)) to Contracts G-CDA-IA(RPM/XC) and
GLID-CDA-HO(17)
(4.68) Endorsement (EGHDHFRPSDO97) to Contracts G-CDA-HF, G-CDA-HD
and G-CDA-IA(RP)(18)
(4.69) Endorsement (EG403-GIE-98) to Contracts G-CDA-HF, G-CDA-HD,
G-CDA-IA(RP), A001RP95, A020RV95 and Contract Certificates
GTCC-HF, GTCC-HD, GTCC-IA(RP), A007RC95 and A027RV95 (19)
(4.70) Endorsement (EG403-GIHC-98) to Contracts G-CDA-IA(RP),
A001RP95 and A020RV95 and Contract Certificates GTCC-IA(RP),
A007RC95 and A027RV95(19)
(4.71) Endorsement (EG403-GI-98) to Contract G-CDA-HF and Contract
Certificate GTCC-HF(20)
(4.72) Endorsement (EFUND97) to Contracts GID-CDA-HO, GLID-CDA-HO,
GSD-CDA-HO, and GST-CDA-HO(21)
<PAGE>
(4.73) Endorsement (E98-G-CDA-HF/HD) to Contracts G-CDA-HF and
G-CDA-HD and Contract Certificates GTCC-HD and GTCC-HF(22)
(4.74) Endorsement (E98-CDA-HO) to Contracts GLID-CDA-HO, GID-CDA-HO
and GSD-CDA-HO(22)
(4.75) Endorsement (E3KSDC96) to Variable Annuity Contract
GLID-CDA-HO(23)
(4.76) Endorsement (EMETHO96) to Variable Annuity Contract
GLID-CDA-HO(24)
(4.77) Endorsement (ENEMHF96) to Variable Annuity Contract
G-CDA-HF(24)
(4.78) Endorsement (E2ME96) to Variable Annuity Contract
GLID-CDA-HO(25)
(4.79) Endorsement (GET 9/96) to Variable Annuity Contracts
G-CDA-95(TORP) and G-CDA-95(ORP) and Contract Certificates
GTCC-95(TORP) and GTCC-95(ORP)(12)
(4.80) Endorsements (EIGET-IC(R)), (EIGF-IC) and (EGF-IC(SPD)) to
Contract IA-CDA-IA(26)
(4.81) Endorsement (EIHDIASDO) to Contracts I-CDA-HD and
IA-CDA-IA(27)
(4.82) Endorsement (EHOSDO) to Contracts GIT-CDA-HO, GLIT-CDA-HO and
GST-CDA-HO(27)
(4.83) Endorsement (EHOTABLE97) to Contracts GIT-CDA-HO, GLIT-CDA-HO
and GST-CDA-HO(27)
(4.84) Endorsement (EI403-GI-98) to Contract IA-CDA-IA(6)
(4.85) Endorsement (E-MMGDB(99)) to Contract G-CDA(99) and Contract
Certificate C-CDA (99) (28)
(4.86) Endorsement (E-MMFPEX(99)) to Contract G-CDA(99) and Contract
Certificate C-CDA(99) (28)
(4.87) Endorsement (E-MMLOAN(99)) to Contract G-CDA(99) and Contract
Certificate C-CDA(99)
(4.88) Endorsement (E-MMLSWC(99)) to Contract G-CDA(99) and Contract
Certificate C-CDA(99) (28)
(4.89) Endorsement (E-MMTC(5/99)) to Contract G-CDA(99) and Contract
Certificate C-CDA(99) (28)
(4.90) Endorsement (EGET-99) to Contracts A001RP95, A020RV95,
G-CDA-IA(RP), G-CDA-IA(RPM/XC), G-CDA-HF, G-CDA-HD,
G-CDA-HD(X), GID-CDA-HO, GLID-CDA-HO, GIT-CDA-HO, GLIT-CDA-HO,
GSD-CDA-HO, GST-CDA-HO, I-CDA-HD, I-CDA-HD(XC),
G-CDA-IB(ATORP), G,CDA-IB(TORP), G-CDA-IB(AORP),
G-CDA-96(TORP), IA-CDA-IA, and I-CDA-98(ORP) and Contract
Certificates A007RC95, A027RV95, GTCC-IA(RP), GTCC-IA(RPM/XC),
GTCC-HF, GTCC-HD, GTCC-HD(XC), and GDCC-HD(XC) (28)
(4.91) Variable Annuity Contract Schedule I (A001RP95(1/98))(6)
(4.92) Variable Annuity Contract Schedule I (A020RV95(1/98))(6)
(5.1) Variable Annuity Contract Application (300-MOP-96)(29)
(5.2) Variable Annuity Contract Application (300-GTD-IA)(30)
(5.3) Variable Annuity Contract Application (710.00.16H(11/97))(31)
<PAGE>
(5.4) Variable Annuity Contract Application
(710.00.16H(NY)(11/97))(31)
(6.1) Certificate of Incorporation of Aetna Life Insurance and
Annuity Company(31)
(6.2) Amendment of Certificate of Incorporation of Aetna Life
Insurance and Annuity Company(10)
(6.3) By-Laws as amended September 17, 1997 of Aetna Life Insurance
and Annuity Company(32)
(7) Not applicable
(8.1) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company and AIM dated June 30, 1998(33)
(8.2) Service Agreement between Aetna Life Insurance and Annuity
Company and AIM effective June 30, 1998(33)
(8.3) Fund Participation Agreement by and among Aetna Life Insurance
and Annuity Company and Aetna Variable Fund, Aetna Variable
Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc.,
Aetna GET Fund on behalf of each of its series, Aetna
Generation Portfolios, Inc. on behalf of each of its series,
Aetna Variable Portfolios, Inc. on behalf of each of its
series, and Aeltus Investment Management, Inc. dated as of May
1, 1998(2)
(8.4) Amendment dated November 9, 1998 to Fund Participation
Agreement by and among Aetna Life Insurance and Annuity
Company and Aetna Variable Fund, Aetna Variable Encore Fund,
Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund
on behalf of each of its series, Aetna Generation Portfolios,
Inc. on behalf of each of its series, Aetna Variable
Portfolios, Inc. on behalf of each of its series, and Aeltus
Investment Management, Inc. dated as of May 1, 1998(34)
(8.5) Second Amendment dated December 31, 1999 to Fund Participation
Agreement by and among Aetna Life Insurance and Annuity
Company and Aetna Variable Fund, Aetna Variable Encore Fund,
Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund
on behalf of each of its series, Aetna Generation Portfolios,
Inc. on behalf of each of its series, Aetna Variable
Portfolios, Inc. on behalf of each of its series, and Aeltus
Investment Management, Inc. dated as of May 1, 1998 and
amended on November 9, 1998
(8.6) Form of Third Amendment dated _____________, 2000 to Fund
Participation Agreement by and among Aetna Life Insurance and
Annuity Company and Aetna Variable Fund, Aetna Variable Encore
Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET
Fund on behalf of each of its series, Aetna Generation
Portfolios, Inc. on behalf of each of its series, Aetna
Variable Portfolios, Inc. on behalf of each of its series, and
Aeltus Investment Management, Inc. dated as of May 1, 1998 and
amended on November 9, 1998 and December 31, 1999
(8.7) Service Agreement between Aeltus Investment Management, Inc.
and Aetna Life Insurance and Annuity Company in connection
with the sale of shares of Aetna Variable Fund, Aetna Variable
Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc.,
Aetna GET Fund on behalf of each of its series, Aetna
Generation
<PAGE>
Portfolios, Inc. on behalf of each of its series, and Aetna
Variable Portfolios, Inc. on behalf of each of its series
dated as of May 1, 1998(2)
(8.8) Amendment dated November 4, 1998 to Service Agreement between
Aeltus Investment Management, Inc. and Aetna Life Insurance
and Annuity Company in connection with the sale of shares of
Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income
Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of
each of its series, Aetna Generation Portfolios, Inc. on
behalf of each of its series and Aetna Variable Portfolios,
Inc. on behalf of each of its series dated as of May 1,
1998(34)
(8.9) Form of Second Amendment dated _______________, 2000 to
Service Agreement between Aeltus Investment Management, Inc.
and Aetna Life Insurance and Annuity Company in connection
with the sale of shares of Aetna Variable Fund, Aetna Variable
Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc.,
Aetna GET Fund on behalf of each of its series, Aetna
Generation Portfolios, Inc. on behalf of each of its series
and Aetna Variable Portfolios, Inc. on behalf of each of its
series dated as of May 1, 1998 and November 14, 1998
(8.10) Fund Participation Agreement among Calvert Responsibly
Invested Balanced Portfolio, Calvert Asset Management Company,
Inc. and Aetna Life Insurance and Annuity Company dated
December 1, 1997(35)
(8.11) Service Agreement between Calvert Asset Management Company,
Inc. and Aetna Life Insurance and Annuity Company dated
December 1, 1997(35)
(8.12) Form of Fund Participation Agreement dated ____________, 2000
between The Chapman Funds, Inc. and Aetna Life Insurance and
Annuity Company
(8.13) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1,
1996 and March 1, 1996(10)
(8.14) Fifth Amendment dated as of May 1, 1997 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1,
1996 and March 1, 1996(36)
(8.15) Sixth Amendment dated November 6, 1997 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1,
1996, March 1, 1996 and May 1, 1997(37)
(8.16) Seventh Amendment dated as of May 1, 1998 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1,
1996, March 1, 1996, May 1, 1997 and November 6, 1997(2)
<PAGE>
(8.17) Eighth Amendment dated December 1, 1999 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund and Fidelity Distributors
Corporation dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1,
1996, May 1, 1997, November 6, 1997 and May 1, 1998
(8.18) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996 and March 1,1996(10)
(8.19) Fifth Amendment dated as of May 1, 1997 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996 and March 1, 1996(36)
(8.20) Sixth Amendment dated as of January 20, 1998 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996, March 1, 1996 and May 1, 1997(38)
(8.21) Seventh Amendment dated as of May 1, 1998 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996, March 1, 1996, May 1, 1997 and January 20,
1998(2)
(8.22) Eighth Amendment dated December 1, 1999 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company,
Variable Insurance Products Fund II and Fidelity Distributors
Corporation dated February 1, 199 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1,
1996, May 1, 1997, January 20, 1998 and May 1, 1998
(8.23) Service Agreement between Aetna Life Insurance and Annuity
Company and Fidelity Investments Institutional Operations
Company dated as of November 1, 1995(25)
(8.24) Amendment dated January 1, 1997 to Service Agreement between
Aetna Life Insurance and Annuity Company and Fidelity
Investments Institutional Operations Company dated as of
November 1, 1995(36)
(8.25) Service Contract between Fidelity Distributors Corporation and
Aetna Life Insurance and Annuity Company dated May 2, 1997(34)
(8.26) Fund Participation Agreement among Janus Aspen Series and
Aetna Life Insurance and Annuity Company and Janus Capital
Corporation dated December 8, 1997(24)
(8.27) Amendment dated October 12, 1998 to Fund Participation
Agreement among Janus Aspen Series and Aetna Life Insurance
and Annuity Company and Janus Capital Corporation dated
December 8, 1997(34)
<PAGE>
(8.28) Second Amendment dated December 1, 1999 to Fund Participation
Agreement among Janus Aspen Series and Aetna Life Insurance
and Annuity Company and Janus Capital Corporation dated
December 8, 1997 and amended on October 12, 1998
(8.29) Service Agreement between Janus Capital Corporation and Aetna
Life Insurance and Annuity Company dated December 8, 1997(39)
(8.30) Fund Participation Agreement dated May 11, 1994, between Janus
Capital Corporation and Aetna Life Insurance and Annuity
Company
(8.31) Amendment dated January 2, 1995 to Fund Participation
Agreement dated May 11, 1994, between Janus Capital
Corporation and Aetna Life Insurance and Annuity Company
(8.32) Amendment dated February 24, 1995 to Fund Participation
Agreement dated May 11, 1994, between Janus Capital
Corporation and Aetna Life Insurance and Annuity Company, as
amended on January 2, 1995
(8.33) Third Amendment dated May 1, 1995 to Fund Participation
Agreement dated May 11, 1994, between Janus Capital
Corporation and Aetna Life Insurance and Annuity Company, as
amended on January 2, 1995 and February 24, 1995
(8.34) Letter Agreement dated January 1,1996 to Fund Participation
Agreement dated May 11, 1994, between Janus Capital
Corporation and Aetna Life Insurance and Annuity Company, as
amended on January 2, 1995, February 24, 1995 and May 1, 1995
(8.35) Letter Agreement dated February 18, 1999 to Fund Participation
Agreement dated May 11, 1994, between Janus Capital
Corporation and Aetna Life Insurance and Annuity Company, as
amended on January 2, 1995, February 24, 1995, May 1, 1995 and
January 1, 1996
(8.36) Amendment dated _________-, 2000 to Fund Participation
Agreement dated May 11, 1994, between Janus Capital
Corporation and Aetna Life Insurance and Annuity Company, as
amended on January 2, 1995, February 24, 1995, May 1, 1995,
January 1, 1996, and February 18, 1999
(8.37) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company and Lexington Management Corporation regarding
Natural Resources Trust dated December 1, 1988 and amended
February 11, 1991(3)
(8.38) Fund Participation Agreement dated March 11, 1997 between
Aetna Life Insurance and Annuity Company and Oppenheimer
Variable Annuity Account Funds and Oppenheimer Funds, Inc.(40)
(8.39) First Amendment dated December 1, 1999 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company and
Oppenheimer Variable Annuity Account Funds and Oppenheimer
Funds, Inc. dated March 11, 1997
(8.40) Service Agreement effective as of March 11, 1997 between
Oppenheimer Funds, Inc. and Aetna Life Insurance and Annuity
Company(40)
(9) Opinion and Consent of Counsel*
(10) Consent of Independent Auditors*
(11) Not applicable
<PAGE>
(12) Not applicable
(13) Schedule for Computation of Performance Data(16)
(14.1) Powers of Attorney(41)
(14.2) Authorization for Signatures(3)
*To be filed by amendment
1. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75986), as filed on April 22, 1996.
2. Incorporated by reference to Registration Statement on Form N-4 (File No.
333-56297), as filed on June 8, 1998.
3. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-75986), as filed on April 12, 1996.
4. Incorporated by reference to Registration Statement on Form N-4 (File No.
333-01107), as filed on February 21, 1996.
5. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on
February 4, 1999.
6. Incorporated by reference to Post-Effective Amendment No. 14 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on July
29, 1997.
7. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75980), as filed on February 12, 1997.
8. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75982), as filed on April 22, 1996.
9. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75982), as filed on
February 20, 1997.
10. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on
February 11, 1997.
11. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-91846), as filed on April 15, 1996.
12. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-91846), as filed on August 6, 1996.
13. Incorporated by reference to Post-Effective Amendment No. 14 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on July
29, 1997.
14. Incorporated by reference to Post-Effective Amendment No. 10 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on July
22, 1998.
15. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form N-4 (File No. 333-01107), as filed on February 26, 1997.
16. Incorporated by reference to Post-Effective Amendment No. 9 to Registration
Statement on Form N-4 (File No. 333-01107), as filed on April 7, 1998.
17. Incorporated by reference to Post-Effective Amendment No. 8 to Registration
Statement on Form N-4 (File No. 33-75986), as filed on August 30, 1996.
<PAGE>
18. Incorporated by reference to Post-Effective Amendment No. 13 to
Registration Statement on Form N-4 (File No. 33-75986), as filed on April
11, 1997.
19. Incorporated by reference to Post-Effective Amendment No. 11 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on
September 10, 1998.
20. Incorporated by reference to Post-Effective Amendment No. 15 to
Registration Statement on Form N-4 (File No. 33-75962), as filed on
September 15, 1998.
21. Incorporated by reference to Post-Effective Amendment No. 14 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on July
29, 1997.
22. Incorporated by reference to Post-Effective Amendment No. 15 to
Registration Statement on Form N-4 (File No. 33-75982), as filed on April
13, 1998.
23. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-88720), as filed on April 22, 1996.
24. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-88720), as filed on June 28, 1996.
25. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-88720), as filed on February 21, 1997.
26. Incorporated by reference to Post Effective Amendment No. 8 to Registration
Statement on Form N-4 (File No. 33-75964), as filed on August 30, 1996.
27. Incorporated by reference to Post-Effective Amendment No. 13 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on April
11, 1997.
28. Incorporated by reference to Post-Effective Amendment No. 13 to
Registration Statement on Form N-4 (File No. 333-01107), as filed on May 3,
1999.
29. Incorporated by reference to Post-Effective Amendment No. 13 to
Registration Statement on Form N-4 (File No. 33-91846), as filed on April
13, 1998.
30. Incorporated by reference to Post-Effective Amendment No. 14 to
Registration Statement on Form N-4 (File No. 33-75986), as filed on August
19, 1997.
31. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-60477), as filed on April 15, 1996.
32. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-91846), as filed on October
30, 1997.
33. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 333-56297), as filed on August 4, 1998.
34. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form N-4 (File No. 333-56297), as filed on December 14, 1998.
35. Incorporated by reference to Post-Effective Amendment No. 8 to Registration
Statement on Form N-4 (File No. 333-01107), as filed on February 19, 1998.
36. Incorporated by reference to Post-Effective Amendment No. 30 to
Registration Statement on Form N-4 (File No. 33-34370), as filed on
September 29, 1997.
37. Incorporated by reference to Post-Effective Amendment No. 16 to
Registration Statement on Form N-4 (File No. 33-75964), as filed on
February 9, 1998.
38. Incorporated by reference to Post-Effective Amendment No. 7 to Registration
Statement on Form S-6 (File No. 33-75248), as filed on February 24, 1998.
<PAGE>
39. Incorporated by reference to Post-Effective Amendment No. 10 to
Registration Statement on Form N-4 (File No. 33-75992), as filed on
December 31, 1997.
40. Incorporated by reference to Post-Effective Amendment No. 27 to
Registration Statement on Form N-4 (File No. 33-34370), as filed on April
16, 1997.
41. Incorporated by reference to Post-Effective Amendment No. 5 to
Registration Statement on Form N-4 (File No. 333-56297), as filed on
February 25, 1999.
<PAGE>
Item 25. Directors and Officers of the Depositor
- ------------------------------------------------
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Depositor
- ---------------- ------------------------------------
<S> <C>
Thomas J. McInerney Director and President
Catherine H. Smith Director, Chief Financial Officer and Senior
Vice President
Shaun P. Mathews Director and Senior Vice President
Deborah Koltenuk Vice President, Corporate Controller, and
Assistant Treasurer
Therese M. Squillacote Vice President and Chief Compliance Officer
Kirk P. Wickman Senior Vice President, General Counsel and
Corporate Secretary
</TABLE>
* The principal business address of all directors and officers listed is 151
Farmington Avenue, Hartford, Connecticut 06156.
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
- --------------------------------------------------------------------------------
Incorporated herein by reference to Item 26 of Registration Statement on
Form N-4 (File No. 333-56297), as filed on November 23, 1999.
Item 27. Number of Contract Owners
- ---------------------------------------
As of December 31, 1999, there were 592,620 individuals holding interests
in variable annuity contracts funded through Variable Annuity Account C.
Item 28. Indemnification
- ------------------------
Section 21 of Public Act No. 97-246 of the Connecticut General Assembly (the
"Act") provides that a corporation may provide indemnification of or advance
expenses to a director, officer, employee or agent only as permitted by Sections
33-770 to 33-778, inclusive, of the Connecticut General Statutes, as amended by
Sections 12 to 20, inclusive, of this Act. Reference is hereby made to Section
33-771(e) of the Connecticut General Statutes ("CGS") regarding indemnification
of directors and Section 33-776(d) of CGS regarding indemnification of officers,
employees and agents of Connecticut corporations. These statutes provide in
general that Connecticut corporations incorporated prior to January 1, 1997
shall, except to the extent that their certificate of incorporation expressly
provides otherwise, indemnify their directors, officers, employees and agents
against "liability" (defined as the obligation to pay a judgment, settlement,
penalty, fine, including an excise tax assessed with respect to an employee
benefit plan, or
<PAGE>
reasonable expenses incurred with respect to a proceeding) when (1) a
determination is made pursuant to Section 33-775 that the party seeking
indemnification has met the standard of conduct set forth in Section 33-771 or
(2) a court has determined that indemnification is appropriate pursuant to
Section 33-774. Under Section 33-775, the determination of and the authorization
for indemnification are made (a) by the disinterested directors, as defined in
Section 33-770(3); (b) by special counsel; (c) by the shareholders; or (d) in
the case of indemnification of an officer, agent or employee of the corporation,
by the general counsel of the corporation or such other officer(s) as the board
of directors may specify. Also, Section 33-772 provides that a corporation shall
indemnify an individual who was wholly successful on the merits or otherwise
against reasonable expenses incurred by him in connection with a proceeding to
which he was a party because he was a director of the corporation. Pursuant to
Section 33-771(d), in the case of a proceeding by or in the right of the
corporation or with respect to conduct for which the director, officer, agent or
employee was adjudged liable on the basis that he received a financial benefit
to which he was not entitled, indemnification is limited to reasonable expenses
incurred in connection with the proceeding against the corporation to which the
individual was named a party.
The statute does specifically authorize a corporation to procure indemnification
insurance on behalf of an individual who was a director, officer, employer or
agent of the corporation. Consistent with the statute, Aetna Inc. has procured
insurance from Lloyd's of London and several major United States and
international excess insurers for its directors and officers and the directors
and officers of its subsidiaries, including the Depositor.
Item 29. Principal Underwriter
- ------------------------------
(a) In addition to serving as the principal underwriter and depositor for
the Registrant, Aetna Life Insurance and Annuity Company (Aetna) also
acts as the principal underwriter, only, for Aetna Variable Encore
Fund, Aetna Variable Fund, Aetna Generation Portfolios, Inc., Aetna
Income Shares, Aetna Balanced VP, Inc. (formerly Aetna Investment
Advisers Fund, Inc.), Aetna GET Fund, and Aetna Variable Portfolios,
Inc. and as the principal underwriter and investment adviser for
Portfolio Partners, Inc. (all management investment companies
registered under the Investment Company Act of 1940 (1940 Act)).
Additionally, Aetna acts as the principal underwriter and depositor for
Variable Life Account B of Aetna, Variable Life Account C of Aenta,
Variable Annuity Account B of Aetna and Variable Annuity Account G of
Aetna (separate accounts of Aetna registered as unit investment trusts
under the 1940 Act). Aetna is also the principal underwriter for
Variable Annuity Account I of Aetna Insurance Company of America (AICA)
(a separate account of AICA registered as a unit investment trust under
the 1940 Act).
(b) See Item 25 regarding the Depositor.
<PAGE>
(c) Compensation as of December 31, 1998:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
<S> <C> <C> <C> <C>
Name of Net Underwriting Compensation
Principal Discounts and on Redemption Brokerage
Underwriter Commissions or Annuitization Commissions Compensation*
- ----------- ----------- ---------------- ----------- -------------
Aetna Life $** $**
Insurance and
Annuity
Company
</TABLE>
* Compensation shown in column 5 includes deductions for mortality and
expense risk guarantees and contract charges assessed to cover costs
incurred in the sales and administration of the contracts issued under
Variable Annuity Account C.
**To be filed by amendment
Item 30. Location of Accounts and Records
- -----------------------------------------
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules under it relating to the securities
described in and issued under this Registration Statement are located at the
home office of the Depositor as follows:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
Item 31. Management Services
- ----------------------------
Not applicable
Item 32. Undertakings
- ---------------------
Registrant hereby undertakes:
(a) to file a post-effective amendment to this registration statement on
Form N-4 as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more than
sixteen months old for as long as payments under the variable annuity
contracts may be accepted;
(b) to include as part of any application to purchase a contract offered by
a prospectus which is part of this registration statement on Form N-4,
a space that an applicant can check to request a Statement of
Additional Information; and
<PAGE>
(c) to deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly
upon written or oral request.
(d) The Company hereby represents that it is relying upon and complies with
the provisions of Paragraphs (1) through (4) of the SEC Staff's
No-Action Letter dated November 28, 1988 with respect to language
concerning withdrawal restrictions applicable to plans established
pursuant to Section 403(b) of the Internal Revenue Code. See American
Counsel of Life Insurance; SEC No-Action Letter, [1988 WL 1235221 *13
(S.E.C.)]
(e) Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
(f) Aetna Life Insurance and Annuity Company represents that the fees and
charges deducted under the contracts covered by this registration
statement, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed
by the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Variable Annuity Account C of Aetna Life Insurance and
Annuity Company, has duly caused this Post-Effective Amendment to its
Registration Statement on Form N-4 (File No. 333-01107) to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Hartford,
State of Connecticut, on the 16 day of February, 2000.
VARIABLE ANNUITY ACCOUNT C OF AETNA
LIFE INSURANCE AND ANNUITY COMPANY
(Registrant)
By: AETNA LIFE INSURANCE AND ANNUITY
COMPANY
(Depositor)
By: Thomas J. McInerney*
-----------------------------------
Thomas J. McInerney
President
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 19 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Thomas J. McInerney* Director and President )
- ------------------------------------- (principal executive officer) )
Thomas J. McInerney )
)
Catherine H. Smith* Director and Chief Financial Officer ) February
- ------------------------------------- ) 16, 2000
Catherine H. Smith )
)
Shaun P. Mathews* Director )
- ------------------------------------- )
Shaun P. Mathews )
)
Deborah Koltenuk* Vice President, Corporate Controller, and )
- ------------------------------------- Assistant Treasurer )
Deborah Koltenuk )
</TABLE>
By: /s/ Julie E. Rockmore
------------------------------------------------------
Julie E. Rockmore
*Attorney-in-Fact
<PAGE>
VARIABLE ANNUITY ACCOUNT C
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C> <C>
99-B.4.1 Variable Annuity Contract (G-CDA(12/99)) ------------
99-B.4.2 Variable Annuity Contract Certificate (C-CDA(12/99)) ------------
99-B.4.3 Endorsement (E-MMLOAN(12/99)) to Contract G-CDA(12/99) and Contract Certificate
C-CDA(12/99) ------------
99-B.4.4 Endorsement (E-MMFPEX-99R) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99) ------------
99-B.4.5 Endorsement (E-MMGDB(12/99)) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99) ------------
99-B.4.6 Endorsement (E-MMLSWC(12/99)) to Contract G-CDA(12/99) and Contract Certificate
C-CDA(12/99) ------------
99-B.4.7 Endorsement (E-MMTC(12/99)) to Contract G-CDA(12/99) and
Contract Certificate C-CDA(12/99) ------------
99-B.4.8 Variable Annuity Contract (G-CDA-99(NY)) ------------
99-B.4.9 Variable Annuity Contract Certificate (C-CDA-99(NY)) ------------
99-B.4.10 Endorsement (E-MMGDB-99(NY)) to Contract G-CDA-99(NY) and Contract Certificate
C-CDA-99(NY) ------------
99-B.4.11 Endorsement (E-MMLOAN-99(NY)) to Contract G-CDA-99(NY) and Contract Certificate
C-CDA-99(NY) ------------
99-B.4.12 Variable Annuity Contract (G-CDA(99)) ------------
99-B.4.13 Variable Annuity Contract Certificate (C-CDA(99)) ------------
99-B.4.23 Variable Annuity Contract Certificate (GDCC-HF) ------------
99-B.4.26 Variable Annuity Contract Certificate (GDCC-HD) ------------
99-B.4.30 Variable Annuity Contract (G-CDA-HD(XC)) ------------
99-B.4.31 Variable Annuity Contract Certificate (GDCC-HO) ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ---------- -------
<S> <C> <C>
99-B.4.32 Variable Annuity Contract Certificate (GDCC-HD(XC)) ------------
99-B.4.33 Variable Annuity Contract Certificate (GTCC-HD(XC)) ------------
99-B.4.34 Variable Annuity Contract Certificate (GTCC-HO) ------------
99-B.4.35 Variable Annuity Contract Certificate (GTCC-96(ORP)) ------------
99-B.4.36 Variable Annuity Contract (G-CDA-96(ORP)) ------------
99-B.4.37 Variable Annuity Contract Certificate (GTCC-96(TORP)) ------------
99-B.4.38 Variable Annuity Contract Certificate (GTCC-IB(ATORP)) ------------
99-B.4.39 Variable Annuity Contract Certificate (GTCC-IB(AORP)) ------------
99-B.4.87 Endorsement (E-MMLOAN(99)) to Contract G-CDA(99) and Contract Certificate
C-CDA(99) ------------
99-B.8.5 Second Amendment dated December 31, 1999 to Fund Participation Agreement by and
among Aetna Life Insurance and Annuity Company and Aetna Variable Fund, Aetna
Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET
Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on
behalf of each of its series, Aetna Variable Portfolios, Inc. on behalf of each
of its series, and Aeltus Investment Management, Inc. dated as of May 1, 1998
and amended on November 9, 1998 ------------
99-B.8.6 Form of Third Amendment dated ___________, 2000 to Fund Participation Agreement
by and among Aetna Life Insurance and Annuity Company and Aetna Variable Fund,
Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna
GET Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on
behalf of each of its series, Aetna Variable Portfolios, Inc. on behalf of each
of its series, and Aeltus Investment Management, Inc. dated as of May 1, 1998
and amended on November 9, 1998 and December 31, 1999 ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C> <C>
99-B.8.9 Form of Second Amendment dated ___________, 2000 to Service Agreement between
Aeltus Investment Management, Inc. and Aetna Life Insurance and Annuity Company
in connection with the sale of shares of Aetna Variable Fund, Aetna Variable
Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on
behalf of each of its series, Aetna Generation Portfolios, Inc. on behalf of
each of its series and Aetna Variable Portfolios, Inc. on behalf of each of its
series dated as of May 1, 1998 and November 14, 1998 ------------
99-B.8.12 Form of Fund Participation Agreement dated ____________, 2000 between The
Chapman Funds, Inc. and Aetna Life Insurance and Annuity Company ------------
99-B.8.17 Eighth Amendment dated December 1, 1999 to Fund Participation Agreement between
Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994 and amended on December
15, 1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1, 1996, May 1,
1997, November 6, 1997 and May 1, 1998 ------------
99-B.8.22 Eighth Amendment dated December 1, 1999 to Fund Participation Agreement between
Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund II
and Fidelity Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1,
1996, May 1, 1997, January 20, 1998 and May 1, 1998 ------------
99-B.8.28 Second Amendment dated December 1, 1999 to Fund Participation Agreement among
Janus Aspen Series and Aetna Life Insurance and Annuity Company and Janus
Capital Corporation dated December 8, 1997 and amended on October 12, 1998 ------------
99-B.8.30 Fund Participation Agreement dated May 11, 1994 between Janus Capital
Corporation and Aetna Life Insurance and Annuity Company ------------
99-B.8.31 Amendment dated January 2, 1995 to Fund Participation Agreement dated May 11,
1994, between Janus Capital Corporation and Aetna Life Insurance and Annuity
Company ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C> <C>
99-B.8.32 Amendment dated February 24, 1995 to Fund Participation Agreement dated May 11,
1994, between Janus Capital Corporation and Aetna Life Insurance and Annuity
Company, as amended on January 2, 1995 ------------
99-B.8.33 Third Amendment dated May 1, 1995 to Fund Participation Agreement dated May 11,
1994, between Janus Capital Corporation and Aetna Life Insurance and Annuity
Company, as amended on January 2, 1995 and February 24, 1995 ------------
99-B.8.34 Letter Agreement dated January 1,1996 to Fund Participation Agreement dated May
11, 1994, between Janus Capital Corporation and Aetna Life Insurance and Annuity
Company, as amended on January 2, 1995, February 24, 1995 and May 1, 1995
------------
99-B.8.35 Letter Agreement dated February 18, 1999 to Fund Participation Agreement dated
May 11, 1994, between Janus Capital Corporation and Aetna Life Insurance and
Annuity Company, as amended on January 2, 1995, February
24, 1995, May 1, 1995 and January 1, 1996
------------
99-B.8.36 Amendment dated ____________, 2000 to Fund Participation Agreement dated May 11,
1994, between Janus Capital Corporation and Aetna Life Insurance and Annuity
Company, as amended on January 2, 1995, February 24,
1995, May 1, 1995, January 1, 1996, and February 18,
1999
------------
99-B.8.39 First Amendment dated December 1, 1999 to Fund Participation Agreement between
Aetna Life Insurance and Annuity Company and Oppenheimer Variable Annuity Account
Funds and Oppenheimer Funds, Inc. dated March 11, 1997 ------------
99-B.9 Opinion and Consent of Counsel *
99-B.10 Consent of Independent Auditors *
</TABLE>
*To be filed by amendment
Exhibit 99-B.4.1
------------------------------------------------------
[Aetna Logo] Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
If you have questions about the Contract, call the
toll-free number shown above.
Group Combination Deferred Annuity Contract (Nonparticipating)
Aetna Life Insurance and Annuity Company (ALIAC), a stock company, will pay
benefits according to the terms and conditions set forth in this Contract. This
Contract is delivered in [YOUR STATE] and is subject to the laws of that
jurisdiction.
Please read this Contract carefully. It states ALIAC's contractual rights and
obligations as well as the rights and obligations of the Contract Holder and
Participants.
Specifications
- --------------------------------------------------------------------------------
| Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Type of Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Contract Holder
| SPECIMEN
- --------------------------------------------------------------------------------
| Group Annuity Contract Number
| SPECIMEN
- --------------------------------------------------------------------------------
| Contract Effective Date
| SPECIMEN
Right to Cancel
- --------------------------------------------------------------------------------
The Contract Holder may cancel this Contract within 10 calendar days of
receiving it by returning it to ALIAC at the address shown above, or to the
agent from whom it was purchased. Within seven calendar days of receiving the
cancellation request at its Home Office, ALIAC will return any Contributions
received, plus any increase, or minus any decrease in value, on the amount, if
any, allocated to the Separate Account.
Signed at the Home Office on the Effective Date.
/s/ Thomas J. McInerney /s/ Kirk P. Wickman
- ------------------------ --------------------
President Secretary
THE VARIABLE FEATURES OF THIS CONTRACT ARE DESCRIBED IN SECTIONS 3 AND 11.
All payments and values provided by the group Contract, when based on the
investment experience of the Separate Account, are variable and are not
guaranteed as to fixed dollar amount. Amounts allocated to the Guaranteed
Accumulation Account, if withdrawn before a guaranteed term maturity date, may
be subject to a market value adjustment. The market value adjustment may result
in an increase, or a decrease, in the Individual Account value.
G-CDA(12/99)
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Contract Schedule I. Accumulation Phase S I - 1
Contract Schedule II. Annuity Phase S II - 1
Definitions 1
Section 1. General Contract Provisions 3
1.01 Entire Contract ............................................... 3
1.02 Nonparticipating Contract ..................................... 3
1.03 Control of Contract ........................................... 3
1.04 Certificate ................................................... 3
1.05 Incontestability .............................................. 3
1.06 Grace Period .................................................. 3
1.07 Change of Contract ............................................ 3
1.08 Payments ...................................................... 4
1.09 Deferral of Payment ........................................... 4
1.10 Proof of Age .................................................. 4
1.11 Evidence of Survival .......................................... 4
1.12 Misstatements and Adjustments ................................. 5
1.13 Reports ....................................................... 5
1.14 State Laws .................................................... 5
1.15 Claims of Creditors ........................................... 5
1.16 Maintenance Fee ............................................... 5
1.17 Charges for Additional Services ............................... 5
1.18 Charges Subject to Change ..................................... 5
Part I. Accumulation Phase 6
Section 2. Contributions and Individual Account Value 6
2.01 Contributions ................................................. 6
2.02 Premium Tax ................................................... 6
2.03 Individual Account ............................................ 6
2.04 Experience Credit ............................................. 6
2.05 Individual Account Value ...................................... 6
Section 3. Separate Account 7
3.01 General ....................................................... 7
3.02 Funds Available ............................................... 7
3.03 Change or Substitution of Funds ............................... 7
3.04 Accumulation Units ............................................ 7
3.05 Accumulation Unit Value ....................................... 7
3.06 Net Investment Factor ......................................... 7
3.07 Charges to the Separate Account ............................... 8
3.08 Fund Transfers ................................................ 8
3.09 Withdrawals from the Separate Account ......................... 8
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 4. Aetna GET Fund 8
4.01 GET Fund Guarantee Period ....................................... 8
4.02 GET Fund Offering Period ........................................ 8
4.03 GET Fund Guarantee .............................................. 9
4.04 GET Fund Maturity Date .......................................... 9
4.05 Transfers or Withdrawals from the GET Fund ...................... 9
Section 5. Fixed Account 9
5.01 Fixed Account Minimum Guaranteed Interest Rate .................. 9
5.02 Transfers from the Fixed Account ................................ 10
5.03 Withdrawals from the Fixed Account .............................. 10
Section 6. Fixed Plus Account 10
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate ............. 10
6.02 Transfers from the Fixed Plus Account ........................... 10
6.03 Partial Withdrawals from the Fixed Plus Account ................. 11
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account ... 11
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision .......... 11
Section 7. Guaranteed Accumulation Account (GAA) 11
7.01 Nonunitized Separate Account .................................... 11
7.02 GAA Minimum Guaranteed Interest Rate ............................ 12
7.03 Deposit Period .................................................. 12
7.04 Guaranteed Term ................................................. 12
7.05 Guaranteed Term Groups .......................................... 12
7.06 Maturity Date, Maturity Value and Reinvestment .................. 12
7.07 Transfers and Withdrawals from the GAA .......................... 12
7.08 Application of the Market Value Adjustment ...................... 13
7.09 Market Value Adjustment (MVA) ................................... 13
Section 8. Transfers, Withdrawals and Distributions 14
8.01 Transfers ....................................................... 14
8.02 Withdrawals ..................................................... 14
8.03 Withdrawal Restrictions Under the Code .......................... 14
8.04 Withdrawal Charge ............................................... 15
8.05 Waiver of Withdrawal Charge ..................................... 15
8.06 Reinstatement ................................................... 15
8.07 Required Distributions .......................................... 15
8.08 Systematic Distribution Options (SDOs) .......................... 16
8.09 Individual Account Termination .................................. 16
Section 9. Loans 16
9.01 Loan Availability ............................................... 16
Section 10. Death Benefit During the Accumulation Phase 16
10.01 Death Benefit ................................................... 16
10.02 Contract Beneficiary ............................................ 16
10.03 Distribution of Death Benefit ................................... 16
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Part II. Annuity Phase 17
Section 11. General Provisions 17
11.01 Election ...................................................... 17
11.02 Change of Annuity Provisions .................................. 17
11.03 Annuity Options ............................................... 17
11.04 Mortality Table ............................................... 18
11.05 Payments ...................................................... 18
11.06 Investment Options ............................................ 18
11.07 Fixed Annuity Minimum Guaranteed Interest Rate ................ 19
11.08 Variable Annuity Assumed Annual Net Return Rate Election ...... 19
11.09 Variable Annuity Transfers .................................... 19
11.10 Fund Annuity Units ............................................ 19
11.11 Fund Annuity Unit Value ....................................... 19
11.12 Fund Annuity Net Return Factor ................................ 20
11.13 Death Benefit During the Annuity Phase ........................ 20
11.14 Charges to the Separate Account ............................... 20
Annuity Tables 21
</TABLE>
iii
<PAGE>
Contract Schedule I
Accumulation Phase
Control of Contract (see 1.03)
[The Contract Holder controls this Contract.
By notifying us in writing, the Contract Holder may allow Participants
to choose Investment Options for an Individual Account. The Contract
Holder may, however, retain the right to choose Investment Options for
employer Contributions. Unless otherwise provided by the Plan, we will
make payments only at the written direction of the Contract Holder and
a Participant. Unless otherwise specified by the Plan, we will make an
in-service transfer under Internal Revenue Service Revenue Ruling 90-24
only at the written direction of the Contract Holder and a Participant
and will make checks payable to the acquiring investment provider(s).
The Contract and Individual Accounts are nontransferable and
nonassignable except to us in the event of a loan (if allowed under the
Contract) or in the event of a qualified domestic relations order as
allowed under the Retirement Equity Act of 1984 (REA).
Participants have a nonforfeitable right to the value of employer
Contributions made to their Individual Accounts subject to any Plan
vesting limits as determined by the Contract Holder. Participants have
a nonforfeitable right to the value of employee Contributions made to
their Individual Accounts as provided by Code Section 403(b) and
subject to the terms of the Plan.
The Contract Holder must notify us in writing if the Plan is, or
becomes, subject to the Employee Retirement Income Security Act of 1974
(ERISA) and/or related law or regulations including REA. We will rely
on the Contract Holder's determination and representation of the
applicability of such laws. If the Plan is subject to ERISA, before we
will make a distribution from an Individual Account, the Contract
Holder must certify in writing that all applicable REA requirements
have been met and that the distribution complies with the Plan.]
Maintenance Fee (see 1.16)
The maintenance fee for each Individual Account is [$XX] as of the
Effective Date of the Contract and is subject to change (see 1.18). The
fee will never exceed [$30].
Contribution Limits (see 2.01)
[Each year, Contributions to the Contract are limited to the lesser of:
(a) The maximum exclusion allowance (MEA) limit under Code Section
403(b); or
(b) The amount set forth in Code Section 415, generally, 25% of
compensation up to $30,000.
In addition, salary reduction Contributions as defined in Code Section
402(g) may not exceed $10,000, or such larger amount as adjusted by the
Secretary of the Treasury during any calendar year, unless the
alternative limitation under Code Section 402(g)(8) applies.]
Separate Account (see 3.01)
Variable Annuity Account [C]
S I - 1
<PAGE>
Daily Charges to the Separate Account (see 3.07)
Charges to the Separate Account are subject to change (see 1.18). The
charges as of the Effective Date of the Contract are as follows:
Mortality and Expense Risk Charge: [X.XX%] (annual basis)
This charge will never exceed [1.50%] (annual basis).
Administrative Charge: [X.XX%] (annual basis)
This charge will never exceed [0.25%] (annual basis).
Aetna GET Fund Guarantee Charge: If applicable, the charge will be
provided to the Contract Holder and will never exceed 0.75% (annual
basis).
Fixed Interest Options Available (see Section 5, Section 6, and Section 7)
[Fixed Account
Fixed Account for transferred amounts only (no ongoing Contributions).
Fixed Plus Account
Guaranteed Accumulation Account (GAA)]
Fixed Account Minimum Guaranteed Interest Rate (see 5.01)
The interest rate will never be less than [3%] (annual basis).
Fixed Account Annual Transfer Limit (see 5.02)
[10%]
Fixed Plus Account Minimum Guaranteed Interest Rate (see 6.01)
The interest rate will never be less than [3%] (annual basis).
Fixed Plus Account Annual Transfer and Partial Withdrawal Limit (see 6.02 and
6.03)
[20%]
Waiver of Fixed Plus Account Transfer Limit (see 6.02)
[$2,000]
Waiver of Fixed Plus Account Full Withdrawal Provision (see 6.05)
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
made:
[(a) When the amount in the Fixed Plus Account is [$2,000] or less
(or, if applicable, as otherwise allowed by the Plan for a
lump-sum cash-out without Participant consent) and during the
previous [12 months] no amounts have been withdrawn,
transferred, taken as a loan (if allowed under the Contract), or
used to purchase Annuity payments;
(b) Due to a Participant's death before Annuity payments begin and
paid within six months of the Participant's death;
(c) As provided in Section 8.09;
(d) To purchase Annuity payments on a life-contingent basis or
payments for a stated period on a fixed-only basis.
(e) When a Participant is separated from service, and when:
(1) Separation from service is documented in a form acceptable
to us;
(2) The amount is paid directly to the Participant; and
(3) The amount paid for all withdrawals due to separation from
service during the previous [12 months] does not exceed
[20%] of the average value of all Individual Accounts under
the Contract during that period; or
S I - 2
<PAGE>
(f) Due to financial hardship as defined in the Code, and when:
(1) If applicable, certified by the employer;
(2) The amount is paid directly to the Participant; and
(3) The amount paid for all withdrawals due to financial
hardship during the previous [12 months] does not exceed
[20%] of the average value of all Individual Accounts under
the Contract during that period.]
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 7.02)
The interest rate will never be less than [3%] (annual basis).
Withdrawal Restrictions Under the Code (see 8.03)
[Limitations apply to partial and full withdrawals of the "restricted
amount" from the Contract as required by Code Section 403(b)(11). The
restricted amount is the sum of:
(1) Contributions attributable to a Participant's salary reduction
Contributions made on and after January 1, 1989; plus
(2) The net increase, if any, in the Individual Account value after
December 31, 1988 attributable to investment gains and losses
and credited interest.
The restricted amount may be partially or fully withdrawn only if one
or more of the following conditions are met. The Participant has:
(a) Separated from service when certified by the employer;
(b) Attained age 59 1/2;
(c) Died;
(d) Become disabled, as defined by the Code;
(e) Experienced financial hardship as defined by the Code. The
amount available for financial hardship is limited to the lesser
of the amount necessary to satisfy the need or Contributions
attributable to salary reduction Contributions made on or after
January 1, 1989; or
(f) Met other circumstances as otherwise allowed by federal law,
regulations or rulings.
No withdrawal restrictions apply to salary reduction Contributions and
earnings credited to such Contributions on or before December 31, 1988.
In addition, any portion of an Individual Account representing amounts
transferred under Internal Revenue Service Revenue Ruling 90-24 from a
Code Section 403(b)(7) custodial account will be subject to the
restrictions set forth in Code Section 403(b)(7)(A)(ii).]
Withdrawal Charge (see 8.04)
[For each withdrawal from an Individual Account, we may deduct a
withdrawal charge. This charge is a percentage of the amount withdrawn.
The withdrawal charge is as follows:
<TABLE>
<CAPTION>
[Number of Years Since Individual
Account Established] Withdrawal Charge
--------------------------------- -----------------
<S> <C>
[Fewer than 5 5%
5 or more, but fewer than 7 4%
7 or more, but fewer than 9 3%
9 or more, but fewer than 10 2%
10 or more 0%]
</TABLE>
The withdrawal charge will never exceed 8.5% of total Contributions, or
the maximum permitted by National Association of Securities Dealers,
Inc. (NASD) rules.]
S I - 3
<PAGE>
Waiver of Withdrawal Charge (see 8.05)
[The withdrawal charge does not apply when the withdrawal is:
(a) Used to purchase Annuity payments;
(b) Used to purchase a single premium immediate Annuity or
individual retirement Annuity issued by ALIAC or one of its
affiliates, provided that the right to cancel under the new
Contract is not exercised. We will treat exercise of the right
to cancel as a reinstatement and any subsequent withdrawal may
then be subject to the withdrawal charge applicable on the date
of the withdrawal;
(c) Under a systematic distribution option (see 8.08);
(d) When we terminate an Individual Account as provided in 8.09;
(e) When the Individual Account value is [$3,500] or less (or, if
applicable, as otherwise allowed by the Plan for lump-sum
cash-out without Participant consent) and during the previous
[12 months] no amounts have been withdrawn, transferred, taken
as a loan (if allowed under the Contract), or used to purchase
Annuity payments;
(f) Made by a Participant who has attained age 59 1/2 and, if
applicable, has completed nine Contribution periods;
(g) Due to a Participant's death before Annuity payments begin;
(h) In an amount equal to or less than [10%] of the Individual
Account value when the withdrawal is the first withdrawal in a
calendar year and is made to a Participant who is at least age
59 1/2 and not older than age 70 1/2 (not available when a
systematic distribution option is in effect). Any outstanding
loans are not included in the Individual Account value when
determining the [10%] amount. This waiver does not apply to full
withdrawals or to a withdrawal due to a loan default;
(i) Made to a Participant who is separated from service when
certified by the employer;
(j) Due to financial hardship as defined in the Code;
(k) Due to the transfer of the Individual Account value to another
contract issued by ALIAC for the Plan, subject to various
conditions agreed to by the Contract Holder and ALIAC; or
(l) For a transfer as provided under Internal Revenue Service
Revenue Ruling 90-24 to an ALIAC Code Section 403(b)(7)
custodial account.]
Required Distributions (see 8.07)
[Generally, for Contributions made and earnings credited after December
31, 1986, distribution must begin by April 1 of the calendar year
following the later of (1) the calendar year in which a Participant
attains age 70 1/2 or (2) retires. For Individual Account values as of
December 31, 1986, distribution must begin by the last day of the year
in which a Participant attains age 75 or retires, whichever is later.]
The entire Individual Account value must be distributed, or begin to be
distributed, over the life or life expectancy of a Participant, or
joint lives or joint life expectancies of a Participant and a
beneficiary.
Individual Account Termination Amount (see 8.09)
[$10,000]
Loans (see 9.01)
[Loans are available under this Contract.]
Contract Beneficiary (see 10.02)
[The Contract Holder is the Contract beneficiary. A Participant may
designate a beneficiary under the Plan (Plan beneficiary).]
S I - 4
<PAGE>
Contract Schedule II
Annuity Phase
Payment Period (see 11.03)
The period for which we will guarantee Annuity payments must be at
least [five] years and no more than [30] years.
Mortality Table (see 11.04)
Society of Actuaries' 1983 Table a
Maximum Number of Funds (see 11.06)
The maximum number of Funds is [four].
Fixed Annuity Minimum Guaranteed Interest Rate (see 11.07)
[3%] (annual basis)
Number of Annual Transfers Among Funds (see 11.09)
Each calendar year, we allow [five] transfers among funds.
Daily Charges to the Separate Account (see 11.14)
Charges to the Separate Account will never be more than the following:
Mortality and Expense Risk Charge: [1.25%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
S II - 1
<PAGE>
Definitions
- --------------------------------------------------------------------------------
Accumulation Phase
The time between an Individual Account Effective Date and the date on which the
entire Individual Account value is used to purchase Annuity payments, or
otherwise distributed.
Aetna GET Fund (GET Fund)
The Aetna GET Fund is an Investment Option which may be available during the
Accumulation Phase. The GET Fund operates as a series offering. Each series is a
separate Fund.
Aetna Life Insurance and Annuity Company (ALIAC)
Aetna Life Insurance and Annuity Company ("we," and "our," and "us" refer to
ALIAC).
Annuitant
The person whose life expectancy determines the amount and/or duration of the
payments under a life-contingent Annuity option.
Annuity
Payment of an income:
(a) For a stated period;
(b) For the life of one or two people; or
(c) Some combination of (a) and (b).
A fixed Annuity is one in which the payment amount does not vary. A variable
Annuity is one in which the payment amount may vary based on the net investment
results of the Funds.
Annuity Phase
The time during which we make Annuity payments.
Business Day
Each day our Home Office is open for business.
Code
The Internal Revenue Code of 1986, as it is amended from time to time.
Contract
This agreement between ALIAC and the Contract Holder.
Contract Holder
The entity, or person, named in the specifications section on the face page, to
which the Contract is issued.
Contribution
The payment made to us during the Accumulation Phase. The Contribution may be
reduced by any applicable premium tax due.
Effective Date
The date, shown in the specifications section on the face page, on which we
issue the Contract or establish an Individual Account.
Fixed Account
A Fixed Interest Option. The Fixed Account is an obligation of our General
Account.
Fixed Interest Options
Investment options, including the Fixed Account, the Fixed Plus Account and the
Guaranteed Accumulation Account that credit interest. The Fixed Interest Options
available during the Accumulation Phase are shown on Contract Schedule I under
Fixed Interest Options Available.
Fixed Plus Account
A Fixed Interest Option. Limitations apply to withdrawals from the Fixed Plus
Account. The Fixed Plus Account is an obligation of our General Account.
1
<PAGE>
Fund
A variable Investment Option available under this Contract. The Funds are
open-end registered investment management companies (mutual funds) in which the
Separate Account invests.
General Account
The account that holds our assets other than those held in the Separate Account
or Nonunitized Separate Account.
Guaranteed Accumulation Account (GAA)
A Fixed Interest Option that may be available during the Accumulation Phase.
Under this option, we guarantee specified rates of interest for specified
periods of time. Amounts allocated to the Guaranteed Accumulation Account are
held in the Nonunitized Separate Account.
Good Order
Instructions that are complete and clear enough to allow us to act without
exercising discretion.
Home Office
Our main office located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Individual Account
An account, or accounts (including, if applicable, employer and employee
accounts) established for each Participant to maintain a record of transactions
and the value of Contributions as invested.
Investment Options
The Funds and Fixed Interest Options available under this Contract.
Maturity Date
The last day of a GAA guaranteed term or the last day of the guarantee period of
an Aetna GET Fund series.
Nonunitized Separate Account
A separate account that holds assets allocated to the Guaranteed Accumulation
Account.
Participant
A person who is covered under the retirement Plan or program for which this
Contract is issued and who has an interest in this Contract.
Plan
The retirement plan or program for which this Contract is issued.
Premium Tax
Any tax assessed by any governmental entity on Contributions or amounts used to
purchase Annuity payments.
Separate Account
An account that buys and holds shares of the Funds through its subaccounts.
Valuation Date
The date and time at which accumulation unit values and Annuity unit values are
calculated. Currently, this calculation is made after the close of business of
the New York Stock Exchange on any normal business day, Monday through Friday,
that the New York Stock Exchange is open.
2
<PAGE>
Section 1. General Contract Provisions
- --------------------------------------------------------------------------------
1.01 Entire Contract
The entire Contract consists of this document, any attachments and
any endorsements incorporated.
The Plan, if applicable, is not part of the Contract and ALIAC is
not bound by its terms.
1.02 Nonparticipating Contract
This Contract is nonparticipating. The Contract Holder, a
Participant or a Contract beneficiary have no right to share in
our earnings.
1.03 Control of Contract
Control of the Contract is as shown on Contract Schedule I under
Control of Contract.
1.04 Certificate
Any certificate provided to a Participant summarizes Contract
provisions; it is for information only and is not part of the
Contract. We will provide certificates as required by state law in
the state where the Contract is delivered and as allowed under the
Plan.
1.05 Incontestability
We will not cancel this Contract because of any error of fact.
1.06 Grace Period
Except as provided in 8.09, this Contract and all Individual
Accounts will remain in effect even if Contributions are not
continued.
1.07 Change of Contract
Only an ALIAC officer at the level of Vice President or higher, or
an officer with written delegation of authority from a Vice
President or higher officer, may change the terms of this
Contract. No other ALIAC officer, employee, agent or
representative can change this Contract.
Except as noted below, this Contract may be changed at any time by
written mutual agreement between the Contract Holder and ALIAC.
For changes we initiate requiring Contract Holder consent, we
notify the Contract Holder 60 calendar days in advance of the
change and consider that the Contract Holder has agreed to the
change unless we receive written notice that the Contract Holder
does not agree to the change at least 30 calendar days before the
date the change becomes effective.
If we propose a change requiring Contract Holder consent and the
Contract Holder does not agree to the change, we have the right to
not establish new Individual Accounts and to stop accepting
Contributions to existing Individual Accounts.
We will not reduce the minimum guaranteed interest rate for the
Fixed Account and the Fixed Plus Account.
We have the right to change the following without Contract Holder
consent:
(a) Net Investment Factor (see 3.06)
We may change the net investment factor by notifying the
Contract Holder in writing at least 30 calendar days
before the change becomes effective. If we do this, the
change will apply only to Individual Accounts established,
and Contributions received, after the date the change
becomes effective.
3
<PAGE>
(b) Guaranteed Accumulation Account (GAA) market value
adjustment (see 7.09)
We may change the GAA market value adjustment by notifying
the Contract Holder in writing at least 90 calendar days
before the change becomes effective. If we do this, the
change will apply only to guaranteed terms offered in
deposit periods after the date the change becomes
effective.
(c) Systematic Distribution Options (see 8.08)
We may change systematic distribution options by notifying
the Contract Holder in writing at least 30 calendar days
before the change becomes effective. If we do this, the
change will not apply to Participants or beneficiaries
receiving payments under an option before the date the
change becomes effective.
(d) Annuity Options (see 11.03)
We may change Annuity options by notifying the Contract
Holder in writing at least 30 calendar days before the
date the change becomes effective. If we do this, the
change will not take effect until at least 12 months after
the Effective Date of the Contract, or until at least 12
months after any previous change. Any change will not
apply to Participants or beneficiaries receiving Annuity
payments before the date the change becomes effective.
(e) Mortality Table (see 11.04)
We may change the mortality table by notifying the
Contract Holder in writing at least 30 calendar days
before the date the change becomes effective. If we do
this, the new table will not apply to Individual Accounts
established before the date the change becomes effective.
In addition, we may change this Contract as required to comply
with state and federal law without Contract Holder consent by
notifying the Contract Holder at least 30 calendar days before the
date the change becomes effective.
Any unilateral change will not apply to Individual Accounts
established before the date the change becomes effective, but will
apply to Individual Accounts established on or after the date the
change becomes effective. If we make a unilateral change, the
Contract Holder or Participants, as applicable, are permitted to
terminate participation in the Contract before the date the change
becomes effective under the terms of the Contract in effect prior
to the date the change becomes effective.
As required by law, we will make any change of Contract by
endorsement, which may be subject to regulatory approval in the
state where the Contract is delivered.
1.08 Payments
We make payments as directed by the Contract Holder or a
Participant, as applicable. Payment requests must be in writing or
as we otherwise allow in our administrative practice. We determine
the amount of any payment based on the Individual Account value as
of the next Valuation Date following our receipt of a payment
request in Good Order at our Home Office. Generally, we make
payments within seven calendar days.
1.09 Deferral of Payment
We may defer payment up to a period of six months or as otherwise
provided by state and/or federal law.
1.10 Proof of Age
If a life-contingent Annuity option is elected, we may require
proof of the age of an Annuitant.
1.11 Evidence of Survival
We may require proof that any Annuitant under a life-contingent
Annuity option is living.
4
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1.12 Misstatements and Adjustments
If we learn that the age of any Annuitant or second Annuitant is
misstated, we will use the correct age to adjust payments. We
reserve the right to obtain reimbursement, or to adjust future
payments for any amount we overpaid. We will pay the amount of any
underpayment.
1.13 Reports
Each calendar year we provide the Contract Holder or a
Participant, as applicable, with a report of the Individual
Account value. We also provide an annual report for the Separate
Account.
1.14 State Laws
This Contract complies with the laws of the state in which it is
delivered. Any cash, death or Annuity payments are equal to or
greater than the minimum required. To determine legal reserve
valuation, we use Annuity tables as required by law; such tables
may be different from those we use to determine Annuity payments.
1.15 Claims of Creditors
Individual Accounts are not subject to the claim of any creditor
of the Contract Holder, a Participant or a beneficiary, except to
the extent permitted by law.
1.16 Maintenance Fee
We may deduct an annual maintenance fee during the Accumulation
Phase.
The amount of the maintenance fee, if any, for this Contract will
never be more than the amount shown on Contract Schedule I under
Maintenance Fee.
The fee, if any, is deducted proportionately from each Investment
Option in which the Individual Account is invested on the
anniversary of the Individual Account Effective Date. The fee is
also deducted if the entire Individual Account value is withdrawn.
If a Participant has more than one Individual Account, we may
deduct the fee proportionately from all Individual Accounts. We
may eliminate the fee for an Individual Account established with
one lump-sum Contribution.
1.17 Charges for Additional Services
At the request of the Contract Holder, we or our authorized
representatives, may provide administrative services to the Plan.
We reserve the right to charge for such services.
1.18 Charges Subject to Change
The maintenance fee (see 1.16) and charges to the Separate Account
during the Accumulation Phase (see 3.07) may vary (increase,
decrease, or be eliminated) based on the total assets held in all
Individual Accounts under the Contract. In determining total
assets, we may aggregate Individual Accounts established under
different ALIAC Contracts. The aggregate amount is equal to the
sum of assets in all Individual Accounts under this Contract, plus
the value of Individual Accounts under other ALIAC Contracts of
the same class issued to the Contract Holder. We may determine the
amount of the maintenance fee and/or charges to the Separate
Account based on total assets on an annual basis. We will
determine initial charges based on our estimate of the amount that
will be allocated to the Contract during a period mutually agreed
upon by the Contract Holder and us.
5
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Part I. Accumulation Phase
Section 2. Contributions and Individual Account Value
- --------------------------------------------------------------------------------
2.01 Contributions
We allocate Contributions in whole percentages among the
Investment Options available as directed by the Contract Holder or
a Participant, as applicable. Changes in future Contribution
allocation may be made at any time without charge. The Contract
Holder or a Participant, as applicable, may also establish an
Individual Account with one lump sum Contribution.
We reserve the right to establish minimum Contribution amounts and
to refuse to accept any Contribution.
Contributions to Individual Accounts may be limited as provided in
the Code. The limits, if any, are shown on Contract Schedule I
under Contribution Limits.
2.02 Premium Tax
We pay any applicable premium tax when it is due. We will deduct
the amount of any applicable premium tax from the Individual
Account value no earlier than when there is a tax liability. We
reserve the right to deduct any premium tax due before a
Contribution is allocated to an Individual Account.
2.03 Individual Account
We will establish an Individual Account for each Participant.
If required, we will provide accounts that distinguish between
employer and employee Contributions for each Participant.
2.04 Experience Credit
We may apply experience credits (investment, administrative,
mortality or other) under this Contract and may apply such credits
as:
(a) A reduction in the maintenance fee;
(b) A reduction in the mortality and expense risk charge to
the Separate Account;
(c) A reduction in the administrative charge to the Separate
Account; and
(d) An increase in a Fixed Interest Option interest rate.
We will apply experience credits at our sole discretion as we deem
appropriate for the class of contracts to which the Contract is
issued.
2.05 Individual Account Value
As of the most recent Valuation Date, the Individual Account value
is equal to the total of all Contributions:
(a) Plus any interest added on the amount, if any, allocated
to a Fixed Interest Option(s);
(b) Plus or minus the investment experience on the amount, if
any, held in the Separate Account;
(c) Minus any applicable maintenance fees, any amounts
withdrawn, or used to purchase Annuity payments, or any
applicable premium tax; and
(d) Minus any applicable fees or charges deducted.
6
<PAGE>
Section 3. Separate Account
- --------------------------------------------------------------------------------
3.01 General
The Separate Account, established under Title 38a, Section 38a-433
of the Connecticut General Statutes, buys and holds shares of the
Funds available under the Contract. The Separate Account is
registered as a unit investment trust under the Investment Company
Act of 1940.
We own the assets held in the Separate Account; we are not a
trustee of those assets. Income, gains or losses, realized or
unrealized, are credited to or charged against the Separate
Account without regard to our other income, gains or losses.
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
3.02 Funds Available
We reserve the right to limit the number of Funds in which an
Individual Account may be invested, at one time or cumulatively,
during the Accumulation Phase and/or Annuity Phase.
3.03 Change or Substitution of Funds
We reserve the right to stop offering any Fund or to add Funds. We
may substitute shares of a Fund for shares of another Fund. We
will provide the Contract Holder with reasonable advance notice of
any elimination, addition or substitution of a Fund. If the Plan
is subject to ERISA, we will seek Contract Holder consent in
advance of any Fund substitution. Consent will be deemed given
unless, following notice of substitution and within a prescribed
time period, the Contract Holder notifies us in writing that it
does not consent and provides us with alternative investment
instructions for the shares that would otherwise be affected by
the substitution.
3.04 Accumulation Units
Each Contribution allocated to one or more of the Funds is
credited to an Individual Account as accumulation units. The
number of accumulation units is calculated by dividing the amount
of the Contribution allocated to the Fund by the accumulation unit
value (see 3.05) as of the next Valuation Date following our
receipt of the Contribution in Good Order at our Home Office.
3.05 Accumulation Unit Value
The value of each accumulation unit for any Fund for each
Valuation Date is computed by multiplying the net investment
factor (see 3.06) by the accumulation unit value for such
Valuation Date.
Accumulation unit values may increase or decrease from Valuation
Date to Valuation Date.
3.06 Net Investment Factor
The net investment factor is used to compute the accumulation unit
value for any Fund.
For each Valuation Date, for each Fund, the net investment factor
is equal to 1.0000000, plus the net return rate.
The net return rate equals:
[a - b - c]
------------- - e - f
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
7
<PAGE>
d is the total value of the accumulation units and Annuity
units of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on
Contract Schedule I under Daily Charges to the Separate
Account; and
f is if applicable, a charge for the GET Fund guarantee, which
is deducted daily during the guarantee period. The charge,
which is determined before the beginning of each offering
period (see 4.02), is shown on Contract Schedule I under
Daily Charges to the Separate Account.
The net return rate may be greater or less than zero percent.
3.07 Charges to the Separate Account
During the Accumulation Phase, we may deduct a mortality and
expense risk charge from the Individual Account value invested in
the Separate Account. In addition, we reserve the right to impose
an administrative charge.
The charges to the Separate Account are shown on Contract Schedule
I under Daily Charges to the Separate Account and are deducted
daily.
3.08 Fund Transfers
During the Accumulation Phase, any portion or all of the
Individual Account value held in a Fund may be transferred to any
other Fund or any available Fixed Interest Option. The Individual
Account value will be based on the Fund's accumulation unit value
next determined after we receive a transfer request in Good Order.
3.09 Withdrawals from the Separate Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 8.02) from the Funds, a withdrawal
charge may apply (see 8.04).
Section 4. Aetna GET Fund (GET Fund)
- --------------------------------------------------------------------------------
The following provisions apply if the GET Fund is available.
4.01 GET Fund Guarantee Period
For each GET Fund series, the period for which the GET Fund
guarantee applies. The guarantee period ends on the Maturity Date.
4.02 GET Fund Offering Period
The period, usually from one to three months, during which the
Contract Holder or a Participant, as applicable, may transfer or
allocate amounts to a GET Fund series. Each GET Fund series has a
specific offering period. Amounts transferred or allocated prior
to the date on which the guarantee period begins are invested in
money market instruments.
We will specify a minimum total asset amount required at the end
of an offering period to offer a GET Fund series. If the minimum
is not achieved, we reserve the right not to begin the guarantee
period. If a GET Fund series is not begun, we will mail a notice
to all Contract Holders or Participants, as applicable, who have
made allocations to that GET Fund series no less than 15 calendar
days after the end of the offering period. The Contract Holder or
a Participant, as applicable, then has 45 calendar days from the
end of the offering period to reallocate the amount allocated to
the GET Fund to any other available Investment Options. During
this time, GET Fund assets are invested in money market
instruments. If the Contract Holder or a Participant, as
applicable, makes no election by the end of the 45-day period, at
the next Valuation Date, we will allocate the amount in the
terminated GET Fund series to the money market fund available
under the Contract.
8
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We reserve the right to specify a maximum total asset amount for a
GET Fund series. If the maximum is achieved, we reserve the right
to set a date on which we will stop accepting allocations for that
GET Fund series. We will announce the date on which we will stop
accepting transfers and allocations 10 calendar days prior to that
date.
4.03 GET Fund Guarantee
On the Maturity Date of each GET Fund series, the GET Fund
accumulation unit value for that series will not be less than the
GET Fund accumulation unit value determined at the close of
business on the last day of the offering period. If necessary to
offset any shortfall in the GET Fund accumulation unit value, we
will transfer funds from our General Account to the Separate
Account. The GET Fund guarantee does not apply to transfers or
withdrawals made before the Maturity Date.
If GET Fund accumulation units are adjusted at any time during the
guarantee period, the GET Fund guarantee will be restated. We
calculate the restated guarantee so that it is equivalent to the
original guarantee for that GET Fund series.
A daily charge is assessed on the amount, if any, allocated to the
GET Fund. This charge for the GET Fund guarantee is shown on
Contract Schedule I under Daily Charges to the Separate Account.
4.04 GET Fund Maturity Date
The GET Fund Maturity Date is the date on which the guarantee
period ends and GET Fund accumulation units are liquidated.
Prior to the Maturity Date for each series, we send a written
notice of the date to each Contract Holder or Participant, as
applicable, who has an Individual Account value in that series. In
response, the Contract Holder or Participant, as applicable, must
tell us to which available Investment Options to transfer the
amount in the GET Fund on the Maturity Date. If we do not receive
instructions, on the Maturity Date we transfer the portion of the
Individual Account value held in the GET Fund to another GET Fund
series, if available. If no GET Fund series is available, we
transfer the amount to the Fund or Funds we designate in the
written notice.
4.05 Transfers or Withdrawals from the GET Fund
Transfers or withdrawals from the GET Fund before the Maturity
Date are based on the GET Fund unit value for the next Valuation
Date following our receipt of the request in Good Order (see 8.01
and 8.02).
Section 5. Fixed Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Account is available as shown on
Contract Schedule I under Fixed Interest Options Available.
5.01 Fixed Account Minimum Guaranteed Interest Rate
The Fixed Account minimum guaranteed interest rate is shown on
Contract Schedule I under Fixed Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Account during the calendar year. The one year minimum guaranteed
interest rate will be established prior to each calendar year and
will be made available to the Contract Holder or Participants, as
applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
Participants, as applicable.
9
<PAGE>
5.02 Transfers from the Fixed Account
Each calendar year, the percentage shown on Contract Schedule I
under Fixed Account Annual Transfer Limit of the amount in the
Fixed Account may be transferred to any available Investment
Options. The amount available for transfer will be based on the
Individual Account value in the Fixed Account as of the date we
receive the transfer request in Good Order at our Home Office. We
may, on a temporary basis, allow transfer of a larger percentage.
There is no limit on the amount that may be transferred to the
Fixed Plus Account.
5.03 Withdrawals from the Fixed Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 8.02) from the Fixed Account, a
withdrawal charge may apply (see 8.04).
Section 6. Fixed Plus Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Plus Account is available as shown
on Contract Schedule I under Fixed Interest Options Available.
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate
The Fixed Plus Account minimum guaranteed interest rate is shown
on Contract Schedule I under Fixed Plus Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Plus Account during the calendar year. The one year minimum
guaranteed interest rate will be established prior to each
calendar year and will be made available to the Contract Holder or
Participants, as applicable, in advance of the calendar year. We,
at our discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
Participants, as applicable.
6.02 Transfers from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit of the amount in the Fixed Plus Account
may be transferred to any available Investment Option.
The amount available for transfer is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
transfer request in Good Order at our Home Office, reduced by any
amount withdrawn, transferred, taken as a loan (if allowed under
the Contract) or used to purchase Annuity payments during the 12
months prior to the transfer request. In addition, we reserve the
right to reduce the amount available for transfer by amounts
withdrawn under a systematic distribution option.
Twenty percent of the amount in the Fixed Plus Account may be
transferred in each of four consecutive 12 months and the balance
transferred in the fifth year subject to the following conditions:
(a) During the five-year period, no additional amounts are
allocated to or transferred from the Fixed Plus Account;
(b) We will include any amount transferred, taken as a loan
(if allowed under the Contract) or used to purchase
Annuity payments during the prior 12-month period when
calculating the amount which equals 20%; and
(c) We reserve the right to include amounts paid under a
systematic distribution option when calculating the amount
which equals 20%.
In addition, we reserve the right to waive the transfer limit when
the amount in the Fixed Plus Account is less than or equal to the
amount shown on Contract Schedule I under Waiver of Fixed Plus
Account Transfer Limit.
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<PAGE>
6.03 Partial Withdrawals from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit may be withdrawn from the Fixed Plus
Account.
The amount available for withdrawal is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
withdrawal request in Good Order at our Home Office, reduced by
any amount withdrawn, transferred, taken as a loan (if allowed
under the Contract), or used to purchase Annuity payments during
the 12 months prior to the request. In addition, we reserve the
right to reduce the amount available by deducting any amount
withdrawn under a systematic distribution option.
The withdrawal limit does not apply when the partial withdrawal
is:
(a) Due to a Participant's death during the Accumulation Phase
and is made within six months of the date of death (this
exception applies to only one partial withdrawal);
(b) Used to purchase Annuity payments; or
(c) Due to other conditions as we may allow without
discrimination.
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account
The Contract Holder, or a Participant, as applicable, may withdraw
the full amount held in the Fixed Plus Account. When we receive a
request for a full withdrawal, no additional transfers, partial
withdrawals or loans (if allowed under the Contract) are allowed.
The withdrawal will be made as follows:
(a) One-fifth of the Individual Account value in the Fixed
Plus Account as of the date we receive the withdrawal
request in Good Order at our Home Office reduced by the
amount, if any, transferred, withdrawn, taken as a loan
(if allowed under the contract) or used to purchase
Annuity payments during the prior 12 months; then
(b) One-fourth of the remaining amount 12 months later; then
(c) One-third of the remaining amount 12 months later; then
(d) One-half of the remaining amount 12 months later; then
(e) The balance of the Individual Account value in the Fixed
Plus Account 12 months later.
No withdrawal charge applies to amounts withdrawn.
The Contract Holder or Participant, as applicable, may cancel a
full withdrawal request from the Fixed Plus Account at any time.
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
as noted on Contract Schedule I under Waiver of Fixed Plus Full
Withdrawal Provision.
Section 7. Guaranteed Accumulation Account (GAA)
- --------------------------------------------------------------------------------
The following provisions apply if the Guaranteed Accumulation Account is
available as shown on Contract Schedule I under Fixed Interest Options
Available.
7.01 Nonunitized Separate Account
The Nonunitized Separate Account is established under Title 38a,
Section 38a-433 of the Connecticut General Statutes. There are no
discrete units for this account. We own the assets held in the
Nonunitized Separate Account; we are not a trustee of those
assets. The Contract Holder or Participant does not participate in
the investment gain or loss from assets held in the Nonunitized
Separate Account. Such gain or loss is borne entirely by us.
Income, gains or losses, realized or unrealized, are credited to
or charged against the Nonunitized Separate Account without regard
to our other income, gains or losses. Nonunitized Separate Account
assets, to the extent of reserves and other Contract liabilities,
cannot be charged with liabilities arising out of any other
business we conduct.
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7.02 GAA Minimum Guaranteed Interest Rate
All Contributions allocated to a GAA guaranteed term (see 7.04)
earn a rate of interest which we determine and which is guaranteed
when the Contribution remains in the guaranteed term until the
Maturity Date. The rate credited will never be less than the
minimum interest rate shown on Contract Schedule I under
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate.
For guaranteed terms of one year or less, one guaranteed rate is
credited for the full guaranteed term. For longer guaranteed
terms, we may credit an initial guaranteed interest rate from the
date of deposit to the end of a specified period within the
guaranteed term. We may credit different interest rates for
subsequent specified periods throughout the guaranteed term.
7.03 Deposit Period
A deposit period is the period of time we determine during which
we accept allocations (Contributions, transfers, or reinvestments)
to one or more guaranteed terms. We reserve the right to extend
the deposit period.
7.04 Guaranteed Term
A guaranteed term is the period of time for which we guarantee the
declared interest rate for allocations (Contributions, transfers,
or reinvestments) to GAA guaranteed terms. We may offer guaranteed
terms ranging in duration from one to ten years. During each
deposit period, we may offer more than one guaranteed term of
varying lengths. The guaranteed term begins the day after the
deposit period ends. The Contract Holder or a Participant, as
applicable, may allocate Contributions or transfers to any or all
guaranteed terms available in the current deposit period.
7.05 Guaranteed Term Groups
A guaranteed term group is comprised of all GAA guaranteed terms
of the same duration.
7.06 Maturity Date, Maturity Value and Reinvestment
The Maturity Date is the last day of a guaranteed term. The
maturity value is the amount we pay at the end of a guaranteed
term. At least 18 calendar days before any guaranteed term
Maturity Date, we notify the Contract Holder or a Participant, as
applicable, of the projected maturity value and the guaranteed
terms (and the guaranteed interest rates for each) available
during the then-current deposit period. The Contract Holder, or a
Participant, as applicable, may then tell us how to allocate the
maturity value.
If the Contract Holder or a Participant, as applicable, does not
tell us how to reinvest the maturity value, we reinvest it in a
guaranteed term of the same duration if one is available. If no
guaranteed term of the same duration is available, we reinvest the
maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term. We mail a
confirmation of reinvestment. The confirmation includes the
guaranteed term in which we have reinvested the maturity value and
the guaranteed interest rate for that term.
If we have reinvested the maturity value, during the month
following the Maturity Date, the Contract Holder or a Participant,
as applicable, may transfer or withdraw the reinvested amount,
with interest earned (as of the date we receive the request)
without incurring a market value adjustment (see 7.08).
7.07 Transfers and Withdrawals from the GAA
Except as noted below, the Contract Holder or a Participant, as
applicable, may transfer any portion or all of the amount held in
the GAA. Transfers or withdrawals before the Maturity Date may be
subject to a market value adjustment (see 7.08). Amounts invested
in a guaranteed term may not be transferred during the deposit
period or for a period of 90 calendar days after the close of the
deposit period.
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Unless directed otherwise, when the Contract Holder or a
Participant, as applicable, requests a transfer or withdrawal from
the GAA, we withdraw amounts proportionately from each guaranteed
term in which the Individual Account is invested. Within a
guaranteed term group, we withdraw first from the oldest deposit
period and then from the next oldest and so on until the amount
requested is withdrawn.
7.08 Application of the Market Value Adjustment
Transfers or withdrawals from the GAA before the Maturity Date are
subject to a market value adjustment, except for:
(a) A one-month period following the Maturity Date on which we
have automatically reinvested the value on the Maturity
Date;
(b) Distributions under certain systematic distribution
options; and
(c) When the withdrawal is equal to the minimum distribution
amount required under the Code, using a method permitted
by the Code and which we offer.
For withdrawals and transfers from the GAA made (1) within six
months of a Participant's death; or (2) to purchase Annuity
payments under a life-contingent Annuity option, the amount
withdrawn from the GAA is the greater of:
(a) The aggregate market value adjustment amount which is the
sum of all market value adjusted amounts calculated due to
a withdrawal before the Maturity Date (which may be
positive or negative); or
(b) The amount in the GAA.
For withdrawals made after the six month period following death,
the withdrawal or transfer amount is the aggregate MVA amount.
A MVA applies to amounts withdrawn to purchase Annuity payment
under a period certain Annuity option.
We may change the GAA market value adjustment by notifying the
Contract Holder in writing at least 90 calendar days before the
change becomes effective. Any such change will apply only to
guaranteed terms offered in deposit periods after the date the
change becomes effective and will apply to existing and new
Individual Accounts.
7.09 Market Value Adjustment (MVA)
The market value adjustment reflects any change in yields on U.S.
Treasury Notes from the time an amount is allocated to a GAA
guaranteed term to the time of a transfer or withdrawal prior to
the Maturity Date. When the market value adjustment is applied,
the amount transferred or withdrawn from the GAA is multiplied by
a factor which is calculated as follows:
x
------
365
(1 + i)
------------------
x
------
365
(1 + j)
Where:
i is the deposit period yield
j is the current yield
x is the number of days remaining (computed from
Wednesday of the week of withdrawal) in the
guaranteed term.
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The deposit period yield and the current yield are determined as
follows:
Deposit Period Yield
--------------------
At the close of the last business day of each week of a
deposit period, we compute a yield that is the average of
the yields on U.S. Treasury Notes which mature in the last
three months of the guaranteed term. The deposit period
yield is the average of those yields for the deposit
period. If a withdrawal is made prior to the close of the
deposit period, the deposit period yield is the average of
the yields of U.S. Treasury Notes for each week preceding
the withdrawal. In the event that no U.S. Treasury Notes
will mature in the last three months of the guaranteed
term, we reserve the right to use the U.S. Treasury Notes
that mature in a following quarter.
Current Yield
-------------
The Current Yield is the average of the yields of the same
U.S. Treasury Notes used to calculate the deposit period
yield on the last business day of the week preceding
withdrawal.
Section 8. Transfers, Withdrawals and Distributions
- --------------------------------------------------------------------------------
8.01 Transfers
During the Accumulation Phase, the Contract Holder or a
Participant, as applicable, may transfer all or any portion of the
Individual Account value among the available Investment Options.
The Individual Account value on any amount transferred from a Fund
will be based on the Fund's accumulation unit value next
determined after we receive the transfer request in Good Order at
our Home Office.
The Contract Holder or a Participant, as applicable, may request a
transfer by properly completing a transfer request form and
sending it to our Home Office, or by otherwise complying with our
administrative procedures. We reserve the right to establish a
minimum transfer amount.
8.02 Withdrawals
As allowed by the Plan, if applicable, and subject to provisions
of the Code (see 8.03), during the Accumulation Phase, the
Contract Holder or a Participant, as applicable, may withdraw any
portion or all of the Individual Account value. For Code Section
403(b) Plans, the Contract Holder or a Participant, as applicable,
may transfer the amount withdrawn to another investment provider
under the Plan or roll over such amount that qualifies as an
eligible rollover distribution in accordance with Code Sections
403(b)(8), 401(a)(31) and 402(c) and applicable regulations. The
Individual Account value of any amount withdrawn from a Fund will
be based on the Fund's accumulation unit value next determined
after we receive the transfer request in Good Order.
The Contract Holder or a Participant, as applicable, may request a
withdrawal by properly completing a withdrawal request form and
forwarding it to our Home Office, or by otherwise complying with
our administrative procedures. Unless the Contract Holder or a
Participant, as applicable, requests otherwise, the withdrawal
will be made proportionately from the Investment Options in which
the Individual Account is invested.
A withdrawal charge may apply to amounts withdrawn (see 8.04). In
addition, a market value adjustment may apply to amounts withdrawn
from the GAA (see 7.08 and 7.09) and limitations may apply to
withdrawals from the Fixed Plus Account (see 6.04).
8.03 Withdrawal Restrictions Under the Code
The Code may impose restrictions on the amount and timing of
withdrawals. The restrictions applicable to this Contract are
shown on Contract Schedule I under Withdrawal Restrictions Under
the Code. Withdrawals that do not comply with the Code may be
subject to tax penalties.
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8.04 Withdrawal Charge
During the Accumulation Phase, we may deduct a withdrawal charge
from the Individual Account value withdrawn. The charge, if any,
is a percentage of the amount withdrawn from the Funds and/or
Fixed Interest Options (except, if applicable, the Fixed Plus
Account). The withdrawal charge will never exceed 8.5% of the
total amount of Contributions, or the maximum permitted by
National Association of Securities Dealers, Inc. (NASD) rules.
The withdrawal charge, if any, is shown on Contract Schedule I
under Withdrawal Charge.
8.05 Waiver of Withdrawal Charge
The withdrawal charge (see 8.04) does not apply in any of the
circumstances shown on Contract Schedule I under Waiver of
Withdrawal Charge.
In addition, we reserve the right to reduce, waive or eliminate
the withdrawal charge.
8.06 Reinstatement
Within 30 calendar days after a withdrawal, the Contract Holder or
a Participant, as applicable may elect to reinstate all or a
portion of the proceeds of a full withdrawal if allowed by
applicable law. We must receive the reinstated amount within 60
calendar days of the withdrawal.
Any maintenance fee and withdrawal charge imposed at the time of
the withdrawal is included in the reinstatement. If only a portion
of the amount withdrawn is reinstated, the amount of any
maintenance fee and withdrawal charge deducted will be restored
proportionally. The amount of any market value adjustment deducted
from any amount withdrawn from GAA is not included in the amount
reinstated.
Any amount reinstated to the GAA will be credited to guaranteed
terms available in the current deposit period. We will reinvest it
in a guaranteed term of the same duration if one is available. If
no guaranteed term of the same duration is available, we reinvest
the maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term.
Amounts withdrawn from a GET Fund series are reinstated to the
current offering period if one is available. If no GET Fund
offering period is available, any amount withdrawn from the GET
Fund is reinstated equally among all other Investment Options in
which the Individual Account is invested.
Amounts are reinstated among the Investment Options in the same
proportion as they were held at the time of withdrawal, except, as
noted above, for amounts from the GET Fund. Any maintenance fee
which falls due after the withdrawal and before the reinstatement
is deducted from the amount reinstated.
The number of accumulation units reinstated to any Fund is based
on the accumulation unit values next computed after we receive the
reinstatement request in Good Order at our Home Office.
Reinstatement is permitted only once.
8.07 Required Distributions
While an Individual Account remains in the Accumulation Phase, the
Code may require distribution of all or a portion of the
Individual Account value. The Contract Holder, a Participant or
Contract beneficiary, as applicable, must tell us when to begin
distributions. We have no responsibility for adverse tax
consequences as the result of the Contract Holder, Participant or
Contract beneficiary, as applicable, not complying with minimum
distribution requirements.
The distribution requirements, if any, are shown on Contract
Schedule I under Required Distributions.
Generally, to meet distribution requirements, the Contract Holder,
a Participant or Contract beneficiary, as applicable, may request
partial withdrawals, a systematic distribution option (see 8.08)
or an Annuity option.
15
<PAGE>
8.08 Systematic Distribution Options (SDOs)
During the Accumulation Phase, we may offer one or more
distribution options under which we make regularly scheduled
automatic partial distributions of the Individual Account value.
To request a SDO, the Contract Holder, a Participant or Contract
beneficiary, as applicable, must complete a SDO election form and
forward it to our Home Office.
Each option is available without discrimination to any class of
Contracts. The availability of any specific option may be subject
to terms and conditions applicable to that option. We may
discontinue the availability of a SDO option for future election.
Payments will, however, continue to Participants who elected the
option before the date it is no longer available.
8.09 Individual Account Termination
If the Individual Account value is an amount equal to or less than
the amount shown on Contract Schedule I under Individual Account
Termination Amount and we have received no Contributions for 12
months, we reserve the right to terminate an Individual Account.
Before we do this, we notify the Contract Holder or Participant,
as applicable, 90 calendar days in advance. When we terminate an
Individual Account, we do not deduct a withdrawal charge. We do
not exercise this right when the Individual Account value is equal
to or less than the amount shown on Contract Schedule I under
Individual Account Termination Amount due to investment
performance.
Section 9. Loans
- --------------------------------------------------------------------------------
9.01 Loan Availability
Contract Schedule I indicates whether loans are available under
this Contract. If available, a loan endorsement is included as
part of this Contract.
Section 10. Death Benefit During the Accumulation Phase
- --------------------------------------------------------------------------------
10.01 Death Benefit
If a Participant dies during the Accumulation Phase, we pay a
death benefit. The amount of the death benefit is the Individual
Account value as of the next Valuation Date following our receipt
of acceptable proof of death at our Home Office (see 7.08 for
amounts in the GAA).
10.02 Contract Beneficiary
The Contract beneficiary is shown on Contract Schedule I under
Contract beneficiary. Generally, the Participant may name a
beneficiary under the Plan (the Plan beneficiary). If allowed by
the Plan, when designating the beneficiary, the Contract Holder or
a Participant, as applicable, may specify, the form of payment as
permitted by the Code. The Contract beneficiary and the form of
payment, if applicable, may be designated or changed in writing or
as we may otherwise allow in our administrative procedures.
10.03 Distribution of Death Benefit
Generally, if the Plan beneficiary is the Participant's surviving
spouse, distribution of the death benefit must begin no later than
the year the Participant would have attained age 70 1/2 or any
other date allowed under federal law or regulations.
If the Plan beneficiary is not the Participant's surviving spouse,
generally, the death benefit must be used to purchase Annuity
payments within one year of the year of the Participant's death or
otherwise paid within five years of the year of the Participant's
death.
Annuity payments to a Plan beneficiary may not extend beyond the
period specified in the Code.
16
<PAGE>
Part II. Annuity Phase
Section 11. General Provisions
- --------------------------------------------------------------------------------
11.01 Election
The Contract Holder, a Participant, or Contract or Plan
beneficiary, as applicable, may elect an Annuity option by
properly completing an election form and forwarding it to our Home
Office no later than 30 calendar days before the desired first
Annuity payment date. All Annuity option elections must comply
with any Plan requirements and regulatory requirements including
the Code minimum distribution requirements.
All or any portion of the Individual Account value (after the
deduction of any applicable premium tax) may be used to purchase
Annuity payments (for amounts from the GAA, see 7.08).
The Contract Holder, a Participant, or Contract or Plan
beneficiary, as applicable, must also select an Annuity option
(see 11.03) and the Investment Options (see 11.06).
Once payments begin, an Annuity option may not be revoked, nor may
any amount be withdrawn except as noted below.
11.02 Change of Annuity Provisions
We reserve the right to change or eliminate Annuity options (see
11.03) and to change the mortality table (see 11.04) we use to
calculate payment rates for life-contingent Annuity payments. If
we do this, any change will not take effect until at least 12
months after the Contract Effective Date, or until at least 12
months after any previous change. A change to Annuity options or
the mortality table used to calculate payment rates will not apply
to Individual Accounts established before the date the change
becomes effective.
11.03 Annuity Options
The Contract Holder, a Participant, or Contract or Plan
beneficiary, as applicable, must elect one of the following:
Option 1: Payments for a Stated Period
---------------------------------------
This option provides payments for a stated period. The number of
years in the stated period must fall within the range shown on
Contract Schedule II under Payment Period.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time. If a withdrawal is requested within five years of the first
payment, the lump-sum payment is treated as a withdrawal during
the Accumulation Phase and any applicable withdrawal charge
applies (see 8.04).
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 2: Life Income for One Annuitant
----------------------------------------
This option provides payments for the life of the Annuitant. If
this option is elected, the Contract Holder, a Participant, or
Contract or Plan beneficiary, as applicable, must also choose one
of the following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period within the range
shown on Contract Schedule II under Payment Period; or
(c) Fixed-only cash refund: at the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal
to the amount applied to the Annuity (minus any applicable
premium tax), minus the amount of payments made to the
Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
17
<PAGE>
Option 3: Life Income for Two Annuitants
-----------------------------------------
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have
died. If this option is elected, the Contract Holder, a
Participant, or Contract or Plan beneficiary as applicable, must
also choose one of the following:
(a) 100% of the payment amount to continue after the first
death; or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first
death; or
(d) 100% of the payment amount to continue after the first
death with payments guaranteed to the beneficiary after
the second death for a period within the range shown on
Contract Schedule II under Payment Period; or
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount
to continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after
the first death with a cash refund to the Contract
beneficiary after the second death. The amount of the cash
refund is equal to the amount applied to the Annuity
(minus any applicable premium tax), minus the amount of
payments made.
Under (a) or (d), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
Other Options
-------------
As allowed under applicable state law, we reserve the right to
make other options available.
11.04 Mortality Table
The mortality table for this Contract is shown on Contract
Schedule II under Mortality Table.
11.05 Payments
The first payment amount must be at least $50 per month or $250
per year. We reserve the right to increase the minimum first
payment amount, if allowed by state law, based on increases
reflected in the Consumer Price Index-Urban (CPI-U) since July 1,
1993.
To calculate the first payment of a variable Annuity or the
guaranteed payments for a fixed Annuity, we will use the
Annuitant's adjusted age and, if applicable, the second
Annuitant's adjusted age. The Annuitant's adjusted age and, if
applicable, the second Annuitant's adjusted age is the person's
age as of the birthday closest to the day Annuity payments begin,
reduced as follows:
(a) Reduced by one year for payments before January 1, 2000;
(b) Reduced by two years for payments beginning during the
period from January 1, 2000 through December 31, 2009;
(c) Starting on January 1, 2010, reduced by one additional
year for payments beginning in each succeeding decade.
If a fixed Annuity is elected, we will use the applicable current
settlement option rates if they will provide higher fixed Annuity
payments.
11.06 Investment Options
When an Annuity option is elected, the Contract Holder, a
Participant, or Contract or Plan beneficiary, as applicable, must
elect:
(a) A fixed Annuity for which the underlying investment is our
General Account;
18
<PAGE>
(b) A variable Annuity for which the underlying investment is
one or more of the available Funds; or
(c) A combination of (a) and (b).
For a variable Annuity, the maximum number of Funds available
during the Annuity Phase is shown on Contract Schedule II under
Maximum Number of Funds. The Funds available during the Annuity
Phase might not be the same as those available during the
Accumulation Phase.
11.07 Fixed Annuity Minimum Guaranteed Interest Rate
For a fixed Annuity, the interest rate will never be less than the
minimum guaranteed rate shown on Contract Schedule II under Fixed
Annuity Minimum Guaranteed Interest Rate.
11.08 Variable Annuity Assumed Annual Net Return Rate Election
If a variable Annuity is elected, the Contract Holder, or
Participant, as applicable must also elect an assumed annual net
return rate of 3.5% or 5%. The initial Annuity payment for the
option elected will reflect the assumed annual net return rate. If
subsequent Annuity payments are to remain level, the Separate
Account must earn this rate, plus enough to cover the mortality
and expense risk charge shown on Contract Schedule II under Daily
Charges to the Separate Account plus any applicable administrative
charge.
11.09 Variable Annuity Transfers
If a variable Annuity is elected, the Contract Holder, a
Participant, or Contract or Plan beneficiary, as applicable, may
request that we transfer all or a portion of the amount allocated
to a Fund to any other available Fund. Transfer requests must be
expressed as a percentage of the allocation among the Funds on
which the variable payment is based. The number of transfers
allowed each calendar year is shown on Contract Schedule II under
Number of Annual Transfers Among Funds. We reserve the right to
allow additional transfers. Transfers are effective as of the next
Valuation Date following our receipt of a transfer request in Good
Order at our Home Office.
11.10 Fund Annuity Units
The number of Fund Annuity units is based on the amount of the
first variable Annuity payment which is equal to:
(a) The portion of the Individual Account value (minus any
applicable premium tax) used to purchase a variable
Annuity; divided by
(b) One thousand; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion of the variable payment will be divided by
the appropriate Fund's, or Funds', Annuity unit value (see 11.11)
on the tenth Valuation Date before the due date of the first
payment to determine the number of Fund Annuity units. The number
of each Fund's Annuity units remains fixed unless changed by a
subsequent Fund transfer or if the Annuity option provides for a
change in units (i.e., under life income for two annuitants option
after the first death). Each future payment is equal to the sum of
the products of each Fund's Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity unit value on the
tenth Valuation Date before the payment due date is used.
11.11 Fund Annuity Unit Value
For any Valuation Date, a Fund's Annuity unit value is equal to:
(a) The Annuity unit value for the prior Valuation Date;
multiplied by
(b) The Annuity unit net return factor (see 11.12) for the
current Valuation Date; multiplied by
(c) A factor to reflect the assumed annual net return rate.
The factor for an assumed annual net return rate of 5% is
0.9998663; for 3.5% it is 0.9999058.
19
<PAGE>
The dollar value of a Fund Annuity unit and the amount of a
variable Annuity payment may increase or decrease due to
investment gain or loss. We will not change the payment amount due
to changes in mortality, expense results, or the administrative
charge.
11.12 Fund Annuity Net Return Factor
The Annuity net return factor(s) are used to compute all variable
Annuity payments for any Fund.
The net return factor(s) for each Fund is equal to 1.0000000 plus
the net return rate.
The net return rate equals:
[a - b - c]
------------- - e
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity
units of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on
Contract Schedule II under Daily Charges to the Separate
Account.
A net return rate may be more or less than 0%. The value of a
share of a Fund is equal to the net assets of the Fund divided by
the number of shares outstanding.
11.13 Death Benefit During the Annuity Phase
The Contract Holder or a Participant, as applicable, must name a
beneficiary for the Annuity Phase. Unless not allowed by the Plan,
or restricted by the Contract Holder, or a Participant, as
applicable, the beneficiary may name a beneficiary.
If an Annuitant(s) dies, any remaining guaranteed payments
continue to the beneficiary. Payments are made at least as rapidly
as provided by the option in effect at the death of the Annuitant.
Annuity payments to a beneficiary may not extend beyond (1) the
life of the beneficiary, or (2) any period certain greater than
the beneficiary's life expectancy as determined by the Code.
The beneficiary may also elect a lump-sum payment equal to the
present value of any remaining payments.
The interest rate used to determine the first Annuity payment is
used to calculate the present value. The present value is
determined as of the next Valuation Date following our receipt of
acceptable proof of death and a written claim for the death
benefit.
Unless not allowed by the Plan or restricted by the Contract
Holder, or a Participant, as applicable, if the beneficiary dies
while receiving payments, the present value of any remaining
guaranteed payments is paid in a lump-sum to the beneficiary's
beneficiary or to the beneficiary's estate.
11.14 Charges to the Separate Account
During the Annuity Phase, we may deduct a mortality and expense
risk charge from the Individual Account value invested in the
Separate Account. In addition, we reserve the right to impose an
administrative charge.
The maximum charges to the Separate Account are shown on Contract
Schedule II under Daily Charges to the Separate Account. If
applicable, the charges are deducted daily.
20
<PAGE>
OPTION 1: Payments for a Stated Period
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $17.91 20 $5.51
10 9.61 25 4.71
15 6.87 30 4.18
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.12 20 $5.75
10 9.83 25 4.96
15 7.10 30 4.45
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.74 20 $6.51
10 10.51 25 5.76
15 7.82 30 5.28
- --------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
21
<PAGE>
Option 2: Life Income for One Annuitant
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate
- -----------------------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
Adjusted payments for payments payments payments payments Cash Refund
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 $4.44 $4.42 $4.39 $4.32 $4.22 $4.19
60 4.95 4.93 4.86 4.73 4.55 4.57
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
70 6.64 6.54 6.23 5.76 5.19 5.70
75 8.06 7.82 7.14 6.25 5.38 6.51
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $4.72 $4.71 $4.67 $4.60 $4.50
60 5.23 5.21 5.13 5.00 4.82
65 5.94 5.89 5.73 5.48 5.15
70 6.92 6.81 6.49 6.00 5.43
75 8.35 8.08 7.38 6.48 5.62
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $5.63 $5.61 $5.56 $5.47 $5.36
60 6.12 6.09 6.00 5.85 5.65
65 6.82 6.75 6.57 6.30 5.95
70 7.80 7.67 7.30 6.78 6.21
75 9.23 8.93 8.16 7.23 6.38
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
22
<PAGE>
Option 3: Life Income for Two Annuitants
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate
- -----------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
- ----------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67
55 60 3.99 4.44 4.71 3.98 4.20 3.94
65 60 4.38 4.97 5.32 4.38 4.93 4.29
65 70 4.93 5.68 6.15 4.91 5.27 4.74
75 70 5.69 6.68 7.32 5.62 6.67 5.29
75 80 6.78 8.11 8.99 6.54 7.36 5.93
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $3.97 $4.35 $4.56 $3.97 $4.31
55 60 4.27 4.73 5.00 4.26 4.48
65 60 4.66 5.25 5.61 4.65 5.22
65 70 5.19 5.97 6.44 5.17 5.54
75 70 5.95 6.96 7.61 5.87 6.95
75 80 7.04 8.39 9.29 6.79 7.64
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 60 5.15 5.63 5.91 5.14 5.38
65 60 5.52 6.14 6.51 5.51 6.10
65 70 6.04 6.84 7.34 6.00 6.41
75 70 6.77 7.84 8.51 6.68 7.81
75 80 7.86 9.28 10.20 7.57 8.49
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
23
<PAGE>
- --------------------------------------------------------------------------------
Aetna
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
Group Combination Deferred Annuity Contract
(Nonparticipating)
- --------------------------------------------------------------------------------
G-CDA(12/99)
Exhibit 99-B.4.2
--------------------------------------------------------------
[Aetna Logo] Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
If you have questions, call the toll-free number shown above.
Certificate of Group Annuity Coverage
Aetna Life Insurance and Annuity Company (ALIAC) will pay benefits according to
the terms and conditions set forth in the Contract. ALIAC certifies that
coverage is in force for you under the stated Group Annuity Contract and
Certificate numbers.
This Certificate is a summary of the Group Annuity Contract provisions. It
replaces any and all prior certificates, riders, or amendments issued to you
under the stated Contract and Certificate numbers. This Certificate is for
information only and is not a part of the Contract.
Specifications
- --------------------------------------------------------------------------------
| Contract Holder
| SPECIMEN
- --------------------------------------------------------------------------------
| Group Annuity Contract Number
| SPECIMEN
- --------------------------------------------------------------------------------
| Type of Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Participant
| SPECIMEN
- --------------------------------------------------------------------------------
| Certificate Number
| SPECIMEN
Right to Cancel
- --------------------------------------------------------------------------------
You may cancel your participation in the group Contract within 10 calendar days
of receiving this Certificate by returning it to ALIAC at the address shown
above, or to the agent from whom it was purchased. Within seven calendar days of
receiving the cancellation request at its Home Office, ALIAC will return any
Contributions received, plus any increase, or minus any decrease in value, on
the amount, if any, allocated to the Separate Account.
/s/ Thomas J. McInerney /s/ Kirk P. Wickman
- ---------------------- -------------------
President Secretary
THE VARIABLE FEATURES OF THE CONTRACT ARE DESCRIBED IN SECTIONS 3 AND 11.
All payments and values provided by the group Contract, when based on the
investment experience of the Separate Account, are variable and are not
guaranteed as to fixed dollar amount. Amounts allocated to the Guaranteed
Accumulation Account, if withdrawn before a guaranteed term maturity date, may
be subject to a market value adjustment. The market value adjustment may result
in an increase, or a decrease, in the Individual Account value.
C-CDA(12/99)
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Contract Schedule I. Accumulation Phase S I - 1
Contract Schedule II. Annuity Phase S II - 1
Definitions 1
Section 1. General Contract Provisions 3
1.01 Entire Contract .............................................. 3
1.02 Nonparticipating Contract .................................... 3
1.03 Control of Contract .......................................... 3
1.04 Certificate .................................................. 3
1.05 Incontestability ............................................. 3
1.06 Grace Period ................................................. 3
1.07 Change of Contract ........................................... 3
1.08 Payments ..................................................... 4
1.09 Deferral of Payment .......................................... 4
1.10 Proof of Age ................................................. 4
1.11 Evidence of Survival ......................................... 4
1.12 Misstatements and Adjustments ................................ 5
1.13 Reports ...................................................... 5
1.14 State Laws ................................................... 5
1.15 Claims of Creditors .......................................... 5
1.16 Maintenance Fee .............................................. 5
1.17 Charges for Additional Services .............................. 5
1.18 Charges Subject to Change .................................... 5
Part I. Accumulation Phase 6
Section 2. Contributions and Individual Account Value 6
2.01 Contributions ................................................ 6
2.02 Premium Tax .................................................. 6
2.03 Individual Account ........................................... 6
2.04 Experience Credit ............................................ 6
2.05 Individual Account Value ..................................... 6
Section 3. Separate Account 7
3.01 General ...................................................... 7
3.02 Funds Available .............................................. 7
3.03 Change or Substitution of Funds .............................. 7
3.04 Accumulation Units ........................................... 7
3.05 Accumulation Unit Value ...................................... 7
3.06 Net Investment Factor ........................................ 7
3.07 Charges to the Separate Account .............................. 8
3.08 Fund Transfers ............................................... 8
3.09 Withdrawals from the Separate Account ........................ 8
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 4. Aetna GET Fund 8
4.01 GET Fund Guarantee Period .................................... 8
4.02 GET Fund Offering Period ..................................... 8
4.03 GET Fund Guarantee ........................................... 9
4.04 GET Fund Maturity Date ....................................... 9
4.05 Transfers or Withdrawals from the GET Fund ................... 9
Section 5. Fixed Account 9
5.01 Fixed Account Minimum Guaranteed Interest Rate ............... 9
5.02 Transfers from the Fixed Account ............................. 10
5.03 Withdrawals from the Fixed Account ........................... 10
Section 6. Fixed Plus Account 10
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate .......... 10
6.02 Transfers from the Fixed Plus Account ........................ 10
6.03 Partial Withdrawals from the Fixed Plus Account .............. 11
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account 11
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision ....... 11
Section 7. Guaranteed Accumulation Account (GAA) 11
7.01 Nonunitized Separate Account ................................. 11
7.02 GAA Minimum Guaranteed Interest Rate ......................... 12
7.03 Deposit Period ............................................... 12
7.04 Guaranteed Term .............................................. 12
7.05 Guaranteed Term Groups ....................................... 12
7.06 Maturity Date, Maturity Value and Reinvestment ............... 12
7.07 Transfers and Withdrawals from the GAA ....................... 12
7.08 Application of the Market Value Adjustment ................... 13
7.09 Market Value Adjustment (MVA) ................................ 13
Section 8. Transfers, Withdrawals and Distributions 14
8.01 Transfers .................................................... 14
8.02 Withdrawals .................................................. 14
8.03 Withdrawal Restrictions Under the Code ....................... 14
8.04 Withdrawal Charge ............................................ 15
8.05 Waiver of Withdrawal Charge .................................. 15
8.06 Reinstatement ................................................ 15
8.07 Required Distributions ....................................... 15
8.08 Systematic Distribution Options (SDOs) ....................... 16
8.09 Individual Account Termination ............................... 16
Section 9. Loans 16
9.01 Loan Availability ............................................ 16
Section 10. Death Benefit During the Accumulation Phase 16
10.01 Death Benefit ................................................ 16
10.02 Contract Beneficiary ......................................... 16
10.03 Distribution of Death Benefit ................................ 16
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Part II. Annuity Phase 17
Section 11. General Provisions 17
11.01 Election ..................................................... 17
11.02 Change of Annuity Provisions ................................. 17
11.03 Annuity Options .............................................. 17
11.04 Mortality Table .............................................. 18
11.05 Payments ..................................................... 18
11.06 Investment Options ........................................... 18
11.07 Fixed Annuity Minimum Guaranteed Interest Rate ............... 19
11.08 Variable Annuity Assumed Annual Net Return Rate Election ..... 19
11.09 Variable Annuity Transfers ................................... 19
11.10 Fund Annuity Units ........................................... 19
11.11 Fund Annuity Unit Value ...................................... 19
11.12 Fund Annuity Net Return Factor ............................... 20
11.13 Death Benefit During the Annuity Phase ....................... 20
11.14 Charges to the Separate Account .............................. 20
Annuity Tables 21
</TABLE>
iii
<PAGE>
Contract Schedule I
Accumulation Phase
Control of Contract (see 1.03)
[The Contract Holder controls the Contract.
By notifying us in writing, the Contract Holder may allow you to
choose Investment Options for an Individual Account. The Contract
Holder may, however, retain the right to choose Investment Options
for employer Contributions. Unless otherwise provided by the Plan,
we will make payments only at the written direction of the
Contract Holder and you. Unless otherwise specified by the Plan,
we will make an in-service transfer under Internal Revenue Service
Revenue Ruling 90-24 only at the written direction of the Contract
Holder and you and will make checks payable to the acquiring
investment provider(s).
The Contract and Individual Accounts are nontransferable and
nonassignable except to us in the event of a loan (if allowed
under the Contract) or in the event of a qualified domestic
relations order as allowed under the Retirement Equity Act of 1984
(REA).
You have a nonforfeitable right to the value of employer
Contributions made to your Individual Accounts subject to any Plan
vesting limits as determined by the Contract Holder. You have a
nonforfeitable right to the value of employee Contributions made
to your Individual Accounts as provided by Code Section 403(b) and
subject to the terms of the Plan.
The Contract Holder must notify us in writing if the Plan is, or
becomes, subject to the Employee Retirement Income Security Act of
1974 (ERISA) and/or related law or regulations including REA. We
will rely on the Contract Holder's determination and
representation of the applicability of such laws. If the Plan is
subject to ERISA, before we will make a distribution from an
Individual Account, the Contract Holder must certify in writing
that all applicable REA requirements have been met and that the
distribution complies with the Plan.]
Maintenance Fee (see 1.16)
The maintenance fee for each Individual Account is [$XX] as of the
Effective Date of the Contract and is subject to change (see
1.18). The fee will never exceed [$30].
Contribution Limits (see 2.01)
[Each year, Contributions to the Contract are limited to the
lesser of:
(a) The maximum exclusion allowance (MEA) limit under Code
Section 403(b); or
(b) The amount set forth in Code Section 415, generally, 25%
of compensation up to $30,000.
In addition, salary reduction Contributions as defined in Code
Section 402(g) may not exceed $10,000, or such larger amount as
adjusted by the Secretary of the Treasury during any calendar
year, unless the alternative limitation under Code Section
402(g)(8) applies.]
Separate Account (see 3.01)
Variable Annuity Account [C]
S I - 1
<PAGE>
Daily Charges to the Separate Account (see 3.07)
Charges to the Separate Account are subject to change (see 1.18).
The charges as of the Effective Date of the Contract are as
follows:
Mortality and Expense Risk Charge: [X.XX%] (annual basis)
This charge will never exceed [1.50%] (annual basis).
Administrative Charge: [X.XX%] (annual basis)
This charge will never exceed [0.25%] (annual basis).
Aetna GET Fund Guarantee Charge: If applicable, the charge will be
provided to the Contract Holder and will never exceed 0.75%
(annual basis).
Fixed Interest Options Available (see Section 5, Section 6, and Section 7)
[Fixed Account
Fixed Account for transferred amounts only (no ongoing
Contributions).
Fixed Plus Account
Guaranteed Accumulation Account (GAA)]
Fixed Account Minimum Guaranteed Interest Rate (see 5.01)
The interest rate will never be less than [3%] (annual basis).
Fixed Account Annual Transfer Limit (see 5.02)
[10%]
Fixed Plus Account Minimum Guaranteed Interest Rate (see 6.01)
The interest rate will never be less than [3%] (annual basis).
Fixed Plus Account Annual Transfer and Partial Withdrawal Limit (see 6.02 and
6.03)
[20%]
Waiver of Fixed Plus Account Transfer Limit (see 6.02)
[$2,000]
Waiver of Fixed Plus Account Full Withdrawal Provision (see 6.05)
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
made:
[(a) When the amount in the Fixed Plus Account is [$2,000] or
less (or, if applicable, as otherwise allowed by the Plan
for a lump-sum cash-out without your consent) and during
the previous [12 months] no amounts have been withdrawn,
transferred, taken as a loan (if allowed under the
Contract), or used to purchase Annuity payments;
(b) Due to your death before Annuity payments begin and paid
within six months of your death;
(c) As provided in Section 8.09; or
(d) To purchase Annuity payments on a life-contingent basis or
payments for a stated period on a fixed-only basis;
(e) When you are separated from service, and when:
(1) Separation from service is documented in a form
acceptable to us;
(2) The amount is paid directly to you; and
(3) The amount paid for all withdrawals due to
separation from service during the previous [12
months] does not exceed [20%] of the average
value of all Individual Accounts under the
Contract during that period.
S I - 2
<PAGE>
(f) Due to financial hardship as defined in the Code, and
when:
(1) If applicable, certified by your employer;
(2) The amount is paid directly to you; and
(3) The amount paid for all withdrawals due to
financial hardship during the previous [12
months] does not exceed [20%] of the average
value of all Individual Accounts under the
Contract during that period.]
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 7.02)
The interest rate will never be less than [3%] (annual basis).
Withdrawal Restrictions Under the Code (see 8.03)
[Limitations apply to partial and full withdrawals of the
"restricted amount" from the Contract as required by Code Section
403(b)(11). The restricted amount is the sum of:
(1) Contributions attributable to your salary reduction
Contributions made on and after January 1, 1989; plus
(2) The net increase, if any, in the Individual Account value
after December 31, 1988 attributable to investment gains
and losses and credited interest.
The restricted amount may be partially or fully withdrawn only if
one or more of the following conditions are met. You have:
(a) Separated from service when certified by the employer;
(b) Attained age 59 1/2;
(c) Died;
(d) Become disabled, as defined by the Code;
(e) Experienced financial hardship as defined by the Code. The
amount available for financial hardship is limited to the
lesser of the amount necessary to satisfy the need or
Contributions attributable to salary reduction
Contributions made on or after January 1, 1989; or
(f) Met other circumstances as otherwise allowed by federal
law, regulations or rulings.
No withdrawal restrictions apply to salary reduction Contributions
and earnings credited to such Contributions on or before December
31, 1988.
In addition, any portion of an Individual Account representing
amounts transferred under Internal Revenue Service Revenue Ruling
90-24 from a Code Section 403(b)(7) custodial account will be
subject to the restrictions set forth in Code Section
403(b)(7)(A)(ii).]
Withdrawal Charge (see 8.04)
[For each withdrawal from an Individual Account, we may deduct a
withdrawal charge. This charge is a percentage of the amount
withdrawn. The withdrawal charge is as follows:
<TABLE>
<CAPTION>
[Number of Years Since Individual
Account Established] Withdrawal Charge
-------------------- -----------------
<S> <C>
[Fewer than 5 5%
5 or more, but fewer than 7 4%
7 or more, but fewer than 9 3%
9 or more, but fewer than 10 2%
10 or more 0%]
</TABLE>
The withdrawal charge will never exceed 8.5% of total
Contributions, or the maximum permitted by National Association of
Securities Dealers, Inc. (NASD) rules.]
S I - 3
<PAGE>
Waiver of Withdrawal Charge (see 8.05)
[The withdrawal charge does not apply when the withdrawal is:
(a) Used to purchase Annuity payments;
(b) Used to purchase a single premium immediate Annuity or
individual retirement Annuity issued by ALIAC or one of
its affiliates, provided that the right to cancel under
the new Contract is not exercised. We will treat exercise
of the right to cancel as a reinstatement and any
subsequent withdrawal may then be subject to the
withdrawal charge applicable on the date of the
withdrawal;
(c) Under a systematic distribution option (see 8.08);
(d) When we terminate an Individual Account as provided in
8.09;
(e) When the Individual Account value is [$3,500] or less (or,
if applicable, as otherwise allowed by the Plans for
lump-sum cash-out without Participant consent) and during
the previous [12 months] no amounts have been withdrawn,
transferred, taken as a loan (if allowed under the
Contract), or used to purchase Annuity payments;
(f) When you have attained age 59 1/2 and, if applicable, have
completed nine Contribution periods;
(g) Due to your death before Annuity payments begin;
(h) In an amount equal to or less than [10%] of the Individual
Account value when the withdrawal is the first withdrawal
in a calendar year and you are at least age 59 1/2 and not
older than age 70 1/2 (not available when a systematic
distribution option is in effect). Any outstanding loans
are not included in the Individual Account value when
determining the [10%] amount. This waiver does not apply
to full withdrawals or to a withdrawal due to a loan
default;
(i) Made when you have separated from service when certified
by the employer;
(j) Due to financial hardship as defined in the Code;
(k) Due to the transfer of the Individual Account value to
another contract issued by ALIAC for the Plan, subject to
various conditions agreed to by the Contract Holder and
ALIAC; or
(l) For a transfer as provided under Internal Revenue Service
Revenue Ruling 90-24 to an ALIAC Code Section 403(b)(7)
custodial account.]
Required Distributions (see 8.07)
[Generally, for Contributions made and earnings credited after
December 31, 1986, distribution must begin by April 1 of the
calendar year following the later of (1) the calendar year in
which you attain age 70 1/2 or (2) retire. For Individual Account
values as of December 31, 1986, distribution must begin by the
last day of the year in which you attain age 75 or retire,
whichever is later.]
The entire Individual Account value must be distributed, or begin
to be distributed, over your life or life expectancy, or the joint
lives or joint life expectancies of you and a beneficiary.
Individual Account Termination Amount (see 8.09)
[$10,000]
Loans (see 9.01)
[Loans are available under the Contract.]
Contract Beneficiary (see 10.02)
[The Contract Holder is the Contract beneficiary. You may
designate a beneficiary under the Plan (Plan beneficiary).]
S I - 4
<PAGE>
Contract Schedule II
Annuity Phase
Payment Period (see 11.03)
The period for which we will guarantee Annuity payments must be at
least [five] years and no more than [30] years.
Mortality Table (see 11.04)
Society of Actuaries' 1983 Table a
Maximum Number of Funds (see 11.06)
The maximum number of Funds is [four].
Fixed Annuity Minimum Guaranteed Interest Rate (see 11.07)
[3%] (annual basis)
Number of Annual Transfers Among Funds (see 11.09)
Each calendar year, we allow [five] transfers among funds.
Daily Charges to the Separate Account (see 11.14)
Charges to the Separate Account will never be more than the
following:
Mortality and Expense Risk Charge: [1.25%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
S II - 1
<PAGE>
Definitions
- --------------------------------------------------------------------------------
Accumulation Phase
The time between an Individual Account Effective Date and the date on which the
entire Individual Account value is used to purchase Annuity payments, or
otherwise distributed.
Aetna GET Fund (GET Fund)
The Aetna GET Fund is an Investment Option which may be available during the
Accumulation Phase. The GET Fund operates as a series offering. Each series is a
separate Fund.
Aetna Life Insurance and Annuity Company (ALIAC)
Aetna Life Insurance and Annuity Company ("we," and "our," and "us" refer to
ALIAC).
Annuitant
The person whose life expectancy determines the amount and/or duration of the
payments under a life-contingent Annuity option.
Annuity
Payment of an income:
(a) For a stated period;
(b) For the life of one or two people; or
(c) Some combination of (a) and (b).
A fixed Annuity is one in which the payment amount does not vary. A variable
Annuity is one in which the payment amount may vary based on the net investment
results of the Funds.
Annuity Phase
The time during which we make Annuity payments.
Business Day
Each day our Home Office is open for business.
Code
The Internal Revenue Code of 1986, as it is amended from time to time.
Contract
The agreement between ALIAC and the Contract Holder.
Contract Holder
The entity, or person, named in the specifications section on the face page, to
which the Contract is issued.
Contribution
The payment made to us during the Accumulation Phase. The Contribution may be
reduced by any applicable premium tax due.
Effective Date
The date on which we issue the Contract or establish an Individual Account.
Fixed Account
A Fixed Interest Option. The Fixed Account is an obligation of our General
Account.
Fixed Interest Options
Investment options, including the Fixed Account, the Fixed Plus Account and the
Guaranteed Accumulation Account that credit interest. The Fixed Interest Options
available during the Accumulation Phase are shown on Contract Schedule I under
Fixed Interest Options Available.
Fixed Plus Account
A Fixed Interest Option. Limitations apply to withdrawals from the Fixed Plus
Account. The Fixed Plus Account is an obligation of our General Account.
1
<PAGE>
Fund
A variable Investment Option available under the Contract. The Funds are
open-end registered investment management companies (mutual funds) in which the
Separate Account invests.
General Account
The account that holds our assets other than those held in the Separate Account
or Nonunitized Separate Account.
Guaranteed Accumulation Account (GAA)
A Fixed Interest Option that may be available during the Accumulation Phase.
Under this option, we guarantee specified rates of interest for specified
periods of time. Amounts allocated to the Guaranteed Accumulation Account are
held in the Nonunitized Separate Account.
Good Order
Instructions that are complete and clear enough to allow us to act without
exercising discretion.
Home Office
Our main office located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Individual Account
An account, or accounts (including, if applicable, employer and employee
accounts) established for you to maintain a record of transactions and the value
of Contributions as invested.
Investment Options
The Funds and Fixed Interest Options available under the Contract.
Maturity Date
The last day of a GAA guaranteed term or the last day of the guarantee period of
an Aetna GET Fund series.
Nonunitized Separate Account
A separate account that holds assets allocated to the Guaranteed Accumulation
Account.
Participant
The person who is covered under the retirement Plan or program for which the
Contract is issued and who has an interest in the Contract ("you" and "your"
refer to the Participant). The name of the Participant is shown in the
specification section on the face page of this Certificate.
Plan
The retirement plan or program for which the Contract is issued.
Premium Tax
Any tax assessed by any governmental entity on Contributions or amounts used to
purchase Annuity payments.
Separate Account
An account that buys and holds shares of the Funds through its subaccounts.
Valuation Date
The date and time at which accumulation unit values and Annuity unit values are
calculated. Currently, this calculation is made after the close of business of
the New York Stock Exchange on any normal business day, Monday through Friday,
that the New York Stock Exchange is open.
2
<PAGE>
Section 1. General Contract Provisions
- --------------------------------------------------------------------------------
1.01 Entire Contract
The entire Contract consists of the Contract, any attachments and
any endorsements incorporated.
The Plan, if applicable, is not part of the Contract and ALIAC is
not bound by its terms.
1.02 Nonparticipating Contract
The Contract is nonparticipating. The Contract Holder, you or a
Contract beneficiary have no right to share in our earnings.
1.03 Control of Contract
Control of the Contract is as shown on Contract Schedule I under
Control of Contract.
1.04 Certificate
Any certificate summarizes Contract provisions; it is for
information only and is not part of the Contract. We will provide
certificates as required by state law in the state where the
Contract is delivered and as allowed under the Plan.
1.05 Incontestability
We will not cancel the Contract because of any error of fact.
1.06 Grace Period
Except as provided in 8.09, the Contract and all Individual
Accounts will remain in effect even if Contributions are not
continued.
1.07 Change of Contract
Only an ALIAC officer at the level of Vice President or higher, or
an officer with written delegation of authority from a Vice
President or higher officer, may change the terms of the Contract.
No other ALIAC officer, employee, agent or representative can
change the Contract.
Except as noted below, the Contract may be changed at any time by
written mutual agreement between the Contract Holder and ALIAC.
For changes we initiate requiring Contract Holder consent, we
notify the Contract Holder 60 calendar days in advance of the
change and consider that the Contract Holder has agreed to the
change unless we receive written notice that the Contract Holder
does not agree to the change at least 30 calendar days before the
date the change becomes effective.
If we propose a change requiring Contract Holder consent and the
Contract Holder does not agree to the change, we have the right to
not establish new Individual Accounts and to stop accepting
Contributions to existing Individual Accounts.
We will not reduce the minimum guaranteed interest rate for the
Fixed Account and the Fixed Plus Account.
We have the right to change the following without Contract Holder
consent:
(a) Net Investment Factor (see 3.06)
We may change the net investment factor by notifying the
Contract Holder in writing at least 30 calendar days before
the change becomes effective. If we do this, the change
will apply only to Individual Accounts established, and
Contributions received, after the date the change becomes
effective.
3
<PAGE>
(b) Guaranteed Accumulation Account (GAA) market value
adjustment (see 7.09)
We may change the GAA market value adjustment by notifying
the Contract Holder in writing at least 90 calendar days
before the change becomes effective. If we do this, the
change will apply only to guaranteed terms offered in
deposit periods after the date the change becomes
effective.
(c) Systematic Distribution Options (see 8.08)
We may change systematic distribution options by notifying
the Contract Holder in writing at least 30 calendar days
before the change becomes effective. If we do this, the
change will not apply to you or beneficiaries receiving
payments under an option before the date the change becomes
effective.
(d) Annuity Options (see 11.03)
We may change Annuity options by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the change
will not take effect until at least 12 months after the
Effective Date of the Contract, or until at least 12 months
after any previous change. Any change will not apply to you
or beneficiaries receiving Annuity payments before the date
the change becomes effective.
(e) Mortality Table (see 11.04)
We may change the mortality table by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the new table
will not apply to Individual Accounts established before
the date the change becomes effective.
In addition, we may change the Contract as required to comply with
state and federal law without Contract Holder consent by notifying
the Contract Holder at least 30 calendar days before the date the
change becomes effective.
Any unilateral change will not apply to Individual Accounts
established before the date the change becomes effective, but will
apply to Individual Accounts established on or after the date the
change becomes effective. If we make a unilateral change, the
Contract Holder or you, as applicable, are permitted to terminate
participation in the Contract before the date the change becomes
effective under the terms of the Contract in effect prior to the
date the change becomes effective.
As required by law, we will make any change of Contract by
endorsement, which may be subject to regulatory approval in the
state where the Contract is delivered.
1.08 Payments
We make payments as directed by the Contract Holder or you, as
applicable. Payment requests must be in writing or as we otherwise
allow in our administrative practice. We determine the amount of
any payment based on the Individual Account value as of the next
Valuation Date following our receipt of a payment request in Good
Order at our Home Office. Generally, we make payments within seven
calendar days.
1.09 Deferral of Payment
We may defer payment up to a period of six months or as otherwise
provided by state and/or federal law.
1.10 Proof of Age
If a life-contingent Annuity option is elected, we may require
proof of the age of an Annuitant.
1.11 Evidence of Survival
We may require proof that any Annuitant under a life-contingent
Annuity option is living.
4
<PAGE>
1.12 Misstatements and Adjustments
If we learn that the age of any Annuitant or second Annuitant is
misstated, we will use the correct age to adjust payments. We
reserve the right to obtain reimbursement, or to adjust future
payments for any amount we overpaid. We will pay the amount of any
underpayment.
1.13 Reports
Each calendar year we provide the Contract Holder or you, as
applicable, with a report of the Individual Account value. We also
provide an annual report for the Separate Account.
1.14 State Laws
The Contract complies with the laws of the state in which it is
delivered. Any cash, death or Annuity payments are equal to or
greater than the minimum required. To determine legal reserve
valuation, we use Annuity tables as required by law; such tables
may be different from those we use to determine Annuity payments.
1.15 Claims of Creditors
Individual Accounts are not subject to the claim of any creditor
of the Contract Holder, you or a beneficiary, except to the extent
permitted by law.
1.16 Maintenance Fee
We may deduct an annual maintenance fee during the Accumulation
Phase.
The amount of the maintenance fee, if any, for the Contract will
never be more than the amount shown on Contract Schedule I under
Maintenance Fee.
The fee, if any, is deducted proportionately from each Investment
Option in which the Individual Account is invested on the
anniversary of the Individual Account Effective Date. The fee is
also deducted if the entire Individual Account value is withdrawn.
If you have more than one Individual Account, we may deduct the
fee proportionately from all Individual Accounts. We may eliminate
the fee for an Individual Account established with one lump sum
Contribution.
1.17 Charges for Additional Services
At the request of the Contract Holder, we, or our authorized
representatives, may provide administrative services to the Plan.
We reserve the right to charge for such services.
1.18 Charges Subject to Change
The maintenance fee (see 1.16) and charges to the Separate Account
during the Accumulation Phase (see 3.07) may vary (increase,
decrease, or be eliminated) based on the total assets held in all
Individual Accounts under the Contract. In determining total
assets, we may aggregate Individual Accounts established under
different ALIAC Contracts. The aggregate amount is equal to the
sum of assets in all Individual Accounts under the Contract, plus
the value of Individual Accounts under other ALIAC Contracts of
the same class issued to the Contract Holder. We may determine the
amount of the maintenance fee and/or charges to the Separate
Account based on total assets on an annual basis. We will
determine initial charges based on our estimate of the amount that
will be allocated to the Contract during a period mutually agreed
upon by the Contract Holder and us.
5
<PAGE>
Part I. Accumulation Phase
Section 2. Contributions and Individual Account Value
- --------------------------------------------------------------------------------
2.01 Contributions
We allocate Contributions in whole percentages among the
Investment Options available as directed by the Contract Holder or
you, as applicable. Changes in future Contribution allocation may
be made at any time without charge. The Contract Holder or you, as
applicable, may also establish an Individual Account with one lump
sum Contribution.
We reserve the right to establish minimum Contribution amounts and
to refuse to accept any Contribution.
Contributions to Individual Accounts may be limited as provided in
the Code. The limits, if any, are shown on Contract Schedule I
under Contribution Limits.
2.02 Premium Tax
We pay any applicable premium tax when it is due. We will deduct
the amount of any applicable premium tax from the Individual
Account value no earlier than when there is a tax liability. We
reserve the right to deduct any premium tax due before a
Contribution is allocated to an Individual Account.
2.03 Individual Account
We will establish an Individual Account for you.
If required, we will provide accounts that distinguish between
your employer's and your Contributions.
2.04 Experience Credit
We may apply experience credits (investment, administrative,
mortality or other) under the Contract and may apply such credits
as:
(a) A reduction in the maintenance fee;
(b) A reduction in the mortality and expense risk charge to the
Separate Account;
(c) A reduction in the administrative charge to the Separate
Account; and
(d) An increase in a Fixed Interest Option interest rate.
We will apply experience credits at our sole discretion as we deem
appropriate for the class of contracts to which the Contract is
issued.
2.05 Individual Account Value
As of the most recent Valuation Date, the Individual Account value
is equal to the total of all Contributions:
(a) Plus any interest added on the amount, if any, allocated to
a Fixed Interest Option(s);
(b) Plus or minus the investment experience on the amount, if
any, held in the Separate Account;
(c) Minus any applicable maintenance fees, any amounts
withdrawn, or used to purchase Annuity payments, or any
applicable premium tax; and
(d) Minus any applicable fees or charges deducted.
6
<PAGE>
Section 3. Separate Account
- --------------------------------------------------------------------------------
3.01 General
The Separate Account, established under Title 38a, Section 38a-433
of the Connecticut General Statutes, buys and holds shares of the
Funds available under the Contract. The Separate Account is
registered as a unit investment trust under the Investment Company
Act of 1940.
We own the assets held in the Separate Account; we are not a
trustee of those assets. Income, gains or losses, realized or
unrealized, are credited to or charged against the Separate
Account without regard to our other income, gains or losses.
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
3.02 Funds Available
We reserve the right to limit the number of Funds in which an
Individual Account may be invested, at one time or cumulatively,
during the Accumulation Phase and/or Annuity Phase.
3.03 Change or Substitution of Funds
We reserve the right to stop offering any Fund or to add Funds. We
may substitute shares of a Fund for shares of another Fund. We
will provide the Contract Holder with reasonable advance notice of
any elimination, addition or substitution of a Fund. If the Plan
is subject to ERISA, we will seek Contract Holder consent in
advance of any Fund substitution. Consent will be deemed given
unless, following notice of substitution and within a prescribed
time period, the Contract Holder notifies us in writing that it
does not consent and provides us with alternative investment
instructions for the shares that would otherwise be affected by
the substitution.
3.04 Accumulation Units
Each Contribution allocated to one or more of the Funds is
credited to an Individual Account as accumulation units. The
number of accumulation units is calculated by dividing the amount
of the Contribution allocated to the Fund by the accumulation unit
value (see 3.05) as of the next Valuation Date following our
receipt of the Contribution in Good Order at our Home Office.
3.05 Accumulation Unit Value
The value of each accumulation unit for any Fund for each
Valuation Date is computed by multiplying the net investment
factor (see 3.06) by the accumulation unit value for such
Valuation Date.
Accumulation unit values may increase or decrease from Valuation
Date to Valuation Date.
3.06 Net Investment Factor
The net investment factor is used to compute the accumulation unit
value for any Fund.
For each Valuation Date, for each Fund, the net investment factor
is equal to 1.0000000, plus the net return rate.
The net return rate equals:
[a - b - c]
------------- - e - f
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
7
<PAGE>
d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule I under Daily Charges to the Separate Account; and
f is if applicable, a charge for the GET Fund guarantee, which
is deducted daily during the guarantee period. The charge,
which is determined before the beginning of each offering
period (see 4.02), is shown on Contract Schedule I under
Daily Charges to the Separate Account.
The net return rate may be greater or less than zero percent.
3.07 Charges to the Separate Account
During the Accumulation Phase, we may deduct a mortality and
expense risk charge from the Individual Account value invested in
the Separate Account. In addition, we reserve the right to impose
an administrative charge.
The charges to the Separate Account are shown on Contract Schedule
I under Daily Charges to the Separate Account and are deducted
daily.
3.08 Fund Transfers
During the Accumulation Phase, any portion or all of the
Individual Account value held in a Fund may be transferred to any
other Fund or any available Fixed Interest Option. The Individual
Account value will be based on the Fund's accumulation unit value
next determined after we receive a transfer request in Good Order.
3.09 Withdrawals from the Separate Account
If the Contract Holder or you, as applicable, requests a partial
or full withdrawal (see 8.02) from the Funds, a withdrawal charge
may apply (see 8.04).
Section 4. Aetna GET Fund (GET Fund)
- --------------------------------------------------------------------------------
The following provisions apply if the GET Fund is available.
4.01 GET Fund Guarantee Period
For each GET Fund series, the period for which the GET Fund
guarantee applies. The guarantee period ends on the Maturity Date.
4.02 GET Fund Offering Period
The period, usually from one to three months, during which the
Contract Holder or you, as applicable, may transfer or allocate
amounts to a GET Fund series. Each GET Fund series has a specific
offering period. Amounts transferred or allocated prior to the
date on which the guarantee period begins are invested in money
market instruments.
We will specify a minimum total asset amount required at the end
of an offering period to offer a GET Fund series. If the minimum
is not achieved, we reserve the right not to begin the guarantee
period. If a GET Fund series is not begun, we will mail a notice
to all Contract Holders or you, as applicable, who have made
allocations to that GET Fund series no less than 15 calendar days
after the end of the offering period. The Contract Holder or you,
as applicable, then has 45 calendar days from the end of the
offering period to reallocate the amount allocated to the GET Fund
to any other available Investment Options. During this time, GET
Fund assets are invested in money market instruments. If the
Contract Holder or you, as applicable, makes no election by the
end of the 45-day period, at the next Valuation Date, we will
allocate the amount in the terminated GET Fund series to the money
market fund available under the Contract.
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We reserve the right to specify a maximum total asset amount for a
GET Fund series. If the maximum is achieved, we reserve the right
to set a date on which we will stop accepting allocations for that
GET Fund series. We will announce the date on which we will stop
accepting transfers and allocations 10 calendar days prior to that
date.
4.03 GET Fund Guarantee
On the Maturity Date of each GET Fund series, the GET Fund
accumulation unit value for that series will not be less than the
GET Fund accumulation unit value determined at the close of
business on the last day of the offering period. If necessary to
offset any shortfall in the GET Fund accumulation unit value, we
will transfer funds from our General Account to the Separate
Account. The GET Fund guarantee does not apply to transfers or
withdrawals made before the Maturity Date.
If GET Fund accumulation units are adjusted at any time during the
guarantee period, the GET Fund guarantee will be restated. We
calculate the restated guarantee so that it is equivalent to the
original guarantee for that GET Fund series.
A daily charge is assessed on the amount, if any, allocated to the
GET Fund. This charge for the GET Fund guarantee is shown on
Contract Schedule I under Daily Charges to the Separate Account.
4.04 GET Fund Maturity Date
The GET Fund Maturity Date is the date on which the guarantee
period ends and GET Fund accumulation units are liquidated.
Prior to the Maturity Date for each series, we send a written
notice of the date to each Contract Holder or you, as applicable,
who has an Individual Account value in that series. In response,
the Contract Holder or you, as applicable, must tell us to which
available Investment Options to transfer the amount in the GET
Fund on the Maturity Date. If we do not receive instructions, on
the Maturity Date we transfer the portion of the Individual
Account value held in the GET Fund to another GET Fund series, if
available. If no GET Fund series is available, we transfer the
amount to the Fund or Funds we designate in the written notice.
4.05 Transfers or Withdrawals from the GET Fund
Transfers or withdrawals from the GET Fund before the Maturity
Date are based on the GET Fund unit value for the next Valuation
Date following our receipt of the request in Good Order (see 8.01
and 8.02).
Section 5. Fixed Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Account is available as shown on
Contract Schedule I under Fixed Interest Options Available.
5.01 Fixed Account Minimum Guaranteed Interest Rate
The Fixed Account minimum guaranteed interest rate is shown on
Contract Schedule I under Fixed Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Account during the calendar year. The one year minimum guaranteed
interest rate will be established prior to each calendar year and
will be made available to the Contract Holder or you, as
applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
you, as applicable.
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<PAGE>
5.02 Transfers from the Fixed Account
Each calendar year, the percentage shown on Contract Schedule I
under Fixed Account Annual Transfer Limit of the amount in the
Fixed Account may be transferred to any available Investment
Options. The amount available for transfer will be based on the
Individual Account value in the Fixed Account as of the date we
receive the transfer request in Good Order at our Home Office. We
may, on a temporary basis, allow transfer of a larger percentage.
There is no limit on the amount that may be transferred to the
Fixed Plus Account.
5.03 Withdrawals from the Fixed Account
If the Contract Holder or you, as applicable, requests a partial
or full withdrawal (see 8.02) from the Fixed Account, a withdrawal
charge may apply (see 8.04).
Section 6. Fixed Plus Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Plus Account is available as shown
on Contract Schedule I under Fixed Interest Options Available.
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate
The Fixed Plus Account minimum guaranteed interest rate is shown
on Contract Schedule I under Fixed Plus Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Plus Account during the calendar year. The one year minimum
guaranteed interest rate will be established prior to each
calendar year and will be made available to the Contract Holder or
you, as applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
you, as applicable.
6.02 Transfers from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit of the amount in the Fixed Plus Account
may be transferred to any available Investment Option.
The amount available for transfer is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
transfer request in Good Order at our Home Office, reduced by any
amount withdrawn, transferred, taken as a loan (if allowed under
the Contract) or used to purchase Annuity payments during the 12
months prior to the transfer request. In addition, we reserve the
right to reduce the amount available for transfer by amounts
withdrawn under a systematic distribution option.
Twenty percent of the amount in the Fixed Plus Account may be
transferred in each of four consecutive 12 months and the balance
transferred in the fifth year subject to the following conditions:
(a) During the five-year period, no additional amounts are
allocated to or transferred from the Fixed Plus Account;
(b) We will include any amount transferred, taken as a loan (if
allowed under the Contract) or used to purchase Annuity
payments during the prior 12-month period when calculating
the amount which equals 20%; and
(c) We reserve the right to include amounts paid under a
systematic distribution option when calculating the amount
which equals 20%.
In addition, we reserve the right to waive the transfer limit when
the amount in the Fixed Plus Account is less than or equal to the
amount shown on Contract Schedule I under Waiver of Fixed Plus
Account Transfer Limit.
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<PAGE>
6.03 Partial Withdrawals from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit may be withdrawn from the Fixed Plus
Account.
The amount available for withdrawal is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
withdrawal request in Good Order at our Home Office, reduced by
any amount withdrawn, transferred, taken as a loan (if allowed
under the Contract), or used to purchase Annuity payments during
the 12 months prior to the request. In addition, we reserve the
right to reduce the amount available by deducting any amount
withdrawn under a systematic distribution option.
The withdrawal limit does not apply when the partial withdrawal
is:
(a) Due to your death during the Accumulation Phase and is made
within six months of the date of death (this exception
applies to only one partial withdrawal);
(b) Used to purchase Annuity payments; or
(c) Due to other conditions as we may allow without
discrimination.
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account
The Contract Holder, or you, as applicable, may withdraw the full
amount held in the Fixed Plus Account. When we receive a request
for a full withdrawal, no additional transfers, partial
withdrawals or loans (if allowed under the Contract) are allowed.
The withdrawal will be made as follows:
(a) One-fifth of the Individual Account value in the Fixed Plus
Account as of the date we receive the withdrawal request in
Good Order at our Home Office reduced by the amount, if
any, transferred, withdrawn, taken as a loan (if allowed
under the contract) or used to purchase Annuity payments
during the prior 12 months; then
(b) One-fourth of the remaining amount 12 months later; then
(c) One-third of the remaining amount 12 months later; then
(d) One-half of the remaining amount 12 months later; then
(e) The balance of the Individual Account value in the Fixed
Plus Account 12 months later.
No withdrawal charge applies to amounts withdrawn.
The Contract Holder or you, as applicable, may cancel a full
withdrawal request from the Fixed Plus Account at any time.
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
as noted on Contract Schedule I under Waiver of Fixed Plus Full
Withdrawal Provision.
Section 7. Guaranteed Accumulation Account (GAA)
- --------------------------------------------------------------------------------
The following provisions apply if the Guaranteed Accumulation Account is
available as shown on Contract Schedule I under Fixed Interest Options
Available.
7.01 Nonunitized Separate Account
The Nonunitized Separate Account is established under Title 38a,
Section 38a-433 of the Connecticut General Statutes. There are no
discrete units for this account. We own the assets held in the
Nonunitized Separate Account; we are not a trustee of those
assets. The Contract Holder or Participant does not participate in
the investment gain or loss from assets held in the Nonunitized
Separate Account. Such gain or loss is borne entirely by us.
Income, gains or losses, realized or unrealized, are credited to
or charged against the Nonunitized Separate Account without regard
to our other income, gains or losses. Nonunitized Separate Account
assets, to the extent of reserves and other Contract liabilities,
cannot be charged with liabilities arising out of any other
business we conduct.
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7.02 GAA Minimum Guaranteed Interest Rate
All Contributions allocated to a GAA guaranteed term (see 7.04)
earn a rate of interest which we determine and which is guaranteed
when the Contribution remains in the guaranteed term until the
Maturity Date. The rate credited will never be less than the
minimum interest rate shown on Contract Schedule I under
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate.
For guaranteed terms of one year or less, one guaranteed rate is
credited for the full guaranteed term. For longer guaranteed
terms, we may credit an initial guaranteed interest rate from the
date of deposit to the end of a specified period within the
guaranteed term. We may credit different interest rates for
subsequent specified periods throughout the guaranteed term.
7.03 Deposit Period
A deposit period is the period of time we determine during which
we accept allocations (Contributions, transfers, or reinvestments)
to one or more guaranteed terms. We reserve the right to extend
the deposit period.
7.04 Guaranteed Term
A guaranteed term is the period of time for which we guarantee the
declared interest rate for allocations (Contributions, transfers,
or reinvestments) to GAA guaranteed terms. We may offer guaranteed
terms ranging in duration from one to ten years. During each
deposit period, we may offer more than one guaranteed term of
varying lengths. The guaranteed term begins the day after the
deposit period ends. The Contract Holder or you, as applicable,
may allocate Contributions or transfers to any or all guaranteed
terms available in the current deposit period.
7.05 Guaranteed Term Groups
A guaranteed term group is comprised of all GAA guaranteed terms
of the same duration.
7.06 Maturity Date, Maturity Value and Reinvestment
The Maturity Date is the last day of a guaranteed term. The
maturity value is the amount we pay at the end of a guaranteed
term. At least 18 calendar days before any guaranteed term
Maturity Date, we notify the Contract Holder or you, as
applicable, of the projected maturity value and the guaranteed
terms (and the guaranteed interest rates for each) available
during the then-current deposit period. The Contract Holder, or
you, as applicable, may then tell us how to allocate the maturity
value.
If the Contract Holder or you, as applicable, does not tell us how
to reinvest the maturity value, we reinvest it in a guaranteed
term of the same duration if one is available. If no guaranteed
term of the same duration is available, we reinvest the maturity
value in the guaranteed term with the next shortest duration. If
no shorter guaranteed term is available, we reinvest the maturity
value in the next longest term. We mail a confirmation of
reinvestment. The confirmation includes the guaranteed term in
which we have reinvested the maturity value and the guaranteed
interest rate for that term.
If we have reinvested the maturity value, during the month
following the Maturity Date, the Contract Holder or you, as
applicable, may transfer or withdraw the reinvested amount, with
interest earned (as of the date we receive the request) without
incurring a market value adjustment (see 7.08).
7.07 Transfers and Withdrawals from the GAA
Except as noted below, the Contract Holder or you, as applicable,
may transfer any portion or all of the amount held in the GAA.
Transfers or withdrawals before the Maturity Date may be subject
to a market value adjustment (see 7.08). Amounts invested in a
guaranteed term may not be transferred during the deposit period
or for a period of 90 calendar days after the close of the deposit
period.
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Unless directed otherwise, when the Contract Holder or you, as
applicable, requests a transfer or withdrawal from the GAA, we
withdraw amounts proportionately from each guaranteed term in
which the Individual Account is invested. Within a guaranteed term
group, we withdraw first from the oldest deposit period and then
from the next oldest and so on until the amount requested is
withdrawn.
7.08 Application of the Market Value Adjustment
Transfers or withdrawals from the GAA before the Maturity Date are
subject to a market value adjustment, except for:
(a) A one-month period following the Maturity Date on which we
have automatically reinvested the value on the Maturity
Date;
(b) Distributions under certain systematic distribution
options; and
(c) When the withdrawal is equal to the minimum distribution
amount required under the Code, using a method permitted by
the Code and which we offer.
For withdrawals and transfers from the GAA made (1) within six
months of your death; or (2) to purchase Annuity payments under a
life-contingent Annuity option, the amount withdrawn from the GAA
is the greater of:
(a) The aggregate market value adjustment amount which is the
sum of all market value adjusted amounts calculated due to
a withdrawal before the Maturity Date (which may be
positive or negative); or
(b) The amount in the GAA.
For withdrawals made after the six month period following death,
the withdrawal or transfer amount is the aggregate MVA amount.
A MVA applies to amounts withdrawn to purchase Annuity payment
under a period certain Annuity option.
We may change the GAA market value adjustment by notifying the
Contract Holder in writing at least 90 calendar days before the
change becomes effective. Any such change will apply only to
guaranteed terms offered in deposit periods after the date the
change becomes effective and will apply to existing and new
Individual Accounts.
7.09 Market Value Adjustment (MVA)
The market value adjustment reflects any change in yields on U.S.
Treasury Notes from the time an amount is allocated to a GAA
guaranteed term to the time of a transfer or withdrawal prior to
the Maturity Date. When the market value adjustment is applied,
the amount transferred or withdrawn from the GAA is multiplied by
a factor which is calculated as follows:
x
------
365
(1 + i)
-------------------
x
------
365
(1 + j)
Where:
i is the deposit period yield
j is the current yield
x is the number of days remaining (computed from Wednesday of
the week of withdrawal) in the guaranteed term.
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The deposit period yield and the current yield are determined as
follows:
Deposit Period Yield
At the close of the last business day of each week of a
deposit period, we compute a yield that is the average of
the yields on U.S. Treasury Notes which mature in the last
three months of the guaranteed term. The deposit period
yield is the average of those yields for the deposit
period. If a withdrawal is made prior to the close of the
deposit period, the deposit period yield is the average of
the yields of U.S. Treasury Notes for each week preceding
the withdrawal. In the event that no U.S. Treasury Notes
will mature in the last three months of the guaranteed
term, we reserve the right to use the U.S. Treasury Notes
that mature in a following quarter.
Current Yield
The Current Yield is the average of the yields of the same
U.S. Treasury Notes used to calculate the deposit period
yield on the last business day of the week preceding
withdrawal.
Section 8. Transfers, Withdrawals and Distributions
- --------------------------------------------------------------------------------
8.01 Transfers
During the Accumulation Phase, the Contract Holder or you, as
applicable, may transfer all or any portion of the Individual
Account value among the available Investment Options. The
Individual Account value on any amount transferred from a Fund
will be based on the Fund's accumulation unit value next
determined after we receive the transfer request in Good Order at
our Home Office.
The Contract Holder or you, as applicable, may request a transfer
by properly completing a transfer request form and sending it to
our Home Office, or by otherwise complying with our administrative
procedures. We reserve the right to establish a minimum transfer
amount.
8.02 Withdrawals
As allowed by the Plan, if applicable, and subject to provisions
of the Code (see 8.03), during the Accumulation Phase, the
Contract Holder or you, as applicable, may withdraw any portion or
all of the Individual Account value. For Code Section 403(b)
Plans, the Contract Holder or you, as applicable, may transfer the
amount withdrawn to another investment provider under the Plan or
roll over such amount that qualifies as an eligible rollover
distribution in accordance with Code Sections 403(b)(8),
401(a)(31) and 402(c) and applicable regulations. The Individual
Account value of any amount withdrawn from a Fund will be based on
the Fund's accumulation unit value next determined after we
receive the transfer request in Good Order.
The Contract Holder or you, as applicable, may request a
withdrawal by properly completing a withdrawal request form and
forwarding it to our Home Office, or by otherwise complying with
our administrative procedures. Unless the Contract Holder or you,
as applicable, requests otherwise, the withdrawal will be made
proportionately from the Investment Options in which the
Individual Account is invested.
A withdrawal charge may apply to amounts withdrawn (see 8.04). In
addition, a market value adjustment may apply to amounts withdrawn
from the GAA (see 7.08 and 7.09) and limitations may apply to
withdrawals from the Fixed Plus Account (see 6.04).
8.03 Withdrawal Restrictions Under the Code
The Code may impose restrictions on the amount and timing of
withdrawals. The restrictions applicable to the Contract are shown
on Contract Schedule I under Withdrawal Restrictions Under the
Code. Withdrawals that do not comply with the Code may be subject
to tax penalties.
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8.04 Withdrawal Charge
During the Accumulation Phase, we may deduct a withdrawal charge
from the Individual Account value withdrawn. The charge, if any,
is a percentage of the amount withdrawn from the Funds and/or
Fixed Interest Options (except, if applicable, the Fixed Plus
Account). The withdrawal charge will never exceed 8.5% of the
total amount of Contributions, or the maximum permitted by
National Association of Securities Dealers, Inc. (NASD) rules.
The withdrawal charge, if any, is shown on Contract Schedule I
under Withdrawal Charge.
8.05 Waiver of Withdrawal Charge
The withdrawal charge (see 8.04) does not apply in any of the
circumstances shown on Contract Schedule I under Waiver of
Withdrawal Charge.
In addition, we reserve the right to reduce, waive or eliminate
the withdrawal charge.
8.06 Reinstatement
Within 30 calendar days after a withdrawal, the Contract Holder or
you, as applicable may elect to reinstate all or a portion of the
proceeds of a full withdrawal if allowed by applicable law. We
must receive the reinstated amount within 60 calendar days of the
withdrawal.
Any maintenance fee and withdrawal charge imposed at the time of
the withdrawal is included in the reinstatement. If only a portion
of the amount withdrawn is reinstated, the amount of any
maintenance fee and withdrawal charge deducted will be restored
proportionally. The amount of any market value adjustment deducted
from any amount withdrawn from GAA is not included in the amount
reinstated.
Any amount reinstated to the GAA will be credited to guaranteed
terms available in the current deposit period. We will reinvest it
in a guaranteed term of the same duration if one is available. If
no guaranteed term of the same duration is available, we reinvest
the maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term.
Amounts withdrawn from a GET Fund series are reinstated to the
current offering period if one is available. If no GET Fund
offering period is available, any amount withdrawn from the GET
Fund is reinstated equally among all other Investment Options in
which the Individual Account is invested.
Amounts are reinstated among the Investment Options in the same
proportion as they were held at the time of withdrawal, except, as
noted above, for amounts from the GET Fund. Any maintenance fee
which falls due after the withdrawal and before the reinstatement
is deducted from the amount reinstated.
The number of accumulation units reinstated to any Fund is based
on the accumulation unit values next computed after we receive the
reinstatement request in Good Order at our Home Office.
Reinstatement is permitted only once.
8.07 Required Distributions
While an Individual Account remains in the Accumulation Phase, the
Code may require distribution of all or a portion of the
Individual Account value. The Contract Holder, you or Contract
beneficiary, as applicable, must tell us when to begin
distributions. We have no responsibility for adverse tax
consequences as the result of the Contract Holder, you or Contract
beneficiary, as applicable, not complying with minimum
distribution requirements.
The distribution requirements, if any, are shown on Contract
Schedule I under Required Distributions.
Generally, to meet distribution requirements, the Contract Holder,
you or Contract beneficiary, as applicable, may request partial
withdrawals, a systematic distribution option (see 8.08) or an
Annuity option.
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8.08 Systematic Distribution Options (SDOs)
During the Accumulation Phase, we may offer one or more
distribution options under which we make regularly scheduled
automatic partial distributions of the Individual Account value.
To request a SDO, the Contract Holder, you or Contract
beneficiary, as applicable, must complete a SDO election form and
forward it to our Home Office.
Each option is available without discrimination to any class of
Contracts. The availability of any specific option may be subject
to terms and conditions applicable to that option. We may
discontinue the availability of a SDO option for future election.
Payments will, however, continue to Participants who elected the
option before the date it is no longer available.
8.09 Individual Account Termination
If the Individual Account value is an amount equal to or less than
the amount shown on Contract Schedule I under Individual Account
Termination Amount and we have received no Contributions for 12
months, we reserve the right to terminate an Individual Account.
Before we do this, we notify the Contract Holder or you, as
applicable, 90 calendar days in advance. When we terminate an
Individual Account, we do not deduct a withdrawal charge. We do
not exercise this right when the Individual Account value is equal
to or less than the amount shown on Contract Schedule I under
Individual Account Termination Amount due to investment
performance.
Section 9. Loans
- --------------------------------------------------------------------------------
9.01 Loan Availability
Contract Schedule I indicates whether loans are available under
the Contract. If available, a loan endorsement is included as part
of the Contract.
Section 10. Death Benefit During the Accumulation Phase
- --------------------------------------------------------------------------------
10.01 Death Benefit
If you die during the Accumulation Phase, we pay a death benefit.
The amount of the death benefit is the Individual Account value as
of the next Valuation Date following our receipt of acceptable
proof of death at our Home Office (see 7.08 for amounts in the
GAA).
10.02 Contract Beneficiary
The Contract beneficiary is shown on Contract Schedule I under
Contract beneficiary. Generally, you may name a beneficiary under
the Plan (the Plan beneficiary). If allowed by the Plan, when
designating the beneficiary, the Contract Holder or you, as
applicable, may specify, the form of payment as permitted by the
Code. The Contract beneficiary and the form of payment, if
applicable, may be designated or changed in writing or as we may
otherwise allow in our administrative procedures.
10.03 Distribution of Death Benefit
Generally, if the Plan beneficiary is your surviving spouse,
distribution of the death benefit must begin no later than the
year you would have attained age 70 1/2 or any other date allowed
under federal law or regulations.
If the Plan beneficiary is not your surviving spouse, generally,
the death benefit must be used to purchase Annuity payments within
one year of the year of your death or otherwise paid within five
years of the year of your death.
Annuity payments to a Plan beneficiary may not extend beyond the
period specified in the Code.
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Part II. Annuity Phase
Section 11. General Provisions
- --------------------------------------------------------------------------------
11.01 Election
The Contract Holder, you, or Contract or Plan beneficiary, as
applicable, may elect an Annuity option by properly completing an
election form and forwarding it to our Home Office no later than
30 calendar days before the desired first Annuity payment date.
All Annuity option elections must comply with any Plan
requirements and regulatory requirements including the Code
minimum distribution requirements.
All or any portion of the Individual Account value (after the
deduction of any applicable premium tax) may be used to purchase
Annuity payments (for amounts from the GAA, see 7.08).
The Contract Holder, you, or Contract or Plan beneficiary, as
applicable, must also select an Annuity option (see 11.03) and the
Investment Options (see 11.06).
Once payments begin, an Annuity option may not be revoked, nor may
any amount be withdrawn except as noted below.
11.02 Change of Annuity Provisions
We reserve the right to change or eliminate Annuity options (see
11.03) and to change the mortality table (see 11.04) we use to
calculate payment rates for life-contingent Annuity payments. If
we do this, any change will not take effect until at least 12
months after the Contract Effective Date, or until at least 12
months after any previous change. A change to Annuity options or
the mortality table used to calculate payment rates will not apply
to Individual Accounts established before the date the change
becomes effective.
11.03 Annuity Options
The Contract Holder, you, or Contract or Plan beneficiary, as
applicable, must elect one of the following:
Option 1: Payments for a Stated Period
This option provides payments for a stated period. The number of
years in the stated period must fall within the range shown on
Contract Schedule II under Payment Period.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time. If a withdrawal is requested within five years of the first
payment, the lump-sum payment is treated as a withdrawal during
the Accumulation Phase and any applicable withdrawal charge
applies (see 8.04).
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 2: Life Income for One Annuitant
This option provides payments for the life of the Annuitant. If
this option is elected, the Contract Holder, you, or Contract or
Plan beneficiary, as applicable, must also choose one of the
following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period within the range shown
on Contract Schedule II under Payment Period; or
(c) Fixed-only cash refund: at the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal
to the amount applied to the Annuity (minus any applicable
premium tax), minus the amount of payments made to the
Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
17
<PAGE>
Option 3: Life Income for Two Annuitants
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have
died. If this option is elected, the Contract Holder, you, or
Contract or Plan beneficiary as applicable, must also choose one
of the following:
(a) 100% of the payment amount to continue after the first
death; or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first
death; or
(d) 100% of the payment amount to continue after the first
death with payments guaranteed to the beneficiary after the
second death for a period within the range shown on
Contract Schedule II under Payment Period; or
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount to
continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the
first death with a cash refund to the Contract beneficiary
after the second death. The amount of the cash refund is
equal to the amount applied to the Annuity (minus any
applicable premium tax), minus the amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
Other Options
As allowed under applicable state law, we reserve the right to
make other options available.
11.04 Mortality Table
The mortality table for the Contract is shown on Contract Schedule
II under Mortality Table.
11.05 Payments
The first payment amount must be at least $50 per month or $250
per year. We reserve the right to increase the minimum first
payment amount, if allowed by state law, based on increases
reflected in the Consumer Price Index-Urban (CPI-U) since July 1,
1993.
To calculate the first payment of a variable Annuity or the
guaranteed payments for a fixed Annuity, we will use the
Annuitant's adjusted age and, if applicable, the second
Annuitant's adjusted age. The Annuitant's adjusted age and, if
applicable, the second Annuitant's adjusted age is the person's
age as of the birthday closest to the day Annuity payments begin,
reduced as follows:
(a) Reduced by one year for payments before January 1, 2000;
(b) Reduced by two years for payments beginning during the
period from January 1, 2000 through December 31, 2009;
(c) Starting on January 1, 2010, reduced by one additional year
for payments beginning in each succeeding decade.
If a fixed Annuity is elected, we will use the applicable current
settlement option rates if they will provide higher fixed Annuity
payments.
11.06 Investment Options
When an Annuity option is elected, the Contract Holder, you, or
Contract or Plan beneficiary, as applicable, must elect:
(a) A fixed Annuity for which the underlying investment is our
General Account;
18
<PAGE>
(b) A variable Annuity for which the underlying investment is
one or more of the available Funds; or
(c) A combination of (a) and (b).
For a variable Annuity, the maximum number of Funds available
during the Annuity Phase is shown on Contract Schedule II under
Maximum Number of Funds. The Funds available during the Annuity
Phase might not be the same as those available during the
Accumulation Phase.
11.07 Fixed Annuity Minimum Guaranteed Interest Rate
For a fixed Annuity, the interest rate will never be less than the
minimum guaranteed rate shown on Contract Schedule II under Fixed
Annuity Minimum Guaranteed Interest Rate.
11.08 Variable Annuity Assumed Annual Net Return Rate Election
If a variable Annuity is elected, the Contract Holder, or you, as
applicable must also elect an assumed annual net return rate of
3.5% or 5%. The initial Annuity payment for the option elected
will reflect the assumed annual net return rate. If subsequent
Annuity payments are to remain level, the Separate Account must
earn this rate, plus enough to cover the mortality and expense
risk charge shown on Contract Schedule II under Daily Charges to
the Separate Account plus any applicable administrative charge.
11.09 Variable Annuity Transfers
If a variable Annuity is elected, the Contract Holder, you, or
Contract or Plan beneficiary, as applicable, may request that we
transfer all or a portion of the amount allocated to a Fund to any
other available Fund. Transfer requests must be expressed as a
percentage of the allocation among the Funds on which the variable
payment is based. The number of transfers allowed each calendar
year is shown on Contract Schedule II under Number of Annual
Transfers Among Funds. We reserve the right to allow additional
transfers. Transfers are effective as of the next Valuation Date
following our receipt of a transfer request in Good Order at our
Home Office.
11.10 Fund Annuity Units
The number of Fund Annuity units is based on the amount of the
first variable Annuity payment which is equal to:
(a) The portion of the Individual Account value (minus any
applicable premium tax) used to purchase a variable
Annuity; divided by
(b) One thousand; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion of the variable payment will be divided by
the appropriate Fund's, or Funds', Annuity unit value (see 11.11)
on the tenth Valuation Date before the due date of the first
payment to determine the number of Fund Annuity units. The number
of each Fund's Annuity units remains fixed unless changed by a
subsequent Fund transfer or if the Annuity option provides for a
change in units (i.e., under life income for two annuitants option
after the first death). Each future payment is equal to the sum of
the products of each Fund's Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity unit value on the
tenth Valuation Date before the payment due date is used.
11.11 Fund Annuity Unit Value
For any Valuation Date, a Fund's Annuity unit value is equal to:
(a) The Annuity unit value for the prior Valuation Date;
multiplied by
(b) The Annuity unit net return factor (see 11.12) for the
current Valuation Date; multiplied by
(c) A factor to reflect the assumed annual net return rate. The
factor for an assumed annual net return rate of 5% is
0.9998663; for 3.5% it is 0.9999058.
19
<PAGE>
The dollar value of a Fund Annuity unit and the amount of a
variable Annuity payment may increase or decrease due to
investment gain or loss. We will not change the payment amount due
to changes in mortality, expense results, or the administrative
charge.
11.12 Fund Annuity Net Return Factor
The Annuity net return factor(s) are used to compute all variable
Annuity payments for any Fund.
The net return factor(s) for each Fund is equal to 1.0000000 plus
the net return rate.
The net return rate equals:
[a - b - c]
------------- - e
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule II under Daily Charges to the Separate Account.
A net return rate may be more or less than 0%. The value of a
share of a Fund is equal to the net assets of the Fund divided by
the number of shares outstanding.
11.13 Death Benefit During the Annuity Phase
The Contract Holder or you, as applicable, must name a beneficiary
for the Annuity Phase. Unless not allowed by the Plan, or
restricted by the Contract Holder, or you, as applicable, the
beneficiary may name a beneficiary.
If an Annuitant(s) dies, any remaining guaranteed payments
continue to the beneficiary. Payments are made at least as rapidly
as provided by the option in effect at the death of the Annuitant.
Annuity payments to a beneficiary may not extend beyond (1) the
life of the beneficiary, or (2) any period certain greater than
the beneficiary's life expectancy as determined by the Code.
The beneficiary may also elect a lump-sum payment equal to the
present value of any remaining payments.
The interest rate used to determine the first Annuity payment is
used to calculate the present value. The present value is
determined as of the next Valuation Date following our receipt of
acceptable proof of death and a written claim for the death
benefit.
Unless not allowed by the Plan or restricted by the Contract
Holder, or you, as applicable, if the beneficiary dies while
receiving payments, the present value of any remaining guaranteed
payments is paid in a lump-sum to the beneficiary's beneficiary or
to the beneficiary's estate.
11.14 Charges to the Separate Account
During the Annuity Phase, we may deduct a mortality and expense
risk charge from the Individual Account value invested in the
Separate Account. In addition, we reserve the right to impose an
administrative charge.
The maximum charges to the Separate Account are shown on Contract
Schedule II under Daily Charges to the Separate Account. If
applicable, the charges are deducted daily.
20
<PAGE>
OPTION 1: Payments for a Stated Period
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $17.91 20 $5.51
10 9.61 25 4.71
15 6.87 30 4.18
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.12 20 $5.75
10 9.83 25 4.96
15 7.10 30 4.45
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.74 20 $6.51
10 10.51 25 5.76
15 7.82 30 5.28
- --------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
21
<PAGE>
Option 2: Life Income for One Annuitant
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate
- ---------------------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
Adjusted payments for payments payments payments payments Cash Refund
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 $4.44 $4.42 $4.39 $4.32 $4.22 $4.19
60 4.95 4.93 4.86 4.73 4.55 4.57
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
70 6.64 6.54 6.23 5.76 5.19 5.70
75 8.06 7.82 7.14 6.25 5.38 6.51
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $4.72 $4.71 $4.67 $4.60 $4.50
60 5.23 5.21 5.13 5.00 4.82
65 5.94 5.89 5.73 5.48 5.15
70 6.92 6.81 6.49 6.00 5.43
75 8.35 8.08 7.38 6.48 5.62
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $5.63 $5.61 $5.56 $5.47 $5.36
60 6.12 6.09 6.00 5.85 5.65
65 6.82 6.75 6.57 6.30 5.95
70 7.80 7.67 7.30 6.78 6.21
75 9.23 8.93 8.16 7.23 6.38
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
22
<PAGE>
Option 3: Life Income for Two Annuitants
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate
- ----------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
- ----------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67
55 60 3.99 4.44 4.71 3.98 4.20 3.94
65 60 4.38 4.97 5.32 4.38 4.93 4.29
65 70 4.93 5.68 6.15 4.91 5.27 4.74
75 70 5.69 6.68 7.32 5.62 6.67 5.29
75 80 6.78 8.11 8.99 6.54 7.36 5.93
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $3.97 $4.35 $4.56 $3.97 $4.31
55 60 4.27 4.73 5.00 4.26 4.48
65 60 4.66 5.25 5.61 4.65 5.22
65 70 5.19 5.97 6.44 5.17 5.54
75 70 5.95 6.96 7.61 5.87 6.95
75 80 7.04 8.39 9.29 6.79 7.64
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 60 5.15 5.63 5.91 5.14 5.38
65 60 5.52 6.14 6.51 5.51 6.10
65 70 6.04 6.84 7.34 6.00 6.41
75 70 6.77 7.84 8.51 6.68 7.81
75 80 7.86 9.28 10.20 7.57 8.49
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
23
<PAGE>
- --------------------------------------------------------------------------------
Aetna
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
Certificate of Group Annuity Coverage
- --------------------------------------------------------------------------------
C-CDA(12/99)
Exhibit 99-B.4.3
Aetna Life Insurance and Annuity Company
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as follows.
Subject to the provisions below, loans are available under the Contract.
During the Accumulation Phase, loans are available (1) as permitted under
applicable law, and (2) subject to the terms and conditions of the loan
agreement.
The Loan Account
For each loan, an amount equal to the loan amount is transferred from the
Investment Options in which the Individual Account is invested and is credited
to the loan account. [The loan account is then credited with interest at a rate
which is not less than the loan interest rate (which is the rate we charge on a
loan as defined below), less [3.0%], on an annual basis.]
Loan Effective Date
The loan effective date is the date we receive a loan request in Good Order at
our Home Office. [For loan requests received in Good Order on the 29th, 30th, or
31st day of the month, however, the loan effective date is the first business
day of the following month.]
Amount Available For Loan
The amount available for loan is limited to the Individual Account value
attributable to employee contributions, plus any additional amounts allowed by
the Plan as determined by the Contract Holder (the vested Individual Account
value).
For plans subject to ERISA, the minimum loan amount is $1,000; for plans not
subject to ERISA, the minimum loan amount is defined in the loan agreement.
The maximum loan amount is the lesser of:
(1) Fifty percent of the vested Individual Account value, including
the amount, if any, in the loan account, reduced by the amount
of any outstanding loan balance on the date we receive a loan
agreement in Good Order at our Home Office; or
(2) Fifty thousand dollars reduced by the highest outstanding loan
balance for the preceding 12 months.
The total amount of all outstanding loans cannot exceed $50,000.
Amounts available from some Investment Options may be subject to limitations
specified in the loan agreement. To obtain the loan amount requested, these
limitations may require transfer of funds among Investment Options. [A market
value adjustment may apply to amounts transferred from the Guaranteed
Accumulation Account.] The amount, if any, from the Fixed Plus Account may be
subject to a default charge if the Participant defaults on the loan.
Loan Interest Rate
For plans subject to ERISA: We set a loan interest rate on the first calendar
day of each month. The rate will be equal to the Monthly Average Corporates
(which is Moody's Corporate Bond Yield Average-Monthly Average Corporates
published by Moody's Investor Service or its successor, or a substantially
similar average that may be allowed by law or regulation) for the calendar month
beginning two months before the loan interest rate is effective. The initial
rate for each loan is the rate for the calendar month in which the Loan
Effective Date occurs. The initial interest rate is effective for not less than
three months and not more than one year. For each subsequent period, the
interest rate is adjusted if the new rate is at least 0.5% higher or lower than
the current rate. We provide reasonable notification in writing of any change to
the loan interest rate.
For plans not subject to ERISA: The loan interest rate will be not greater than
8% on an annual basis.
Loan Repayment
A loan may be repaid as described in the loan agreement, or repaid in full at
any time.
1
E-MMLOAN(12/99)
<PAGE>
Partial Withdrawal(s) While A Loan Is Outstanding
While a loan is outstanding, the amount available for partial withdrawal is
equal to the vested Individual Account value, including the loan account, minus
125% of the outstanding loan balance.
Full Withdrawal While A Loan Is Outstanding
When a full withdrawal is requested while a loan is outstanding, one of the
following occurs:
(1) If the amount of the vested Individual Account value available for
distribution is sufficient to repay (a) the outstanding loan
balance, plus (b) any applicable Fixed Plus Account default charge,
and (c) any applicable withdrawal charge due on the outstanding
loan balance, that amount (the total of a, b, and c,), minus the
loan account balance, is deducted from the vested Individual
Account value and the loan is canceled. The outstanding loan
balance, if not previously reported, will be reported to the
Internal Revenue Service as a distribution.
(2) If the amount of the vested Individual Account value available for
distribution is not sufficient to repay (a) the outstanding loan
balance, plus (b) any applicable Fixed Plus Account default charge,
and (c) any applicable withdrawal charge due on the outstanding
loan balance, the withdrawal cannot be made until the loan is
repaid in full.
Electing An Annuity Option While A Loan Is Outstanding
Before all or any portion of the vested Individual Account value is used to
purchase Annuity payments, the Participant may repay any outstanding loan
balance, or the vested Individual Account value is adjusted to cancel the loan
as described in "Full Withdrawal While a Loan Is Outstanding" above.
Death Of The Participant While A Loan Is Outstanding
If a death benefit claim is submitted for an Individual Account with an
outstanding loan, the vested Individual Account value, including the amount of
the loan account, is reduced by the amount of the outstanding loan balance
before the death benefit amount is determined.
[Loan Default: If we do not receive a loan payment when it is due, the defaulted
payment is treated as follows:
(1) If the amount of the vested Individual Account value available for
distribution is sufficient to repay (a) the defaulted payment, plus
(b) any applicable Fixed Plus Account default charge, and (c) any
withdrawal charge due on the defaulted payment, then that amount
(the total of a, b, and c,) is deducted from the vested Individual
Account value. The amount of the defaulted payment is reported to
the Internal Revenue Service as a distribution.
(2) If the amount of the vested Individual Account value available for
distribution is not sufficient to repay (a) the defaulted payment,
plus (b) any applicable Fixed Plus Account default charge, and (c)
any withdrawal charge due on the defaulted payment, until such time
that the amount due (the total of a, b and c) can be distributed,
the loan account continues to earn interest, and interest is
charged on the defaulted payment. The amount of the defaulted
payment is reported to the Internal Revenue Service as a deemed
distribution. At the time the amount due can be distributed, it is
withdrawn from the vested Individual Account value.]
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
2
E-MMLOAN(12/99)
Exhibit 99-B.4.4
Aetna Life Insurance and Annuity Company
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as shown below.
This endorsement applies to Individual Accounts established under an Exchanged
Contract. An Exchanged Contract is an ALIAC contract (other than this Contract)
that was issued prior to the Contract Effective Date and from which Individual
Account values may be transferred to this Contract.
For an Individual Account established under an Exchanged Contract, any amount
allocated to the Fixed Plus Account after the Contract Effective Date will be
subject to the Fixed Plus Account provisions stated in this Contract except as
provided below.
For amounts held in the Fixed Plus Account under the previous ALIAC contract,
the amount, if any, transferred to the Fixed Plus Account under this Contract
will be subject to the Fixed Plus Account provisions of the previous contract
unless the Contract Holder or Participant, as applicable, elects to have the
provisions of this Contract apply. The election must be in writing or as
otherwise allowed under our administrative practices during the [three months]
beginning on the Contract Effective Date. Such an election cannot be revoked.
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
E-MMFPEX-99R
Exhibit 99-B.4.5
Aetna Life Insurance and Annuity Company
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as follows.
Delete Section 10.01, Death Benefit, and replace it with the following:
If a Participant dies during the Accumulation Phase, we pay a death benefit. If
the Contract beneficiary requests payment of the death benefit as a lump sum or
Annuity option within six months of the Participant's death, the amount of the
death benefit MVA on the date we receive notice of death and a request for
payment in Good Order is guaranteed to be the greater of:
(a) The Individual Account value, minus any outstanding loan balance,
plus any applicable aggregate positive MVA; or
(b) The total of Contributions to the Individual Account, minus:
(1) Any amount withdrawn,
(2) Any outstanding loan balance,
(3) Or any amount used to purchase Annuity payments.
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
E-MMGDB(12/99)
Exhibit 99-B.4.6
Aetna Life Insurance and Annuity Company
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as follows.
For an Individual Account established with one lump sum Contribution, the
Withdrawal Charge shown on Contract Schedule I does not apply; it is replaced
with the following.
Withdrawal Charge (see 8.04)
For each withdrawal from an Individual Account, we may deduct a withdrawal
charge. This charge is a percentage of the amount withdrawn. The withdrawal
charge for an Individual Account established with a single Contribution is:
<TABLE>
<CAPTION>
[Number of Years Since Individual
Account Established] Withdrawal Charge
-------------------- -----------------
<S> <C>
[Fewer than 5 years 5%
5 or more, but fewer than 6 years 4%
6 or more, but fewer than 7 years 3%
7 or more, but fewer than 8 years 2%
8 or more, but fewer than 9 years 1%
9 or more years 0%]
</TABLE>
The withdrawal charge will never exceed 8.5% of total Contributions, or the
maximum permitted by National Association of Securities Dealers, Inc. (NASD)
rules.
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
E-MMLSWC(12/99)
Exhibit 99-B.4.7
Aetna Life Insurance and Annuity Company
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as follows.
We will apply a transfer credit to assets transferred from another investment
provider and allocated to Individual Accounts under this Contract. The amount of
the transfer credit will equal [five percent] of the amount of transferred
assets, less any applicable premium tax.
The transfer credit amount is calculated on the first anniversary of the
Individual Account Effective Date. The amount of the transfer credit is based on
transferred assets allocated to the Individual Account, minus any withdrawals.
The transfer credit amount is deposited in the Fixed Plus Account. The amount
deposited will include any interest that would have accrued had the transfer
credit amount been deposited to the Fixed Plus Account on the first business day
of the calendar month following its calculation.
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
E-MMTC(12/99)
Exhibit 99-B.4.8
--------------------------------------------------------------
[Aetna Logo] Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
If you have questions about the Contract, call the toll-free
number shown above.
Group, Combination, Deferred Annuity Contract (Nonparticipating)
Aetna Life Insurance and Annuity Company (ALIAC), a stock company, will pay
benefits according to the terms and conditions set forth in this Contract. This
Contract is delivered in New York and is subject to the laws of that
jurisdiction.
Please read this Contract carefully. It states ALIAC's contractual rights and
obligations as well as the rights and obligations of the Contract Holder and
Participants.
Specifications
- --------------------------------------------------------------------------------
| Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Type of Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Contract Holder
| SPECIMEN
- --------------------------------------------------------------------------------
| Group Annuity Contract Number
| SPECIMEN
- --------------------------------------------------------------------------------
| Contract Effective Date
| SPECIMEN
Right to Cancel
- --------------------------------------------------------------------------------
The Contract Holder may cancel this Contract within 10 calendar days of
receiving it by returning it to ALIAC at the address shown above, or to the
agent from whom it was purchased. Within seven calendar days of receiving the
cancellation request at its Home Office, ALIAC will return any Contributions
received, plus any increase, or minus any decrease in value, on the amount, if
any, allocated to the Separate Account.
Signed at the Home Office on the Effective Date.
/s/ Thomas J. McInerney /s/ Kirk P. Wickman
- ----------------------- -------------------
President Secretary
THE VARIABLE FEATURES OF THIS CONTRACT ARE DESCRIBED IN SECTIONS 3 AND 10.
All payments and values provided by the group Contract, when based on the
investment experience of the Separate Account, are variable and are not
guaranteed as to fixed dollar amount. Amounts allocated to the Guaranteed
Accumulation Account, if withdrawn before a guaranteed term maturity date, may
be subject to a market value adjustment. The market value adjustment may result
in an increase, or a decrease, in the Individual Account value.
G-CDA-99(NY)
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Contract Schedule I. Accumulation Phase S I - 1
Contract Schedule II. Annuity Phase S II - 1
Definitions 1
Section 1. General Contract Provisions 3
1.01 Entire Contract ......................................... 3
1.02 Nonparticipating Contract ............................... 3
1.03 Control of Contract ..................................... 3
1.04 Certificate ............................................. 3
1.05 Incontestability ........................................ 3
1.06 Grace Period ............................................ 3
1.07 Change of Contract ...................................... 3
1.08 Payments ................................................ 4
1.09 Deferral of Payment ..................................... 4
1.10 Proof of Age ............................................ 4
1.11 Evidence of Survival .................................... 4
1.12 Misstatements and Adjustments ........................... 4
1.13 Reports ................................................. 4
1.14 State Laws .............................................. 5
1.15 Claims of Creditors ..................................... 5
1.16 Maintenance Fee ......................................... 5
1.17 Charges for Additional Services ......................... 5
1.18 Charges Subject to Change ............................... 5
Part I. Accumulation Phase 5
Section 2. Contributions and Individual Account Value 5
2.01 Contributions ........................................... 5
2.02 Premium Tax ............................................. 6
2.03 Individual Account ...................................... 6
2.04 Experience Credit ....................................... 6
2.05 Individual Account Value ................................ 6
Section 3. Separate Account 6
3.01 General ................................................. 6
3.02 Funds Available ......................................... 6
3.03 Change or Substitution of Funds ......................... 7
3.04 Accumulation Units ...................................... 7
3.05 Accumulation Unit Value ................................. 7
3.06 Net Investment Factor ................................... 7
3.07 Charges to the Separate Account ......................... 7
3.08 Fund Transfers .......................................... 8
3.09 Withdrawals from the Separate Account ................... 8
Section 4. Aetna GET Fund 8
4.01 GET Fund Guarantee Period ............................... 8
4.02 GET Fund Offering Period ................................ 8
4.03 GET Fund Guarantee ...................................... 8
4.04 GET Fund Maturity Date .................................. 9
4.05 Transfers or Withdrawals from the GET Fund .............. 9
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 5. Fixed Account 9
5.01 Fixed Account Minimum Guaranteed Interest Rate .............. 9
5.02 Transfers from the Fixed Account ............................ 9
5.03 Withdrawals from the Fixed Account .......................... 9
Section 6. Guaranteed Accumulation Account (GAA) 10
6.01 Nonunitized Separate Account ................................ 10
6.02 GAA Minimum Guaranteed Interest Rate ........................ 10
6.03 Deposit Period .............................................. 10
6.04 Guaranteed Term ............................................. 10
6.05 Guaranteed Term Groups ...................................... 10
6.06 Maturity Date, Maturity Value and Reinvestment .............. 10
6.07 Transfers and Withdrawals from the GAA ...................... 11
6.08 Application of the Market Value Adjustment .................. 11
6.09 Market Value Adjustment (MVA) ............................... 11
Section 7. Transfers, Withdrawals and Distributions 12
7.01 Transfers ................................................... 12
7.02 Withdrawals ................................................. 13
7.03 Withdrawal Restrictions Under the Code ...................... 13
7.04 Withdrawal Charge ........................................... 13
7.05 Waiver of Withdrawal Charge ................................. 13
7.06 Reinstatement ............................................... 13
7.07 Required Distributions ...................................... 14
7.08 Systematic Distribution Options (SDO) ....................... 14
7.09 Systematic Withdrawal Option (SWO) .......................... 14
7.10 Estate Conservation Option (ECO) ............................ 15
7.11 Life Expectancy Option (LEO) ................................ 15
7.12 Individual Account Termination .............................. 16
Section 8. Loans 16
8.01 Loan Availability ........................................... 16
Section 9. Death Benefit During the Accumulation Phase 16
9.01 Death Benefit ............................................... 16
9.02 Contract Beneficiary ........................................ 16
9.03 Distribution of Death Benefit ............................... 16
Part II. Annuity Phase 17
Section 10. General Provisions 17
10.01 Election .................................................... 17
10.02 Change of Annuity Provisions ................................ 17
10.03 Annuity Options ............................................. 17
10.04 Mortality Table ............................................. 18
10.05 Payments .................................................... 18
10.06 Investment Options .......................................... 18
10.07 Fixed Annuity Minimum Guaranteed Interest Rate .............. 19
10.08 Variable Annuity Assumed Annual Net Return Rate Election .... 19
10.09 Variable Annuity Transfers .................................. 19
10.10 Fund Annuity Units .......................................... 19
10.11 Fund Annuity Unit Value ..................................... 19
10.12 Fund Annuity Net Return Factor .............................. 20
10.13 Death Benefit During the Annuity Phase ...................... 20
10.14 Charges to the Separate Account ............................. 20
Annuity Tables 21
</TABLE>
ii
<PAGE>
Accumulation Phase
Control of Contract (see 1.03)
[The Contract Holder controls this Contract.
By notifying us in writing, the Contract Holder may allow
Participants to choose Investment Options for an Individual
Account. The Contract Holder may, however, retain the right to
choose Investment Options for employer Contributions. Unless
otherwise provided by the Plan, we will make payments only at the
written direction of the Contract Holder and a Participant. Unless
otherwise specified by the Plan, we will make an in-service
transfer under Internal Revenue Service Revenue Ruling 90-24 only
at the written direction of the Contract Holder and a Participant
and will make checks payable to the acquiring investment
provider(s).
The Contract and Individual Accounts are nontransferable and
nonassignable except to us in the event of a loan (if allowed
under the Contract) or in the event of a qualified domestic
relations order as allowed under the Retirement Equity Act of 1984
(REA).
Participants have a nonforfeitable right to the value of employer
Contributions made to their Individual Accounts subject to any
Plan vesting limits as determined by the Contract Holder.
Participants have a nonforfeitable right to the value of employee
Contributions made to their Individual Accounts as provided by
Code Section 403(b) and subject to the terms of the Plan.
The Contract Holder must notify us in writing if the Plan is, or
becomes, subject to the Employee Retirement Income Security Act of
1974 (ERISA) and/or related law or regulations including REA. We
will rely on the Contract Holder's determination and
representation of the applicability of such laws. If the Plan is
subject to ERISA, before we will make a distribution from an
Individual Account, the Contract Holder must certify in writing
that all applicable REA requirements have been met and that the
distribution complies with the Plan.]
Maintenance Fee (see 1.16)
The maintenance fee for each Individual Account is [$XX] as of the
Effective Date of the Contract and is subject to change (see
1.18). The fee will never exceed [$30].
Contribution Limits (see 2.01)
[Each year, Contributions to the Contract are limited to the
lesser of:
(a) The maximum exclusion allowance (MEA) limit under Code
Section 403(b); or
(b) The amount set forth in Code Section 415, generally, 25% of
compensation up to $30,000.
In addition, salary reduction Contributions as defined in Code
Section 402(g) may not exceed $10,000, or such larger amount as
adjusted by the Secretary of the Treasury during any calendar
year, unless the alternative limitation under Code Section
402(g)(8) applies.]
Separate Account (see 3.01)
Variable Annuity Account [C]
Daily Charges to the Separate Account (see 3.07)
Charges to the Separate Account are subject to change (see 1.18).
The charges as of the Effective Date of the Contract are as
follows:
Mortality and Expense Risk Charge: [X.XX%] (annual basis)
This charge will never exceed [1.50%] (annual basis).
Administrative Charge: [X.XX%] (annual basis)
This charge will never exceed [0.25%] (annual basis).
Aetna GET Fund Guarantee Charge: If applicable, the charge will be
provided to the Contract Holder and will never exceed 0.75%
(annual basis).
S I - 1
<PAGE>
Fixed Interest Options Available (see Section 5 and Section 6)
[Fixed Account
Guaranteed Accumulation Account]
Fixed Account Minimum Guaranteed Interest Rate (see 5.01)
The interest rate will never be less than 3% (annual basis).
Fixed Account Annual Transfer Limit (see 5.02)
[10%]
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 6.02)
The interest rate will never be less than 3% (annual basis).
Withdrawal Restrictions Under the Code (see 7.03)
[Limitations apply to partial and full withdrawals of the
"restricted amount" from this Contract as required by Code Section
403(b)(11). The restricted amount is the sum of:
(1) Contributions attributable to a Participant's salary
reduction Contributions made on and after January 1, 1989;
plus
(2) The net increase, if any, in the Individual Account value
after December 31, 1988 attributable to investment gains
and losses and credited interest.
The restricted amount may be partially or fully withdrawn only if
one or more of the following conditions are met. The Participant
has:
(a) Separated from service when certified by the employer;
(b) Attained age 59 1/2;
(c) Died;
(d) Become disabled, as defined by the Code;
(e) Experienced financial hardship as defined by the Code. The
amount available for financial hardship is limited to the
lesser of the amount necessary to satisfy the need or
Contributions attributable to salary reduction
Contributions made on or after January 1, 1989; or
(f) Met other circumstances as otherwise allowed by federal
law, regulations or rulings.
No limitations apply to salary reduction Contributions made and
earnings credited to such Contributions made on or before December
31, 1988.
In addition, any portion of an Individual Account representing
amounts transferred under Internal Revenue Service Revenue Ruling
90-24 from a Code Section 403(b)(7) custodial account will be
subject to the restrictions set forth in Code Section
403(b)(7)(A)(ii).]
Withdrawal Charge (see 7.04)
[For each withdrawal from an Individual Account, we may deduct a
withdrawal charge. This charge is a percentage of the amount
withdrawn, determined as follows:
<TABLE>
<CAPTION>
[Number of Years Since Individual
Account Established] Withdrawal Charge
-------------------- -----------------
<S> <C>
[Fewer than 3 5%
3 or more, but fewer than 4 4%
4 or more, but fewer than 5 3%
5 or more, but fewer than 6 2%
6 or more, but fewer than 7 1%
7 or more 0%]
</TABLE>
S I - 2
<PAGE>
The withdrawal charge will never exceed 8.5% of total
Contributions, or the maximum permitted by National Association of
Securities Dealers, Inc. (NASD) rules.]
Waiver of Withdrawal Charge (see 7.05)
[The withdrawal charge does not apply when the withdrawal is:
(a) Used to purchase Annuity payments;
(b) Used to purchase a single premium immediate Annuity or
individual retirement Annuity issued by ALIAC or one of its
affiliates, provided that the right to cancel under the new
Contract is not exercised. We will treat exercise of the
right to cancel as a reinstatement and any subsequent
withdrawal may then be subject to the withdrawal charge
applicable on the date of the withdrawal;
(c) Under a systematic distribution option (see 7.08);
(d) When we terminate an Individual Account as provided in
7.12;
(e) When the Individual Account value is [$3,500] or less (or,
if applicable, as otherwise allowed by the Plan for
lump-sum cash-out without Participant consent) and during
the previous [12 months] no amounts have been withdrawn,
transferred, taken as a loan (if allowed under the
Contract), or used to purchase Annuity payments;
(f) Made by a Participant who has attained age 59 1/2 and, if
applicable, has completed nine Contribution periods;
(g) Due to a Participant's death before Annuity payments begin;
(h) In an amount equal to or less than [10%] of the Individual
Account value when the withdrawal is the first withdrawal
in a calendar year and is made to a Participant who has
attained age 59 1/2 and is less than age 70 1/2 (not
available when a systematic distribution option is in
effect). Any outstanding loans are not included in the
Individual Account value when determining the [10%] amount.
This waiver does not apply to full withdrawals or to a
withdrawal due to a loan default;
(i) To a Participant who is separated from service when
certified by the employer;
(j) Due to financial hardship as defined in the Code;
(k) Due to the transfer of the Individual Account value to
another contract issued by ALIAC for the Plan, subject to
various conditions agreed to by the Contract Holder and
ALIAC; or
(l) For a transfer as provided under Internal Revenue Service
Revenue Ruling 90-24 to an ALIAC Code Section 403(b)(7)
custodial account.]
Required Distributions (see 7.07)
[Generally, for Contributions made and earnings credited after
December 31, 1986, distribution must begin by April 1 of the
calendar year following the later of the calendar year in which a
Participant (1) attains age 70 1/2 or (2) retires. For Individual
Account values as of December 31, 1986, distribution must begin by
the last day of the year in which a Participant attains age 75 or
retires, whichever is later.]
The entire Individual Account value must be distributed, or begin
to be distributed, over the life or life expectancy of a
Participant, or the joint lives or joint life expectancies of a
Participant and a beneficiary.
Individual Account Termination Amount (see 7.12)
$1,999
Loans (see 8.01)
[Loans are available under this Contract.]
Contract Beneficiary (see 9.02)
[The Contract Holder is the Contract beneficiary. A Participant
may designate a beneficiary under the Plan (Plan beneficiary).]
S I - 3
<PAGE>
Contract Schedule II
Annuity Phase
Payment Period (see 10.03)
The period for which we will guarantee Annuity payments must be at
least [five] years and no more than [30] years.
Mortality Table (see 10.04)
Society of Actuaries' 1983 Table a
Maximum Number of Funds (see 10.06)
The maximum number of Funds is [four].
Fixed Annuity Minimum Guaranteed Interest Rate (see 10.07)
3% (annual basis)
Number of Annual Transfers Among Funds (see 10.09)
Each calendar year, we allow [five] transfers among funds.
Daily Charges to the Separate Account (see 10.14)
Charges to the Separate Account will never be more than the
following:
Mortality and Expense Risk Charge: [1.25%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
S II - 1
<PAGE>
Definitions
- --------------------------------------------------------------------------------
Accumulation Phase
The time between an Individual Account Effective Date and the date on which the
entire Individual Account value is used to purchase Annuity payments, or
otherwise distributed.
Aetna GET Fund (GET Fund)
The Aetna GET Fund is an Investment Option which may be available during the
Accumulation Phase. The GET Fund operates as a series offering. Each series is a
separate Fund.
Aetna Life Insurance and Annuity Company (ALIAC)
Aetna Life Insurance and Annuity Company ("we," and "our," and "us" refer to
ALIAC).
Annuitant
The person whose life expectancy determines the amount and/or duration of the
payments under a life-contingent Annuity option.
Annuity
Payment of an income:
(a) For a stated period;
(b) For the life of one or two people; or
(c) Some combination of (a) and (b).
A fixed Annuity is one in which the payment amount does not vary. A variable
Annuity is one in which the payment amount may vary based on the net investment
results of the Funds.
Annuity Phase
The time during which we make Annuity payments.
Business Day
Each day our Home Office is open for business.
Code
The Internal Revenue Code of 1986, as it is amended from time to time.
Contract
This agreement between ALIAC and the Contract Holder.
Contract Holder
The entity, or person, named in the specifications section on the face page, to
which the Contract is issued.
Contribution
The payment made to us during the Accumulation Phase. The Contribution may be
reduced by any applicable premium tax due.
Effective Date
The date, shown in the specifications section on the face page, on which we
issue the Contract or establish an Individual Account.
Fixed Account
A Fixed Interest Option. The Fixed Account is an obligation of our General
Account.
Fixed Interest Options
Investment options, including the Fixed Account and the Guaranteed Accumulation
Account that credit interest. The Fixed Interest Options available during the
Accumulation Phase are shown on Contract Schedule I under Fixed Interest Options
Available.
1
<PAGE>
Fund
A variable Investment Option available under this Contract. The Funds are
open-end registered investment management companies (mutual funds) in which the
Separate Account invests.
General Account
The account that holds our assets other than those held in the Separate Account
or Nonunitized Separate Account.
Guaranteed Accumulation Account (GAA)
A Fixed Interest Option that may be available during the Accumulation Phase.
Under this option, we guarantee specified rates of interest for specified
periods of time. Amounts allocated to the Guaranteed Accumulation Account are
held in the Nonunitized Separate Account.
Good Order
Instructions that are complete and clear enough to allow us to act without
exercising discretion.
Home Office
Our main office located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Individual Account
An account, or accounts (including, if applicable, employer and employee
accounts) established for each Participant to maintain a record of transactions
and the value of Contributions as invested.
Investment Options
The Funds and Fixed Interest Options available under this Contract.
Maturity Date
The last day of a GAA guaranteed term or the last day of the guarantee period of
an Aetna GET Fund series.
Nonunitized Separate Account
A separate account that holds assets allocated to the Guaranteed Accumulation
Account.
Participant
A person who is covered under the retirement Plan or program for which this
Contract is issued and who has an interest in this Contract.
Plan
The retirement plan or program for which this Contract is issued.
Premium Tax
Any tax assessed by any governmental entity on Contributions or amounts used to
purchase Annuity payments.
Separate Account
An account that buys and holds shares of the Funds through its subaccounts.
Valuation Date
The date and time at which accumulation unit values and Annuity unit values are
calculated. Currently, this calculation is made after the close of business of
the New York Stock Exchange on any normal business day, Monday through Friday,
that the New York Stock Exchange is open.
2
<PAGE>
Section 1. General Contract Provisions
- --------------------------------------------------------------------------------
1.01 Entire Contract
The entire Contract consists of this document, any attachments and
any endorsements incorporated.
The Plan, if applicable, is not part of the Contract and ALIAC is
not bound by its terms.
1.02 Nonparticipating Contract
This Contract is nonparticipating. The Contract Holder, a
Participant, or a Contract beneficiary have no right to share in
our earnings.
1.03 Control of Contract
Control of the Contract is as shown on Contract Schedule I under
Control of Contract.
1.04 Certificate
Any certificate provided to a Participant summarizes Contract
provisions; it is for information only and is not part of the
Contract. We will provide certificates as required by state law in
the state where the Contract is delivered and as allowed under the
Plan. Nothing in this Contract invalidates or impairs any right
granted under New York Insurance Law Section 3219.
1.05 Incontestability
We will not cancel this Contract because of any error of fact.
1.06 Grace Period
Except as provided in 7.12, this Contract and all Individual
Accounts will remain in effect even if Contributions are not
continued.
1.07 Change of Contract
Only an ALIAC officer at the level of Vice President or higher, or
an officer with written delegation of authority from a Vice
President or higher officer, may change the terms of this
Contract. No other ALIAC officer, employee, agent or
representative can change this Contract.
Except as noted below, this Contract may be changed at any time by
written mutual agreement between the Contract Holder and ALIAC.
For changes we initiate requiring Contract Holder consent, we
notify the Contract Holder 60 calendar days in advance of the
change and consider that the Contract Holder has agreed to the
change unless we receive written notice that the Contract Holder
does not agree to the change at least 30 calendar days before the
date the change becomes effective.
If we propose a change requiring Contract Holder consent and the
Contract Holder does not agree to the change, we have the right to
not establish new Individual Accounts and to stop accepting
Contributions to existing Individual Accounts.
We will not reduce the minimum guaranteed interest rate for the
Fixed Account.
We have the right to change the following without Contract Holder
consent:
(a) Net Investment Factor (see 3.06)
We may change the net investment factor by notifying the
Contract Holder in writing at least 30 calendar days before
the change becomes effective. If we do this, the change
will apply only to Individual Accounts established, and
Contributions received, after the date the change becomes
effective.
(b) Guaranteed Accumulation Account (GAA) market value
adjustment (see 6.09)
We may change the GAA market value adjustment by notifying
the Contract Holder in writing at least 90 calendar days
before the change becomes effective. If we do this, the
change will apply only to guaranteed terms offered in
deposit periods after the date the change becomes
effective.
3
<PAGE>
(c) Systematic Distribution Options (see 7.08)
We may change systematic distribution options by notifying
the Contract Holder in writing at least 30 calendar days
before the change becomes effective. If we do this, the
change will not apply to Participants or beneficiaries
receiving payments under an option before the date the
change becomes effective.
(d) Annuity Options (see 10.03)
We may change Annuity options by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the change
will not take effect until at least 12 months after the
Effective Date of the Contract, or until at least 12 months
after any previous change. Any change will not apply to
Participants or beneficiaries receiving Annuity payments
before the date the change becomes effective.
(e) Mortality Table (see 10.04)
We may change the mortality table by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the new table
will not apply to Individual Accounts established before
the date the change becomes effective.
In addition, we may change this Contract as required to comply
with state and federal law without Contract Holder consent by
notifying the Contract Holder at least 30 calendar days before the
date the change becomes effective.
Any unilateral change will not apply to Individual Accounts
established before the date the change becomes effective, but will
apply to Individual Accounts established on or after the date the
change becomes effective. If we make a unilateral change, the
Contract Holder or Participants, as applicable, are permitted to
terminate participation in the Contract before the date the change
becomes effective under the terms of the Contract in effect prior
to the date the change becomes effective.
As required by law, we will make any change of Contract by
endorsement, which may be subject to regulatory approval in the
state where the Contract is delivered.
1.08 Payments
We make payments as directed by the Contract Holder or a
Participant, as applicable. Payment requests must be in writing or
as we otherwise allow in our administrative practice. We determine
the amount of any payment based on the Individual Account value as
of the next Valuation Date following our receipt of a payment
request in Good Order at our Home Office. Generally, we make
payments within seven calendar days.
1.09 Deferral of Payment
We may defer payment up to a period of six months or as otherwise
provided by state and/or federal law.
1.10 Proof of Age
If a life-contingent Annuity option is elected, we may require
proof of the age of an Annuitant.
1.11 Evidence of Survival
We may require proof that any Annuitant under a life-contingent
Annuity option is living.
1.12 Misstatements and Adjustments
If we learn that the age of any Annuitant or second Annuitant is
misstated, we will use the correct age to adjust payments. We
reserve the right to obtain reimbursement, or to adjust future
payments for any amount we overpaid. We will pay the amount of any
underpayment.
1.13 Reports
Each calendar year we provide the Contract Holder or a
Participant, as applicable, with a report of the Individual
Account value. We also provide an annual report for the Separate
Account.
4
<PAGE>
1.14 State Laws
This Contract complies with the laws of the state in which it is
delivered. Any cash, death or Annuity payments are equal to or
greater than the minimum required. To determine legal reserve
valuation, we use Annuity tables as required by law; such tables
may be different from those we use to determine Annuity payments.
1.15 Claims of Creditors
Individual Accounts are not subject to the claim of any creditor
of the Contract Holder, a Participant, or a beneficiary, except to
the extent permitted by law.
1.16 Maintenance Fee
We may deduct an annual maintenance fee during the Accumulation
Phase.
The amount of the maintenance fee, if any, for this Contract is
shown on Contract Schedule I under Maintenance Fee.
The fee, if any, is deducted proportionately from each Investment
Option in which the Individual Account is invested on the
anniversary of the Individual Account Effective Date. The fee is
also deducted if the entire Individual Account value is withdrawn.
If a Participant has more than one Individual Account, we may
deduct the fee proportionately from all Individual Accounts. We
may eliminate the fee for an Individual Account established with
one lump-sum Contribution.
1.17 Charges for Additional Services
At the request of the Contract Holder, we, or our authorized
representatives, may provide administrative services to the Plan.
We reserve the right to charge for such services.
1.18 Charges Subject to Change
The maintenance fee (see 1.16) and charges to the Separate Account
during the Accumulation Phase (see 3.07) may vary (increase,
decrease, or be eliminated) based on the total assets held in all
Individual Accounts under the Contract. In determining total
assets, we may aggregate Individual Accounts established under
different ALIAC Contracts. The aggregate amount is equal to the
sum of assets in all Individual Accounts under this Contract, plus
the value of Individual Accounts under other ALIAC Contracts of
the same class issued to the Contract Holder. We may determine the
amount of the maintenance fee and/or charges to the Separate
Account based on total assets on an annual basis. We will
determine initial charges based on our estimate of the amount that
will be allocated to the Contract during a period mutually agreed
upon by the Contract Holder and us.
Part I. Accumulation Phase
Section 2. Contributions and Individual Account Value
- --------------------------------------------------------------------------------
2.01 Contributions
We allocate Contributions in whole percentages among the
Investment Options available as directed by the Contract Holder or
a Participant, as applicable. Changes in future Contribution
allocation may be made at any time without charge. The Contract
Holder or a Participant, as applicable, may also establish an
Individual Account with one lump-sum Contribution.
We reserve the right to establish minimum Contribution amounts and
to refuse to accept any Contribution.
Contributions to Individual Accounts may be limited as provided in
the Code. The limits, if any, are shown on Contract Schedule I
under Contribution Limits.
5
<PAGE>
2.02 Premium Tax
We pay any applicable premium tax when it is due. We will deduct
the amount of any applicable premium tax from the Individual
Account value no earlier than when there is a tax liability. We
reserve the right to deduct any premium tax due before a
Contribution is allocated to an Individual Account.
2.03 Individual Account
We will establish an Individual Account for each Participant.
If required, we will provide accounts that distinguish between
employer and employee Contributions for each Participant.
2.04 Experience Credit
We may apply experience credits (investment, administrative,
mortality or other) under this Contract and may apply such credits
as:
(a) A reduction in the maintenance fee;
(b) A reduction in the mortality and expense risk charge to the
Separate Account;
(c) A reduction in the administrative charge to the Separate
Account; and
(d) An increase in a Fixed Interest Option interest rate.
We will apply experience credits at our sole discretion as we deem
appropriate for the class of contracts to which the Contract is
issued.
2.05 Individual Account Value
As of the most recent Valuation Date, the Individual Account value
is equal to the total of all Contributions:
(a) Plus any interest added on the amount, if any, allocated to
a Fixed Interest Option(s);
(b) Plus or minus the investment experience on the amount, if
any, held in the Separate Account;
(c) Minus any applicable maintenance fees, any amounts
withdrawn, or used to purchase Annuity payments, or any
applicable premium tax; and
(d) Minus any applicable fees or charges deducted.
Section 3. Separate Account
- --------------------------------------------------------------------------------
3.01 General
The Separate Account, established under Title 38a, Section 38a-433
of the Connecticut General Statutes, buys and holds shares of the
Funds available under this Contract. The Separate Account is
registered as a unit investment trust under the Investment Company
Act of 1940.
We own the assets held in the Separate Account; we are not a
trustee of those assets. Income, gains or losses, realized or
unrealized, are credited to or charged against the Separate
Account without regard to our other income, gains or losses.
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
3.02 Funds Available
We reserve the right to limit the number of Funds in which an
Individual Account may be invested, at one time or cumulatively,
during the Accumulation Phase and/or Annuity Phase.
6
<PAGE>
3.03 Change or Substitution of Funds
We reserve the right to stop offering any Fund or to add Funds. We
may substitute shares of a Fund for shares of another Fund. We
will provide the Contract Holder with reasonable advance notice of
any elimination, addition or substitution of a Fund. If the Plan
is subject to ERISA, we will seek Contract Holder consent in
advance of any Fund substitution. Consent will be deemed given
unless, following notice of substitution and within a prescribed
time period, the Contract Holder notifies us in writing that it
does not consent and provides us with alternative investment
instructions for the shares that would otherwise be affected by
the substitution.
3.04 Accumulation Units
Each Contribution allocated to one or more of the Funds is
credited to an Individual Account as accumulation units. The
number of accumulation units is calculated by dividing the amount
of the Contribution allocated to the Fund by the accumulation unit
value (see 3.05) as of the next Valuation Date following our
receipt of the Contribution in Good Order at our Home Office.
3.05 Accumulation Unit Value
The value of each accumulation unit for any Fund for each
Valuation Date is computed by multiplying the net investment
factor (see 3.06) by the accumulation unit value for such
Valuation Date.
Accumulation unit values may increase or decrease from Valuation
Date to Valuation Date.
3.06 Net Investment Factor
The net investment factor is used to compute the accumulation unit
value for any Fund.
For each Valuation Date, for each Fund, the net investment factor
is equal to 1.0000000, plus the net return rate.
The net return rate equals:
[a - b - c]
------------- - e - f
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule I under Daily Charges to the Separate Account; and
f is if applicable, a charge for the GET Fund guarantee, which
is deducted daily during the guarantee period. The charge,
which is determined before the beginning of each offering
period (see 4.02), is shown on Contract Schedule I under
Daily Charges to the Separate Account.
The net return rate may be greater or less than zero percent.
3.07 Charges to the Separate Account
During the Accumulation Phase, we may deduct a mortality and
expense risk charge from the Individual Account value invested in
the Separate Account. In addition, we reserve the right to impose
an administrative charge.
The charges to the Separate Account are shown on Contract Schedule
I under Daily Charges to the Separate Account and are deducted
daily.
7
<PAGE>
3.08 Fund Transfers
During the Accumulation Phase, any portion or all of the
Individual Account value held in a Fund may be transferred to any
other Fund or any available Fixed Interest Option. The Individual
Account value will be based on the Fund's accumulation unit value
next determined after we receive a transfer request in Good Order.
3.09 Withdrawals from the Separate Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 7.02) from the Funds, a withdrawal
charge may apply (see 7.04).
Section 4. Aetna GET Fund (GET Fund)
- --------------------------------------------------------------------------------
The following provisions apply if the GET Fund is available.
4.01 GET Fund Guarantee Period
For each GET Fund series, the period for which the GET Fund
guarantee applies. The guarantee period ends on the Maturity Date.
4.02 GET Fund Offering Period
The period, usually from one to three months, during which the
Contract Holder or a Participant, as applicable, may transfer or
allocate amounts to a GET Fund series. Each GET Fund series has a
specific offering period. Amounts transferred or allocated prior
to the date on which the guarantee period begins are invested in
money market instruments.
We will specify a minimum total asset amount required at the end
of an offering period to offer a GET Fund series. If the minimum
is not achieved, we reserve the right not to begin the guarantee
period. If a GET Fund series is not begun, we will mail a notice
to all Contract Holders or Participants, as applicable, who have
made allocations to that GET Fund series no less than 15 calendar
days after the end of the offering period. The Contract Holder or
a Participant, as applicable, then has 45 calendar days from the
end of the offering period to reallocate the amount allocated to
the GET Fund to any other available Investment Options. During
this time, GET Fund assets are invested in money market
instruments. If the Contract Holder or a Participant, as
applicable, makes no election by the end of the 45-day period, at
the next Valuation Date, we will allocate the amount in the
terminated GET Fund series to the money market fund available
under the Contract.
We reserve the right to specify a maximum total asset amount for a
GET Fund series. If the maximum is achieved, we reserve the right
to set a date on which we will stop accepting allocations for that
GET Fund series. We will announce the date on which we will stop
accepting transfers and allocations 10 calendar days prior to that
date.
4.03 GET Fund Guarantee
On the Maturity Date of each GET Fund series, the GET Fund
accumulation unit value for that series will not be less than the
GET Fund accumulation unit value determined at the close of
business on the last day of the offering period. If necessary to
offset any shortfall in the GET Fund accumulation unit value, we
will transfer funds from our General Account to the Separate
Account. The GET Fund guarantee does not apply to transfers or
withdrawals made before the Maturity Date.
If GET Fund accumulation units are adjusted at any time during the
guarantee period, the GET Fund guarantee will be restated. We
calculate the restated guarantee so that it is equivalent to the
original guarantee for that GET Fund series.
A daily charge is assessed on the amount, if any, allocated to the
GET Fund. This charge for the GET Fund guarantee is shown on
Contract Schedule I under Daily Charges to the Separate Account.
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<PAGE>
4.04 GET Fund Maturity Date
The GET Fund Maturity Date is the date on which the guarantee
period ends and GET Fund accumulation units are liquidated.
Prior to the Maturity Date for each series, we send a written
notice of the date to each Contract Holder or Participant, as
applicable, who has an Individual Account value in that series. In
response, the Contract Holder or Participant, as applicable, must
tell us to which available Investment Options to transfer the
amount in the GET Fund on the Maturity Date. If we do not receive
instructions, on the Maturity Date we transfer the portion of the
Individual Account value held in the GET Fund to another GET Fund
series, if available. If no GET Fund series is available, we
transfer the amount to the Fund or Funds we designate in the
written notice.
4.05 Transfers or Withdrawals from the GET Fund
Transfers or withdrawals from the GET Fund before the Maturity
Date are based on the GET Fund unit value for the next Valuation
Date following our receipt of the request in Good Order (see 7.01
and 7.02).
Section 5. Fixed Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Account is available as shown on
Contract Schedule I under Fixed Interest Options Available.
5.01 Fixed Account Minimum Guaranteed Interest Rate
The Fixed Account minimum guaranteed interest rate is shown on
Contract Schedule I under Fixed Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Account during the calendar year. The one year minimum guaranteed
interest rate will be established prior to each calendar year and
will be made available to the Contract Holder or Participants, as
applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
Participants, as applicable.
5.02 Transfers from the Fixed Account
Each calendar year, the percentage shown on Contract Schedule I
under Fixed Account Annual Transfer Limit of the amount in the
Fixed Account may be transferred to any available Investment
Options. The amount available for transfer will be based on the
Individual Account value in the Fixed Account as of the date we
receive the transfer request in Good Order at our Home Office. We
may, on a temporary basis, allow transfer of a larger percentage.
5.03 Withdrawals from the Fixed Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 7.02) from the Fixed Account, a
withdrawal charge may apply (see 7.04).
9
<PAGE>
Section 6. Guaranteed Accumulation Account (GAA)
- --------------------------------------------------------------------------------
The following provisions apply if the Guaranteed Accumulation Account is
available as shown on Contract Schedule I under Fixed Interest Options
Available.
6.01 Nonunitized Separate Account
The Nonunitized Separate Account is established under Title 38a,
Section 38a-433 of the Connecticut General Statutes and is subject
to New York insurance law. There are no discrete units for this
account. We own the assets held in the Nonunitized Separate
Account; we are not a trustee of those assets. The Contract Holder
or Participant does not participate in the investment gain or loss
from assets held in the Nonunitized Separate Account. Such gain or
loss is borne entirely by us. Income, gains or losses, realized or
unrealized, are credited to or charged against the Nonunitized
Separate Account without regard to our other income, gains or
losses. Nonunitized Separate Account assets, to the extent of
reserves and other Contract liabilities, cannot be charged with
liabilities arising out of any other business we conduct.
6.02 GAA Minimum Guaranteed Interest Rate
All Contributions allocated to a GAA guaranteed term (see 6.04)
earn a rate of interest which we determine and which is guaranteed
when the Contribution remains in the guaranteed term until the
Maturity Date. We will declare the interest rate applicable to a
specific guaranteed term at the start of the deposit period for
that guaranteed term. The rate credited will never be less than
the minimum interest rate shown on Contract Schedule I under
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate.
For guaranteed terms of one year or less, one guaranteed rate is
credited for the full guaranteed term. For longer guaranteed
terms, we may credit an initial guaranteed interest rate from the
date of deposit to the end of a specified period within the
guaranteed term. We may credit different interest rates for
subsequent specified periods throughout the guaranteed term.
6.03 Deposit Period
A deposit period is the period of time we determine during which
we accept allocations (Contributions, transfers, or reinvestments)
to one or more guaranteed terms. We reserve the right to extend
the deposit period.
6.04 Guaranteed Term
A guaranteed term is the period of time for which we guarantee the
declared interest rate for allocations (Contributions, transfers,
or reinvestments) to GAA guaranteed terms. We may offer guaranteed
terms ranging in duration from one to ten years. During each
deposit period, we may offer more than one guaranteed term of
varying lengths. The guaranteed term begins the day after the
deposit period ends and ends on the Maturity Date. The Contract
Holder or a Participant, as applicable, may allocate Contributions
or transfers to any or all guaranteed terms available in the
current deposit period.
6.05 Guaranteed Term Groups
A guaranteed term group is comprised of all GAA guaranteed terms
of the same duration.
6.06 Maturity Date, Maturity Value and Reinvestment
The Maturity Date is the last day of a guaranteed term. The
maturity value is the amount we pay at the end of a guaranteed
term. At least 18 calendar days before any guaranteed term
Maturity Date, we notify the Contract Holder or a Participant, as
applicable, of the projected maturity value and the guaranteed
terms (and the guaranteed interest rates for each) available
during the then-current deposit period. The Contract Holder, or a
Participant, as applicable, may then tell us how to allocate the
maturity value.
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<PAGE>
If the Contract Holder or a Participant, as applicable, does not
tell us how to reinvest the maturity value, we reinvest it in a
guaranteed term of the same duration if one is available. If no
guaranteed term of the same duration is available, we reinvest the
maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term. We mail a
confirmation of reinvestment. The confirmation includes the
guaranteed term in which we have reinvested the maturity value and
the guaranteed interest rate for that term.
If we have reinvested the maturity value, during the month
following the Maturity Date, the Contract Holder or a Participant,
as applicable, may transfer or withdraw the reinvested amount,
with interest earned (as of the date we receive the request)
without incurring a market value adjustment (see 6.08).
6.07 Transfers and Withdrawals from the GAA
Except as noted below, the Contract Holder or a Participant, as
applicable, may transfer any portion or all of the amount held in
the GAA. Transfers or withdrawals before the Maturity Date may be
subject to a market value adjustment (see 6.08). Amounts invested
in a guaranteed term may not be transferred during the deposit
period or for a period of 90 calendar days after the close of the
deposit period.
Unless directed otherwise, when the Contract Holder or a
Participant, as applicable, requests a transfer or withdrawal from
the GAA, we withdraw amounts proportionately from each guaranteed
term in which the Individual Account is invested. Within a
guaranteed term group (see 6.05), we withdraw first from the
oldest deposit period and then from the next oldest and so on
until the amount requested is withdrawn.
6.08 Application of the Market Value Adjustment
Transfers or withdrawals from the GAA before the Maturity Date are
subject to a market value adjustment, except for:
(a) A one-month period following the Maturity Date on which we
have automatically reinvested the value on the Maturity
Date;
(b) Distributions under the estate conservation option (see
7.10); and
(c) When the withdrawal is equal to the minimum distribution
amount required under the Code, using a method permitted by
the Code and which we offer.
For withdrawals and transfers from the GAA made (1) within six
months of a Participant's death or (2) to purchase Annuity
payments under a life-contingent Annuity option, the amount
withdrawn from the GAA is the greater of:
(a) The aggregate market value adjustment amount which is the
sum of all market value adjusted amounts calculated due to
a withdrawal before the Maturity Date (which may be
positive or negative); or
(b) The amount in the GAA.
For withdrawals made after the six month period following death,
the withdrawal or transfer amount is the aggregate MVA amount.
A MVA applies to amounts withdrawn to purchase Annuity payment
under a period certain Annuity option.
We may change the GAA market value adjustment by notifying the
Contract Holder in writing at least 90 calendar days before the
change becomes effective. Any such change will apply only to
guaranteed terms offered in deposit periods after the date the
change becomes effective and will apply to existing and new
Individual Accounts.
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<PAGE>
6.09 Market Value Adjustment (MVA)
The market value adjustment reflects any change in yields on U.S.
Treasury Notes from the time an amount is allocated to a GAA
guaranteed term to the time of a transfer or withdrawal prior to
the Maturity Date. When the market value adjustment is applied,
the amount transferred or withdrawn from the GAA is multiplied by
a factor which is calculated as follows:
x
------
365
(1 + I)
------------------
x
------
365
(1 + j)
Where:
I is the deposit period yield
j is the current yield
x is the number of days remaining (computed from
Wednesday of the week of withdrawal) in the guaranteed
term.
The deposit period yield and the current yield are determined as
follows:
Deposit Period Yield
At the close of the last business day of each week of a
deposit period, we compute a yield that is the average of
the yields on U.S. Treasury Notes which mature in the last
three months of the guaranteed term. The deposit period
yield is the average of those yields for the deposit
period. If a withdrawal is made prior to the close of the
deposit period, the deposit period yield is the average of
the yields of U.S. Treasury Notes for each week preceding
the withdrawal. In the event that no U.S. Treasury Notes
will mature in the last three months of the guaranteed
term, we reserve the right to use the U.S. Treasury Notes
that mature in a following quarter.
Current Yield
The Current Yield is the average of the yields of the same
U.S. Treasury Notes used to calculate the deposit period
yield on the last business day of the week preceding
withdrawal.
If U.S. Treasury Notes are no longer available, we will
substitute a suitable replacement index, subject to
approval of the Superintendent of the New York Insurance
Department.
A detailed description of the MVA has been filed with the
Superintendent of the New York Insurance Department.
Section 7. Transfers, Withdrawals and Distributions
- --------------------------------------------------------------------------------
7.01 Transfers
During the Accumulation Phase, the Contract Holder or a
Participant, as applicable, may transfer all or any portion of the
Individual Account value among the available Investment Options.
The Individual Account value on any amount transferred from a Fund
will be based on the Fund's accumulation unit value next
determined after we receive the transfer request in Good Order at
our Home Office.
The Contract Holder or a Participant, as applicable, may request a
transfer by properly completing a transfer request form and
sending it to our Home Office, or by otherwise complying with our
administrative procedures. We reserve the right to establish a
minimum transfer amount.
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7.02 Withdrawals
As allowed by the Plan, if applicable, and subject to provisions
of the Code (see 7.03), during the Accumulation Phase, the
Contract Holder or a Participant, as applicable, may withdraw any
portion or all of the Individual Account value. For Code Section
403(b) Plans, the Contract Holder or a Participant, as applicable,
may transfer the amount withdrawn to another investment provider
under the Plan or roll over such amount that qualifies as an
eligible rollover distribution in accordance with Code Sections
403(b)(8), 401(a)(31) and 402(c) and applicable regulations. The
Individual Account value of any amount withdrawn from a Fund will
be based on the Fund's accumulation unit value next determined
after we receive the transfer request in Good Order.
The Contract Holder or a Participant, as applicable, may request a
withdrawal by properly completing a withdrawal request form and
forwarding it to our Home Office, or by otherwise complying with
our administrative procedures. Unless the Contract Holder or a
Participant, as applicable, requests otherwise, the withdrawal
will be made proportionately from the Investment Options in which
the Individual Account is invested.
A withdrawal charge may apply to amounts withdrawn (see 7.04). In
addition, a market value adjustment may apply to amounts withdrawn
from the GAA (see 6.08 and 6.09).
7.03 Withdrawal Restrictions Under the Code
The Code may impose restrictions on the amount and timing of
withdrawals. The restrictions applicable to this Contract are
shown on Contract Schedule I under Withdrawal Restrictions Under
the Code. Withdrawals that do not comply with the Code may be
subject to tax penalties.
7.04 Withdrawal Charge
During the Accumulation Phase, we may deduct a withdrawal charge
from the Individual Account value withdrawn. The charge, if any,
is a percentage of the amount withdrawn from the Funds and/or
Fixed Interest Options. The withdrawal charge will never exceed
8.5% of the total amount of Contributions, or the maximum
permitted by National Association of Securities Dealers, Inc.
(NASD) rules.
The withdrawal charge, if any, is shown on Contract Schedule I
under Withdrawal Charge.
7.05 Waiver of Withdrawal Charge
The withdrawal charge (see 7.04) does not apply in any of the
circumstances shown on Contract Schedule I under Waiver of
Withdrawal Charge.
In addition, we reserve the right to reduce, waive or eliminate
the withdrawal charge.
7.06 Reinstatement
Within 30 calendar days after a withdrawal, the Contract Holder or
a Participant, as applicable may elect to reinstate all or a
portion of the proceeds of a full withdrawal if allowed by
applicable law. We must receive the reinstated amount within 60
calendar days of the withdrawal.
Any maintenance fee and withdrawal charge imposed at the time of
the withdrawal is included in the reinstatement. If only a portion
of the amount withdrawn is reinstated, the amount of any
maintenance fee and withdrawal charge deducted will be restored
proportionally. The amount of any market value adjustment deducted
from any amount withdrawn from GAA is not included in the amount
reinstated.
Any amount reinstated to GAA will be credited to guaranteed terms
available in the current deposit period. We will reinvest it in a
guaranteed term of the same duration if one is available. If no
guaranteed term of the same duration is available, we reinvest the
maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term.
Amounts withdrawn from a GET Fund series are reinstated to the
current offering period if one is available. If no GET Fund
offering period is available, any amount withdrawn from the GET
Fund is reinstated equally among all other Investment Options in
which the Individual Account is invested.
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<PAGE>
Amounts are reinstated among the Investment Options in the same
proportion as they were held at the time of withdrawal, except, as
noted above, for amounts from the GET Fund. Any maintenance fee
which falls due after the withdrawal and before the reinstatement
is deducted from the amount reinstated.
The number of accumulation units reinstated to any Fund is based
on the accumulation unit values next computed after we receive the
reinstatement request in Good Order at our Home Office.
Reinstatement is permitted only once.
7.07 Required Distributions
While an Individual Account remains in the Accumulation Phase, the
Code may require distribution of all or a portion of the
Individual Account value. The Contract Holder, a Participant or
Contract beneficiary, as applicable, must tell us when to begin
distributions. We have no responsibility for adverse tax
consequences as the result of the Contract Holder, Participant or
Contract beneficiary, as applicable, not complying with minimum
distribution requirements.
The distribution requirements, if any, are shown on Contract
Schedule I under Required Distributions.
Generally, to meet distribution requirements, the Contract Holder,
a Participant or Contract beneficiary, as applicable, may request
partial withdrawals, a systematic distribution option (see 7.08)
or an Annuity option.
7.08 Systematic Distribution Options
During the Accumulation Phase, we offer three distribution
options, the Systematic Withdrawal Option (see 7.09), the Estate
Conservation Option (7.10), and the Life Expectancy Option (see
7.11). Under these options we make regularly-scheduled, automatic,
partial distributions of the Individual Account value.
Withdrawals from the Individual Account value for an SDO are made
proportionately from each investment option in which the account
is invested. No withdrawal charge applies to amounts distributed
under a systematic distribution option. A MVA will apply, however,
to amounts withdrawn from the GAA.
If applicable, all payments comply with the incidental death
benefit test of Code Section 401(a)(9). Any single or joint life
expectancy factor(s) used in the calculation of a systematic
distribution option will comply with Code Section 401(a)(9) and
related regulations and are generally based on the tables
associated with that section of the Code.
To request SWO, ECO or LEO, the Contract Holder, a Participant, or
Contract beneficiary, as applicable, must complete an election
form and forward it to our Home Office. We may require a minimum
Individual Account value to elect an SDO. Generally, an SDO may be
elected only once and if revoked, may not be reinstated.
The availability of any specific option will be subject to terms
and conditions applicable to that option. Availability is also
determined by the Plan. We reserve the right to discontinue the
availability of an SDO option for future election. Payments will,
however, continue to Participants who elected the option before
the date it is no longer available.
7.09 Systematic Withdrawal Option (SWO)
Under SWO, a portion of the Individual Account value is
automatically withdrawn and paid to the Participant. The earliest
date SWO payments may begin is the date the Participant attains
[age 59 1/2 or] age 55 if the Participant has separated from
service at or later than age 55. SWO is not available when a loan
(if allowed under the Contract) is in effect.
The Contract Holder, or a Participant, as applicable, may elect
one of the following payments methods:
(a) Payment of a specified dollar amount annually
The amount distributed may not be more than 20% of the
Individual Account value as of the date SWO is elected.
The amount will remain constant unless a larger amount
is required under the Code's minimum distribution rules.
Each year, we will calculate the minimum distribution
required by dividing the Individual Account value as of
December 31 of the prior year by the life expectancy
factor. If the minimum distribution required is larger
than the amount requested, we distribute the minimum
required amount.
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<PAGE>
(b) Payment over a specified period
Payments must be over a period of at least five years
unless a larger amount is required under the Code's
minimum distribution rules. The maximum period allowed
is determined by the life expectancy factor. The amount
paid each year is the Individual Account value as of
December 31 of the prior year divided by the remaining
number of payment years.
(c) Payment of a percentage of the Individual Account value
We will distribute an amount equal to or less than 20%
of the Individual Account value as of the date SWO is
elected. Each year the amount distributed is calculated
by multiplying the Individual Account value on December
31 of the prior year by the percentage elected. Payments
are made each year until the Participant attains age
70 1/2.
For SWO, the life expectancy factor for the initial distribution
is reduced by one.
If amounts are withdrawn from the GAA, a MVA (see 6.08 and 6.09)
will apply to amounts withdrawn under SWO.
7.10 Estate Conservation Option (ECO)
Under ECO, a portion of the Individual Account value is
automatically withdrawn and paid to the Participant. The earliest
date ECO payments may begin is the first day of the calendar year
in which the Participant attains age 70 1/2. (A spousal
beneficiary may elect ECO and payments may begin as of the date of
the Participant's death.)
When ECO is in effect, we will calculate and distribute an amount
equal to the minimum distribution required under the Code.
Generally, the amount distributed is equal to the Individual
Account value as of December 31 of the year prior to the payment
year divided by a single or joint life expectancy factor. The life
expectancy factor is recalculated each year.
If amounts are withdrawn from the GAA, no MVA applies to amounts
withdrawn under ECO.
7.11 Life Expectancy Option (LEO)
This option is available only to Participants who have separated
from service. LEO provides automatic, substantially equal periodic
payments of the Individual Account value prior to age 59 1/2. LEO
is not available when a loan (if allowed under the Contract) is in
effect.
To avoid tax penalties, the calculation of payments under LEO must
comply with methods allowed under federal regulations. Currently,
we offer the following three methods:
(a) Life expectancy method
The annual payment amount is recalculated each year. It
is calculated by dividing the Individual Account value
by the Participant's life expectancy. The amount
distributed each year will be based on the Individual
Account value as of December 31 of the prior year.
(b) Amortization method
The annual payment amount remains level. The annual
amount is determined by amortizing the Individual
Account value over the life expectancy of the
Participant or the joint life expectancies of the
Participant and the beneficiary at an interest rate that
does not exceed a reasonable interest rate on the date
payments begin.
(c) Annuity method
The annual payment amount remains level. The amount is
determined by dividing the Individual Account value by
an annuity factor beginning at the Participant's age in
the year payments begin and continuing for the life of
the Participant and which is derived using an interest
rate that does not exceed a reasonable interest rate on
the date payments begin.
15
<PAGE>
As allowed by law, we may offer additional methods.
Once a payment method is elected, payments must continue for at
least five years or until the Participant attains age 59 1/2,
whichever is later. We will not make payments under LEO once the
Participant attains age 70. At age 70, the Participant must elect
another distribution option or use all or a portion of the
Individual Account value to purchase Annuity payments.
If amounts are withdrawn from the GAA, a MVA (see 6.08 and 6.09)
will apply to amounts withdrawn under LEO.
7.12 Individual Account Termination
If the Individual Account value is an amount equal to or less than
the amount shown on Contract Schedule I under Individual Account
Termination Amount and we have received no Contributions for 36
months, we reserve the right to terminate an Individual Account.
Before we do this, we notify the Contract Holder or Participant,
as applicable, 90 calendar days in advance. When we terminate an
Individual Account, we do not deduct a withdrawal charge. We do
not exercise this right when the Individual Account value is equal
to or less than the amount shown on Contract Schedule I under
Individual Account Termination Amount due to investment
performance.
Section 8. Loans
- --------------------------------------------------------------------------------
8.01 Loan Availability
Contract Schedule I indicates whether loans are available under
this Contract. If available, a loan endorsement is included as
part of this Contract.
Section 9. Death Benefit During the Accumulation Phase
- --------------------------------------------------------------------------------
9.01 Death Benefit
If a Participant dies during the Accumulation Phase, we pay a
death benefit. The amount of the death benefit is the Individual
Account value as of the next Valuation Date following our receipt
of acceptable proof of death at our Home Office (see 6.08 for
amounts in the GAA).
9.02 Contract Beneficiary
The Contract beneficiary is shown on Contract Schedule I under
Contract beneficiary. Generally, the Participant may name a
beneficiary under the Plan (the Plan beneficiary). If allowed by
the Plan, when designating the beneficiary, the Contract Holder or
a Participant, as applicable, may specify, the form of payment as
permitted by the Code. The Contract beneficiary and the form of
payment, if applicable, may be designated or changed in writing or
as we may otherwise allow in our administrative procedures.
9.03 Distribution of Death Benefit
Generally, if the Plan beneficiary is the Participant's surviving
spouse, distribution of the death benefit must begin no later than
the year the Participant would have attained age 70 1/2 or any
other date allowed under federal law or regulations.
If the Plan beneficiary is not the Participant's surviving spouse,
generally, the death benefit must be used to purchase Annuity
payments within one year of the year of the Participant's death or
otherwise paid within five years of the year of the Participant's
death.
Annuity payments to a Plan beneficiary may not extend beyond the
period specified in the Code.
16
<PAGE>
Part II. Annuity Phase
Section 10. General Provisions
- --------------------------------------------------------------------------------
10.01 Election
The Contract Holder, a Participant, or Contract or Plan
beneficiary, as applicable, may elect an Annuity option by
properly completing an election form and forwarding it to our Home
Office no later than 30 calendar days before the desired first
Annuity payment date. All Annuity option elections must comply
with any Plan requirements and regulatory requirements including
the Code minimum distribution requirements.
All or any portion of the Individual Account value (after the
deduction of any applicable premium tax) may be used to purchase
Annuity payments (for amounts from the GAA, see 6.08).
The Contract Holder, a Participant, or Contract or Plan
beneficiary, as applicable, must also select an Annuity option
(see 10.03) and the Investment Options (see 10.06).
Once payments begin, an Annuity option may not be revoked, nor may
any amount be withdrawn except as noted below.
10.02 Change of Annuity Provisions
We reserve the right to change or eliminate Annuity options (see
10.03) and to change the mortality table (see 10.04) we use to
calculate payment rates for life-contingent Annuity payments. If
we do this, any change will not take effect until at least 12
months after the Contract Effective Date, or until at least 12
months after any previous change. A change to Annuity options or
the mortality table used to calculate payment rates will not apply
to Individual Accounts established before the date the change
becomes effective.
10.03 Annuity Options
The Contract Holder, a Participant, or Contract or Plan
beneficiary, as applicable, must elect one of the following:
Option 1: Payments for a Stated Period
This option provides payments for a stated period. The number of
years in the stated period must fall within the range shown on
Contract Schedule II under Payment Period.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time. If a withdrawal is requested within five years of the first
payment, the lump-sum payment is treated as a withdrawal during
the Accumulation Phase and any applicable withdrawal charge
applies (see 7.04).
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 2: Life Income for One Annuitant
This option provides payments for the life of the Annuitant. If
this option is elected, the Contract Holder, a Participant, or
Contract or Plan beneficiary, as applicable, must also choose one
of the following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period within the range shown
on Contract Schedule II under Payment Period; or
(c) Fixed-only cash refund: at the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal
to the amount applied to the Annuity (minus any applicable
premium tax), minus the amount of payments made to the
Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
17
<PAGE>
Option 3: Life Income for Two Annuitants
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have
died. If this option is elected, the Contract Holder, a
Participant, or Contract or Plan beneficiary as applicable, must
also choose one of the following:
(a) 100% of the payment amount to continue after the first
death; or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first
death; or
(d) 100% of the payment amount to continue after the first
death with payments guaranteed to the beneficiary after the
second death for a period within the range shown on
Contract Schedule II under Payment Period; or
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount to
continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the
first death with a cash refund to the Contract beneficiary
after the second death. The amount of the cash refund is
equal to the amount applied to the Annuity (minus any
applicable premium tax), minus the amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
Other Options
As allowed under applicable state law, we reserve the right to
make other options available.
10.04 Mortality Table
The mortality table for this Contract is shown on Contract
Schedule II under Mortality Table.
10.05 Payments
The first payment amount must be at least $50 per month or $250
per year. We reserve the right to increase the minimum first
payment amount, if allowed by state law, based on increases
reflected in the Consumer Price Index-Urban (CPI-U) since July 1,
1993.
To calculate the first payment of a variable Annuity or the
guaranteed payments for a fixed Annuity, we will use the
Annuitant's adjusted age and, if applicable, the second
Annuitant's adjusted age. The Annuitant's adjusted age and, if
applicable, the second Annuitant's adjusted age is the person's
age as of the birthday closest to the day Annuity payments begin,
reduced as follows:
(a) Reduced by one year for payments before January 1, 2000;
(b) Reduced by two years for payments beginning during the
period from January 1, 2000 through December 31, 2009;
(c) Starting on January 1, 2010, reduced by one additional year
for payments beginning in each succeeding decade.
If a fixed Annuity is elected, we will use the applicable current
settlement option rates if they will provide higher fixed Annuity
payments.
10.06 Investment Options
When an Annuity option is elected, the Contract Holder, a
Participant, or Contract or Plan beneficiary, as applicable, must
elect:
(a) A fixed Annuity for which the underlying investment is our
General Account; or
(b) A variable Annuity for which the underlying investment is
one or more of the available Funds; or
(c) A combination of (a) and (b).
18
<PAGE>
For a variable Annuity, the maximum number of Funds available
during the Annuity Phase is shown on Contract Schedule II under
Maximum Number of Funds. The Funds available during the Annuity
Phase might not be the same as those available during the
Accumulation Phase.
10.07 Fixed Annuity Minimum Guaranteed Interest Rate
For a fixed Annuity, the interest rate will never be less than the
minimum guaranteed rate shown on Contract Schedule II under Fixed
Annuity Minimum Guaranteed Interest Rate.
10.08 Variable Annuity Assumed Annual Net Return Rate Election
If a variable Annuity is elected, the Contract Holder, or
Participant, as applicable must also elect an assumed annual net
return rate of 3.5% or 5%. The initial Annuity payment for the
option elected will reflect the assumed annual net return rate. If
subsequent Annuity payments are to remain level, the Separate
Account must earn this rate, plus enough to cover the mortality
and expense risk charge shown on Contract Schedule II under Daily
Charges to the Separate Account plus any applicable administrative
charge.
10.09 Variable Annuity Transfers
If a variable Annuity is elected, the Contract Holder, a
Participant, or Contract or Plan beneficiary, as applicable, may
request that we transfer all or a portion of the amount allocated
to a Fund to any other available Fund. Transfer requests must be
expressed as a percentage of the allocation among the Funds on
which the variable payment is based. The number of transfers
allowed each calendar year is shown on Contract Schedule II under
Number of Annual Transfers Among Funds. We reserve the right to
allow additional transfers. Transfers are effective as of the next
Valuation Date following our receipt of a transfer request in Good
Order at our Home Office.
10.10 Fund Annuity Units
The number of Fund Annuity units is based on the amount of the
first variable Annuity payment which is equal to:
(a) The portion of the Individual Account value (minus any
applicable premium tax) used to purchase a variable
Annuity; divided by
(b) One thousand; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion of the variable payment will be divided by
the appropriate Fund's, or Funds', Annuity unit value (see 10.11)
on the tenth Valuation Date before the due date of the first
payment to determine the number of Fund Annuity units. The number
of each Fund's Annuity units remains fixed unless changed by a
subsequent Fund transfer or if the Annuity option provides for a
change in units (i.e., under life income for two annuitants option
after the first death). Each future payment is equal to the sum of
the products of each Fund's Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity unit value on the
tenth Valuation Date before the payment due date is used.
10.11 Fund Annuity Unit Value
For any Valuation Date, a Fund's Annuity unit value is equal to:
(a) The Annuity unit value for the prior Valuation Date;
multiplied by
(b) The Annuity unit net return factor (see 10.12) for the
current Valuation Date; multiplied by
(c) A factor to reflect the assumed annual net return rate. The
factor for an assumed annual net return rate of 5% is
0.9998663; for 3.5% it is 0.9999058.
The dollar value of a Fund Annuity unit and the amount of a
variable Annuity payment may increase or decrease due to
investment gain or loss. We will not change the payment amount due
to changes in mortality, expense results, or the administrative
charge.
19
<PAGE>
10.12 Fund Annuity Net Return Factor
The Annuity net return factor(s) are used to compute all variable
Annuity payments for any Fund.
The net return factor(s) for each Fund is equal to 1.0000000 plus
the net return rate.
The net return rate equals:
[a - b - c]
------------- - e
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule II under Daily Charges to the Separate Account.
A net return rate may be more or less than 0%. The value of a
share of a Fund is equal to the net assets of the Fund divided by
the number of shares outstanding.
10.13 Death Benefit During the Annuity Phase
The Contract Holder, or a Participant, as applicable, must name a
beneficiary for the Annuity Phase. Unless not allowed by the Plan,
or restricted by the Contract Holder, or a Participant, as
applicable, the beneficiary may name a beneficiary.
If an Annuitant(s) dies, any remaining guaranteed payments
continue to the beneficiary. Payments are made at least as rapidly
as provided by the option in effect at the death of the Annuitant.
Annuity payments to an beneficiary may not extend beyond (1) the
life of the beneficiary, or (2) any period certain greater than
the beneficiary's life expectancy as determined by the Code.
The beneficiary may also elect a lump-sum payment equal to the
present value of any remaining payments.
The interest rate used to determine the first Annuity payment is
used to calculate the present value. The present value is
determined as of the next Valuation Date following our receipt of
acceptable proof of death and a written claim for the death
benefit.
Unless not allowed by the Plan or restricted by the Contract
Holder, or a Participant, as applicable, if the beneficiary dies
while receiving payments, the present value of any remaining
guaranteed payments is paid in a lump-sum to the beneficiary's
beneficiary or to the beneficiary's estate.
10.14 Charges to the Separate Account
During the Annuity Phase, we may deduct a mortality and expense
risk charge from the Individual Account value invested in the
Separate Account. In addition, we reserve the right to impose an
administrative charge.
The maximum charges to the Separate Account are shown on Contract
Schedule II under Daily Charges to the Separate Account. If
applicable, the charges are deducted daily.
20
<PAGE>
OPTION 1: Payments for a Stated Period
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $17.91 20 $5.51
10 9.61 25 4.71
15 6.87 30 4.18
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.12 20 $5.75
10 9.83 25 4.96
15 7.10 30 4.45
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.74 20 $6.51
10 10.51 25 5.76
15 7.82 30 5.28
- --------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
21
<PAGE>
Option 2: Life Income for One Annuitant
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate
- ---------------------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(C):
Adjusted payments for payments payments payments payments Cash Refund
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 $4.44 $4.42 $4.39 $4.32 $4.22 $4.19
60 4.95 4.93 4.86 4.73 4.55 4.57
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
70 6.64 6.54 6.23 5.76 5.19 5.70
75 8.06 7.82 7.14 6.25 5.38 6.51
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $4.72 $4.71 $4.67 $4.60 $4.50
60 5.23 5.21 5.13 5.00 4.82
65 5.94 5.89 5.73 5.48 5.15
70 6.92 6.81 6.49 6.00 5.43
75 8.35 8.08 7.38 6.48 5.62
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $5.63 $5.61 $5.56 $5.47 $5.36
60 6.12 6.09 6.00 5.85 5.65
65 6.82 6.75 6.57 6.30 5.95
70 7.80 7.67 7.30 6.78 6.21
75 9.23 8.93 8.16 7.23 6.38
-------------------------------------------------------------------------------------------------------------------
</TABLE>
o Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
22
<PAGE>
Option 3: Life Income for Two Annuitants
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate
- ----------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
- ----------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67
55 60 3.99 4.44 4.71 3.98 4.20 3.94
65 60 4.38 4.97 5.32 4.38 4.93 4.29
65 70 4.93 5.68 6.15 4.91 5.27 4.74
75 70 5.69 6.68 7.32 5.62 6.67 5.29
75 80 6.78 8.11 8.99 6.54 7.36 5.93
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
--------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $3.97 $4.35 $4.56 $3.97 $4.31
55 60 4.27 4.73 5.00 4.26 4.48
65 60 4.66 5.25 5.61 4.65 5.22
65 70 5.19 5.97 6.44 5.17 5.54
75 70 5.95 6.96 7.61 5.87 6.95
75 80 7.04 8.39 9.29 6.79 7.64
-------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
--------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 60 5.15 5.63 5.91 5.14 5.38
65 60 5.52 6.14 6.51 5.51 6.10
65 70 6.04 6.84 7.34 6.00 6.41
75 70 6.77 7.84 8.51 6.68 7.81
75 80 7.86 9.28 10.20 7.57 8.49
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
23
<PAGE>
- --------------------------------------------------------------------------------
Aetna
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
Group Combination, Deferred Annuity Contract
(Nonparticipating)
- --------------------------------------------------------------------------------
G-CDA-99(NY)
Exhibit 99-B.4.9
--------------------------------------------------------------
[Aetna Logo] Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
If you have questions, call the toll-free number shown above.
Certificate of Group Annuity Coverage
Aetna Life Insurance and Annuity Company (ALIAC) will pay benefits according to
the terms and conditions set forth in the Contract. ALIAC certifies that
coverage is in force for you under the stated Group Annuity Contract and
Certificate numbers.
This Certificate is a summary of the Group Annuity Contract provisions. It
replaces any and all prior certificates, riders, or amendments issued to you
under the stated Contract and Certificate numbers. This Certificate is for
information only and is not a part of the Contract.
Specifications
- --------------------------------------------------------------------------------
| Contract Holder
| SPECIMEN
- --------------------------------------------------------------------------------
| Group Annuity Contract Number
| SPECIMEN
- --------------------------------------------------------------------------------
| Type of Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Participant
| SPECIMEN
- --------------------------------------------------------------------------------
| Certificate Number
| SPECIMEN
Right to Cancel
- --------------------------------------------------------------------------------
You may cancel your participation in the group Contract within 10 calendar days
of receiving this Certificate by returning it to ALIAC at the address shown
above, or to the agent from whom it was purchased. Within seven calendar days of
receiving the cancellation request at its Home Office, ALIAC will return any
Contributions received, plus any increase, or minus any decrease in value, on
the amount, if any, allocated to the Separate Account.
/s/ Thomas J. McInerney /s/ Kirk P. Wickman
- ----------------------- -------------------
President Secretary
THE VARIABLE FEATURES OF THE CONTRACT ARE DESCRIBED IN SECTIONS 3 AND 10.
All payments and values provided by the group Contract, when based on the
investment experience of the Separate Account, are variable and are not
guaranteed as to fixed dollar amount. Amounts allocated to the Guaranteed
Accumulation Account, if withdrawn before a guaranteed term maturity date, may
be subject to a market value adjustment. The market value adjustment may result
in an increase, or a decrease, in the Individual Account value.
C-CDA-99(NY)
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Contract Schedule I. Accumulation Phase S I - 1
Contract Schedule II. Annuity Phase S II - 1
Definitions 1
Section 1. General Contract Provisions 3
1.01 Entire Contract ............................................... 3
1.02 Nonparticipating Contract ..................................... 3
1.03 Control of Contract ........................................... 3
1.04 Certificate ................................................... 3
1.05 Incontestability .............................................. 3
1.06 Grace Period .................................................. 3
1.07 Change of Contract ............................................ 3
1.08 Payments ...................................................... 4
1.09 Deferral of Payment ........................................... 4
1.10 Proof of Age .................................................. 4
1.11 Evidence of Survival .......................................... 4
1.12 Misstatements and Adjustments ................................. 4
1.13 Reports ....................................................... 4
1.14 State Laws .................................................... 5
1.15 Claims of Creditors ........................................... 5
1.16 Maintenance Fee ............................................... 5
1.17 Charges for Additional Services ............................... 5
1.18 Charges Subject to Change ..................................... 5
Part I. Accumulation Phase 5
Section 2. Contributions and Individual Account Value 5
2.01 Contributions ................................................. 5
2.02 Premium Tax ................................................... 6
2.03 Individual Account ............................................ 6
2.04 Experience Credit ............................................. 6
2.05 Individual Account Value ...................................... 6
Section 3. Separate Account 6
3.01 General ....................................................... 6
3.02 Funds Available ............................................... 6
3.03 Change or Substitution of Funds ............................... 7
3.04 Accumulation Units ............................................ 7
3.05 Accumulation Unit Value ....................................... 7
3.06 Net Investment Factor ......................................... 7
3.07 Charges to the Separate Account ............................... 7
3.08 Fund Transfers ................................................ 8
3.09 Withdrawals from the Separate Account ......................... 8
Section 4. Aetna GET Fund 8
4.01 GET Fund Guarantee Period ..................................... 8
4.02 GET Fund Offering Period ...................................... 8
4.03 GET Fund Guarantee ............................................ 8
4.04 GET Fund Maturity Date ........................................ 9
4.05 Transfers or Withdrawals from the GET Fund .................... 9
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 5. Fixed Account 9
5.01 Fixed Account Minimum Guaranteed Interest Rate .............. 9
5.02 Transfers from the Fixed Account ............................ 9
5.03 Withdrawals from the Fixed Account .......................... 9
Section 6. Guaranteed Accumulation Account (GAA) 10
6.01 Nonunitized Separate Account ................................ 10
6.02 GAA Minimum Guaranteed Interest Rate ........................ 10
6.03 Deposit Period .............................................. 10
6.04 Guaranteed Term ............................................. 10
6.05 Guaranteed Term Groups ...................................... 10
6.06 Maturity Date, Maturity Value and Reinvestment .............. 10
6.07 Transfers and Withdrawals from the GAA ...................... 11
6.08 Application of the Market Value Adjustment .................. 11
6.09 Market Value Adjustment (MVA) ............................... 12
Section 7. Transfers, Withdrawals and Distributions 12
7.01 Transfers ................................................... 12
7.02 Withdrawals ................................................. 13
7.03 Withdrawal Restrictions Under the Code ...................... 13
7.04 Withdrawal Charge ........................................... 13
7.05 Waiver of Withdrawal Charge ................................. 13
7.06 Reinstatement ............................................... 13
7.07 Required Distributions ...................................... 14
7.08 Systematic Distribution Options (SDO) ....................... 14
7.09 Systematic Withdrawal Option (SWO) .......................... 14
7.10 Estate Conservation Option (ECO) ............................ 15
7.11 Life Expectancy Option (LEO) ................................ 15
7.12 Individual Account Termination .............................. 16
Section 8. Loans 16
8.01 Loan Availability ........................................... 16
Section 9. Death Benefit During the Accumulation Phase 16
9.01 Death Benefit ............................................... 16
9.02 Contract Beneficiary ........................................ 16
9.03 Distribution of Death Benefit ............................... 16
Part II. Annuity Phase 17
Section 10. General Provisions 17
10.01 Election .................................................... 17
10.02 Change of Annuity Provisions ................................ 17
10.03 Annuity Options ............................................. 17
10.04 Mortality Table ............................................. 18
10.05 Payments .................................................... 18
10.06 Investment Options .......................................... 18
10.07 Fixed Annuity Minimum Guaranteed Interest Rate .............. 19
10.08 Variable Annuity Assumed Annual Net Return Rate Election .... 19
10.09 Variable Annuity Transfers .................................. 19
10.10 Fund Annuity Units .......................................... 19
10.11 Fund Annuity Unit Value ..................................... 19
10.12 Fund Annuity Net Return Factor .............................. 20
10.13 Death Benefit During the Annuity Phase ...................... 20
10.14 Charges to the Separate Account ............................. 20
Annuity Tables 21
</TABLE>
ii
<PAGE>
Accumulation Phase
Control of Contract (see 1.03)
[The Contract Holder controls the Contract.
By notifying us in writing, the Contract Holder may allow you to
choose Investment Options for an Individual Account. The Contract
Holder may, however, retain the right to choose Investment Options
for employer Contributions. Unless otherwise provided by the Plan,
we will make payments only at the written direction of the
Contract Holder and you. Unless otherwise specified by the Plan,
we will make an in-service transfer under Internal Revenue Service
Revenue Ruling 90-24 only at the written direction of the Contract
Holder and you and will make checks payable to the acquiring
investment provider(s).
The Contract and Individual Accounts are nontransferable and
nonassignable except to us in the event of a loan (if allowed
under the Contract) or in the event of a qualified domestic
relations order as allowed under the Retirement Equity Act of 1984
(REA).
You have a nonforfeitable right to the value of employer
Contributions made to your Individual Accounts subject to any Plan
vesting limits as determined by the Contract Holder. You have a
nonforfeitable right to the value of employee Contributions made
to your Individual Accounts as provided by Code Section 403(b) and
subject to the terms of the Plan.
The Contract Holder must notify us in writing if the Plan is, or
becomes, subject to the Employee Retirement Income Security Act of
1974 (ERISA) and/or related law or regulations including REA. We
will rely on the Contract Holder's determination and
representation of the applicability of such laws. If the Plan is
subject to ERISA, before we will make a distribution from an
Individual Account, the Contract Holder must certify in writing
that all applicable REA requirements have been met and that the
distribution complies with the Plan.]
Maintenance Fee (see 1.16)
The maintenance fee for each Individual Account is [$XX] as of the
Effective Date of the Contract and is subject to change (see
1.18). The fee will never exceed [$30].
Contribution Limits (see 2.01)
[Each year, Contributions to the Contract are limited to the
lesser of:
(a) The maximum exclusion allowance (MEA) limit under Code
Section 403(b); or
(b) The amount set forth in Code Section 415, generally, 25% of
compensation up to $30,000.
In addition, salary reduction Contributions as defined in Code
Section 402(g) may not exceed $10,000, or such larger amount as
adjusted by the Secretary of the Treasury during any calendar
year, unless the alternative limitation under Code Section
402(g)(8) applies.]
Separate Account (see 3.01)
Variable Annuity Account [C]
Daily Charges to the Separate Account (see 3.07)
Charges to the Separate Account are subject to change (see 1.18).
The charges as of the Effective Date of the Contract are as
follows:
Mortality and Expense Risk Charge: [X.XX%] (annual basis)
This charge will never exceed [1.50%] (annual basis).
Administrative Charge: [X.XX%] (annual basis)
This charge will never exceed [0.25%] (annual basis).
Aetna GET Fund Guarantee Charge: If applicable, the charge will be
provided to the Contract Holder and will never exceed 0.75%
(annual basis).
S I - 1
<PAGE>
Fixed Interest Options Available (see Section 5 and Section 6)
[Fixed Account
Guaranteed Accumulation Account]
Fixed Account Minimum Guaranteed Interest Rate (see 5.01)
The interest rate will never be less than 3% (annual basis).
Fixed Account Annual Transfer Limit (see 5.02)
[10%]
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 6.02)
The interest rate will never be less than 3% (annual basis).
Withdrawal Restrictions Under the Code (see 7.03)
[Limitations apply to partial and full withdrawals of the
"restricted amount" from the Contract as required by Code Section
403(b)(11). The restricted amount is the sum of:
(1) Contributions attributable to your salary reduction
Contributions made on and after January 1, 1989; plus
(2) The net increase, if any, in the Individual Account value
after December 31, 1988 attributable to investment gains
and losses and credited interest.
The restricted amount may be partially or fully withdrawn only if
one or more of the following conditions are met. You have:
(a) Separated from service when certified by the employer;
(b) Attained age 59 1/2;
(c) Died;
(d) Become disabled, as defined by the Code;
(e) Experienced financial hardship as defined by the Code. The
amount available for financial hardship is limited to the
lesser of the amount necessary to satisfy the need or
Contributions attributable to salary reduction
Contributions made on or after January 1, 1989; or
(f) Met other circumstances as otherwise allowed by federal
law, regulations or rulings.
No limitations apply to salary reduction Contributions made and
earnings credited to such Contributions made on or before December
31, 1988.
In addition, any portion of an Individual Account representing
amounts transferred under Internal Revenue Service Revenue Ruling
90-24 from a Code Section 403(b)(7) custodial account will be
subject to the restrictions set forth in Code Section
403(b)(7)(A)(ii).]
Withdrawal Charge (see 7.04)
[For each withdrawal from an Individual Account, we may deduct a
withdrawal charge. This charge is a percentage of the amount
withdrawn, determined as follows:
<TABLE>
<CAPTION>
[Number of Years Since Individual
Account Established] Withdrawal Charge
-------------------- -----------------
<S> <C>
[Fewer than 3 5%
3 or more, but fewer than 4 4%
4 or more, but fewer than 5 3%
5 or more, but fewer than 6 2%
6 or more, but fewer than 7 1%
7 or more 0%]
</TABLE>
S I - 2
<PAGE>
The withdrawal charge will never exceed 8.5% of total
Contributions, or the maximum permitted by National Association of
Securities Dealers, Inc. (NASD) rules.]
Waiver of Withdrawal Charge (see 7.05)
[The withdrawal charge does not apply when the withdrawal is:
(a) Used to purchase Annuity payments;
(b) Used to purchase a single premium immediate Annuity or
individual retirement Annuity issued by ALIAC or one of its
affiliates, provided that the right to cancel under the new
Contract is not exercised. We will treat exercise of the
right to cancel as a reinstatement and any subsequent
withdrawal may then be subject to the withdrawal charge
applicable on the date of the withdrawal;
(c) Under a systematic distribution option (see 7.08);
(d) When we terminate an Individual Account as provided in
7.12;
(e) When the Individual Account value is [$3,500] or less (or,
if applicable, as otherwise allowed by the Plan for
lump-sum cash-out without your consent) and during the
previous [12 months] no amounts have been withdrawn,
transferred, taken as a loan (if allowed under the
Contract), or used to purchase Annuity payments;
(f) Made by you when you have attained age 59 1/2 and, if
applicable, have completed nine Contribution periods;
(g) Due to your death before Annuity payments begin;
(h) In an amount equal to or less than [10%] of the Individual
Account value when the withdrawal is the first withdrawal
in a calendar year and you have attained age 59 1/2 and are
less than age 70 1/2 (not available when a systematic
distribution option is in effect). Any outstanding loans
are not included in the Individual Account value when
determining the [10%] amount. This waiver does not apply to
full withdrawals or to a withdrawal due to a loan default;
(i) To you when you have separated from service when certified
by your employer;
(j) Due to financial hardship as defined in the Code;
(k) Due to the transfer of the Individual Account value to
another contract issued by ALIAC for the Plan, subject to
various conditions agreed to by the Contract Holder and
ALIAC; or
(l) For a transfer as provided under Internal Revenue Service
Revenue Ruling 90-24 to an ALIAC Code Section 403(b)(7)
custodial account.]
Required Distributions (see 7.07)
[Generally, for Contributions made and earnings credited after
December 31, 1986, distribution must begin by April 1 of the
calendar year following the later of the calendar year in which
you (1) attain age 70 1/2 or (2) retire. For Individual Account
values as of December 31, 1986, distribution must begin by the
last day of the year in which you attain age 75 or retire,
whichever is later.]
The entire Individual Account value must be distributed, or begin
to be distributed, over your life or life expectancy, or the joint
lives or joint life expectancies of you and a beneficiary.
Individual Account Termination Amount (see 7.12)
$1,999
Loans (see 8.01)
[Loans are available under the Contract.]
Contract Beneficiary (see 9.02)
[The Contract Holder is the Contract beneficiary. You may
designate a beneficiary under the Plan (Plan beneficiary).]
S I - 3
<PAGE>
Contract Schedule II
Annuity Phase
Payment Period (see 10.03)
The period for which we will guarantee Annuity payments must be at
least [five] years and no more than [30] years.
Mortality Table (see 10.04)
Society of Actuaries' 1983 Table a
Maximum Number of Funds (see 10.06)
The maximum number of Funds is [four].
Fixed Annuity Minimum Guaranteed Interest Rate (see 10.07)
3% (annual basis)
Number of Annual Transfers Among Funds (see 10.09)
Each calendar year, we allow [five] transfers among funds.
Daily Charges to the Separate Account (see 10.14)
Charges to the Separate Account will never be more than the
following:
Mortality and Expense Risk Charge: [1.25%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
S II - 1
<PAGE>
Definitions
- --------------------------------------------------------------------------------
Accumulation Phase
The time between an Individual Account Effective Date and the date on which the
entire Individual Account value is used to purchase Annuity payments, or
otherwise distributed.
Aetna GET Fund (GET Fund)
The Aetna GET Fund is an Investment Option which may be available during the
Accumulation Phase. The GET Fund operates as a series offering. Each series is a
separate Fund.
Aetna Life Insurance and Annuity Company (ALIAC)
Aetna Life Insurance and Annuity Company ("we," and "our," and "us" refer to
ALIAC).
Annuitant
The person whose life expectancy determines the amount and/or duration of the
payments under a life-contingent Annuity option.
Annuity
Payment of an income:
(a) For a stated period;
(b) For the life of one or two people; or
(c) Some combination of (a) and (b).
A fixed Annuity is one in which the payment amount does not vary. A variable
Annuity is one in which the payment amount may vary based on the net investment
results of the Funds.
Annuity Phase
The time during which we make Annuity payments.
Business Day
Each day our Home Office is open for business.
Code
The Internal Revenue Code of 1986, as it is amended from time to time.
Contract
The agreement between ALIAC and the Contract Holder.
Contract Holder
The entity, or person, named in the specifications section on the face page, to
which the Contract is issued.
Contribution
The payment made to us during the Accumulation Phase. The Contribution may be
reduced by any applicable premium tax due.
Effective Date
The date on which we issue the Contract or establish an Individual Account.
Fixed Account
A Fixed Interest Option. The Fixed Account is an obligation of our General
Account.
Fixed Interest Options
Investment options, including the Fixed Account and the Guaranteed Accumulation
Account that credit interest. The Fixed Interest Options available during the
Accumulation Phase are shown on Contract Schedule I under Fixed Interest Options
Available.
1
<PAGE>
Fund
A variable Investment Option available under the Contract. The Funds are
open-end registered investment management companies (mutual funds) in which the
Separate Account invests.
General Account
The account that holds our assets other than those held in the Separate Account
or Nonunitized Separate Account.
Guaranteed Accumulation Account (GAA)
A Fixed Interest Option that may be available during the Accumulation Phase.
Under this option, we guarantee specified rates of interest for specified
periods of time. Amounts allocated to the Guaranteed Accumulation Account are
held in the Nonunitized Separate Account.
Good Order
Instructions that are complete and clear enough to allow us to act without
exercising discretion.
Home Office
Our main office located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Individual Account
An account, or accounts (including, if applicable, employer and employee
accounts) established for you to maintain a record of transactions and the value
of Contributions as invested.
Investment Options
The Funds and Fixed Interest Options available under the Contract.
Maturity Date
The last day of a GAA guaranteed term or the last day of the guarantee period of
an Aetna GET Fund series.
Nonunitized Separate Account
A separate account that holds assets allocated to the Guaranteed Accumulation
Account.
Participant
The person who is covered under the retirement Plan or program for which the
Contract is issued and who has an interest in the Contract ("you" and "your"
refer to the Participant). The name of the Participant is shown in the
specification section on the face page of this Certificate.
Plan
The retirement plan or program for which the Contract is issued.
Premium Tax
Any tax assessed by any governmental entity on Contributions or amounts used to
purchase Annuity payments.
Separate Account
An account that buys and holds shares of the Funds through its subaccounts.
Valuation Date
The date and time at which accumulation unit values and Annuity unit values are
calculated. Currently, this calculation is made after the close of business of
the New York Stock Exchange on any normal business day, Monday through Friday,
that the New York Stock Exchange is open.
2
<PAGE>
Section 1. General Contract Provisions
- --------------------------------------------------------------------------------
1.01 Entire Contract
The entire Contract consists of the Contract, any attachments and
any endorsements incorporated.
The Plan, if applicable, is not part of the Contract and ALIAC is
not bound by its terms.
1.02 Nonparticipating Contract
The Contract is nonparticipating. The Contract Holder, you, or a
Contract beneficiary have no right to share in our earnings.
1.03 Control of Contract
Control of the Contract is as shown on Contract Schedule I under
Control of Contract.
1.04 Certificate
Any certificate summarizes Contract provisions; it is for
information only and is not part of the Contract. We will provide
certificates as required by state law in the state where the
Contract is delivered and as allowed under the Plan. Nothing in
the Contract invalidates or impairs any right granted under New
York Insurance Law Section 3219.
1.05 Incontestability
We will not cancel the Contract because of any error of fact.
1.06 Grace Period
Except as provided in 7.12, the Contract and all Individual
Accounts will remain in effect even if Contributions are not
continued.
1.07 Change of Contract
Only an ALIAC officer at the level of Vice President or higher, or
an officer with written delegation of authority from a Vice
President or higher officer, may change the terms of the Contract.
No other ALIAC officer, employee, agent or representative can
change the Contract.
Except as noted below, the Contract may be changed at any time by
written mutual agreement between the Contract Holder and ALIAC.
For changes we initiate requiring Contract Holder consent, we
notify the Contract Holder 60 calendar days in advance of the
change and consider that the Contract Holder has agreed to the
change unless we receive written notice that the Contract Holder
does not agree to the change at least 30 calendar days before the
date the change becomes effective.
If we propose a change requiring Contract Holder consent and the
Contract Holder does not agree to the change, we have the right to
not establish new Individual Accounts and to stop accepting
Contributions to existing Individual Accounts.
We will not reduce the minimum guaranteed interest rate for the
Fixed Account.
We have the right to change the following without Contract Holder
consent:
(a) Net Investment Factor (see 3.06)
We may change the net investment factor by notifying the
Contract Holder in writing at least 30 calendar days before
the change becomes effective. If we do this, the change
will apply only to Individual Accounts established, and
Contributions received, after the date the change becomes
effective.
(b) Guaranteed Accumulation Account (GAA) market value
adjustment (see 6.09)
We may change the GAA market value adjustment by notifying
the Contract Holder in writing at least 90 calendar days
before the change becomes effective. If we do this, the
change will apply only to guaranteed terms offered in
deposit periods after the date the change becomes
effective.
3
<PAGE>
(c) Systematic Distribution Options (see 7.08)
We may change systematic distribution options by notifying
the Contract Holder in writing at least 30 calendar days
before the change becomes effective. If we do this, the
change will not apply to you or beneficiaries receiving
payments under an option before the date the change becomes
effective.
(d) Annuity Options (see 10.03)
We may change Annuity options by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the change
will not take effect until at least 12 months after the
Effective Date of the Contract, or until at least 12 months
after any previous change. Any change will not apply to you
or beneficiaries receiving Annuity payments before the date
the change becomes effective.
(e) Mortality Table (see 10.04)
We may change the mortality table by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the new table
will not apply to Individual Accounts established before
the date the change becomes effective.
In addition, we may change the Contract as required to comply with
state and federal law without Contract Holder consent by notifying
the Contract Holder at least 30 calendar days before the date the
change becomes effective.
Any unilateral change will not apply to Individual Accounts
established before the date the change becomes effective, but will
apply to Individual Accounts established on or after the date the
change becomes effective. If we make a unilateral change, the
Contract Holder or you, as applicable, are permitted to terminate
participation in the Contract before the date the change becomes
effective under the terms of the Contract in effect prior to the
date the change becomes effective.
As required by law, we will make any change of Contract by
endorsement, which may be subject to regulatory approval in the
state where the Contract is delivered.
1.08 Payments
We make payments as directed by the Contract Holder or you, as
applicable. Payment requests must be in writing or as we otherwise
allow in our administrative practice. We determine the amount of
any payment based on the Individual Account value as of the next
Valuation Date following our receipt of a payment request in Good
Order at our Home Office. Generally, we make payments within seven
calendar days.
1.09 Deferral of Payment
We may defer payment up to a period of six months or as otherwise
provided by state and/or federal law.
1.10 Proof of Age
If a life-contingent Annuity option is elected, we may require
proof of the age of an Annuitant.
1.11 Evidence of Survival
We may require proof that any Annuitant under a life-contingent
Annuity option is living.
1.12 Misstatements and Adjustments
If we learn that the age of any Annuitant or second Annuitant is
misstated, we will use the correct age to adjust payments. We
reserve the right to obtain reimbursement, or to adjust future
payments for any amount we overpaid. We will pay the amount of any
underpayment.
1.13 Reports
Each calendar year we provide the Contract Holder or you, as
applicable, with a report of the Individual Account value. We also
provide an annual report for the Separate Account.
4
<PAGE>
1.14 State Laws
The Contract complies with the laws of the state in which it is
delivered. Any cash, death or Annuity payments are equal to or
greater than the minimum required. To determine legal reserve
valuation, we use Annuity tables as required by law; such tables
may be different from those we use to determine Annuity payments.
1.15 Claims of Creditors
Individual Accounts are not subject to the claim of any creditor
of the Contract Holder, you, or a Contract beneficiary, except to
the extent permitted by law.
1.16 Maintenance Fee
We may deduct an annual maintenance fee during the Accumulation
Phase.
The amount of the maintenance fee, if any, for the Contract is
shown on Contract Schedule I under Maintenance Fee.
The fee, if any, is deducted proportionately from each Investment
Option in which the Individual Account is invested on the
anniversary of the Individual Account Effective Date. The fee is
also deducted if the entire Individual Account value is withdrawn.
If you have more than one Individual Account, we may deduct the
fee proportionately from all Individual Accounts. We may eliminate
the fee for an Individual Account established with one lump-sum
Contribution.
1.17 Charges for Additional Services
At the request of the Contract Holder, we, or our authorized
representatives, may provide administrative services to the Plan.
We reserve the right to charge for such services.
1.18 Charges Subject to Change
The maintenance fee (see 1.16) and charges to the Separate Account
during the Accumulation Phase (see 3.07) may vary (increase,
decrease, or be eliminated) based on the total assets held in all
Individual Accounts under the Contract. In determining total
assets, we may aggregate Individual Accounts established under
different ALIAC Contracts. The aggregate amount is equal to the
sum of assets in all Individual Accounts under the Contract, plus
the value of Individual Accounts under other ALIAC Contracts of
the same class issued to the Contract Holder. We may determine the
amount of the maintenance fee and/or charges to the Separate
Account based on total assets on an annual basis. We will
determine initial charges based on our estimate of the amount that
will be allocated to the Contract during a period mutually agreed
upon by the Contract Holder and us.
Part I. Accumulation Phase
Section 2. Contributions and Individual Account Value
- --------------------------------------------------------------------------------
2.01 Contributions
We allocate Contributions in whole percentages among the
Investment Options available as directed by the Contract Holder or
you, as applicable. Changes in future Contribution allocation may
be made at any time without charge. The Contract Holder or you, as
applicable, may also establish an Individual Account with one
lump-sum Contribution.
We reserve the right to establish minimum Contribution amounts and
to refuse to accept any Contribution.
Contributions to Individual Accounts may be limited as provided in
the Code. The limits, if any, are shown on Contract Schedule I
under Contribution Limits.
5
<PAGE>
2.02 Premium Tax
We pay any applicable premium tax when it is due. We will deduct
the amount of any applicable premium tax from the Individual
Account value no earlier than when there is a tax liability. We
reserve the right to deduct any premium tax due before a
Contribution is allocated to an Individual Account.
2.03 Individual Account
We will establish an Individual Account for you.
If required, we will provide accounts that distinguish between
your employer's and your Contributions.
2.04 Experience Credit
We may apply experience credits (investment, administrative,
mortality or other) under the Contract and may apply such credits
as:
(a) A reduction in the maintenance fee;
(b) A reduction in the mortality and expense risk charge to the
Separate Account;
(c) A reduction in the administrative charge to the Separate
Account; and
(d) An increase in a Fixed Interest Option interest rate.
We will apply experience credits at our sole discretion as we deem
appropriate for the class of contracts to which the Contract is
issued.
2.05 Individual Account Value
As of the most recent Valuation Date, the Individual Account value
is equal to the total of all Contributions:
(a) Plus any interest added on the amount, if any, allocated to
a Fixed Interest Option(s);
(b) Plus or minus the investment experience on the amount, if
any, held in the Separate Account;
(c) Minus any applicable maintenance fees, any amounts
withdrawn, or used to purchase Annuity payments, or any
applicable premium tax; and
(d) Minus any applicable fees or charges deducted.
Section 3. Separate Account
- --------------------------------------------------------------------------------
3.01 General
The Separate Account, established under Title 38a, Section 38a-433
of the Connecticut General Statutes, buys and holds shares of the
Funds available under the Contract. The Separate Account is
registered as a unit investment trust under the Investment Company
Act of 1940.
We own the assets held in the Separate Account; we are not a
trustee of those assets. Income, gains or losses, realized or
unrealized, are credited to or charged against the Separate
Account without regard to our other income, gains or losses.
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
3.02 Funds Available
We reserve the right to limit the number of Funds in which an
Individual Account may be invested, at one time or cumulatively,
during the Accumulation Phase and/or Annuity Phase.
6
<PAGE>
3.03 Change or Substitution of Funds
We reserve the right to stop offering any Fund or to add Funds. We
may substitute shares of a Fund for shares of another Fund. We
will provide the Contract Holder with reasonable advance notice of
any elimination, addition or substitution of a Fund. If the Plan
is subject to ERISA, we will seek Contract Holder consent in
advance of any Fund substitution. Consent will be deemed given
unless, following notice of substitution and within a prescribed
time period, the Contract Holder notifies us in writing that it
does not consent and provides us with alternative investment
instructions for the shares that would otherwise be affected by
the substitution.
3.04 Accumulation Units
Each Contribution allocated to one or more of the Funds is
credited to an Individual Account as accumulation units. The
number of accumulation units is calculated by dividing the amount
of the Contribution allocated to the Fund by the accumulation unit
value (see 3.05) as of the next Valuation Date following our
receipt of the Contribution in Good Order at our Home Office.
3.05 Accumulation Unit Value
The value of each accumulation unit for any Fund for each
Valuation Date is computed by multiplying the net investment
factor (see 3.06) by the accumulation unit value for such
Valuation Date.
Accumulation unit values may increase or decrease from Valuation
Date to Valuation Date.
3.06 Net Investment Factor
The net investment factor is used to compute the accumulation unit
value for any Fund.
For each Valuation Date, for each Fund, the net investment factor
is equal to 1.0000000, plus the net return rate.
The net return rate equals:
[a - b - c]
------------- - e - f
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule I under Daily Charges to the Separate Account; and
f is if applicable, a charge for the GET Fund guarantee, which
is deducted daily during the guarantee period. The charge,
which is determined before the beginning of each offering
period (see 4.02), is shown on Contract Schedule I under
Daily Charges to the Separate Account.
The net return rate may be greater or less than zero percent.
3.07 Charges to the Separate Account
During the Accumulation Phase, we may deduct a mortality and
expense risk charge from the Individual Account value invested in
the Separate Account. In addition, we reserve the right to impose
an administrative charge.
The charges to the Separate Account are shown on Contract Schedule
I under Daily Charges to the Separate Account and are deducted
daily.
7
<PAGE>
3.08 Fund Transfers
During the Accumulation Phase, any portion or all of the
Individual Account value held in a Fund may be transferred to any
other Fund or any available Fixed Interest Option. The Individual
Account value will be based on the Fund's accumulation unit value
next determined after we receive a transfer request in Good Order.
3.09 Withdrawals from the Separate Account
If the Contract Holder or you, as applicable, requests a partial
or full withdrawal (see 7.02) from the Funds, a withdrawal charge
may apply (see 7.04).
Section 4. Aetna GET Fund (GET Fund)
- --------------------------------------------------------------------------------
The following provisions apply if the GET Fund is available.
4.01 GET Fund Guarantee Period
For each GET Fund series, the period for which the GET Fund
guarantee applies. The guarantee period ends on the Maturity Date.
4.02 GET Fund Offering Period
The period, usually from one to three months, during which the
Contract Holder or you, as applicable, may transfer or allocate
amounts to a GET Fund series. Each GET Fund series has a specific
offering period. Amounts transferred or allocated prior to the
date on which the guarantee period begins are invested in money
market instruments.
We will specify a minimum total asset amount required at the end
of an offering period to offer a GET Fund series. If the minimum
is not achieved, we reserve the right not to begin the guarantee
period. If a GET Fund series is not begun, we will mail a notice
to all Contract Holders or you, as applicable, who have made
allocations to that GET Fund series no less than 15 calendar days
after the end of the offering period. The Contract Holder or you,
as applicable, then has 45 calendar days from the end of the
offering period to reallocate the amount allocated to the GET Fund
to any other available Investment Options. During this time, GET
Fund assets are invested in money market instruments. If the
Contract Holder or you, as applicable, makes no election by the
end of the 45-day period, at the next Valuation Date, we will
allocate the amount in the terminated GET Fund series to the money
market fund available under the Contract.
We reserve the right to specify a maximum total asset amount for a
GET Fund series. If the maximum is achieved, we reserve the right
to set a date on which we will stop accepting allocations for that
GET Fund series. We will announce the date on which we will stop
accepting transfers and allocations 10 calendar days prior to that
date.
4.03 GET Fund Guarantee
On the Maturity Date of each GET Fund series, the GET Fund
accumulation unit value for that series will not be less than the
GET Fund accumulation unit value determined at the close of
business on the last day of the offering period. If necessary to
offset any shortfall in the GET Fund accumulation unit value, we
will transfer funds from our General Account to the Separate
Account. The GET Fund guarantee does not apply to transfers or
withdrawals made before the Maturity Date.
If GET Fund accumulation units are adjusted at any time during the
guarantee period, the GET Fund guarantee will be restated. We
calculate the restated guarantee so that it is equivalent to the
original guarantee for that GET Fund series.
A daily charge is assessed on the amount, if any, allocated to the
GET Fund. This charge for the GET Fund guarantee is shown on
Contract Schedule I under Daily Charges to the Separate Account.
8
<PAGE>
4.04 GET Fund Maturity Date
The GET Fund Maturity Date is the date on which the guarantee
period ends and GET Fund accumulation units are liquidated.
Prior to the Maturity Date for each series, we send a written
notice of the date to each Contract Holder or you, as applicable,
who has an Individual Account value in that series. In response,
the Contract Holder or you, as applicable, must tell us to which
available Investment Options to transfer the amount in the GET
Fund on the Maturity Date. If we do not receive instructions, on
the Maturity Date we transfer the portion of the Individual
Account value held in the GET Fund to another GET Fund series, if
available. If no GET Fund series is available, we transfer the
amount to the Fund or Funds we designate in the written notice.
4.05 Transfers or Withdrawals from the GET Fund
Transfers or withdrawals from the GET Fund before the Maturity
Date are based on the GET Fund unit value for the next Valuation
Date following our receipt of the request in Good Order (see 7.01
and 7.02).
Section 5. Fixed Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Account is available as shown on
Contract Schedule I under Fixed Interest Options Available.
5.01 Fixed Account Minimum Guaranteed Interest Rate
The Fixed Account minimum guaranteed interest rate is shown on
Contract Schedule I under Fixed Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Account during the calendar year. The one year minimum guaranteed
interest rate will be established prior to each calendar year and
will be made available to the Contract Holder or you, as
applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
you, as applicable.
5.02 Transfers from the Fixed Account
Each calendar year, the percentage shown on Contract Schedule I
under Fixed Account Annual Transfer Limit of the amount in the
Fixed Account may be transferred to any available Investment
Options. The amount available for transfer will be based on the
Individual Account value in the Fixed Account as of the date we
receive the transfer request in Good Order at our Home Office. We
may, on a temporary basis, allow transfer of a larger percentage.
5.03 Withdrawals from the Fixed Account
If the Contract Holder or you, as applicable, requests a partial
or full withdrawal (see 7.02) from the Fixed Account, a withdrawal
charge may apply (see 7.04).
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Section 6. Guaranteed Accumulation Account (GAA)
- --------------------------------------------------------------------------------
The following provisions apply if the Guaranteed Accumulation Account is
available as shown on Contract Schedule I under Fixed Interest Options
Available.
6.01 Nonunitized Separate Account
The Nonunitized Separate Account is established under Title 38a,
Section 38a-433 of the Connecticut General Statutes and is subject
to New York insurance law. There are no discrete units for this
account. We own the assets held in the Nonunitized Separate
Account; we are not a trustee of those assets. The Contract Holder
or you do not participate in the investment gain or loss from
assets held in the Nonunitized Separate Account. Such gain or loss
is borne entirely by us. Income, gains or losses, realized or
unrealized, are credited to or charged against the Nonunitized
Separate Account without regard to our other income, gains or
losses. Nonunitized Separate Account assets, to the extent of
reserves and other Contract liabilities, cannot be charged with
liabilities arising out of any other business we conduct.
6.02 GAA Minimum Guaranteed Interest Rate
All Contributions allocated to a GAA guaranteed term (see 6.04)
earn a rate of interest which we determine and which is guaranteed
when the Contribution remains in the guaranteed term until the
Maturity Date. We will declare the interest rate applicable to a
specific guaranteed term at the start of the deposit period for
that guaranteed term. The rate credited will never be less than
the minimum interest rate shown on Contract Schedule I under
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate.
For guaranteed terms of one year or less, one guaranteed rate is
credited for the full guaranteed term. For longer guaranteed
terms, we may credit an initial guaranteed interest rate from the
date of deposit to the end of a specified period within the
guaranteed term. We may credit different interest rates for
subsequent specified periods throughout the guaranteed term.
6.03 Deposit Period
A deposit period is the period of time we determine during which
we accept allocations (Contributions, transfers, or reinvestments)
to one or more guaranteed terms. We reserve the right to extend
the deposit period.
6.04 Guaranteed Term
A guaranteed term is the period of time for which we guarantee the
declared interest rate for allocations (Contributions, transfers,
or reinvestments) to GAA guaranteed terms. We may offer guaranteed
terms ranging in duration from one to ten years. During each
deposit period, we may offer more than one guaranteed term of
varying lengths. The guaranteed term begins the day after the
deposit period ends and ends on the Maturity Date. The Contract
Holder or you, as applicable, may allocate Contributions or
transfers to any or all guaranteed terms available in the current
deposit period.
6.05 Guaranteed Term Groups
A guaranteed term group is comprised of all GAA guaranteed terms
of the same duration.
6.06 Maturity Date, Maturity Value and Reinvestment
The Maturity Date is the last day of a guaranteed term. The
maturity value is the amount we pay at the end of a guaranteed
term. At least 18 calendar days before any guaranteed term
Maturity Date, we notify the Contract Holder or you, as
applicable, of the projected maturity value and the guaranteed
terms (and the guaranteed interest rates for each) available
during the then-current deposit period. The Contract Holder, or a
Participant, as applicable, may then tell us how to allocate the
maturity value.
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If the Contract Holder or you, as applicable, does not tell us how
to reinvest the maturity value, we reinvest it in a guaranteed
term of the same duration if one is available. If no guaranteed
term of the same duration is available, we reinvest the maturity
value in the guaranteed term with the next shortest duration. If
no shorter guaranteed term is available, we reinvest the maturity
value in the next longest term. We mail a confirmation of
reinvestment. The confirmation includes the guaranteed term in
which we have reinvested the maturity value and the guaranteed
interest rate for that term.
If we have reinvested the maturity value, during the month
following the Maturity Date, the Contract Holder or you, as
applicable, may transfer or withdraw the reinvested amount, with
interest earned (as of the date we receive the request) without
incurring a market value adjustment (see 6.08).
6.07 Transfers and Withdrawals from the GAA
Except as noted below, the Contract Holder or you, as applicable,
may transfer any portion or all of the amount held in the GAA.
Transfers or withdrawals before the Maturity Date may be subject
to a market value adjustment (see 6.08). Amounts invested in a
guaranteed term may not be transferred during the deposit period
or for a period of 90 calendar days after the close of the deposit
period.
Unless directed otherwise, when the Contract Holder or you, as
applicable, requests a transfer or withdrawal from the GAA, we
withdraw amounts proportionately from each guaranteed term in
which the Individual Account is invested. Within a guaranteed term
group (see 6.05), we withdraw first from the oldest deposit period
and then from the next oldest and so on until the amount requested
is withdrawn.
6.08 Application of the Market Value Adjustment
Transfers or withdrawals from the GAA before the Maturity Date are
subject to a market value adjustment, except for:
(a) A one-month period following the Maturity Date on which we
have automatically reinvested the value on the Maturity
Date;
(b) Distributions under the estate conservation option (see
7.10); and
(c) When the withdrawal is equal to the minimum distribution
amount required under the Code, using a method permitted by
the Code and which we offer.
For withdrawals and transfers from the GAA made (1) within six
months of your death or (2) to purchase Annuity payments under a
life-contingent Annuity option, the amount withdrawn from the GAA
is the greater of:
(a) The aggregate market value adjustment amount which is the
sum of all market value adjusted amounts calculated due to
a withdrawal before the Maturity Date (which may be
positive or negative); or
(b) The amount in the GAA.
For withdrawals made after the six month period following death,
the withdrawal or transfer amount is the aggregate MVA amount.
A MVA applies to amounts withdrawn to purchase Annuity payment
under a period certain Annuity option.
We may change the GAA market value adjustment by notifying the
Contract Holder in writing at least 90 calendar days before the
change becomes effective. Any such change will apply only to
guaranteed terms offered in deposit periods after the date the
change becomes effective and will apply to existing and new
Individual Accounts.
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6.09 Market Value Adjustment (MVA)
The market value adjustment reflects any change in yields on U.S.
Treasury Notes from the time an amount is allocated to a GAA
guaranteed term to the time of a transfer or withdrawal prior to
the Maturity Date. When the market value adjustment is applied,
the amount transferred or withdrawn from the GAA is multiplied by
a factor which is calculated as follows:
x
------
365
(1 + i)
------------------
x
------
365
(1 + j)
Where:
i is the deposit period yield
j is the current yield
x is the number of days remaining (computed from
Wednesday of the week of withdrawal) in the
guaranteed term.
The deposit period yield and the current yield are determined as
follows:
Deposit Period Yield
At the close of the last business day of each week of a
deposit period, we compute a yield that is the average of
the yields on U.S. Treasury Notes which mature in the last
three months of the guaranteed term. The deposit period
yield is the average of those yields for the deposit
period. If a withdrawal is made prior to the close of the
deposit period, the deposit period yield is the average of
the yields of U.S. Treasury Notes for each week preceding
the withdrawal. In the event that no U.S. Treasury Notes
will mature in the last three months of the guaranteed
term, we reserve the right to use the U.S. Treasury Notes
that mature in a following quarter.
Current Yield
The Current Yield is the average of the yields of the same
U.S. Treasury Notes used to calculate the deposit period
yield on the last business day of the week preceding
withdrawal.
If U.S. Treasury Notes are no longer available, we will
substitute a suitable replacement index, subject to
approval of the Superintendent of the New York Insurance
Department.
A detailed description of the MVA has been filed with the
Superintendent of the New York Insurance Department.
Section 7. Transfers, Withdrawals and Distributions
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7.01 Transfers
During the Accumulation Phase, the Contract Holder or you, as
applicable, may transfer all or any portion of the Individual
Account value among the available Investment Options. The
Individual Account value on any amount transferred from a Fund
will be based on the Fund's accumulation unit value next
determined after we receive the transfer request in Good Order at
our Home Office.
The Contract Holder or you, as applicable, may request a transfer
by properly completing a transfer request form and sending it to
our Home Office, or by otherwise complying with our administrative
procedures. We reserve the right to establish a minimum transfer
amount.
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7.02 Withdrawals
As allowed by the Plan, if applicable, and subject to provisions
of the Code (see 7.03), during the Accumulation Phase, the
Contract Holder or you, as applicable, may withdraw any portion or
all of the Individual Account value. For Code Section 403(b)
Plans, the Contract Holder or you, as applicable, may transfer the
amount withdrawn to another investment provider under the Plan or
roll over such amount that qualifies as an eligible rollover
distribution in accordance with Code Sections 403(b)(8),
401(a)(31) and 402(c) and applicable regulations. The Individual
Account value of any amount withdrawn from a Fund will be based on
the Fund's accumulation unit value next determined after we
receive the transfer request in Good Order.
The Contract Holder or you, as applicable, may request a
withdrawal by properly completing a withdrawal request form and
forwarding it to our Home Office, or by otherwise complying with
our administrative procedures. Unless the Contract Holder or you,
as applicable, requests otherwise, the withdrawal will be made
proportionately from the Investment Options in which the
Individual Account is invested.
A withdrawal charge may apply to amounts withdrawn (see 7.04). In
addition, a market value adjustment may apply to amounts withdrawn
from the GAA (see 6.08 and 6.09).
7.03 Withdrawal Restrictions Under the Code
The Code may impose restrictions on the amount and timing of
withdrawals. The restrictions applicable to the Contract are shown
on Contract Schedule I under Withdrawal Restrictions Under the
Code. Withdrawals that do not comply with the Code may be subject
to tax penalties.
7.04 Withdrawal Charge
During the Accumulation Phase, we may deduct a withdrawal charge
from the Individual Account value withdrawn. The charge, if any,
is a percentage of the amount withdrawn from the Funds and/or
Fixed Interest Options. The withdrawal charge will never exceed
8.5% of the total amount of Contributions, or the maximum
permitted by National Association of Securities Dealers, Inc.
(NASD) rules.
The withdrawal charge, if any, is shown on Contract Schedule I
under Withdrawal Charge.
7.05 Waiver of Withdrawal Charge
The withdrawal charge (see 7.04) does not apply in any of the
circumstances shown on Contract Schedule I under Waiver of
Withdrawal Charge.
In addition, we reserve the right to reduce, waive or eliminate
the withdrawal charge.
7.06 Reinstatement
Within 30 calendar days after a withdrawal, the Contract Holder or
you, as applicable may elect to reinstate all or a portion of the
proceeds of a full withdrawal if allowed by applicable law. We
must receive the reinstated amount within 60 calendar days of the
withdrawal.
Any maintenance fee and withdrawal charge imposed at the time of
the withdrawal is included in the reinstatement. If only a portion
of the amount withdrawn is reinstated, the amount of any
maintenance fee and withdrawal charge deducted will be restored
proportionally. The amount of any market value adjustment deducted
from any amount withdrawn from GAA is not included in the amount
reinstated.
Any amount reinstated to GAA will be credited to guaranteed terms
available in the current deposit period. We will reinvest it in a
guaranteed term of the same duration if one is available. If no
guaranteed term of the same duration is available, we reinvest the
maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term.
Amounts withdrawn from a GET Fund series are reinstated to the
current offering period if one is available. If no GET Fund
offering period is available, any amount withdrawn from the GET
Fund is reinstated equally among all other Investment Options in
which the Individual Account is invested.
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Amounts are reinstated among the Investment Options in the same
proportion as they were held at the time of withdrawal, except, as
noted above, for amounts from the GET Fund. Any maintenance fee
which falls due after the withdrawal and before the reinstatement
is deducted from the amount reinstated.
The number of accumulation units reinstated to any Fund is based
on the accumulation unit values next computed after we receive the
reinstatement request in Good Order at our Home Office.
Reinstatement is permitted only once.
7.07 Required Distributions
While an Individual Account remains in the Accumulation Phase, the
Code may require distribution of all or a portion of the
Individual Account value. The Contract Holder, you, or Contract
beneficiary, as applicable, must tell us when to begin
distributions. We have no responsibility for adverse tax
consequences as the result of the Contract Holder, you, or
Contract beneficiary, as applicable, not complying with minimum
distribution requirements.
The distribution requirements, if any, are shown on Contract
Schedule I under Required Distributions.
Generally, to meet distribution requirements, the Contract Holder,
you, or Contract beneficiary, as applicable, may request partial
withdrawals, a systematic distribution option (see 7.08) or an
Annuity option.
7.08 Systematic Distribution Options
During the Accumulation Phase, we offer three distribution
options, the Systematic Withdrawal Option (see 7.09), the Estate
Conservation Option (7.10), and the Life Expectancy Option (see
7.11). Under these options we make regularly-scheduled, automatic,
partial distributions of the Individual Account value.
Withdrawals from the Individual Account value for an SDO are made
proportionately from each investment option in which the account
is invested. No withdrawal charge applies to amounts distributed
under a systematic distribution option. A MVA will apply, however,
to amounts withdrawn from the GAA.
If applicable, all payments comply with the incidental death
benefit test of Code Section 401(a)(9). Any single or joint life
expectancy factor(s) used in the calculation of a systematic
distribution option will comply with Code Section 401(a)(9) and
related regulations and are generally based on the tables
associated with that section of the Code.
To request SWO, ECO or LEO, the Contract Holder, you, or Contract
beneficiary, as applicable, must complete an election form and
forward it to our Home Office. We may require a minimum Individual
Account value to elect an SDO. Generally, an SDO may be elected
only once and if revoked, may not be reinstated.
The availability of any specific option will be subject to terms
and conditions applicable to that option. Availability is also
determined by the Plan. We reserve the right to discontinue the
availability of an SDO option for future election. Payments will,
however, continue to you if you elected the option before the date
it is no longer available.
7.09 Systematic Withdrawal Option (SWO)
Under SWO, a portion of the Individual Account value is
automatically withdrawn and paid to you. The earliest date SWO
payments may begin is the date you attain [age 59 1/2 or] age 55
if you have separated from service at or later than age 55. SWO is
not available when a loan (if allowed under the Contract) is in
effect.
The Contract Holder, or you, as applicable, may elect one of the
following payments methods:
(a) Payment of a specified dollar amount annually
The amount distributed may not be more than 20% of the
Individual Account value as of the date SWO is elected.
The amount will remain constant unless a larger amount
is required under the Code's minimum distribution rules.
Each year, we will calculate the minimum distribution
required by dividing the Individual Account value as of
December 31 of the prior year by the life expectancy
factor. If the minimum distribution required is larger
than the amount requested, we distribute the minimum
required amount.
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(b) Payment over a specified period
Payments must be over a period of at least five years
unless a larger amount is required under the Code's
minimum distribution rules. The maximum period allowed
is determined by the life expectancy factor. The amount
paid each year is the Individual Account value as of
December 31 of the prior year divided by the remaining
number of payment years.
(c) Payment of a percentage of the Individual Account value
We will distribute an amount equal to or less than 20%
of the Individual Account value as of the date SWO is
elected. Each year the amount distributed is calculated
by multiplying the Individual Account value on December
31 of the prior year by the percentage elected. Payments
are made each year until you attain age 70 1/2.
For SWO, the life expectancy factor for the initial distribution
is reduced by one.
If amounts are withdrawn from the GAA, a MVA (see 6.08 and 6.09)
will apply to amounts withdrawn under SWO.
7.10 Estate Conservation Option (ECO)
Under ECO, a portion of the Individual Account value is
automatically withdrawn and paid to you. The earliest date ECO
payments may begin is the first day of the calendar year in which
you attain age 70 1/2. (A spousal beneficiary may elect ECO and
payments may begin as of the date of your death.)
When ECO is in effect, we will calculate and distribute an amount
equal to the minimum distribution required under the Code.
Generally, the amount distributed is equal to the Individual
Account value as of December 31 of the year prior to the payment
year divided by a single or joint life expectancy factor. The life
expectancy factor is recalculated each year.
If amounts are withdrawn from the GAA, no MVA applies to amounts
withdrawn under ECO.
7.11 Life Expectancy Option (LEO)
This option is available only to you if you have separated from
service. LEO provides automatic, substantially equal periodic
payments of the Individual Account value prior to age 59 1/2. LEO
is not available when a loan (if allowed under the Contract) is in
effect.
To avoid tax penalties, the calculation of payments under LEO must
comply with methods allowed under federal regulations. Currently,
we offer the following three methods:
(a) Life expectancy method
The annual payment amount is recalculated each year. It
is calculated by dividing the Individual Account value
by your life expectancy. The amount distributed each
year will be based on the Individual Account value as of
December 31 of the prior year.
(b) Amortization method
The annual payment amount remains level. The annual
amount is determined by amortizing the Individual
Account value over your life expectancy or the joint
life expectancies of you and the beneficiary at an
interest rate that does not exceed a reasonable interest
rate on the date payments begin.
(c) Annuity method
The annual payment amount remains level. The amount is
determined by dividing the Individual Account value by
an annuity factor beginning at your age in the year
payments begin and continuing for your life and which is
derived using an interest rate that does not exceed a
reasonable interest rate on the date payments begin.
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<PAGE>
As allowed by law, we may offer additional methods.
Once a payment method is elected, payments must continue for at
least five years or until you attain age 59 1/2, whichever is
later. We will not make payments under LEO once you attain age 70.
At age 70, you must elect another distribution option or use all
or a portion of the Individual Account value to purchase Annuity
payments.
If amounts are withdrawn from the GAA, a MVA (see 6.08 and 6.09)
will apply to amounts withdrawn under LEO.
7.12 Individual Account Termination
If the Individual Account value is an amount equal to or less than
the amount shown on Contract Schedule I under Individual Account
Termination Amount and we have received no Contributions for 36
months, we reserve the right to terminate an Individual Account.
Before we do this, we notify the Contract Holder or you, as
applicable, 90 calendar days in advance. When we terminate an
Individual Account, we do not deduct a withdrawal charge. We do
not exercise this right when the Individual Account value is equal
to or less than the amount shown on Contract Schedule I under
Individual Account Termination Amount due to investment
performance.
Section 8. Loans
- --------------------------------------------------------------------------------
8.01 Loan Availability
Contract Schedule I indicates whether loans are available under
the Contract. If available, a loan endorsement is included as part
of the Contract.
Section 9. Death Benefit During the Accumulation Phase
- --------------------------------------------------------------------------------
9.01 Death Benefit
If you die during the Accumulation Phase, we pay a death benefit.
The amount of the death benefit is the Individual Account value as
of the next Valuation Date following our receipt of acceptable
proof of death at our Home Office (see 6.08 for amounts in the
GAA).
9.02 Contract Beneficiary
The Contract beneficiary is shown on Contract Schedule I under
Contract beneficiary. Generally, you may name a beneficiary under
the Plan (the Plan beneficiary). If allowed by the Plan, when
designating the beneficiary, the Contract Holder or you, as
applicable, may specify, the form of payment as permitted by the
Code. The Contract beneficiary and the form of payment, if
applicable, may be designated or changed in writing or as we may
otherwise allow in our administrative procedures.
9.03 Distribution of Death Benefit
Generally, if the Plan beneficiary is your surviving spouse,
distribution of the death benefit must begin no later than the
year you would have attained age 70 1/2 or any other date allowed
under federal law or regulations.
If the Plan beneficiary is not your surviving spouse, generally,
the death benefit must be used to purchase Annuity payments within
one year of the year of your death or otherwise paid within five
years of the year of your death.
Annuity payments to a Plan beneficiary may not extend beyond the
period specified in the Code.
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Part II. Annuity Phase
Section 10. General Provisions
- --------------------------------------------------------------------------------
10.01 Election
The Contract Holder, you, or Contract or Plan beneficiary, as
applicable, may elect an Annuity option by properly completing an
election form and forwarding it to our Home Office no later than
30 calendar days before the desired first Annuity payment date.
All Annuity option elections must comply with any Plan
requirements and regulatory requirements including the Code
minimum distribution requirements.
All or any portion of the Individual Account value (after the
deduction of any applicable premium tax) may be used to purchase
Annuity payments (for amounts from the GAA, see 6.08).
The Contract Holder, you, or Contract or Plan beneficiary, as
applicable, must also select an Annuity option (see 10.03) and the
Investment Options (see 10.06).
Once payments begin, an Annuity option may not be revoked, nor may
any amount be withdrawn except as noted below.
10.02 Change of Annuity Provisions
We reserve the right to change or eliminate Annuity options (see
10.03) and to change the mortality table (see 10.04) we use to
calculate payment rates for life-contingent Annuity payments. If
we do this, any change will not take effect until at least 12
months after the Contract Effective Date, or until at least 12
months after any previous change. A change to Annuity options or
the mortality table used to calculate payment rates will not apply
to Individual Accounts established before the date the change
becomes effective.
10.03 Annuity Options
The Contract Holder, you, or Contract or Plan beneficiary, as
applicable, must elect one of the following:
Option 1: Payments for a Stated Period
This option provides payments for a stated period. The number of
years in the stated period must fall within the range shown on
Contract Schedule II under Payment Period.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time. If a withdrawal is requested within five years of the first
payment, the lump-sum payment is treated as a withdrawal during
the Accumulation Phase and any applicable withdrawal charge
applies (see 7.04).
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 2: Life Income for One Annuitant
This option provides payments for the life of the Annuitant. If
this option is elected, the Contract Holder, you, or Contract or
Plan beneficiary, as applicable, must also choose one of the
following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period within the range shown
on Contract Schedule II under Payment Period; or
(c) Fixed-only cash refund: at the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal
to the amount applied to the Annuity (minus any applicable
premium tax), minus the amount of payments made to the
Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
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Option 3: Life Income for Two Annuitants
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have
died. If this option is elected, the Contract Holder, you, or
Contract or Plan beneficiary as applicable, must also choose one
of the following:
(a) 100% of the payment amount to continue after the first
death; or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first
death; or
(d) 100% of the payment amount to continue after the first
death with payments guaranteed to the beneficiary after the
second death for a period within the range shown on
Contract Schedule II under Payment Period; or
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount to
continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the
first death with a cash refund to the Contract beneficiary
after the second death. The amount of the cash refund is
equal to the amount applied to the Annuity (minus any
applicable premium tax), minus the amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
Other Options
As allowed under applicable state law, we reserve the right to
make other options available.
10.04 Mortality Table
The mortality table for the Contract is shown on Contract Schedule
II under Mortality Table.
10.05 Payments
The first payment amount must be at least $50 per month or $250
per year. We reserve the right to increase the minimum first
payment amount, if allowed by state law, based on increases
reflected in the Consumer Price Index-Urban (CPI-U) since July 1,
1993.
To calculate the first payment of a variable Annuity or the
guaranteed payments for a fixed Annuity, we will use the
Annuitant's adjusted age and, if applicable, the second
Annuitant's adjusted age. The Annuitant's adjusted age and, if
applicable, the second Annuitant's adjusted age is the person's
age as of the birthday closest to the day Annuity payments begin,
reduced as follows:
(a) Reduced by one year for payments before January 1, 2000;
(b) Reduced by two years for payments beginning during the
period from January 1, 2000 through December 31, 2009;
(c) Starting on January 1, 2010, reduced by one additional year
for payments beginning in each succeeding decade.
If a fixed Annuity is elected, we will use the applicable current
settlement option rates if they will provide higher fixed Annuity
payments.
10.06 Investment Options
When an Annuity option is elected, the Contract Holder, you, or
Contract or Plan beneficiary, as applicable, must elect:
(a) A fixed Annuity for which the underlying investment is our
General Account; or
(b) A variable Annuity for which the underlying investment is
one or more of the available Funds; or
(c) A combination of (a) and (b).
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For a variable Annuity, the maximum number of Funds available
during the Annuity Phase is shown on Contract Schedule II under
Maximum Number of Funds. The Funds available during the Annuity
Phase might not be the same as those available during the
Accumulation Phase.
10.07 Fixed Annuity Minimum Guaranteed Interest Rate
For a fixed Annuity, the interest rate will never be less than the
minimum guaranteed rate shown on Contract Schedule II under Fixed
Annuity Minimum Guaranteed Interest Rate.
10.08 Variable Annuity Assumed Annual Net Return Rate Election
If a variable Annuity is elected, the Contract Holder, or you, as
applicable must also elect an assumed annual net return rate of
3.5% or 5%. The initial Annuity payment for the option elected
will reflect the assumed annual net return rate. If subsequent
Annuity payments are to remain level, the Separate Account must
earn this rate, plus enough to cover the mortality and expense
risk charge shown on Contract Schedule II under Daily Charges to
the Separate Account plus any applicable administrative charge.
10.09 Variable Annuity Transfers
If a variable Annuity is elected, the Contract Holder, you, or
Contract or Plan beneficiary, as applicable, may request that we
transfer all or a portion of the amount allocated to a Fund to any
other available Fund. Transfer requests must be expressed as a
percentage of the allocation among the Funds on which the variable
payment is based. The number of transfers allowed each calendar
year is shown on Contract Schedule II under Number of Annual
Transfers Among Funds. We reserve the right to allow additional
transfers. Transfers are effective as of the next Valuation Date
following our receipt of a transfer request in Good Order at our
Home Office.
10.10 Fund Annuity Units
The number of Fund Annuity units is based on the amount of the
first variable Annuity payment which is equal to:
(a) The portion of the Individual Account value (minus any
applicable premium tax) used to purchase a variable
Annuity; divided by
(b) One thousand; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion of the variable payment will be divided by
the appropriate Fund's, or Funds', Annuity unit value (see 10.11)
on the tenth Valuation Date before the due date of the first
payment to determine the number of Fund Annuity units. The number
of each Fund's Annuity units remains fixed unless changed by a
subsequent Fund transfer or if the Annuity option provides for a
change in units (i.e., under life income for two annuitants option
after the first death). Each future payment is equal to the sum of
the products of each Fund's Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity unit value on the
tenth Valuation Date before the payment due date is used.
10.11 Fund Annuity Unit Value
For any Valuation Date, a Fund's Annuity unit value is equal to:
(a) The Annuity unit value for the prior Valuation Date;
multiplied by
(b) The Annuity unit net return factor (see 10.12) for the
current Valuation Date; multiplied by
(c) A factor to reflect the assumed annual net return rate. The
factor for an assumed annual net return rate of 5% is
0.9998663; for 3.5% it is 0.9999058.
The dollar value of a Fund Annuity unit and the amount of a
variable Annuity payment may increase or decrease due to
investment gain or loss. We will not change the payment amount due
to changes in mortality, expense results, or the administrative
charge.
19
<PAGE>
10.12 Fund Annuity Net Return Factor
The Annuity net return factor(s) are used to compute all variable
Annuity payments for any Fund.
The net return factor(s) for each Fund is equal to 1.0000000 plus
the net return rate.
The net return rate equals:
[a - b - c]
------------- - e
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule II under Daily Charges to the Separate Account.
A net return rate may be more or less than 0%. The value of a
share of a Fund is equal to the net assets of the Fund divided by
the number of shares outstanding.
10.13 Death Benefit During the Annuity Phase
The Contract Holder, or you, as applicable, must name a
beneficiary for the Annuity Phase. Unless not allowed by the Plan,
or restricted by the Contract Holder, or you, as applicable, the
beneficiary may name a beneficiary.
If an Annuitant(s) dies, any remaining guaranteed payments
continue to the beneficiary. Payments are made at least as rapidly
as provided by the option in effect at the death of the Annuitant.
Annuity payments to an beneficiary may not extend beyond (1) the
life of the beneficiary, or (2) any period certain greater than
the beneficiary's life expectancy as determined by the Code.
The beneficiary may also elect a lump-sum payment equal to the
present value of any remaining payments.
The interest rate used to determine the first Annuity payment is
used to calculate the present value. The present value is
determined as of the next Valuation Date following our receipt of
acceptable proof of death and a written claim for the death
benefit.
Unless not allowed by the Plan or restricted by the Contract
Holder, or you, as applicable, if the beneficiary dies while
receiving payments, the present value of any remaining guaranteed
payments is paid in a lump-sum to the beneficiary's beneficiary or
to the beneficiary's estate.
10.14 Charges to the Separate Account
During the Annuity Phase, we may deduct a mortality and expense
risk charge from the Individual Account value invested in the
Separate Account. In addition, we reserve the right to impose an
administrative charge.
The maximum charges to the Separate Account are shown on Contract
Schedule II under Daily Charges to the Separate Account. If
applicable, the charges are deducted daily.
20
<PAGE>
OPTION 1: Payments for a Stated Period
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $17.91 20 $5.51
10 9.61 25 4.71
15 6.87 30 4.18
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.12 20 $5.75
10 9.83 25 4.96
15 7.10 30 4.45
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.74 20 $6.51
10 10.51 25 5.76
15 7.82 30 5.28
- --------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
21
<PAGE>
Option 2: Life Income for One Annuitant
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
Adjusted payments for payments payments payments payments Cash Refund
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 $4.44 $4.42 $4.39 $4.32 $4.22 $4.19
60 4.95 4.93 4.86 4.73 4.55 4.57
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
70 6.64 6.54 6.23 5.76 5.19 5.70
75 8.06 7.82 7.14 6.25 5.38 6.51
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $4.72 $4.71 $4.67 $4.60 $4.50
60 5.23 5.21 5.13 5.00 4.82
65 5.94 5.89 5.73 5.48 5.15
70 6.92 6.81 6.49 6.00 5.43
75 8.35 8.08 7.38 6.48 5.62
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 $5.63 $5.61 $5.56 $5.47 $5.36
60 6.12 6.09 6.00 5.85 5.65
65 6.82 6.75 6.57 6.30 5.95
70 7.80 7.67 7.30 6.78 6.21
75 9.23 8.93 8.16 7.23 6.38
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
22
<PAGE>
Option 3: Life Income for Two Annuitants
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate
- ----------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
- ----------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67
55 60 3.99 4.44 4.71 3.98 4.20 3.94
65 60 4.38 4.97 5.32 4.38 4.93 4.29
65 70 4.93 5.68 6.15 4.91 5.27 4.74
75 70 5.69 6.68 7.32 5.62 6.67 5.29
75 80 6.78 8.11 8.99 6.54 7.36 5.93
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $3.97 $4.35 $4.56 $3.97 $4.31
55 60 4.27 4.73 5.00 4.26 4.48
65 60 4.66 5.25 5.61 4.65 5.22
65 70 5.19 5.97 6.44 5.17 5.54
75 70 5.95 6.96 7.61 5.87 6.95
75 80 7.04 8.39 9.29 6.79 7.64
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 60 5.15 5.63 5.91 5.14 5.38
65 60 5.52 6.14 6.51 5.51 6.10
65 70 6.04 6.84 7.34 6.00 6.41
75 70 6.77 7.84 8.51 6.68 7.81
75 80 7.86 9.28 10.20 7.57 8.49
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
23
<PAGE>
- --------------------------------------------------------------------------------
Aetna
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
Certificate of Group Annuity Coverage
- --------------------------------------------------------------------------------
C-CDA-99(NY)
Exhibit 99-B.4.10
Aetna Life Insurance and Annuity Company
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as follows.
Delete Section 9.01, Death Benefit, and replace it with the following:
If a Participant dies during the Accumulation Phase, we pay a death benefit. If
the Contract beneficiary requests payment of the death benefit as a lump sum or
Annuity option within six months of the Participant's death, the amount of the
death benefit MVA on the date we receive notice of death and a request for
payment in Good Order is guaranteed to be the greater of:
(a) The Individual Account value, minus any outstanding loan balance,
plus any applicable aggregate positive MVA; or
(b) The total of Contributions to the Individual Account, minus:
(1) Any amount withdrawn,
(2) Any outstanding loan balance,
(3) Or any amount used to purchase Annuity payments.
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
E-MMGDB-99(NY)
Exhibit 99-B.4.11
Aetna Life Insurance and Annuity Company
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as follows.
Subject to the provisions below, loans are available under the Contract.
During the Accumulation Phase, loans are available (1) as permitted under
applicable law, and (2) subject to our standard terms and conditions.
The Loan Account
For each loan, an amount equal to the loan amount is transferred from the
Investment Options in which the Individual Account is invested and is credited
to the loan account. [The loan account is then credited with interest at a rate
which is not less than the loan interest rate (which is the rate we charge on a
loan as defined below), less [3.0%], on an annual basis.]
Loan Effective Date
The loan effective date is the date we receive a loan request in Good Order at
our Home Office. [For loan requests received in Good Order on the 29th, 30th, or
31st day of the month, however, the loan effective date is the first business
day of the following month.]
Amount Available For Loan
The amount available for loan is limited to the Individual Account value
attributable to employee contributions, plus any additional amounts allowed by
the Plan as determined by the Contract Holder (the vested Individual Account
value).
[For plans subject to ERISA, the minimum loan amount is $1,000; for plans not
subject to ERISA, the minimum loan amount is $1,000 for non-residential loans
and $2,500 for residential loans.]
The maximum loan amount is the lesser of:
(1) Fifty percent of the vested Individual Account value, including the
amount, if any, in the loan account, reduced by the amount of any
outstanding loan balance on the date we receive a loan request in
Good Order at our Home Office; or
(2) Fifty thousand dollars reduced by the highest outstanding loan
balance for the preceding 12 months.
The total amount of all outstanding loans cannot exceed $50,000.
Amounts available from some Investment Options may be subject to the following
limitations:
(1) Amounts used to satisfy loan requests will be withdrawn
proportionately from the investment options under the Individual
Account unless otherwise specified by the Participant. However,
amounts may not be withdrawn from [the Guaranteed Accumulation
Account (GAA) or from] the Aetna GET fund (GET Fund). Amounts
withdrawn do not share in the investment experience of the options
from which they were withdrawn; and
[(2) If the loan amount requested exceeds the amount held in the
Individual Account (excluding amounts held in GAA or GET Fund),
funds must be transferred from GAA and/or GET Fund to one of the
other investment options in order to be available for loan.
Requests for transfers of funds from GAA or GET Fund will be
honored only if the value in the other investment options is
insufficient to satisfy the loan request. Funds transferred from
GAA prior to the end of a Guaranteed Term will be subject to a
Market Value Adjustment, which may be positive or negative. The
amount available for transfer from GET Fund may be more or less
than the amount initially deposited into GET Fund.]
To obtain the loan amount requested, these limitations may require transfer of
funds among Investment Options. [A market value adjustment may apply to amounts
transferred from the Guaranteed Accumulation Account.]
1
E-MMLOAN-99(NY)
<PAGE>
Loan Interest Rate
For plans subject to ERISA: We set a loan interest rate on the first calendar
day of each month. The rate will be equal to the Monthly Average Corporates
(which is Moody's Corporate Bond Yield Average-Monthly Average Corporates
published by Moody's Investor Service or its successor, or a substantially
similar average that may be allowed by law or regulation) for the calendar month
beginning two months before the loan interest rate is effective. The initial
rate for each loan is the rate for the calendar month in which the Loan
Effective Date occurs. The initial interest rate is effective for not less than
three months and not more than one year. For each subsequent period, the
interest rate is adjusted if the new rate is at least 0.5% higher or lower than
the current rate. We provide reasonable notification in writing of any change to
the loan interest rate.
For plans not subject to ERISA: The loan interest rate will be not greater than
8% on an annual basis.
Loan Repayment
A loan may be repaid in full at any time, or repaid as follows:
(1) Principal and interest must be amortized and repaid quarterly. The
repayment period is selected by the Participant. The repayment
period for non-residential loans is from one (1) to five (5) years.
For residential loans, the repayment period is from one (1) to (20)
years. Once a repayment period has been selected, it cannot be
extended; however, a loan may be repaid in full at any time;
(2) The first quarterly payment will be due three months after the loan
effective date, with subsequent quarterly payments due in three
month intervals. [Payments not received by our Home Office within
31 days following the due date will be considered in default]; and
(3) The principal portion of each loan payment will be allocated among
the same investment options and in the same proportion [as when the
loan was taken]. If Aetna receives a payment that is in excess of
the amount due, the excess will be applied to the principal portion
of the outstanding loan. Any payment that is less than the amount
due will be returned to the Participant.
Partial Withdrawal(s) While A Loan Is Outstanding
While a loan is outstanding, the amount available for partial withdrawal is
equal to the vested Individual Account value, including the loan account, minus
110% of the outstanding loan balance.
Full Withdrawal While A Loan Is Outstanding
When a full withdrawal is requested while a loan is outstanding, one of the
following occurs:
(1) If the amount of the vested Individual Account value available for
distribution is sufficient to repay (a) the outstanding loan
balance, plus (b) any applicable withdrawal charge due on the
outstanding loan balance, that amount (the total of a and b), minus
the loan account balance, is deducted from the vested Individual
Account value and the loan is canceled. The outstanding loan
balance, if not previously reported, will be reported to the
Internal Revenue Service as a distribution.
(2) If the amount of the vested Individual Account value available for
distribution is not sufficient to repay (a) the outstanding loan
balance, plus (b) any applicable withdrawal charge due on the
outstanding loan balance, the withdrawal cannot be made until the
loan is repaid in full.
Electing An Annuity Option While A Loan Is Outstanding
Before all or any portion of the vested Individual Account value is used to
purchase Annuity payments, the Participant may repay any outstanding loan
balance, or the vested Individual Account value is adjusted to cancel the loan
as described in "Full Withdrawal While a Loan Is Outstanding" above.
Death Of The Participant While A Loan Is Outstanding
If a death benefit claim is submitted for an Individual Account with an
outstanding loan, the vested Individual Account value, including the amount of
the loan account, is reduced by the amount of the outstanding loan balance
before the death benefit amount is determined.
2
<PAGE>
[Loan Default: If we do not receive a loan payment when it is due, the
defaulted payment is treated as follows:
(1) If the amount of the vested Individual Account value available for
distribution is sufficient to repay (a) the defaulted payment, plus
(b) any withdrawal charge due on the defaulted payment, then that
amount (the total of a and b) is deducted from the vested
Individual Account value. The amount of the defaulted payment is
reported to the Internal Revenue Service as a distribution.
(2) If the amount of the vested Individual Account value available for
distribution is not sufficient to repay (a) the defaulted payment,
plus (b) any withdrawal charge due on the defaulted payment, until
such time that the amount due (the total of a and b) can be
distributed, the loan account continues to earn interest, and
interest is charged on the defaulted payment. The amount of the
defaulted payment is reported to the Internal Revenue Service as a
deemed distribution. At the time the amount due can be distributed,
it is withdrawn from the vested Individual Account value.]
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
3
E-MMLOAN-99(NY)
Exhibit 99-B.4.12
-------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
If you have questions about the Contract, call the toll-free number shown above.
Group, Combination, Deferred Annuity Contract (Nonparticipating)
Aetna Life Insurance and Annuity Company (ALIAC), a stock company, will pay
benefits according to the terms and conditions set forth in this Contract. This
Contract is delivered in [YOUR STATE] and is subject to the laws of that
jurisdiction.
Please read this Contract carefully. It states ALIAC's contractual rights and
obligations as well as the rights and obligations of the Contract Holder and
Participants.
Specifications
- --------------------------------------------------------------------------------
| Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Type of Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Contract Holder
| SPECIMEN
- --------------------------------------------------------------------------------
| Contract No.
| SPECIMEN
- --------------------------------------------------------------------------------
| Contract Effective Date
| SPECIMEN
Right to Cancel
- --------------------------------------------------------------------------------
The Contract Holder may cancel this Contract within 10 calendar days of
receiving it by returning it to ALIAC at the address shown above, or to the
agent from whom it was purchased. Within seven calendar days of receiving the
cancellation request at its Home Office, ALIAC will return any Contributions
received, plus any increase, or minus any decrease in value, on the amount, if
any, allocated to the Separate Account.
Signed at the Home Office on the Effective Date.
/s/ Thomas J. McInerney /s/ Kirk Wickman
- ----------------------- -----------------
President Secretary
All payments and values provided by the group Contract, when based on the
investment experience of the Separate Account, are variable and are not
guaranteed as to fixed dollar amount. Amounts allocated to the Guaranteed
Accumulation Account, if withdrawn before a guaranteed term maturity date, may
be subject to a market value adjustment. The market value adjustment may result
in an increase, or a decrease, in the Individual Account value.
G-CDA-99
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Contract Schedule I. Accumulation Phase S I - 1
Contract Schedule II. Annuity Phase S II - 1
Definitions 1
Section 1. General Contract Provisions 3
1.01 Entire Contract ........................................... 3
1.02 Nonparticipating Contract ................................. 3
1.03 Control of Contract ....................................... 3
1.04 Certificate ............................................... 3
1.05 Incontestability .......................................... 3
1.06 Grace Period .............................................. 3
1.07 Change of Contract ........................................ 3
1.08 Payments .................................................. 4
1.09 Deferral of Payment ....................................... 4
1.10 Proof of Age .............................................. 4
1.11 Evidence of Survival ...................................... 4
1.12 Misstatements and Adjustments ............................. 5
1.13 Reports ................................................... 5
1.14 State Laws ................................................ 5
1.15 Claims of Creditors ....................................... 5
1.16 Maintenance Fee ........................................... 5
1.17 Charges for Additional Services ........................... 5
1.18 Charges Subject to Change ................................. 5
Part I. Accumulation Phase 6
Section 2. Contributions and Individual Account Value 6
2.01 Contributions ............................................. 6
2.02 Premium Tax ............................................... 6
2.03 Individual Account ........................................ 6
2.04 Experience Credit ......................................... 6
2.05 Individual Account Value .................................. 6
Section 3. Separate Account 7
3.01 General ................................................... 7
3.02 Funds Available ........................................... 7
3.03 Change or Substitution of Funds ........................... 7
3.04 Accumulation Units ........................................ 7
3.05 Accumulation Unit Value ................................... 7
3.06 Net Investment Factor ..................................... 7
3.07 Charges to the Separate Account ........................... 8
3.08 Fund Transfers ............................................ 8
3.09 Withdrawals from the Separate Account ..................... 8
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 4. Aetna GET Fund 8
4.01 GET Fund Guarantee Period ..................................... 8
4.02 GET Fund Offering Period ...................................... 8
4.03 GET Fund Guarantee ............................................ 9
4.04 GET Fund Maturity Date ........................................ 9
4.05 Transfers or Withdrawals from the GET Fund .................... 9
Section 5. Fixed Account 9
5.01 Fixed Account Minimum Guaranteed Interest Rate ................ 9
5.02 Transfers from the Fixed Account .............................. 10
5.03 Withdrawals from the Fixed Account ............................ 10
Section 6. Fixed Plus Account 10
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate ........... 10
6.02 Transfers from the Fixed Plus Account ......................... 10
6.03 Partial Withdrawals from the Fixed Plus Account ............... 11
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account . 11
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision ........ 11
Section 7. Guaranteed Accumulation Account (GAA) 11
7.01 Nonunitized Separate Account .................................. 11
7.02 GAA Minimum Guaranteed Interest Rate .......................... 12
7.03 Deposit Period ................................................ 12
7.04 Guaranteed Term ............................................... 12
7.05 Guaranteed Term Groups ........................................ 12
7.06 Maturity Date, Maturity Value and Reinvestment ................ 12
7.07 Transfers and Withdrawals from the GAA ........................ 12
7.08 Application of the Market Value Adjustment .................... 13
7.09 Market Value Adjustment (MVA) ................................. 13
Section 8. Transfers, Withdrawals and Distributions 14
8.01 Transfers ..................................................... 14
8.02 Withdrawals ................................................... 14
8.03 Withdrawal Restrictions Under the Code ........................ 14
8.04 Withdrawal Charge ............................................. 15
8.05 Waiver of Withdrawal Charge ................................... 15
8.06 Reinstatement ................................................. 15
8.07 Required Distributions ........................................ 15
8.08 Systematic Distribution Options (SDOs) ........................ 16
8.09 Individual Account Termination ................................ 16
Section 9. Loans 16
9.01 Loan Availability ............................................. 16
Section 10. Death Benefit During the Accumulation Phase 16
10.01 Death Benefit ................................................. 16
10.02 Contract Beneficiary .......................................... 16
10.03 Distribution of Death Benefit ................................. 16
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Part II. Annuity Phase 17
Section 11. General Provisions 17
11.01 Election ..................................................... 17
11.02 Change of Annuity Provisions ................................. 17
11.03 Annuity Options .............................................. 17
11.04 Mortality Table .............................................. 18
11.05 Payments ..................................................... 18
11.06 Investment Options ........................................... 18
11.07 Fixed Annuity Minimum Guaranteed Interest Rate ............... 19
11.08 Variable Annuity Assumed Annual Net Return Rate Election ..... 19
11.09 Variable Annuity Transfers ................................... 19
11.10 Fund Annuity Units ........................................... 19
11.11 Fund Annuity Unit Value ...................................... 19
11.12 Fund Annuity Net Return Factor ............................... 20
11.13 Death Benefit During the Annuity Phase ....................... 20
Annuity Tables 21
</TABLE>
iii
<PAGE>
Contract Schedule I
Accumulation Phase
Control of Contract (see 1.03)
[The Contract Holder controls this Contract.
By notifying us in writing, the Contract Holder may allow
Participants to choose Investment Options for an Individual
Account. The Contract Holder may, however, retain the right to
choose Investment Options for employer Contributions. Unless
otherwise provided by the Plan, we will make payments only at the
written direction of the Contract Holder and a Participant. Unless
otherwise specified by the Plan, we will make an inservice
transfer under Internal Revenue Service Revenue Ruling 90-24 only
at the written direction of the Contract Holder and a Participant
and will make checks payable to the acquiring investment
provider(s).
The Contract and Individual Accounts are nontransferable and
nonassignable except to us in the event of a loan (if allowed
under the Contract) or in the event of a qualified domestic
relations order as allowed under the Retirement Equity Act of 1984
(REA).
Participants have a nonforfeitable right to the value of employer
Contributions made to their Individual Accounts subject to any
Plan vesting limits as determined by the Contract Holder.
Participants have a nonforfeitable right to the value of employee
Contributions made to their Individual Accounts as provided by
Code Section 403(b) and subject to the terms of the Plan.
The Contract Holder must notify us in writing if the Plan is, or
becomes, subject to the Employee Retirement Income Security Act of
1974 (ERISA) and/or related law or regulations including REA. We
will rely on the Contract Holder's determination and
representation of the applicability of such laws. If the Plan is
subject to ERISA, before we will make a distribution from an
Individual Account, the Contract Holder must certify in writing
that all applicable REA requirements have been met and that the
distribution complies with the Plan.]
Maximum Maintenance Fee (see 1.16)
The maintenance fee for each Individual Account will never be more
than [$30].
Contribution Limits (see 2.01)
[Each year, Contributions to the Contract are limited to the
lesser of:
(a) The maximum exclusion allowance (MEA) limit under Code
Section 403(b); or
(b) The amount set forth in Code Section 415, generally, 25% of
compensation up to $30,000.
In addition, salary reduction Contributions as defined in Code
Section 402(g) may not exceed $10,000, or such larger amount as
adjusted by the Secretary of the Treasury, unless the alternative
limitation under Code Section 402(g)(8) applies.]
Maximum Daily Charges to the Separate Account (see 3.07)
Charges to the Separate Account will never be more than the
following:
<TABLE>
<S> <C>
Mortality and Expense Risk Charge: [1.50%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
Aetna GET Fund Guarantee Charge (if applicable): [0.75%] (annual basis)
</TABLE>
S I - 1
<PAGE>
Fixed Interest Options Available (see Section 5, Section 6, and Section 7)
[Fixed Account
- Fixed Account is available for transferred amounts only (no
ongoing Contributions).
Fixed Plus Account
Guaranteed Accumulation Account]
Fixed Account Minimum Guaranteed Interest Rate (see 5.01)
The interest rate will never be less than [3%] (annual basis).
Fixed Account Annual Transfer Limit (see 5.02)
[10%.]
Fixed Plus Account Minimum Guaranteed Interest Rate (see 6.01)
The interest rate will never be less than [3%] (annual basis)
Fixed Plus Annual Account Transfer and Partial Withdrawal Limit (see 6.02 and
6.03)
[20%]
Waiver of Fixed Plus Account Transfer Limit (see 6.05)
[$2,000]
Waiver of Fixed Plus Account Full Withdrawal Provision (see 6.05)
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
made:
[(a) To a Participant who has attained age 59 1/2 and, if
applicable, has completed nine Contribution periods;
(b) When a Participant is separated from service, and when:
(1) Separation from service is documented in a form
acceptable to us;
(2) The amount is paid directly to the Participant; and
(3) When the amount paid for all withdrawals due to
separation from service during the previous
[12-months] does not exceed [20%] of the average value
of all Individual Accounts under the Contract during
that period.
(c) Due to financial hardship as defined in the Code, and when:
(1) The financial hardship is certified by the employer if
applicable;
(2) The amount is paid directly to the Participant; and
(3) When the amount paid for all withdrawals due to
financial hardship during the previous [12-months]
does not exceed [20%] of the average value of all
Individual Accounts under the Contract during that
period.
(d) When the amount in the Fixed Plus Account is [$2,000] or
less (or as otherwise required by the Plan for a lump-sum
cash-out without Participant consent) and during the
previous [12] months no amounts have been withdrawn,
transferred, taken as a loan (if allowed under the
Contract), or used to purchase Annuity payments;
(e) Due to a Participant's death before Annuity payments begin
and paid within six months of the Participant's death;
(f) As provided in Section 8.09; or
(g) To purchase Annuity payments on a life-contingent basis or
payments for a stated period on a fixed-only basis.]
S I - 2
<PAGE>
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 7.02)
The interest rate will never be less than [3%] (annual basis).
Withdrawal Restrictions Under the Code (see 8.03)
[Limitations apply to partial and full withdrawals of the
"restricted amount" from this Contract as required by Code Section
403(b)(11). The restricted amount is the sum of:
(1) Contributions attributable to a Participant's salary
reduction Contributions made on and after January 1, 1989;
plus
(2) The net increase, if any, in the Individual Account value
after December 31, 1988 attributable to investment gains
and losses and credited interest.
The "restricted amount" may be partially or fully withdrawn only
if one or more of the following conditions are met. The
Participant has:
(a) Separated from service;
(b) Attained age 59 1/2;
(c) Died;
(d) Become disabled, as defined by the Code;
(e) Experienced financial hardship as defined by the Code. The
amount available for financial hardship is limited to the
lesser of the amount necessary to satisfy the need or
Contributions attributable to salary reduction
Contributions made on or after January 1, 1989; or
(f) Met other circumstances as otherwise allowed by federal
law, regulations or rulings.
No limitations apply to salary reduction Contributions made and
earnings credited to such Contributions made on or before December
31, 1988.
In addition, any portion of an Individual Account representing
amounts transferred from a Code Section 403(b)(7) custodial
account will be subject to the restrictions set forth in the
Code.]
Withdrawal Charge (see 8.04)
For each withdrawal from an Individual Account, we may deduct a
withdrawal charge. This charge is a percentage of the amount
withdrawn. The withdrawal charge is as follows.
<TABLE>
<CAPTION>
[Number of Years Since Individual
Account Established] Withdrawal Charge
-------------------- -----------------
<S> <C>
[Fewer than 5 5%
5 or more, but fewer than 7 4%
7 or more, but fewer than 9 3%
9 or more, but fewer than 10 2%
10 or more 0%]
</TABLE>
The withdrawal charge will never exceed [8.5%] of total
Contributions, or the maximum permitted by National Association of
Securities Dealers, Inc. (NASD) rules.
S I - 3
<PAGE>
Waiver of Withdrawal Charge (see 8.05)
The withdrawal charge does not apply when the withdrawal is:
[(a) Used to purchase Annuity payments;
(b) Used to purchase a single premium immediate Annuity or
individual retirement Annuity issued by ALIAC or one of its
affiliates, provided that the right to cancel under the new
Contract is not exercised. We will treat exercise of the
right to cancel as a reinstatement and any subsequent
withdrawal may then be subject to the withdrawal charge
applicable on the date of the withdrawal;
(c) Under a systematic distribution option (see 8.08);
(d) In an amount equal to up to [10%] of the Individual Account
value when the withdrawal is the first partial withdrawal
in a calendar year and is made to a Participant who is at
least age 59 1/2 and not older than age 70 1/2 (not
available when a systematic distribution option is in
effect);
(e) When we terminate an Individual Account as provided in
8.09;
(f) When the Individual Account value is [$3,500] or less and
during the previous 12 months no amounts have been
withdrawn, transferred, taken as a loan (if allowed under
the Contract), or used to purchase Annuity payments;
(g) Made by a Participant who has attained age 59 1/2 and, if
applicable, has completed nine Contribution periods;
(h) Made to a Participant who is separated from service as
documented in a form acceptable to us;
(i) Due to financial hardship as defined in the Code; or
(j) Due to a Participant's death before Annuity payments
begin.]
Required Distributions (see 8.07)
[Generally, for Contributions made and earnings credited after
December 31, 1986, distribution must begin by April 1 of the
calendar year following the later of (1) the calendar year in
which a Participant attains age 70 1/2, or (2) retires. For
Individual Account values as of December 31, 1986, distribution
must begin by the last day of the year in which a Participant
attains age 75 or retires, whichever is later.
In addition, any portion of an Individual Account representing
amounts transferred from a Code Section 403(b)(7) custodial
account will be subject to the restrictions set forth in the Code.
The entire Individual Account value must be distributed, or begin
to be distributed, over the life or life expectancy of a
Participant, or lives or life expectancies of a Participant and a
beneficiary.]
Individual Account Termination Amount (see 8.09)
[$10,000]
Contract Beneficiary (see 10.02)
[The Contract Holder is the Contract beneficiary. A Participant
may designate a beneficiary under the Plan (the Plan
beneficiary).]
S I - 4
<PAGE>
Contract Schedule II
Annuity Phase
Payment Period (see 11.03)
The period for which we will guarantee Annuity payments must be at
least [five] years and no more than [30] years.
Mortality Table (see 11.04)
[Society of Actuaries' 1983 Table a]
Maximum Number of Funds (see 11.06)
The maximum number of Funds is [four].
Fixed Annuity Minimum Guaranteed Interest Rate (see 11.07)
[3%] (annual basis)
Number of Annual Transfers Among Funds (see 11.09)
Each calendar year, we allow [five] transfers among funds.
Maximum Daily Charges to the Separate Account (see 11.12)
Charges to the Separate Account will never be more than the
following:
Mortality and Expense Risk Charge: [1.25%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
S II - 1
<PAGE>
S II - 2
<PAGE>
Definitions
- --------------------------------------------------------------------------------
Accumulation Phase
The time between an Individual Account Effective Date and the date on which the
entire Individual Account value is used to purchase Annuity payments, or
otherwise distributed.
Aetna GET Fund (GET Fund)
The Aetna GET Fund is an Investment Option which may be available during the
Accumulation Phase. The GET Fund operates as a series offering. Each series is a
separate Fund.
Aetna Life Insurance and Annuity Company (ALIAC)
Aetna Life Insurance and Annuity Company ("we," and "our," and "us" refer to
ALIAC).
Annuitant
The person whose life expectancy determines the amount and/or duration of the
payments under a life-contingent Annuity option.
Annuity
Payment of an income:
(a) For a stated period;
(b) For the life of one or two people; or
(c) Some combination of (a) and (b).
A fixed Annuity is one in which the payment amount does not vary. A variable
Annuity is one in which the payment amount may vary based on the net investment
results of the Funds.
Annuity Phase
The time during which we make Annuity payments.
Business Day
Each day our Home Office is open for business.
Code
The Internal Revenue Code of 1986, as it is amended from time to time.
Contract
This agreement between ALIAC and the Contract Holder.
Contract Holder
The entity, or person, named in the specifications section on the face page, to
which the Contract is issued.
Contribution
The payment made to us during the Accumulation Phase. The Contribution may be
reduced by any applicable premium tax due.
Effective Date
The date, shown in the specifications section on the face page, on which we
issue the Contract or establish an Individual Account.
Fixed Account
A Fixed Interest Option. The Fixed Account is an obligation of our General
Account.
Fixed Interest Options
Investment options, including the Fixed Account, the Fixed Plus Account and the
Guaranteed Accumulation Account that credit interest. The Fixed Interest Options
available during the Accumulation Phase are shown on Contract Schedule I under
Fixed Interest Options Available.
Fixed Plus Account
A Fixed Interest Option. Limitations apply to withdrawals from the Fixed Plus
Account. The Fixed Plus Account is an obligation of our General Account.
1
<PAGE>
Fund
A variable Investment Option available under this Contract. The Funds are
open-end, registered investment management companies (mutual funds) in which the
Separate Account invests.
General Account
The account that holds our assets other than those held in the Separate Account
or Nonunitized Separate Account.
Guaranteed Accumulation Account (GAA)
A Fixed Interest Option that may be available during the Accumulation Phase.
Under this option, we guarantee specified rates of interest for specified
periods of time. Amounts allocated to the Guaranteed Accumulation Account are
held in the Nonunitized Separate Account.
Good Order
Instructions that are complete and clear enough to allow us to act without
exercising discretion.
Home Office
Our main office located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Individual Account
An account, or accounts (including, if applicable, employer and employee
accounts) established for each Participant to maintain a record of transactions
and the value of Contributions as invested.
Investment Options
The Funds and Fixed Interest Options available under this Contract.
Maturity Date
The last day of a GAA guaranteed term or the last day of the guarantee period of
an Aetna GET Fund series.
Nonunitized Separate Account
A separate account that holds assets allocated to the Guaranteed Accumulation
Account.
Participant
A person who is covered under the retirement Plan or program for which this
Contract is issued and who has an interest in this Contract.
Plan
The retirement plan or program for which this Contract is issued.
Premium Tax
Any tax assessed by any governmental entity on Contributions or amounts used to
purchase Annuity payments.
Separate Account
An account that buys and holds shares of the Funds through its subaccounts.
Valuation Date
The date and time at which accumulation unit values and Annuity unit values are
calculated. Currently, this calculation is made after the close of business of
the New York Stock Exchange on any normal business day, Monday through Friday,
the New York Stock Exchange is open.
2
<PAGE>
Section 1. General Contract Provisions
- --------------------------------------------------------------------------------
1.01 Entire Contract
The entire Contract consists of this document and any endorsements
incorporated.
The Plan, if applicable, is not part of the Contract and ALIAC is
not bound by its terms.
1.02 Nonparticipating Contract
This Contract is nonparticipating. The Contract Holder, a
Participant or a Contract beneficiary have no right to share in
our earnings.
1.03 Control of Contract
Control of the Contract is as shown on Contract Schedule I under
Control of Contract.
1.04 Certificate
Any certificate provided to a Participant summarizes Contract
provisions; it is for information only and is not part of the
Contract. We will provide certificates as required by state law in
the state where the Contract is delivered and as allowed under the
Plan.
1.05 Incontestability
We will not cancel this Contract because of any error of fact.
1.06 Grace Period
Except as provided in 8.09, this Contract and all Individual
Accounts will remain in effect even if Contributions are not
continued.
1.07 Change of Contract
Only an ALIAC officer at the level of Vice President or higher, or
an officer with written delegation of authority from a Vice
President or higher officer, may change the terms of this
Contract. No other ALIAC officer, employee, agent or
representative can change this Contract.
Except as noted below, this Contract may be changed at any time by
written mutual agreement between the Contract Holder and ALIAC.
For changes we initiate requiring Contract Holder consent, we
notify the Contract Holder 60 calendar days in advance of the
change and consider that the Contract Holder has agreed to the
change unless we receive written notice that the Contract Holder
does not agree to the change at least 30 calendar days before the
date the change becomes effective.
If we propose a change requiring Contract Holder consent and the
Contract Holder does not agree to the change, we have the right to
not establish new Individual Accounts and to stop accepting
Contributions to existing Individual Accounts.
We will not reduce the minimum guaranteed interest rate for the
Fixed Account and the Fixed Plus Account.
We have the right to change the following without Contract Holder
consent:
(a) Net Investment Factor (see 3.06)
We may change the net investment factor by notifying the
Contract Holder in writing at least 30 calendar days before
the change becomes effective. If we do this, the change
will apply only to Individual Accounts established, and
Contributions received, after the date the change becomes
effective.
3
<PAGE>
(b) Guaranteed Accumulation Account (GAA) market value
adjustment (see 7.09)
We may change the GAA market value adjustment by notifying
the Contract Holder in writing at least 90 calendar days
before the change becomes effective. If we do this, the
change will apply only to guaranteed terms offered in
deposit periods after the date the change becomes
effective.
(c) Systematic Distribution Options (see 8.08)
We may change systematic distribution options by notifying
the Contract Holder in writing at least 30 calendar days
before the change becomes effective. If we do this, the
change will not apply to Participants or beneficiaries
receiving payments under an option before the date the
change becomes effective.
(d) Annuity Options (see 11.03)
We may change Annuity options by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the change
will not take effect until at least 12 months after the
Effective Date of the Contract, or until at least 12 months
after any previous change. Any change will not apply to
Participants or beneficiaries receiving Annuity payments
before the date the change becomes effective.
(e) Mortality Table (see 11.04)
We may change the mortality table by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the new table
will not apply to Individual Accounts established before
the date the change becomes effective.
In addition, we may change this Contract as required to comply
with state and federal law without Contract Holder consent by
notifying the Contract Holder at least 30 calendar days before the
date the change becomes effective.
Any unilateral change will not apply to Individual Accounts
established before the date the change becomes effective, but will
apply to Individual Accounts established on or after the date the
change becomes effective. If we make a unilateral change, the
Contract Holder or Participants, as applicable, are permitted to
terminate participation in the Contract before the date the change
becomes effective under the terms of the Contract in effect prior
to the date the change becomes effective.
As required by law, we will make any change of Contract by
endorsement, which may be subject to regulatory approval in the
state where the Contract is delivered.
1.08 Payments
We make payments as directed by the Contract Holder or a
Participant, as applicable. Payment requests must be in writing or
as we otherwise allow in our administrative practice. We determine
the amount of any payment based on the Individual Account value as
of the next Valuation Date following our receipt of a payment
request in Good Order at our Home Office. Generally, we make
payments within seven calendar days.
1.09 Deferral of Payment
We may defer payment up to a period of six months or as otherwise
provided by state and/or federal law.
1.10 Proof of Age
If a life-contingent Annuity option is elected, we may require
proof of the age of an Annuitant.
1.11 Evidence of Survival
We may require proof that any Annuitant under a life-contingent
Annuity option is living.
4
<PAGE>
1.12 Misstatements and Adjustments
If we learn that the age of any Annuitant or second Annuitant is
misstated, we will use the correct age to adjust payments. We
reserve the right to obtain reimbursement, or to adjust future
payments for any amount we overpaid. We will pay the amount of any
underpayment.
1.13 Reports
Each calendar year we provide the Contract Holder or a
Participant, as applicable, with a report of the Individual
Account value. We also provide an annual report for the Separate
Account.
1.14 State Laws
This Contract complies with the laws of the state in which it is
delivered. Any cash, death or Annuity payments are equal to or
greater than the minimum required. To determine legal reserve
valuation, we use Annuity tables as required by law; such tables
may be different from those we use to determine Annuity payments.
1.15 Claims of Creditors
Individual Accounts are not subject to the claim of any creditor
of the Contract Holder, a Participant or a beneficiary, except to
the extent permitted by law.
1.16 Maintenance Fee
We may deduct an annual maintenance fee during the Accumulation
Phase.
The amount of the maintenance fee, if any, for this Contract will
never be more than the amount shown on Contract Schedule I under
Maximum Maintenance Fee.
The fee, if any, is deducted proportionately from each Investment
Option in which the Individual Account is invested on the
anniversary of the Individual Account Effective Date. The fee is
also deducted if the entire Individual Account value is withdrawn.
If a Participant has more than one Individual Account, we may
deduct the fee proportionately from all Individual Accounts. We
may eliminate the fee for an Individual Account established with
one lump-sum Contribution.
1.17 Charges for Additional Services
At the request of the Contract Holder, we, or our authorized
representatives, may provide administrative services to the Plan.
We reserve the right to charge for such services.
1.18 Charges Subject to Change
The maintenance fee (see 1.16) and charges to the Separate Account
(see 3.07) may vary (increase, decrease, or be eliminated) based
on the total assets held in all Individual Accounts under the
Contract. In determining total assets, we may aggregate Individual
Accounts established under different ALIAC Contracts. The
aggregate amount is equal to the sum of assets in all Individual
Accounts under this Contract, plus the value of Individual
Accounts under other ALIAC Contracts of the same class issued to
the Contract Holder. We may determine the amount of the
maintenance fee and/or charges to the Separate Account based on
total assets on an annual basis. We will determine initial charges
based on our estimate of the amount that will be allocated to the
Contract during a period mutually agreed upon by the Contract
Holder and us.
5
<PAGE>
Part I. Accumulation Phase
Section 2. Contributions and Individual Account Value
- --------------------------------------------------------------------------------
2.01 Contributions
We allocate Contributions in whole percentages among the
Investment Options available as directed by the Contract Holder or
a Participant, as applicable. Changes in future Contribution
allocation may be made at any time without charge. The Contract
Holder or a Participant, as applicable, may also establish an
Individual Account with one lump-sum Contribution.
We reserve the right to establish minimum Contribution amounts and
to refuse to accept any Contribution.
Contributions to Individual Accounts may be limited as provided in
the Code. The limits, if any, are shown on Contract Schedule I
under Contribution Limits.
2.02 Premium Tax
We pay any applicable premium tax when it is due. We will deduct
the amount of any applicable premium tax from the Individual
Account value no earlier than when there is a tax liability. We
reserve the right to deduct any premium tax due before a
Contribution is allocated to an Individual Account.
2.03 Individual Account
We will establish an Individual Account for each Participant.
If required, we will provide accounts that distinguish between
employer and employee Contributions for each Participant.
2.04 Experience Credit
We may apply experience credits (investment, administrative,
mortality or other) under this Contract and may apply such credits
as:
(a) A reduction in the maintenance fee;
(b) A reduction in the mortality and expense risk charge to the
Separate Account;
(c) A reduction in the administrative charge to the Separate
Account; and
(d) An increase in a Fixed Interest Option interest rate.
We will apply experience credits at our sole discretion as we deem
appropriate for the class of contracts to which the Contract is
issued.
2.05 Individual Account Value
As of the most recent Valuation Date, the Individual Account value
is equal to the total of all Contributions:
(a) Plus any interest added on the amount, if any, allocated to
a Fixed Interest Option(s),
(b) Plus or minus the investment experience on the amount, if
any, held in the Separate Account;
(c) Minus any applicable maintenance fees, any amounts
withdrawn, or used to purchase Annuity payments, or any
applicable premium tax; and
(d) Minus any applicable fees or charges deducted.
6
<PAGE>
Section 3. Separate Account
- --------------------------------------------------------------------------------
3.01 General
The Separate Account, established under Title 38a, Section 38a-433
of the Connecticut General Statutes, buys and holds shares of the
Funds available. The Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940.
We own the assets held in the Separate Account; we are not a
trustee of those assets. Income, gains or losses, realized or
unrealized, are credited to or charged against the Separate
Account without regard to our other income, gains or losses.
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
3.02 Funds Available
We reserve the right to limit the number of Funds in which an
Individual Account may be invested, at one time or cumulatively,
during the Accumulation Phase and/or Annuity Phase.
3.03 Change or Substitution of Funds
We reserve the right to stop offering any Fund or to add Funds. We
may substitute shares of a Fund for shares of another Fund. We
will provide the Contract Holder with reasonable advance notice of
any elimination, addition or substitution of a Fund. If the Plan
is subject to ERISA, we will seek Contract Holder consent in
advance of any Fund substitution. Consent will be deemed given
unless, following notice of substitution and within a prescribed
time period, the Contract Holder notifies us in writing that it
does not consent and provides us with alternative investment
instructions for the shares that would otherwise be affected by
the substitution.
3.04 Accumulation Units
Each Contribution allocated to one or more of the Funds is
credited to an Individual Account as accumulation units. The
number of accumulation units is calculated by dividing the amount
of the Contribution allocated to the Fund by the accumulation unit
value (see 3.05) as of the next Valuation Date following our
receipt of the Contribution in Good Order at our Home Office.
3.05 Accumulation Unit Value
The value of each accumulation unit for any Fund for each
Valuation Date is computed by multiplying the net investment
factor (see 3.06) by the accumulation unit value for such
Valuation Date.
Accumulation unit values may increase or decrease from Valuation
Date to Valuation Date.
3.06 Net Investment Factor
The net investment factor is used to compute the accumulation unit
value for any Fund.
For each Valuation Date, for each Fund, the net investment factor
is equal to 1.0000000, plus the net return rate.
The net return rate equals:
[a - b - c]
------------- - e - f
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
7
<PAGE>
d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule I under Daily Charges to the Separate Account; and
f is if applicable, a fee for the GET Fund guarantee, which is
deducted daily during the guarantee period. The fee, which
is determined before the beginning of each offering period
(see 4.02), is shown on Contract Schedule I under Maximum
Daily Charges to the Separate Account.
The net return rate may be greater or less than zero percent.
3.07 Charges to the Separate Account
During the Accumulation Phase, we may deduct a mortality and
expense risk charge from the Individual Account value invested in
the Separate Account. In addition, we reserve the right to impose
an administrative charge.
The charges to the Separate Account are shown on Contract Schedule
I under Maximum Daily Charges to the Separate Account and are
deducted daily.
3.08 Fund Transfers
During the Accumulation Phase, any portion or all of the
Individual Account value held in a Fund may be transferred to any
other Fund or any available Fixed Interest Option. The Individual
Account value will be based on the Fund's accumulation unit value
next determined after we receive a transfer request in Good Order.
3.09 Withdrawals from the Separate Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 8.02) from the Funds, a withdrawal
charge may apply (see 8.04).
Section 4. Aetna GET Fund (GET Fund)
- --------------------------------------------------------------------------------
The following provisions apply if the GET Fund is available.
4.01 GET Fund Guarantee Period
For each GET Fund series, the period for which the GET Fund
guarantee applies. The guarantee period ends on the Maturity Date.
4.02 GET Fund Offering Period
The period, usually from one to three months, during which the
Contract Holder or a Participant, as applicable, may transfer or
allocate amounts to a GET Fund series. Each GET Fund series has a
specific offering period. Amounts transferred or allocated prior
to the date on which the guarantee period begins are invested in
money market instruments.
We will specify a minimum total asset amount required at the end
of an offering period to offer a GET Fund series. If the minimum
is not achieved, we reserve the right not to begin the guarantee
period. If a GET Fund series is not begun, we will mail a notice
to all Contract Holders or Participants, as applicable, who have
made allocations to that GET Fund series no less than 15 calendar
days after the end of the offering period. The Contract Holder or
a Participant, as applicable, then has 45 calendar days from the
end of the offering period to reallocate the amount allocated to
the GET Fund to any other available Investment Options. During
this time, GET Fund assets are invested in money market
instruments. If the Contract Holder or a Participant, as
applicable, makes no election by the end of the 45-day period, at
the next Valuation Date, we will allocate the amount in the
terminated GET Fund series to the money market fund available
under the Contract.
8
<PAGE>
We reserve the right to specify a maximum total asset amount for a
GET Fund series. If the maximum is achieved, we reserve the right
to set a date on which we will stop accepting allocations for that
GET Fund series. We will announce the date on which we will stop
accepting transfers and allocations 10 calendar days prior to that
date.
4.03 GET Fund Guarantee
On the Maturity Date of each GET Fund series, the GET Fund
accumulation unit value for that series will not be less than the
GET Fund accumulation unit value determined at the close of
business on the last day of the offering period. If necessary to
offset any shortfall in the GET Fund accumulation unit value, we
will transfer funds from our General Account to the Separate
Account. The GET Fund guarantee does not apply to transfers or
withdrawals made before the Maturity Date.
If GET Fund accumulation units are adjusted at any time during the
guarantee period, the GET Fund guarantee will be restated. We
calculate the restated guarantee so that it is equivalent to the
original guarantee for that GET Fund series.
A daily charge is assessed on the amount, if any, allocated to the
GET Fund. This charge for the GET Fund guarantee is shown on
Contract Schedule I under Maximum Daily Charges to the Separate
Account.
4.04 GET Fund Maturity Date
The GET Fund Maturity Date is the date on which the guarantee
period ends and GET Fund accumulation units are liquidated.
Prior to the Maturity Date for each series, we send a written
notice of the date to each Contract Holder or Participant, as
applicable, who has an Individual Account value in that series. In
response, the Contract Holder or Participant, as applicable, must
tell us to which available Investment Options to transfer the
amount in the GET Fund on the Maturity Date. If we do not receive
instructions, on the Maturity Date we transfer the portion of the
Individual Account value held in the GET Fund to another GET Fund
series, if available. If no GET Fund series is available, we
transfer the amount to the Fund or Funds we designate in the
written notice.
4.05 Transfers or Withdrawals from the GET Fund
Transfers or withdrawals from the GET Fund before the Maturity
Date are based on the GET Fund unit value for the next Valuation
Date following our receipt of the request in Good Order (see 8.01
and 8.02).
Section 5. Fixed Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Account is available as shown on
Contract Schedule I under Fixed Interest Options Available.
5.01 Fixed Account Minimum Guaranteed Interest Rate
The Fixed Account minimum guaranteed interest rate is shown on
Contract Schedule I under Fixed Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Account during the calendar year. The one year minimum guaranteed
interest rate will be established prior to each calendar year and
will be made available to the Contract Holder or Participants, as
applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
Participants, as applicable.
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5.02 Transfers from the Fixed Account
Each calendar year, the percentage shown on Contract Schedule I
under Fixed Account Annual Transfer Limit of the amount in the
Fixed Account may be transferred to any available Investment
Options. The amount available for transfer will be based on the
Individual Account value in the Fixed Account as of the date we
receive the transfer request in Good Order at our Home Office. We
may, on a temporary basis, allow transfer of a larger percentage.
There is no limit on the amount that may be transferred to the
Fixed Plus Account.
5.03 Withdrawals from the Fixed Account
If the Contract Holder or a Participant, as applicable, requests a
partial or full withdrawal (see 8.02) from the Fixed Account, a
withdrawal charge may apply (see 8.04).
Section 6. Fixed Plus Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Plus Account is available as shown
on Contract Schedule I under Fixed Interest Options Available.
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate
The Fixed Plus Account minimum guaranteed interest rate is shown
on Contract Schedule I under Fixed Plus Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Plus Account during the calendar year. The one year minimum
guaranteed interest rate will be established prior to each
calendar year and will be made available to the Contract Holder or
Participants, as applicable, in advance of the calendar year. We,
at our discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
Participants, as applicable.
6.02 Transfers from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit of the amount in the Fixed Plus Account
may be transferred to any available Investment Option.
The amount available for transfer is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
transfer request in Good Order at our Home Office, reduced by any
amount withdrawn, transferred, taken as a loan (if allowed under
the Contract) or used to purchase Annuity payments during the 12
months prior to the transfer request. In addition, we reserve the
right to reduce the amount available for transfer by amounts
withdrawn under a systematic distribution option.
Twenty percent of the amount in the Fixed Plus Account may be
transferred in each of four consecutive 12-months and the balance
transferred in the fifth year subject to the following conditions:
(a) During the five-year period, no additional amounts are
allocated to or transferred from the Fixed Plus Account;
(b) We will include any amount transferred, taken as a loan (if
allowed under the Contract) or used to purchase Annuity
payments during the prior 12-month period when calculating
the amount which equals 20%; and
(c) We reserve the right to include amounts paid under a
systematic distribution option when calculating the amount
which equals 20%.
In addition, we reserve the right to waive the transfer limit when
the amount in the Fixed Plus Account is less than or equal to the
amount shown on Contract Schedule I under Waiver of Fixed Plus
Account Transfer Limit.
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6.03 Partial Withdrawals from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit may be withdrawn from the Fixed Plus
Account.
The amount available for withdrawal is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
withdrawal request in Good Order at our Home Office, reduced by
any amount withdrawn, transferred, taken as a loan (if allowed
under the Contract), or used to purchase Annuity payments during
the 12 months prior to the request. In addition, we reserve the
right to reduce the amount available by deducting any amount
withdrawn under a systematic distribution option.
The withdrawal limit does not apply when the partial withdrawal
is:
(a) Due to a Participant's death during the Accumulation Phase
and is made within six months of the date of death (this
exception applies to only one partial withdrawal);
(b) Used to purchase Annuity payments; or
(c) Due to other conditions as we may allow without
discrimination.
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account
The Contract Holder, or a Participant, as applicable, may withdraw
the full amount held in the Fixed Plus Account. When we receive a
request for a full withdrawal, no additional transfers, partial
withdrawals or loans (if allowed under the Contract) are allowed.
The withdrawal will be made as follows:
(a) One-fifth of the Individual Account value in the Fixed Plus
Account as of the date we receive the withdrawal request in
Good Order at our Home Office reduced by the amount, if
any, transferred, withdrawn, taken as a loan (if allowed
under the contract) or used to purchase Annuity payments
during the prior 12 months; then
(b) One-fourth of the remaining amount 12 months later; then
(c) One-third of the remaining amount 12 months later; then
(d) One-half of the remaining amount 12 months later; then
(e) The balance of the Individual Account value in the Fixed
Plus Account 12 months later.
No withdrawal charge applies to amounts withdrawn.
The Contract Holder or Participant, as applicable, may cancel a
full withdrawal request from the Fixed Plus Account at any time.
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
as noted on Contract Schedule I under Waiver of Fixed Plus Full
Withdrawal Provision.
Section 7. Guaranteed Accumulation Account (GAA)
- --------------------------------------------------------------------------------
The following provisions apply if the Guaranteed Accumulation Account is
available as shown on Contract Schedule I under Fixed Interest Options
Available.
7.01 Nonunitized Separate Account
The Nonunitized Separate Account is established under Title 38a,
Section 38a-433 of the Connecticut General Statutes. There are no
discrete units for this account. We own the assets held in the
Nonunitized Separate Account; we are not a trustee of those
assets. Income, gains or losses, realized or unrealized, are
credited to or charged against the Nonunitized Separate Account
without regard to our other income, gains or losses. Nonunitized
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
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7.02 GAA Minimum Guaranteed Interest Rate
All Contributions allocated to a GAA guaranteed term (see 7.04)
earn a rate of interest which we determine and which is guaranteed
when the Contribution remains in the guaranteed term until the
Maturity Date. The rate credited will never be less than the
minimum interest rate shown on Contract Schedule I under
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate.
For guaranteed terms of one year or less, one guaranteed rate is
credited for the full guaranteed term. For longer guaranteed
terms, we may credit an initial guaranteed interest rate from the
date of deposit to the end of a specified period within the
guaranteed term. We may credit different interest rates for
subsequent specified periods throughout the guaranteed term.
7.03 Deposit Period
A deposit period is the period of time we determine during which
we accept allocations (Contributions, transfers, or reinvestments)
to one or more guaranteed terms. We reserve the right to extend
the deposit period.
7.04 Guaranteed Term
A guaranteed term is the period of time for which we guarantee the
declared interest rate for allocations (Contributions, transfers,
or reinvestments) to GAA guaranteed terms. We may offer guaranteed
terms ranging in duration from one to ten years. During each
deposit period, we may offer more than one guaranteed term of
varying lengths. The guaranteed term begins the day after the
deposit period ends. The Contract Holder or a Participant, as
applicable, may allocate new Contributions or transfers to any or
all guaranteed terms available in the current deposit period.
7.05 Guaranteed Term Groups
A guaranteed term group is comprised of all GAA guaranteed terms
of the same duration.
7.06 Maturity Date, Maturity Value and Reinvestment
The Maturity Date is the last day of a guaranteed term. The
maturity value is the amount we pay at the end of a guaranteed
term. At least 18 calendar days before any guaranteed term
Maturity Date, we notify the Contract Holder or a Participant, as
applicable, of the projected maturity value and the guaranteed
terms (and the guaranteed interest rates for each) available
during the then-current deposit period. The Contract Holder, or a
Participant, as applicable, may then tell us how to allocate the
maturity value.
If the Contract Holder or a Participant, as applicable, does not
tell us how to reinvest the maturity value, we reinvest it in a
guaranteed term of the same duration if one is available. If no
guaranteed term of the same duration is available, we reinvest the
maturity value in the guaranteed term with the next shortest
duration. If no shorter guaranteed term is available, we reinvest
the maturity value in the next longest term. We mail a
confirmation of reinvestment. The confirmation includes the
guaranteed term in which we have reinvested the maturity value and
the guaranteed interest rate for that term.
If we have reinvested the maturity value, during the month
following the Maturity Date, the Contract Holder or a Participant,
as applicable, may transfer or withdraw the reinvested amount,
with interest earned (as of the date we receive the request)
without incurring a market value adjustment (see 7.08).
7.07 Transfers and Withdrawals from the GAA
Except as noted below, the Contract Holder or a Participant, as
applicable, may transfer any portion or all of the amount held in
the GAA. Transfers or withdrawals before the Maturity Date may be
subject to a market value adjustment (see 7.08). Amounts invested
in a guaranteed term may not be transferred during the deposit
period or for a period of 90 calendar days after the close of the
deposit period.
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Unless directed otherwise, when the Contract Holder or a
Participant, as applicable, requests a transfer or withdrawal from
the GAA, we withdraw amounts proportionately from each guaranteed
term in which the Individual Account is invested. Within a
guaranteed term group, we withdraw first from the oldest deposit
period and then from the next oldest and so on until the amount
requested is withdrawn.
7.08 Application of the Market Value Adjustment
Transfers or withdrawals from the GAA before the Maturity Date are
subject to a market value adjustment, except for:
(a) A one-month period following the Maturity Date on which we
have automatically reinvested the value on the Maturity
Date;
(b) Distributions under certain systematic distribution
options; and
(c) When the withdrawal is equal to the minimum distribution
amount required under the Code, using a method permitted by
the Code and which we offer.
For withdrawals and transfers from the GAA made (1) within six
months of a Participant's death; or (2) to purchase Annuity
payments under a life-contingent Annuity option, the amount
withdrawn from the GAA is the greater of:
(a) The aggregate market value adjustment amount which is the
sum of all market value adjusted amounts calculated due to
a withdrawal before the Maturity Date (which may be
positive or negative); or
(b) The amount in the GAA.
For withdrawals made after the six month period following death,
the withdrawal or transfer amount is the aggregate MVA amount.
An MVA applies to amounts withdrawn to purchase Annuity payment
under a period certain Annuity option.
We may change the GAA market value adjustment by notifying the
Contract Holder in writing at least 90 calendar days before the
change becomes effective. Any such change will apply only to
guaranteed terms offered in deposit periods after the date the
change becomes effective and will apply to existing and new
Individual Accounts.
7.09 Market Value Adjustment (MVA)
The market value adjustment reflects any change in yields on U.S.
Treasury Notes from the time an amount is allocated to a GAA
guaranteed term to the time of a transfer or withdrawal prior to
the Maturity Date. When the market value adjustment is applied,
the amount transferred or withdrawn from the GAA is multiplied by
a factor which is calculated as follows:
x
------
365
(1 + I)
------------------
x
------
365
(1 + j)
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Where:
I is the deposit period yield
j is the current yield
x is the number of days remaining (computed from
Wednesday of the week of withdrawal) in the guaranteed
term.
The deposit period yield and the current yield are determined as
follows:
Deposit Period Yield
At the close of the last business day of each week of a
deposit period, we compute a yield that is the average of
the yields on U.S. Treasury Notes which mature in the last
three months of the guaranteed term. The deposit period
yield is the average of those yields for the deposit
period. If a withdrawal is made prior to the close of the
deposit period, the deposit period yield is the average of
the yields of U.S. Treasury Notes for each week preceding
the withdrawal. In the event that no U.S. Treasury Notes
will mature in the last three months of the guaranteed
term, we reserve the right to use the U.S. Treasury Notes
that mature in a following quarter.
Current Yield
The Current Yield is the average of the yields of the same
U.S. Treasury Notes used to calculate the deposit period
yield on the last business day of the week preceding
withdrawal.
Section 8. Transfers, Withdrawals and Distributions
- --------------------------------------------------------------------------------
8.01 Transfers
During the Accumulation Phase, the Contract Holder or a
Participant, as applicable, may transfer all or any portion of the
Individual Account value among the available Investment Options.
The Individual Account value on any amount transferred from a Fund
will be based on the Fund's accumulation unit value next
determined after we receive the transfer request In Good Order at
our Home Office.
The Contract Holder or a Participant, as applicable, may request a
transfer by properly completing a transfer request form and
sending it to our Home Office, or by otherwise complying with our
administrative procedures. We reserve the right to establish a
minimum transfer amount.
8.02 Withdrawals
As allowed by the Plan, if applicable, and subject to provisions
of the Code (see 8.03), during the Accumulation Phase, the
Contract Holder or a Participant, as applicable, may withdraw any
portion or all of the Individual Account value. The Individual
Account value of any amount withdrawn from a Fund will be based on
the Fund's accumulation unit value next determined after we
receive the transfer request In Good Order.
The Contract Holder or a Participant, as applicable, may request a
withdrawal by properly completing a withdrawal request form and
forwarding it to our Home Office, or by otherwise complying with
our administrative procedures. Unless the Contract Holder or a
Participant, as applicable, requests otherwise, the withdrawal
will be made proportionately from the Investment Options in which
the Individual Account is invested.
A withdrawal charge may apply to amounts withdrawn (see 8.04). In
addition, a market value adjustment may apply to amounts withdrawn
from the GAA (see 7.08 and 7.09) and limitations may apply to
withdrawals from the Fixed Plus Account (see 6.04).
8.03 Withdrawal Restrictions Under the Code
The Code may impose restrictions on the amount and timing of
withdrawals. The restrictions applicable to this Contract are
shown on Contract Schedule I under Withdrawal Restrictions Under
the Code. Withdrawals that do not comply with the Code may be
subject to tax penalties.
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8.04 Withdrawal Charge
During the Accumulation Phase, we may deduct a withdrawal charge
from the Individual Account value withdrawn. The charge, if any,
is a percentage of the amount withdrawn from the Funds and/or
Fixed Interest Options (except, if applicable, the Fixed Plus
Account). The withdrawal charge will never exceed 8.5% of the
total amount of Contributions.
The withdrawal charge, if any, is shown on Contract Schedule I
under Withdrawal Charge.
8.05 Waiver of Withdrawal Charge
The withdrawal charge (see 8.04) does not apply in any of the
circumstances shown on Contract Schedule I under Waiver of
Withdrawal Charge.
In addition, we reserve the right to reduce, waive or eliminate
the withdrawal charge.
8.06 Reinstatement
Within 30 calendar days after a withdrawal, the Contract Holder or
a Participant, as applicable may elect to reinstate all or a
portion of the proceeds of a full withdrawal if allowed by
applicable law. We must receive the reinstated amount within 60
calendar days of the withdrawal.
Any maintenance fee and withdrawal charge imposed at the time of
the withdrawal is included in the reinstatement. If only a portion
of the amount withdrawn is reinstated, the amount of any
maintenance fee and withdrawal charge deducted will be restored
proportionally. The amount of any market value adjustment deducted
from any amount withdrawn from GAA is not included in the amount
reinstated.
Any amount reinstated to the GA Account will be credited to
guaranteed terms available in the current deposit period. We will
reinvest it in a guaranteed term of the same duration if one is
available. If no guaranteed term of the same duration is
available, we reinvest the maturity value in the guaranteed term
with the next shortest duration. If no shorter guaranteed term is
available, we reinvest the maturity value in the next longest
term.
Amounts withdrawn from a GET Fund series are reinstated to the
current offering period if one is available. If no GET Fund
offering period is available, any amount withdrawn from the GET
Fund is reinstated equally among all other Investment Options in
which the Individual Account is invested.
Amounts are reinstated among the Investment Options in the same
proportion as they were held at the time of withdrawal, except, as
noted above, for amounts from the GET Fund. Any maintenance fee
which falls due after the withdrawal and before the reinstatement
is deducted from the amount reinstated.
The number of accumulation units reinstated to any Fund is based
on the accumulation unit values next computed after we receive the
reinstatement request in Good Order at our Home Office.
Reinstatement is permitted only once.
8.07 Required Distributions
While an Individual Account remains in the Accumulation Phase, the
Code may require distribution of all or a portion of the
Individual Account value. The Contract Holder, a Participant or
Contract beneficiary, as applicable, must tell us when to begin
distributions. We have no responsibility for adverse tax
consequences as the result of the Contract Holder, Participant or
Contract beneficiary, as applicable, not complying with minimum
distribution requirements.
The distribution requirements, if any, are shown on Contract
Schedule I under Required Distributions.
Generally, to meet distribution requirements, the Contract Holder,
a Participant or Contract beneficiary, as applicable, may request
partial withdrawals, a systematic distribution option (see 8.08)
or an Annuity option.
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<PAGE>
8.08 Systematic Distribution Options (SDOs)
During the Accumulation Phase, we may offer one or more
distribution options under which we make regularly scheduled
automatic partial distributions of the Individual Account value.
To request an SDO, the Contract Holder, a Participant or Contract
beneficiary, as applicable, must complete an SDO election form and
forward it to our Home Office.
Each option is available without discrimination to any class of
Contracts. The availability of any specific option may be subject
to terms and conditions applicable to that option. We may
discontinue the availability of an SDO option for future election.
Payments will, however, continue to Participants who elected the
option before the date it is no longer available.
8.09 Individual Account Termination
If the Individual Account value is an amount equal to or less than
the amount shown on Contract Schedule I under Individual Account
Termination Amount and we have received no Contributions for 12
months, we reserve the right to terminate an Individual Account.
Before we do this, we notify the Contract Holder or Participant,
as applicable, 90 calendar days in advance. When we terminate an
Individual Account, we do not deduct a withdrawal charge. We do
not exercise this right when the Individual Account value is equal
to or less than the amount shown on Contract Schedule I under
Individual Account Termination Amount due to investment
performance.
Section 9. Loans
- --------------------------------------------------------------------------------
9.01 Loan Availability
If loans are available under the Contract, a loan endorsement is
attached.
Section 10. Death Benefit During the Accumulation Phase
- --------------------------------------------------------------------------------
10.01 Death Benefit
If a Participant dies during the Accumulation Phase, we pay a
death benefit. The amount of the death benefit is the Individual
Account value as of the next Valuation Date following our receipt
of acceptable proof of death at our Home Office (see 7.08 for
amounts in the GAA).
10.02 Contract Beneficiary
The Contract beneficiary is shown on Contract Schedule I under
Contract beneficiary. Generally, the Participant may name a
beneficiary under the Plan (the Plan beneficiary). If allowed by
the Plan, when designating the beneficiary, the Contract Holder or
a Participant, as applicable, may specify, the form of payment as
permitted by the Code. The Contract beneficiary and the form of
payment, if applicable, may be designated or changed in writing or
as we may otherwise allow in our administrative procedures.
10.03 Distribution of Death Benefit
Generally, if the Plan beneficiary is the Participant's surviving
spouse, distribution of the death benefit must begin no later than
the year the Participant would have attained age 70 1/2 or any
other date allowed under federal law or regulations.
If the Plan beneficiary is not the Participant's surviving spouse,
generally, the death benefit must be used to purchase Annuity
payments within one year of the year of the Participant's death or
otherwise paid within five years of the year of the Participant's
death.
Annuity payments to a Plan beneficiary may not extend beyond the
period specified in the Code.
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Part II. Annuity Phase
Section 11. General Provisions
- --------------------------------------------------------------------------------
11.01 Election
The Contract Holder, a Participant, Contract or Plan beneficiary,
as applicable, may elect an Annuity option by properly completing
an election form and forwarding it to our Home Office no later
than 30 calendar days before the desired first Annuity payment
date. All Annuity option elections must comply with any Plan
requirements and regulatory requirements including the Code
minimum distribution requirements.
All or any portion of the Individual Account value (after the
deduction of any applicable premium tax) may be used to purchase
Annuity payments (for amounts from the GAA, see 7.08).
The Contract Holder, a Participant, Contract or Plan beneficiary,
as applicable, must also select an Annuity option (see 11.03) and
the Investment Options (see 11.06).
Once payments begin, an Annuity option may not be revoked, nor may
any amount be withdrawn except as noted below.
11.02 Change of Annuity Provisions
We reserve the right to change or eliminate Annuity options (see
11.03) and to change the mortality table (see 11.04) we use to
calculate payment rates for life-contingent Annuity payments. If
we do this, any change will not take effect until at least 12
months after the Contract Effective Date, or until at least 12
months after any previous change. A change to Annuity options or
the mortality table used to calculate payment rates will not apply
to Individual Accounts established before the date the change
becomes effective.
11.03 Annuity Options
The Contract Holder, a Participant, Contract or Plan beneficiary,
as applicable, must elect one of the following:
Option 1: Payments for a Stated Period
This option provides payments for a stated period. The number of
years in the stated period must fall within the range shown on
Contract Schedule II under Payment Period.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time. If a withdrawal is requested within five years of the first
payment, the lump-sum payment is treated as a withdrawal during
the Accumulation Phase and any applicable withdrawal charge
applies (see 8.04).
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 2: Life Income for One Annuitant
This option provides payments for the life of the Annuitant. If
this option is elected, the Contract Holder, a Participant or
Contract beneficiary, as applicable, must also choose one of the
following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period within the range shown
on Contract Schedule II under Payment Period; or
(c) Fixed-only cash refund: at the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal
to the amount applied to the Annuity (minus any applicable
premium tax), minus the amount of payments made to the
Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
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<PAGE>
Option 3: Life Income for Two Annuitants
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have
died. If this option is elected, the Contract Holder, a
Participant, Contract or Plan beneficiary as applicable, must also
choose one of the following:
(a) 100% of the payment amount to continue after the first
death; or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first
death; or
(d) 100% of the payment amount to continue after the first
death with payments guaranteed to the beneficiary after the
second death for a period within the range shown on
Contract Schedule II under Payment Period; or
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount to
continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the
first death with a cash refund to the Contract beneficiary
after the second death. The amount of the cash refund is
equal to the amount applied to the Annuity (minus any
applicable premium tax), minus the amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
Other Options
As allowed under applicable state law, we reserve the right to
make other options available.
11.04 Mortality Table
The mortality table for this Contract is shown on Contract
Schedule II under Mortality Table.
11.05 Payments
The first payment amount must be at least $50 per month or $250
per year. We reserve the right to increase the minimum first
payment amount, if allowed by state law, based on increases
reflected in the Consumer Price Index-Urban (CPI-U) since July 1,
1993.
To calculate the guaranteed first payment of a variable Annuity or
the payments for a fixed Annuity, we will use the Annuitant's
adjusted age and, if applicable, the second Annuitant's adjusted
age. The Annuitant's adjusted age and, if applicable, the second
Annuitant's adjusted age is the person's age as of the birthday
closest to the day Annuity payments begin, reduced as follows:
(a) Reduced by one year for payments before January 31, 2000;
(b) Reduced by two years for payments beginning during the
period from January 1, 2000 through December 31, 2009;
(c) Starting on January 1, 2010, reduced by one additional year
for payments beginning in each succeeding decade.
If a fixed Annuity is elected, we will use the applicable current
settlement option rates if they will provide higher fixed Annuity
payments.
11.06 Investment Options
When an Annuity option is elected, the Contract Holder, a
Participant, Contract or Plan beneficiary, as applicable, must
elect:
(a) A fixed Annuity for which the underlying investment is our
General Account;
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<PAGE>
(b) A variable Annuity for which the underlying investment is
one or more of the available Funds; or
(c) A combination of (a) and (b).
For a variable Annuity, the maximum number of Funds available
during the Annuity Phase is shown on Contract Schedule II under
Maximum Number of Funds. The Funds available during the Annuity
Phase may not be the same as those available during the
Accumulation Phase.
11.07 Fixed Annuity Minimum Guaranteed Interest Rate
For a fixed Annuity, the interest rate will never be less than the
minimum guaranteed rate shown on Contract Schedule II under Fixed
Annuity Minimum Guaranteed Interest Rate.
11.08 Variable Annuity Assumed Annual Net Return Rate Election
If a variable Annuity is elected, the Contract Holder, or
Participant, as applicable must also elect an assumed annual net
return rate of 3.5% or 5%. The initial Annuity payment for the
option elected will reflect the assumed annual net return rate. If
subsequent Annuity payments are to remain level, the Separate
Account must earn this rate, plus enough to cover the mortality
and expense risk charge shown on Contract Schedule II under
Maximum Daily Charges to the Separate Account plus any applicable
administrative charge.
11.09 Variable Annuity Transfers
If a variable Annuity is elected, the Contract Holder, a
Participant, Contract or Plan beneficiary, as applicable, may
request that we transfer all or a portion of the amount allocated
to a Fund to any other available Fund. Transfer requests must be
expressed as a percentage of the allocation among the Funds on
which the variable payment is based. The number of transfers
allowed each calendar year is shown on Contract Schedule II under
Number of Annual Transfers Among Funds. We reserve the right to
allow additional transfers. Transfers are effective as of the next
Valuation Date following our receipt of a transfer request in Good
Order at our Home Office.
11.10 Fund Annuity Units
The number of Fund Annuity units is based on the amount of the
first variable Annuity payment which is equal to:
(a) The portion of the Individual Account value (minus any
applicable premium tax) used to purchase a variable
Annuity; divided by
(b) One thousand; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion of the variable payment will be divided by
the appropriate Fund's, or Funds', Annuity unit value (see 11.11)
on the tenth Valuation Date before the due date of the first
payment to determine the number of Fund Annuity units. The number
of each Fund's Annuity units remains fixed unless changed by a
subsequent Fund transfer or if the Annuity option provides for a
change in units (i.e., under life income for two annuitants option
after the first death). Each future payment is equal to the sum of
the products of each Fund's Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity unit value on the
tenth Valuation Date before the payment due date is used.
11.11 Fund Annuity Unit Value
For any Valuation Date, a Fund's Annuity unit value is equal to:
(a) The Annuity unit value for the prior Valuation Date;
multiplied by
(b) The Annuity unit net return factor (see 11.12) for the
current Valuation Date; multiplied by
(c) A factor to reflect the assumed annual net return rate. The
factor for an assumed annual net return rate of 5% is
0.9998663; for 3.5% it is 0.9999058.
19
<PAGE>
The dollar value of a Fund Annuity unit and the amount of a
variable Annuity payment may increase or decrease due to
investment gain or loss. We will not change the payment amount due
to changes in mortality, expense results, or the administrative
charge.
11.12 Fund Annuity Net Return Factor
The Annuity net return factor(s) are used to compute all variable
Annuity payments for any Fund.
The net return factor(s) for each Fund is equal to 1.0000000 plus
the net return rate.
The net return rate equals:
[a - b - c]
------------- - e
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity units
of the Separate Account on the current Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
II under Maximum Daily Charges to the Separate Account.
A net return rate may be more or less than 0%. The value of a
share of a Fund is equal to the net assets of the Fund divided by
the number of shares outstanding.
11.13 Death Benefit During the Annuity Phase
The Contract Holder or a Participant, as applicable, must name a
beneficiary for the Annuity Phase. Unless not allowed by the Plan,
or restricted by the Contract Holder, or a Participant, as
applicable, the beneficiary may name a beneficiary.
If an Annuitant(s) dies, any remaining guaranteed payments
continue to the beneficiary. Payments are made at least as rapidly
as provided by the option in effect at the death of the Annuitant.
Annuity payments to an beneficiary may not extend beyond (1) the
life of the beneficiary, or (2) any period certain greater than
the beneficiary's life expectancy as determined by the Code.
The beneficiary may also elect a lump-sum payment equal to the
present value of any remaining payments.
The interest rate used to determine the first Annuity payment is
used to calculate the present value. The present value is
determined as of the next Valuation Date following our receipt of
acceptable proof of death and a written claim for the death
benefit.
Unless not allowed by the Plan or restricted by the Contract
Holder, or a Participant, as applicable, if the beneficiary dies
while receiving payments, the present value of any remaining
guaranteed payments is paid in a lump-sum to the beneficiary's
beneficiary or to the beneficiary's estate.
20
<PAGE>
OPTION 1: Payments for a Specified Period
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $17.91 20 $5.51
10 9.61 25 4.71
15 6.87 30 4.18
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.12 20 $5.75
10 9.83 25 4.96
15 7.10 30 4.45
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.74 20 $6.51
10 10.51 25 5.76
15 7.82 30 5.28
- --------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
21
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate
- -------------------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
Adjusted payments for payments payments payments payments Cash Refund
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 4.44 4.42 4.39 4.32 4.22 4.19
60 4.95 4.93 4.86 4.73 4.55 4.57
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
70 6.64 6.54 6.23 5.76 5.19 5.70
75 8.06 7.82 7.14 6.25 5.38 6.51
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 4.72 4.71 4.67 4.60 4.50
60 5.23 5.21 5.13 5.00 4.82
65 5.94 5.89 5.73 5.48 5.15
70 6.92 6.81 6.49 6.00 5.43
75 8.35 8.08 7.38 6.48 5.62
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 5.63 5.61 5.56 5.47 5.36
60 6.12 6.09 6.00 5.85 5.65
65 6.82 6.75 6.57 6.30 5.95
70 7.80 7.67 7.30 6.78 6.21
75 9.23 8.93 8.16 7.23 6.38
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
22
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate
- ---------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
- ----------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67
55 60 3.99 4.44 4.71 3.98 4.20 3.94
65 60 4.38 4.97 5.32 4.38 4.93 4.29
65 70 4.93 5.68 6.15 4.91 5.27 4.74
75 70 5.69 6.68 7.32 5.62 6.67 5.29
75 80 6.78 8.11 8.99 6.54 7.36 5.93
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $3.97 $4.35 $4.56 $3.97 $4.31
55 60 4.27 4.73 5.00 4.26 4.48
65 60 4.66 5.25 5.61 4.65 5.22
65 70 5.19 5.97 6.44 5.17 5.54
75 70 5.95 6.96 7.61 5.87 6.95
75 80 7.04 8.39 9.29 6.79 7.64
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 60 5.15 5.63 5.91 5.14 5.38
65 60 5.52 6.14 6.51 5.51 6.10
65 70 6.04 6.84 7.34 6.00 6.41
75 70 6.77 7.84 8.51 6.68 7.81
75 80 7.86 9.28 10.20 7.57 8.49
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
23
<PAGE>
- --------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
Group Combination, Deferred Annuity Contract
(Nonparticipating)
- --------------------------------------------------------------------------------
G-CDA-99
Exhibit 99-B.4.13
------------------------------------------------------------
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
800-525-4225
If you have questions about the Contract, call the toll-free
number shown above.
Group, Combination, Deferred Annuity Certificate (Nonparticipating)
Aetna Life Insurance and Annuity Company (ALIAC), a stock company, will pay
benefits according to the terms and conditions set forth group Contract.
Please read this Certificate carefully. It states ALIAC's contractual rights and
obligations as well as the rights and obligations of the Contract Holder and
you.
Specifications
- --------------------------------------------------------------------------------
| Contract Holder
| SPECIMEN
- --------------------------------------------------------------------------------
| Group Annuity Contract Number
| SPECIMEN
- --------------------------------------------------------------------------------
| Type of Plan
| SPECIMEN
- --------------------------------------------------------------------------------
| Participant
| SPECIMEN
- --------------------------------------------------------------------------------
| Certificate Number
| SPECIMEN
- --------------------------------------------------------------------------------
| Effective Date
| SPECIMEN
Right to Cancel
- --------------------------------------------------------------------------------
You may cancel your participation in the group Contract within 10 calendar days
of receiving this Certificate by returning it to ALIAC at the address shown
above, or to the agent from whom it was purchased. Within seven calendar days of
receiving the cancellation request at its Home Office, ALIAC will return any
Contributions received, plus any increase, or minus any decrease in value, on
the amount, if any, allocated to the Separate Account.
Signed at the Home Office on the Effective Date.
/s/ Thomas J. McInerney /s/ Kirk Wickman
- ----------------------- ----------------
President Secretary
All payments and values provided by the group Contract, when based on the
investment experience of the Separate Account, are variable and are not
guaranteed as to fixed dollar amount. Amounts allocated to the Guaranteed
Accumulation Account, if withdrawn before a guaranteed term maturity date, may
be subject to a market value adjustment. The market value adjustment may result
in an increase, or a decrease, in the Individual Account value.
C-CDA-99
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Contract Schedule I. Accumulation Phase S I - 1
Contract Schedule II. Annuity Phase S II - 1
Definitions 1
Section 1. General Contract Provisions 3
1.01 Entire Contract ............................................... 3
1.02 Nonparticipating Contract ..................................... 3
1.03 Control of Contract ........................................... 3
1.04 Certificate ................................................... 3
1.05 Incontestability .............................................. 3
1.06 Grace Period .................................................. 3
1.07 Change of Contract ............................................ 3
1.08 Payments ...................................................... 4
1.09 Deferral of Payment ........................................... 4
1.10 Proof of Age .................................................. 4
1.11 Evidence of Survival .......................................... 4
1.12 Misstatements and Adjustments ................................. 5
1.13 Reports ....................................................... 5
1.14 State Laws .................................................... 5
1.15 Claims of Creditors ........................................... 5
1.16 Maintenance Fee ............................................... 5
1.17 Charges for Additional Services ............................... 5
1.18 Charges Subject to Change ..................................... 5
Part I. Accumulation Phase 6
Section 2. Contributions and Individual Account Value 6
2.01 Contributions ................................................. 6
2.02 Premium Tax ................................................... 6
2.03 Individual Account ............................................ 6
2.04 Experience Credit ............................................. 6
2.05 Individual Account Value ...................................... 6
Section 3. Separate Account 7
3.01 General ....................................................... 7
3.02 Funds Available ............................................... 7
3.03 Change or Substitution of Funds ............................... 7
3.04 Accumulation Units ............................................ 7
3.05 Accumulation Unit Value ....................................... 7
3.06 Net Investment Factor ......................................... 7
3.07 Charges to the Separate Account ............................... 8
3.08 Fund Transfers ................................................ 8
3.09 Withdrawals from the Separate Account ......................... 8
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 4. Aetna GET Fund 8
4.01 GET Fund Guarantee Period ..................................... 8
4.02 GET Fund Offering Period ...................................... 8
4.03 GET Fund Guarantee ............................................ 9
4.04 GET Fund Maturity Date ........................................ 9
4.05 Transfers or Withdrawals from the GET Fund .................... 9
Section 5. Fixed Account 9
5.01 Fixed Account Minimum Guaranteed Interest Rate ................ 9
5.02 Transfers from the Fixed Account .............................. 10
5.03 Withdrawals from the Fixed Account ............................ 10
Section 6. Fixed Plus Account 10
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate ........... 10
6.02 Transfers from the Fixed Plus Account ......................... 10
6.03 Partial Withdrawals from the Fixed Plus Account ............... 11
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account . 11
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision ........ 11
Section 7. Guaranteed Accumulation Account (GAA) 11
7.01 Nonunitized Separate Account .................................. 11
7.02 GAA Minimum Guaranteed Interest Rate .......................... 12
7.03 Deposit Period ................................................ 12
7.04 Guaranteed Term ............................................... 12
7.05 Guaranteed Term Groups ........................................ 12
7.06 Maturity Date, Maturity Value and Reinvestment ................ 12
7.07 Transfers and Withdrawals from the GAA ........................ 12
7.08 Application of the Market Value Adjustment .................... 13
7.09 Market Value Adjustment (MVA) ................................. 13
Section 8. Transfers, Withdrawals and Distributions 14
8.01 Transfers ..................................................... 14
8.02 Withdrawals ................................................... 14
8.03 Withdrawal Restrictions Under the Code ........................ 14
8.04 Withdrawal Charge ............................................. 15
8.05 Waiver of Withdrawal Charge ................................... 15
8.06 Reinstatement ................................................. 15
8.07 Required Distributions ........................................ 15
8.08 Systematic Distribution Options (SDOs) ........................ 16
8.09 Individual Account Termination ................................ 16
Section 9. Loans 16
9.01 Loan Availability ............................................. 16
Section 10. Death Benefit During the Accumulation Phase 16
10.01 Death Benefit ................................................. 16
10.02 Contract Beneficiary .......................................... 16
10.03 Distribution of Death Benefit ................................. 16
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Part II. Annuity Phase 17
Section 11. General Provisions 17
11.01 Election ...................................................... 17
11.02 Change of Annuity Provisions .................................. 17
11.03 Annuity Options ............................................... 17
11.04 Mortality Table ............................................... 18
11.05 Payments ...................................................... 18
11.06 Investment Options ............................................ 18
11.07 Fixed Annuity Minimum Guaranteed Interest Rate ................ 19
11.08 Variable Annuity Assumed Annual Net Return Rate Election ...... 19
11.09 Variable Annuity Transfers .................................... 19
11.10 Fund Annuity Units ............................................ 19
11.11 Fund Annuity Unit Value ....................................... 19
11.12 Fund Annuity Net Return Factor ................................ 20
11.13 Death Benefit During the Annuity Phase ........................ 20
Annuity Tables 21
</TABLE>
iii
<PAGE>
Contract Schedule I
Accumulation Phase
Control of Contract (see 1.03)
[The Contract Holder controls this Contract.
By notifying us in writing, the Contract Holder may allow yous to
choose Investment Options for an Individual Account. The Contract
Holder may, however, retain the right to choose Investment Options
for employer Contributions. Unless otherwise provided by the Plan,
we will make payments only at the written direction of the
Contract Holder and you. Unless otherwise specified by the Plan,
we will make an inservice transfer under Internal Revenue Service
Revenue Ruling 90-24 only at the written direction of the Contract
Holder and you and will make checks payable to the acquiring
investment provider(s).
The Contract and Individual Accounts are nontransferable and
nonassignable except to us in the event of a loan (if allowed
under the Contract) or in the event of a qualified domestic
relations order as allowed under the Retirement Equity Act of 1984
(REA).
You have a nonforfeitable right to the value of employer
Contributions made to their Individual Accounts subject to any
Plan vesting limits as determined by the Contract Holder. You have
a nonforfeitable right to the value of employee Contributions made
to their Individual Accounts as provided by Code Section 403(b)
and subject to the terms of the Plan.
The Contract Holder must notify us in writing if the Plan is, or
becomes, subject to the Employee Retirement Income Security Act of
1974 (ERISA) and/or related law or regulations including REA. We
will rely on the Contract Holder's determination and
representation of the applicability of such laws. If the Plan is
subject to ERISA, before we will make a distribution from an
Individual Account, the Contract Holder must certify in writing
that all applicable REA requirements have been met and that the
distribution complies with the Plan.]
Maximum Maintenance Fee (see 1.16)
The maintenance fee for each Individual Account will never be more
than [$30].
Contribution Limits (see 2.01)
[Each year, Contributions to the Contract are limited to the
lesser of:
(a) The maximum exclusion allowance (MEA) limit under Code
Section 403(b); or
(b) The amount set forth in Code Section 415, generally, 25% of
compensation up to $30,000.
In addition, salary reduction Contributions as defined in Code
Section 402(g) may not exceed $10,000, or such larger amount as
adjusted by the Secretary of the Treasury, unless the alternative
limitation under Code Section 402(g)(8) applies.]
Maximum Daily Charges to the Separate Account (see 3.07)
Charges to the Separate Account will never be more than the
following:
<TABLE>
<S> <C>
Mortality and Expense Risk Charge: [1.50%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
Aetna GET Fund Guarantee Charge (if applicable): [0.75%] (annual basis)
</TABLE>
S I - 1
<PAGE>
Fixed Interest Options Available (see Section 5, Section 6, and Section 7)
[Fixed Account
- Fixed Account is available for transferred amounts only (no
ongoing Contributions).
Fixed Plus Account
Guaranteed Accumulation Account]
Fixed Account Minimum Guaranteed Interest Rate (see 5.01)
The interest rate will never be less than [3%] (annual basis).
Fixed Account Annual Transfer Limit (see 5.02)
[10%.]
Fixed Plus Account Minimum Guaranteed Interest Rate (see 6.01)
The interest rate will never be less than [3%] (annual basis)
Fixed Plus Annual Account Transfer and Partial Withdrawal Limit (see 6.02 and
6.03)
[20%]
Waiver of Fixed Plus Account Transfer Limit (see 6.05)
[$2,000]
Waiver of Fixed Plus Account Full Withdrawal Provision (see 6.05)
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
made:
[(a) When you have attained age 59 1/2 and, if applicable, has
completed nine Contribution periods;
(b) When you are separated from service, and when:
(1) Separation from service is documented in a form
acceptable to us;
(2) The amount is paid directly to you; and
(3) When the amount paid for all withdrawals due to
separation from service during the previous
[12-months] does not exceed [20%] of the average value
of all Individual Accounts under the Contract during
that period.
(c) Due to financial hardship as defined in the Code, and when:
(1) The financial hardship is certified by your employer
if applicable;
(2) The amount is paid directly to you; and
(3) When the amount paid for all withdrawals due to
financial hardship during the previous [12-months]
does not exceed [20%] of the average value of all
Individual Accounts under the Contract during that
period.
(d) When the amount in the Fixed Plus Account is [$2,000] or
less (or as otherwise required by the Plan for a lump-sum
cash-out without your consent) and during the previous [12]
months no amounts have been withdrawn, transferred, taken
as a loan (if allowed under the Contract), or used to
purchase Annuity payments;
(e) Due to your death before Annuity payments begin and paid
within six months of your death;
(f) As provided in Section 8.09; or
(g) To purchase Annuity payments on a life-contingent basis or
payments for a stated period on a fixed-only basis.]
S I - 2
<PAGE>
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 7.02)
The interest rate will never be less than [3%] (annual basis).
Withdrawal Restrictions Under the Code (see 8.03)
[Limitations apply to partial and full withdrawals of the
"restricted amount" from this Contract as required by Code Section
403(b)(11). The restricted amount is the sum of:
(1) Contributions attributable to your salary reduction
Contributions made on and after January 1, 1989; plus
(2) The net increase, if any, in the Individual Account value
after December 31, 1988 attributable to investment gains
and losses and credited interest.
The "restricted amount" may be partially or fully withdrawn only
if one or more of the following conditions are met. You have:
(a) Separated from service;
(b) Attained age 59 1/2;
(c) Died;
(d) Become disabled, as defined by the Code;
(e) Experienced financial hardship as defined by the Code. The
amount available for financial hardship is limited to the
lesser of the amount necessary to satisfy the need or
Contributions attributable to salary reduction
Contributions made on or after January 1, 1989; or
(f) Met other circumstances as otherwise allowed by federal
law, regulations or rulings.
No limitations apply to salary reduction Contributions made and
earnings credited to such Contributions made on or before December
31, 1988.
In addition, any portion of an Individual Account representing
amounts transferred from a Code Section 403(b)(7) custodial
account will be subject to the restrictions set forth in the
Code.]
Withdrawal Charge (see 8.04)
For each withdrawal from an Individual Account, we may deduct a
withdrawal charge. This charge is a percentage of the amount
withdrawn. The withdrawal charge is as follows.
<TABLE>
<CAPTION>
[Number of Years Since Individual
Account Established] Withdrawal Charge
-------------------- -----------------
<S> <C>
[Fewer than 5 5%
5 or more, but fewer than 7 4%
7 or more, but fewer than 9 3%
9 or more, but fewer than 10 2%
10 or more 0%]
</TABLE>
The withdrawal charge will never exceed [8.5%] of total
Contributions, or the maximum permitted by National Association of
Securities Dealers, Inc. (NASD) rules.
S I - 3
<PAGE>
Waiver of Withdrawal Charge (see 8.05)
The withdrawal charge does not apply when the withdrawal is:
[(a) Used to purchase Annuity payments;
(b) Used to purchase a single premium immediate Annuity or
individual retirement Annuity issued by ALIAC or one of its
affiliates, provided that the right to cancel under the new
Contract is not exercised. We will treat exercise of the
right to cancel as a reinstatement and any subsequent
withdrawal may then be subject to the withdrawal charge
applicable on the date of the withdrawal;
(c) Under a systematic distribution option (see 8.08);
(d) In an amount equal to up to [10%] of the Individual Account
value when the withdrawal is the first partial withdrawal
in a calendar year and you are at least age 59 1/2 and not
older than age 70 1/2 (not available when a systematic
distribution option is in effect);
(e) When we terminate an Individual Account as provided in
8.09;
(f) When the Individual Account value is [$3,500] or less and
during the previous 12 months no amounts have been
withdrawn, transferred, taken as a loan (if allowed under
the Contract), or used to purchase Annuity payments;
(g) When you have attained age 59 1/2 and, if applicable, has
completed nine Contribution periods;
(h) Made when you have separated from service as documented in
a form acceptable to us;
(i) Due to financial hardship as defined in the Code; or
(j) Due to your death before Annuity payments begin.]
Required Distributions (see 8.07)
[Generally, for Contributions made and earnings credited after
December 31, 1986, distribution must begin by April 1 of the
calendar year following the later of (1) the calendar year in
which you attain age 70 1/2, or (2) retire. For Individual Account
values as of December 31, 1986, distribution must begin by the
last day of the year in which you attain age 75 or retire,
whichever is later.
In addition, any portion of an Individual Account representing
amounts transferred from a Code Section 403(b)(7) custodial
account will be subject to the restrictions set forth in the Code.
The entire Individual Account value must be distributed, or begin
to be distributed, over your life or life expectancy, or the lives
or life expectancies of you and a beneficiary.]
Individual Account Termination Amount (see 8.09)
[$10,000]
Contract Beneficiary (see 10.02)
[The Contract Holder is the Contract beneficiary. You may
designate a beneficiary under the Plan (the Plan beneficiary).]
S I - 4
<PAGE>
Contract Schedule II
Annuity Phase
Payment Period (see 11.03)
The period for which we will guarantee Annuity payments must be at
least [five] years and no more than [30] years.
Mortality Table (see 11.04)
[Society of Actuaries' 1983 Table a]
Maximum Number of Funds (see 11.06)
The maximum number of Funds is [four].
Fixed Annuity Minimum Guaranteed Interest Rate (see 11.07)
[3%] (annual basis)
Number of Annual Transfers Among Funds (see 11.09)
Each calendar year, we allow [five] transfers among funds.
Maximum Daily Charges to the Separate Account (see 11.12)
Charges to the Separate Account will never be more than the
following:
Mortality and Expense Risk Charge: [1.25%] (annual basis)
Administrative Charge: [0.25%] (annual basis)
S II - 1
<PAGE>
S II - 2
<PAGE>
Definitions
- --------------------------------------------------------------------------------
Accumulation Phase
The time between an Individual Account Effective Date and the date on which the
entire Individual Account value is used to purchase Annuity payments, or
otherwise distributed.
Aetna GET Fund (GET Fund)
The Aetna GET Fund is an Investment Option which may be available during the
Accumulation Phase. The GET Fund operates as a series offering. Each series is a
separate Fund.
Aetna Life Insurance and Annuity Company (ALIAC)
Aetna Life Insurance and Annuity Company ("we," and "our," and "us" refer to
ALIAC).
Annuitant
The person whose life expectancy determines the amount and/or duration of the
payments under a life-contingent Annuity option.
Annuity
Payment of an income:
(a) For a stated period;
(b) For the life of one or two people; or
(c) Some combination of (a) and (b).
A fixed Annuity is one in which the payment amount does not vary. A variable
Annuity is one in which the payment amount may vary based on the net investment
results of the Funds.
Annuity Phase
The time during which we make Annuity payments.
Business Day
Each day our Home Office is open for business.
Code
The Internal Revenue Code of 1986, as it is amended from time to time.
Contract
This agreement between ALIAC and the Contract Holder.
Contract Holder
The entity, or person, named in the specifications section on the face page, to
which the Contract is issued.
Contribution
The payment made to us during the Accumulation Phase. The Contribution may be
reduced by any applicable premium tax due.
Effective Date
The date, shown in the specifications section on the face page, on which we
issue the Contract or establish an Individual Account.
Fixed Account
A Fixed Interest Option. The Fixed Account is an obligation of our General
Account.
Fixed Interest Options
Investment options, including the Fixed Account, the Fixed Plus Account and the
Guaranteed Accumulation Account that credit interest. The Fixed Interest Options
available during the Accumulation Phase are shown on Contract Schedule I under
Fixed Interest Options Available.
Fixed Plus Account
A Fixed Interest Option. Limitations apply to withdrawals from the Fixed Plus
Account. The Fixed Plus Account is an obligation of our General Account.
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Fund
A variable Investment Option available under this Contract. The Funds are
open-end, registered investment management companies (mutual funds) in which the
Separate Account invests.
General Account
The account that holds our assets other than those held in the Separate Account
or Nonunitized Separate Account.
Guaranteed Accumulation Account (GAA)
A Fixed Interest Option that may be available during the Accumulation Phase.
Under this option, we guarantee specified rates of interest for specified
periods of time. Amounts allocated to the Guaranteed Accumulation Account are
held in the Nonunitized Separate Account.
Good Order
Instructions that are complete and clear enough to allow us to act without
exercising discretion.
Home Office
Our main office located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Individual Account
An account, or accounts (including, if applicable, employer and employee
accounts) established for you to maintain a record of transactions and the value
of Contributions as invested.
Investment Options
The Funds and Fixed Interest Options available under this Contract.
Maturity Date
The last day of a GAA guaranteed term or the last day of the guarantee period of
an Aetna GET Fund series.
Nonunitized Separate Account
A separate account that holds assets allocated to the Guaranteed Accumulation
Account.
Participant
The person who is covered under the retirement Plan or program for which this
Contract is issued and who has an interest in this Contract ("you" and "your"
refer to the Participant). The name of the Participant is shown in the
specification section on the face page of this Certificate.
Plan
The retirement plan or program for which this Contract is issued.
Premium Tax
Any tax assessed by any governmental entity on Contributions or amounts used to
purchase Annuity payments.
Separate Account
An account that buys and holds shares of the Funds through its subaccounts.
Valuation Date
The date and time at which accumulation unit values and Annuity unit values are
calculated. Currently, this calculation is made after the close of business of
the New York Stock Exchange on any normal business day, Monday through Friday,
the New York Stock Exchange is open.
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Section 1. General Contract Provisions
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1.01 Entire Contract
The entire Contract consists of this document and any endorsements
incorporated.
The Plan, if applicable, is not part of the Contract and ALIAC is
not bound by its terms.
1.02 Nonparticipating Contract
This Contract is nonparticipating. The Contract Holder, you or a
Contract beneficiary have no right to share in our earnings.
1.03 Control of Contract
Control of the Contract is as shown on Contract Schedule I under
Control of Contract.
1.04 Certificate
Any certificate summarizes Contract provisions; it is for
information only and is not part of the Contract. We will provide
certificates as required by state law in the state where the
Contract is delivered and as allowed under the Plan.
1.05 Incontestability
We will not cancel this Contract because of any error of fact.
1.06 Grace Period
Except as provided in 8.09, this Contract and all Individual
Accounts will remain in effect even if Contributions are not
continued.
1.07 Change of Contract
Only an ALIAC officer at the level of Vice President or higher, or
an officer with written delegation of authority from a Vice
President or higher officer, may change the terms of this
Contract. No other ALIAC officer, employee, agent or
representative can change this Contract.
Except as noted below, this Contract may be changed at any time by
written mutual agreement between the Contract Holder and ALIAC.
For changes we initiate requiring Contract Holder consent, we
notify the Contract Holder 60 calendar days in advance of the
change and consider that the Contract Holder has agreed to the
change unless we receive written notice that the Contract Holder
does not agree to the change at least 30 calendar days before the
date the change becomes effective.
If we propose a change requiring Contract Holder consent and the
Contract Holder does not agree to the change, we have the right to
not establish new Individual Accounts and to stop accepting
Contributions to existing Individual Accounts.
We will not reduce the minimum guaranteed interest rate for the
Fixed Account and the Fixed Plus Account.
We have the right to change the following without Contract Holder
consent:
(a) Net Investment Factor (see 3.06)
We may change the net investment factor by notifying the
Contract Holder in writing at least 30 calendar days before
the change becomes effective. If we do this, the change
will apply only to Individual Accounts established, and
Contributions received, after the date the change becomes
effective.
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(b) Guaranteed Accumulation Account (GAA) market value
adjustment (see 7.09)
We may change the GAA market value adjustment by notifying
the Contract Holder in writing at least 90 calendar days
before the change becomes effective. If we do this, the
change will apply only to guaranteed terms offered in
deposit periods after the date the change becomes
effective.
(c) Systematic Distribution Options (see 8.08)
We may change systematic distribution options by notifying
the Contract Holder in writing at least 30 calendar days
before the change becomes effective. If we do this, the
change will not apply to you or beneficiaries receiving
payments under an option before the date the change becomes
effective.
(d) Annuity Options (see 11.03)
We may change Annuity options by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the change
will not take effect until at least 12 months after the
Effective Date of the Contract, or until at least 12 months
after any previous change. Any change will not apply to you
or beneficiaries receiving Annuity payments before the date
the change becomes effective.
(e) Mortality Table (see 11.04)
We may change the mortality table by notifying the Contract
Holder in writing at least 30 calendar days before the date
the change becomes effective. If we do this, the new table
will not apply to Individual Accounts established before
the date the change becomes effective.
In addition, we may change this Contract as required to comply
with state and federal law without Contract Holder consent by
notifying the Contract Holder at least 30 calendar days before the
date the change becomes effective.
Any unilateral change will not apply to Individual Accounts
established before the date the change becomes effective, but will
apply to Individual Accounts established on or after the date the
change becomes effective. If we make a unilateral change, the
Contract Holder or you, as applicable, are permitted to terminate
participation in the Contract before the date the change becomes
effective under the terms of the Contract in effect prior to the
date the change becomes effective.
As required by law, we will make any change of Contract by
endorsement, which may be subject to regulatory approval in the
state where the Contract is delivered.
1.08 Payments
We make payments as directed by the Contract Holder or you, as
applicable. Payment requests must be in writing or as we otherwise
allow in our administrative practice. We determine the amount of
any payment based on the Individual Account value as of the next
Valuation Date following our receipt of a payment request in Good
Order at our Home Office. Generally, we make payments within seven
calendar days.
1.09 Deferral of Payment
We may defer payment up to a period of six months or as otherwise
provided by state and/or federal law.
1.10 Proof of Age
If a life-contingent Annuity option is elected, we may require
proof of the age of an Annuitant.
1.11 Evidence of Survival
We may require proof that any Annuitant under a life-contingent
Annuity option is living.
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1.12 Misstatements and Adjustments
If we learn that the age of any Annuitant or second Annuitant is
misstated, we will use the correct age to adjust payments. We
reserve the right to obtain reimbursement, or to adjust future
payments for any amount we overpaid. We will pay the amount of any
underpayment.
1.13 Reports
Each calendar year we provide the Contract Holder or you, as
applicable, with a report of the Individual Account value. We also
provide an annual report for the Separate Account.
1.14 State Laws
This Contract complies with the laws of the state in which it is
delivered. Any cash, death or Annuity payments are equal to or
greater than the minimum required. To determine legal reserve
valuation, we use Annuity tables as required by law; such tables
may be different from those we use to determine Annuity payments.
1.15 Claims of Creditors
Individual Accounts are not subject to the claim of any creditor
of the Contract Holder, you or a beneficiary, except to the extent
permitted by law.
1.16 Maintenance Fee
We may deduct an annual maintenance fee during the Accumulation
Phase.
The amount of the maintenance fee, if any, for this Contract will
never be more than the amount shown on Contract Schedule I under
Maximum Maintenance Fee.
The fee, if any, is deducted proportionately from each Investment
Option in which the Individual Account is invested on the
anniversary of the Individual Account Effective Date. The fee is
also deducted if the entire Individual Account value is withdrawn.
If you have more than one Individual Account, we may deduct the
fee proportionately from all Individual Accounts. We may eliminate
the fee for an Individual Account established with one lump-sum
Contribution.
1.17 Charges for Additional Services
At the request of the Contract Holder, we, or our authorized
representatives, may provide administrative services to the Plan.
We reserve the right to charge for such services.
1.18 Charges Subject to Change
The maintenance fee (see 1.16) and charges to the Separate Account
(see 3.07) may vary (increase, decrease, or be eliminated) based
on the total assets held in all Individual Accounts under the
Contract. In determining total assets, we may aggregate Individual
Accounts established under different ALIAC Contracts. The
aggregate amount is equal to the sum of assets in all Individual
Accounts under this Contract, plus the value of Individual
Accounts under other ALIAC Contracts of the same class issued to
the Contract Holder. We may determine the amount of the
maintenance fee and/or charges to the Separate Account based on
total assets on an annual basis. We will determine initial charges
based on our estimate of the amount that will be allocated to the
Contract during a period mutually agreed upon by the Contract
Holder and us.
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Part I. Accumulation Phase
Section 2. Contributions and Individual Account Value
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2.01 Contributions
We allocate Contributions in whole percentages among the
Investment Options available as directed by the Contract Holder or
you, as applicable. Changes in future Contribution allocation may
be made at any time without charge. The Contract Holder or you, as
applicable, may also establish an Individual Account with one
lump-sum Contribution.
We reserve the right to establish minimum Contribution amounts and
to refuse to accept any Contribution.
Contributions to Individual Accounts may be limited as provided in
the Code. The limits, if any, are shown on Contract Schedule I
under Contribution Limits.
2.02 Premium Tax
We pay any applicable premium tax when it is due. We will deduct
the amount of any applicable premium tax from the Individual
Account value no earlier than when there is a tax liability. We
reserve the right to deduct any premium tax due before a
Contribution is allocated to an Individual Account.
2.03 Individual Account
We will establish an Individual Account for you.
If required, we will provide accounts that distinguish between
your employer's and your Contributions.
2.04 Experience Credit
We may apply experience credits (investment, administrative,
mortality or other) under this Contract and may apply such credits
as:
(a) A reduction in the maintenance fee;
(b) A reduction in the mortality and expense risk charge to the
Separate Account;
(c) A reduction in the administrative charge to the Separate
Account; and
(d) An increase in a Fixed Interest Option interest rate.
We will apply experience credits at our sole discretion as we deem
appropriate for the class of contracts to which the Contract is
issued.
2.05 Individual Account Value
As of the most recent Valuation Date, the Individual Account value
is equal to the total of all Contributions:
(a) Plus any interest added on the amount, if any, allocated to
a Fixed Interest Option(s),
(b) Plus or minus the investment experience on the amount, if
any, held in the Separate Account;
(c) Minus any applicable maintenance fees, any amounts
withdrawn, or used to purchase Annuity payments, or any
applicable premium tax; and
(d) Minus any applicable fees or charges deducted.
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Section 3. Separate Account
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3.01 General
The Separate Account, established under Title 38a, Section 38a-433
of the Connecticut General Statutes, buys and holds shares of the
Funds available. The Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940.
We own the assets held in the Separate Account; we are not a
trustee of those assets. Income, gains or losses, realized or
unrealized, are credited to or charged against the Separate
Account without regard to our other income, gains or losses.
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
3.02 Funds Available
We reserve the right to limit the number of Funds in which an
Individual Account may be invested, at one time or cumulatively,
during the Accumulation Phase and/or Annuity Phase.
3.03 Change or Substitution of Funds
We reserve the right to stop offering any Fund or to add Funds. We
may substitute shares of a Fund for shares of another Fund. We
will provide the Contract Holder with reasonable advance notice of
any elimination, addition or substitution of a Fund. If the Plan
is subject to ERISA, we will seek Contract Holder consent in
advance of any Fund substitution. Consent will be deemed given
unless, following notice of substitution and within a prescribed
time period, the Contract Holder notifies us in writing that it
does not consent and provides us with alternative investment
instructions for the shares that would otherwise be affected by
the substitution.
3.04 Accumulation Units
Each Contribution allocated to one or more of the Funds is
credited to an Individual Account as accumulation units. The
number of accumulation units is calculated by dividing the amount
of the Contribution allocated to the Fund by the accumulation unit
value (see 3.05) as of the next Valuation Date following our
receipt of the Contribution in Good Order at our Home Office.
3.05 Accumulation Unit Value
The value of each accumulation unit for any Fund for each
Valuation Date is computed by multiplying the net investment
factor (see 3.06) by the accumulation unit value for such
Valuation Date.
Accumulation unit values may increase or decrease from Valuation
Date to Valuation Date.
3.06 Net Investment Factor
The net investment factor is used to compute the accumulation unit
value for any Fund.
For each Valuation Date, for each Fund, the net investment factor
is equal to 1.0000000, plus the net return rate.
The net return rate equals:
[a - b - c]
------------- - e - f
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
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d is the total value of the accumulation units and Annuity units
of the Separate Account on the prior Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
Schedule I under Daily Charges to the Separate Account; and
f is if applicable, a fee for the GET Fund guarantee, which is
deducted daily during the guarantee period. The fee, which
is determined before the beginning of each offering period
(see 4.02), is shown on Contract Schedule I under Maximum
Daily Charges to the Separate Account.
The net return rate may be greater or less than zero percent.
3.07 Charges to the Separate Account
During the Accumulation Phase, we may deduct a mortality and
expense risk charge from the Individual Account value invested in
the Separate Account. In addition, we reserve the right to impose
an administrative charge.
The charges to the Separate Account are shown on Contract Schedule
I under Maximum Daily Charges to the Separate Account and are
deducted daily.
3.08 Fund Transfers
During the Accumulation Phase, any portion or all of the
Individual Account value held in a Fund may be transferred to any
other Fund or any available Fixed Interest Option. The Individual
Account value will be based on the Fund's accumulation unit value
next determined after we receive a transfer request in Good Order.
3.09 Withdrawals from the Separate Account
If the Contract Holder or you, as applicable, requests a partial
or full withdrawal (see 8.02) from the Funds, a withdrawal charge
may apply (see 8.04).
Section 4. Aetna GET Fund (GET Fund)
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The following provisions apply if the GET Fund is available.
4.01 GET Fund Guarantee Period
For each GET Fund series, the period for which the GET Fund
guarantee applies. The guarantee period ends on the Maturity Date.
4.02 GET Fund Offering Period
The period, usually from one to three months, during which the
Contract Holder or you, as applicable, may transfer or allocate
amounts to a GET Fund series. Each GET Fund series has a specific
offering period. Amounts transferred or allocated prior to the
date on which the guarantee period begins are invested in money
market instruments.
We will specify a minimum total asset amount required at the end
of an offering period to offer a GET Fund series. If the minimum
is not achieved, we reserve the right not to begin the guarantee
period. If a GET Fund series is not begun, we will mail a notice
to all Contract Holders or you, as applicable, who have made
allocations to that GET Fund series no less than 15 calendar days
after the end of the offering period. The Contract Holder or you,
as applicable, then has 45 calendar days from the end of the
offering period to reallocate the amount allocated to the GET Fund
to any other available Investment Options. During this time, GET
Fund assets are invested in money market instruments. If the
Contract Holder or you, as applicable, makes no election by the
end of the 45-day period, at the next Valuation Date, we will
allocate the amount in the terminated GET Fund series to the money
market fund available under the Contract.
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We reserve the right to specify a maximum total asset amount for a
GET Fund series. If the maximum is achieved, we reserve the right
to set a date on which we will stop accepting allocations for that
GET Fund series. We will announce the date on which we will stop
accepting transfers and allocations 10 calendar days prior to that
date.
4.03 GET Fund Guarantee
On the Maturity Date of each GET Fund series, the GET Fund
accumulation unit value for that series will not be less than the
GET Fund accumulation unit value determined at the close of
business on the last day of the offering period. If necessary to
offset any shortfall in the GET Fund accumulation unit value, we
will transfer funds from our General Account to the Separate
Account. The GET Fund guarantee does not apply to transfers or
withdrawals made before the Maturity Date.
If GET Fund accumulation units are adjusted at any time during the
guarantee period, the GET Fund guarantee will be restated. We
calculate the restated guarantee so that it is equivalent to the
original guarantee for that GET Fund series.
A daily charge is assessed on the amount, if any, allocated to the
GET Fund. This charge for the GET Fund guarantee is shown on
Contract Schedule I under Maximum Daily Charges to the Separate
Account.
4.04 GET Fund Maturity Date
The GET Fund Maturity Date is the date on which the guarantee
period ends and GET Fund accumulation units are liquidated.
Prior to the Maturity Date for each series, we send a written
notice of the date to each Contract Holder or you, as applicable,
who has an Individual Account value in that series. In response,
the Contract Holder or you, as applicable, must tell us to which
available Investment Options to transfer the amount in the GET
Fund on the Maturity Date. If we do not receive instructions, on
the Maturity Date we transfer the portion of the Individual
Account value held in the GET Fund to another GET Fund series, if
available. If no GET Fund series is available, we transfer the
amount to the Fund or Funds we designate in the written notice.
4.05 Transfers or Withdrawals from the GET Fund
Transfers or withdrawals from the GET Fund before the Maturity
Date are based on the GET Fund unit value for the next Valuation
Date following our receipt of the request in Good Order (see 8.01
and 8.02).
Section 5. Fixed Account
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The following provisions apply if the Fixed Account is available as shown on
Contract Schedule I under Fixed Interest Options Available.
5.01 Fixed Account Minimum Guaranteed Interest Rate
The Fixed Account minimum guaranteed interest rate is shown on
Contract Schedule I under Fixed Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Account during the calendar year. The one year minimum guaranteed
interest rate will be established prior to each calendar year and
will be made available to the Contract Holder or you, as
applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
you, as applicable.
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5.02 Transfers from the Fixed Account
Each calendar year, the percentage shown on Contract Schedule I
under Fixed Account Annual Transfer Limit of the amount in the
Fixed Account may be transferred to any available Investment
Options. The amount available for transfer will be based on the
Individual Account value in the Fixed Account as of the date we
receive the transfer request in Good Order at our Home Office. We
may, on a temporary basis, allow transfer of a larger percentage.
There is no limit on the amount that may be transferred to the
Fixed Plus Account.
5.03 Withdrawals from the Fixed Account
If the Contract Holder or you, as applicable, requests a partial
or full withdrawal (see 8.02) from the Fixed Account, a withdrawal
charge may apply (see 8.04).
Section 6. Fixed Plus Account
- --------------------------------------------------------------------------------
The following provisions apply if the Fixed Plus Account is available as shown
on Contract Schedule I under Fixed Interest Options Available.
6.01 Fixed Plus Account Minimum Guaranteed Interest Rate
The Fixed Plus Account minimum guaranteed interest rate is shown
on Contract Schedule I under Fixed Plus Account Minimum Guaranteed
Interest Rate.
Each calendar year, we will set an annual minimum guaranteed
interest rate which will apply to all amounts held in the Fixed
Plus Account during the calendar year. The one year minimum
guaranteed interest rate will be established prior to each
calendar year and will be made available to the Contract Holder or
you, as applicable, in advance of the calendar year. We, at our
discretion, may credit a higher interest rate, which is not
guaranteed; we will make the current rate, and the period for
which it will be credited, available to the Contract Holder or
you, as applicable.
6.02 Transfers from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit of the amount in the Fixed Plus Account
may be transferred to any available Investment Option.
The amount available for transfer is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
transfer request in Good Order at our Home Office, reduced by any
amount withdrawn, transferred, taken as a loan (if allowed under
the Contract) or used to purchase Annuity payments during the 12
months prior to the transfer request. In addition, we reserve the
right to reduce the amount available for transfer by amounts
withdrawn under a systematic distribution option.
Twenty percent of the amount in the Fixed Plus Account may be
transferred in each of four consecutive 12-months and the balance
transferred in the fifth year subject to the following conditions:
(a) During the five-year period, no additional amounts are
allocated to or transferred from the Fixed Plus Account;
(b) We will include any amount transferred, taken as a loan (if
allowed under the Contract) or used to purchase Annuity
payments during the prior 12-month period when calculating
the amount which equals 20%; and
(c) We reserve the right to include amounts paid under a
systematic distribution option when calculating the amount
which equals 20%.
In addition, we reserve the right to waive the transfer limit when
the amount in the Fixed Plus Account is less than or equal to the
amount shown on Contract Schedule I under Waiver of Fixed Plus
Account Transfer Limit.
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6.03 Partial Withdrawals from the Fixed Plus Account
During each rolling 12-month period, the percentage shown on
Contract Schedule I under Fixed Plus Account Annual Transfer and
Partial Withdrawal Limit may be withdrawn from the Fixed Plus
Account.
The amount available for withdrawal is based on the Individual
Account value in the Fixed Plus Account on the date we receive the
withdrawal request in Good Order at our Home Office, reduced by
any amount withdrawn, transferred, taken as a loan (if allowed
under the Contract), or used to purchase Annuity payments during
the 12 months prior to the request. In addition, we reserve the
right to reduce the amount available by deducting any amount
withdrawn under a systematic distribution option.
The withdrawal limit does not apply when the partial withdrawal
is:
(a) Due to your death during the Accumulation Phase and is made
within six months of the date of death (this exception
applies to only one partial withdrawal);
(b) Used to purchase Annuity payments; or
(c) Due to other conditions as we may allow without
discrimination.
6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account
The Contract Holder, or you, as applicable, may withdraw the full
amount held in the Fixed Plus Account. When we receive a request
for a full withdrawal, no additional transfers, partial
withdrawals or loans (if allowed under the Contract) are allowed.
The withdrawal will be made as follows:
(a) One-fifth of the Individual Account value in the Fixed Plus
Account as of the date we receive the withdrawal request in
Good Order at our Home Office reduced by the amount, if
any, transferred, withdrawn, taken as a loan (if allowed
under the contract) or used to purchase Annuity payments
during the prior 12 months; then
(b) One-fourth of the remaining amount 12 months later; then
(c) One-third of the remaining amount 12 months later; then
(d) One-half of the remaining amount 12 months later; then
(e) The balance of the Individual Account value in the Fixed
Plus Account 12 months later.
No withdrawal charge applies to amounts withdrawn.
The Contract Holder or you, as applicable, may cancel a full
withdrawal request from the Fixed Plus Account at any time.
6.05 Waiver of Fixed Plus Account Full Withdrawal Provision
When a full withdrawal is requested, payment from the Fixed Plus
Account is not limited as described in 6.04 when the withdrawal is
as noted on Contract Schedule I under Waiver of Fixed Plus Full
Withdrawal Provision.
Section 7. Guaranteed Accumulation Account (GAA)
- --------------------------------------------------------------------------------
The following provisions apply if the Guaranteed Accumulation Account is
available as shown on Contract Schedule I under Fixed Interest Options
Available.
7.01 Nonunitized Separate Account
The Nonunitized Separate Account is established under Title 38a,
Section 38a-433 of the Connecticut General Statutes. There are no
discrete units for this account. We own the assets held in the
Nonunitized Separate Account; we are not a trustee of those
assets. Income, gains or losses, realized or unrealized, are
credited to or charged against the Nonunitized Separate Account
without regard to our other income, gains or losses. Nonunitized
Separate Account assets, to the extent of reserves and other
Contract liabilities, cannot be charged with liabilities arising
out of any other business we conduct.
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7.02 GAA Minimum Guaranteed Interest Rate
All Contributions allocated to a GAA guaranteed term (see 7.04)
earn a rate of interest which we determine and which is guaranteed
when the Contribution remains in the guaranteed term until the
Maturity Date. The rate credited will never be less than the
minimum interest rate shown on Contract Schedule I under
Guaranteed Accumulation Account Minimum Guaranteed Interest Rate.
For guaranteed terms of one year or less, one guaranteed rate is
credited for the full guaranteed term. For longer guaranteed
terms, we may credit an initial guaranteed interest rate from the
date of deposit to the end of a specified period within the
guaranteed term. We may credit different interest rates for
subsequent specified periods throughout the guaranteed term.
7.03 Deposit Period
A deposit period is the period of time we determine during which
we accept allocations (Contributions, transfers, or reinvestments)
to one or more guaranteed terms. We reserve the right to extend
the deposit period.
7.04 Guaranteed Term
A guaranteed term is the period of time for which we guarantee the
declared interest rate for allocations (Contributions, transfers,
or reinvestments) to GAA guaranteed terms. We may offer guaranteed
terms ranging in duration from one to ten years. During each
deposit period, we may offer more than one guaranteed term of
varying lengths. The guaranteed term begins the day after the
deposit period ends. The Contract Holder or you, as applicable,
may allocate new Contributions or transfers to any or all
guaranteed terms available in the current deposit period.
7.05 Guaranteed Term Groups
A guaranteed term group is comprised of all GAA guaranteed terms
of the same duration.
7.06 Maturity Date, Maturity Value and Reinvestment
The Maturity Date is the last day of a guaranteed term. The
maturity value is the amount we pay at the end of a guaranteed
term. At least 18 calendar days before any guaranteed term
Maturity Date, we notify the Contract Holder or you, as
applicable, of the projected maturity value and the guaranteed
terms (and the guaranteed interest rates for each) available
during the then-current deposit period. The Contract Holder, or
you, as applicable, may then tell us how to allocate the maturity
value.
If the Contract Holder or you, as applicable, does not tell us how
to reinvest the maturity value, we reinvest it in a guaranteed
term of the same duration if one is available. If no guaranteed
term of the same duration is available, we reinvest the maturity
value in the guaranteed term with the next shortest duration. If
no shorter guaranteed term is available, we reinvest the maturity
value in the next longest term. We mail a confirmation of
reinvestment. The confirmation includes the guaranteed term in
which we have reinvested the maturity value and the guaranteed
interest rate for that term.
If we have reinvested the maturity value, during the month
following the Maturity Date, the Contract Holder or you, as
applicable, may transfer or withdraw the reinvested amount, with
interest earned (as of the date we receive the request) without
incurring a market value adjustment (see 7.08).
7.07 Transfers and Withdrawals from the GAA
Except as noted below, the Contract Holder or you, as applicable,
may transfer any portion or all of the amount held in the GAA.
Transfers or withdrawals before the Maturity Date may be subject
to a market value adjustment (see 7.08). Amounts invested in a
guaranteed term may not be transferred during the deposit period
or for a period of 90 calendar days after the close of the deposit
period.
12
<PAGE>
Unless directed otherwise, when the Contract Holder or you, as
applicable, requests a transfer or withdrawal from the GAA, we
withdraw amounts proportionately from each guaranteed term in
which the Individual Account is invested. Within a guaranteed term
group, we withdraw first from the oldest deposit period and then
from the next oldest and so on until the amount requested is
withdrawn.
7.08 Application of the Market Value Adjustment
Transfers or withdrawals from the GAA before the Maturity Date are
subject to a market value adjustment, except for:
(a) A one-month period following the Maturity Date on which we
have automatically reinvested the value on the Maturity
Date;
(b) Distributions under certain systematic distribution
options; and
(c) When the withdrawal is equal to the minimum distribution
amount required under the Code, using a method permitted by
the Code and which we offer.
For withdrawals and transfers from the GAA made (1) within six
months of your death; or (2) to purchase Annuity payments under a
life-contingent Annuity option, the amount withdrawn from the GAA
is the greater of:
(a) The aggregate market value adjustment amount which is the
sum of all market value adjusted amounts calculated due to
a withdrawal before the Maturity Date (which may be
positive or negative); or
(b) The amount in the GAA.
For withdrawals made after the six month period following death,
the withdrawal or transfer amount is the aggregate MVA amount.
An MVA applies to amounts withdrawn to purchase Annuity payment
under a period certain Annuity option.
We may change the GAA market value adjustment by notifying the
Contract Holder in writing at least 90 calendar days before the
change becomes effective. Any such change will apply only to
guaranteed terms offered in deposit periods after the date the
change becomes effective and will apply to existing and new
Individual Accounts.
7.09 Market Value Adjustment (MVA)
The market value adjustment reflects any change in yields on U.S.
Treasury Notes from the time an amount is allocated to a GAA
guaranteed term to the time of a transfer or withdrawal prior to
the Maturity Date. When the market value adjustment is applied,
the amount transferred or withdrawn from the GAA is multiplied by
a factor which is calculated as follows:
x
------
365
(1 + I)
------------------
x
------
365
(1 + j)
13
<PAGE>
Where:
I is the deposit period yield
j is the current yield
x is the number of days remaining (computed from Wednesday
of the week of withdrawal) in the guaranteed term.
The deposit period yield and the current yield are determined as
follows:
Deposit Period Yield
--------------------
At the close of the last business day of each week of a
deposit period, we compute a yield that is the average of
the yields on U.S. Treasury Notes which mature in the last
three months of the guaranteed term. The deposit period
yield is the average of those yields for the deposit
period. If a withdrawal is made prior to the close of the
deposit period, the deposit period yield is the average of
the yields of U.S. Treasury Notes for each week preceding
the withdrawal. In the event that no U.S. Treasury Notes
will mature in the last three months of the guaranteed
term, we reserve the right to use the U.S. Treasury Notes
that mature in a following quarter.
Current Yield
-------------
The Current Yield is the average of the yields of the same
U.S. Treasury Notes used to calculate the deposit period
yield on the last business day of the week preceding
withdrawal.
Section 8. Transfers, Withdrawals and Distributions
- --------------------------------------------------------------------------------
8.01 Transfers
During the Accumulation Phase, the Contract Holder or you, as
applicable, may transfer all or any portion of the Individual
Account value among the available Investment Options. The
Individual Account value on any amount transferred from a Fund
will be based on the Fund's accumulation unit value next
determined after we receive the transfer request In Good Order at
our Home Office.
The Contract Holder or you, as applicable, may request a transfer
by properly completing a transfer request form and sending it to
our Home Office, or by otherwise complying with our administrative
procedures. We reserve the right to establish a minimum transfer
amount.
8.02 Withdrawals
As allowed by the Plan, if applicable, and subject to provisions
of the Code (see 8.03), during the Accumulation Phase, the
Contract Holder or you, as applicable, may withdraw any portion or
all of the Individual Account value. The Individual Account value
of any amount withdrawn from a Fund will be based on the Fund's
accumulation unit value next determined after we receive the
transfer request In Good Order.
The Contract Holder or you, as applicable, may request a
withdrawal by properly completing a withdrawal request form and
forwarding it to our Home Office, or by otherwise complying with
our administrative procedures. Unless the Contract Holder or you,
as applicable, requests otherwise, the withdrawal will be made
proportionately from the Investment Options in which the
Individual Account is invested.
A withdrawal charge may apply to amounts withdrawn (see 8.04). In
addition, a market value adjustment may apply to amounts withdrawn
from the GAA (see 7.08 and 7.09) and limitations may apply to
withdrawals from the Fixed Plus Account (see 6.04).
8.03 Withdrawal Restrictions Under the Code
The Code may impose restrictions on the amount and timing of
withdrawals. The restrictions applicable to this Contract are
shown on Contract Schedule I under Withdrawal Restrictions Under
the Code. Withdrawals that do not comply with the Code may be
subject to tax penalties.
14
<PAGE>
8.04 Withdrawal Charge
During the Accumulation Phase, we may deduct a withdrawal charge
from the Individual Account value withdrawn. The charge, if any,
is a percentage of the amount withdrawn from the Funds and/or
Fixed Interest Options (except, if applicable, the Fixed Plus
Account). The withdrawal charge will never exceed 8.5% of the
total amount of Contributions.
The withdrawal charge, if any, is shown on Contract Schedule I
under Withdrawal Charge.
8.05 Waiver of Withdrawal Charge
The withdrawal charge (see 8.04) does not apply in any of the
circumstances shown on Contract Schedule I under Waiver of
Withdrawal Charge.
In addition, we reserve the right to reduce, waive or eliminate
the withdrawal charge.
8.06 Reinstatement
Within 30 calendar days after a withdrawal, the Contract Holder or
you, as applicable may elect to reinstate all or a portion of the
proceeds of a full withdrawal if allowed by applicable law. We
must receive the reinstated amount within 60 calendar days of the
withdrawal.
Any maintenance fee and withdrawal charge imposed at the time of
the withdrawal is included in the reinstatement. If only a portion
of the amount withdrawn is reinstated, the amount of any
maintenance fee and withdrawal charge deducted will be restored
proportionally. The amount of any market value adjustment deducted
from any amount withdrawn from GAA is not included in the amount
reinstated.
Any amount reinstated to the GA Account will be credited to
guaranteed terms available in the current deposit period. We will
reinvest it in a guaranteed term of the same duration if one is
available. If no guaranteed term of the same duration is
available, we reinvest the maturity value in the guaranteed term
with the next shortest duration. If no shorter guaranteed term is
available, we reinvest the maturity value in the next longest
term.
Amounts withdrawn from a GET Fund series are reinstated to the
current offering period if one is available. If no GET Fund
offering period is available, any amount withdrawn from the GET
Fund is reinstated equally among all other Investment Options in
which the Individual Account is invested.
Amounts are reinstated among the Investment Options in the same
proportion as they were held at the time of withdrawal, except, as
noted above, for amounts from the GET Fund. Any maintenance fee
which falls due after the withdrawal and before the reinstatement
is deducted from the amount reinstated.
The number of accumulation units reinstated to any Fund is based
on the accumulation unit values next computed after we receive the
reinstatement request in Good Order at our Home Office.
Reinstatement is permitted only once.
8.07 Required Distributions
While an Individual Account remains in the Accumulation Phase, the
Code may require distribution of all or a portion of the
Individual Account value. The Contract Holder, you or Contract
beneficiary, as applicable, must tell us when to begin
distributions. We have no responsibility for adverse tax
consequences as the result of the Contract Holder, you or Contract
beneficiary, as applicable, not complying with minimum
distribution requirements.
The distribution requirements, if any, are shown on Contract
Schedule I under Required Distributions.
Generally, to meet distribution requirements, the Contract Holder,
you or Contract beneficiary, as applicable, may request partial
withdrawals, a systematic distribution option (see 8.08) or an
Annuity option.
15
<PAGE>
8.08 Systematic Distribution Options (SDOs)
During the Accumulation Phase, we may offer one or more
distribution options under which we make regularly scheduled
automatic partial distributions of the Individual Account value.
To request an SDO, the Contract Holder, you or Contract
beneficiary, as applicable, must complete an SDO election form and
forward it to our Home Office.
Each option is available without discrimination to any class of
Contracts. The availability of any specific option may be subject
to terms and conditions applicable to that option. We may
discontinue the availability of an SDO option for future election.
Payments will, however, continue to you who elected the option
before the date it is no longer available.
8.09 Individual Account Termination
If the Individual Account value is an amount equal to or less than
the amount shown on Contract Schedule I under Individual Account
Termination Amount and we have received no Contributions for 12
months, we reserve the right to terminate an Individual Account.
Before we do this, we notify the Contract Holder or you, as
applicable, 90 calendar days in advance. When we terminate an
Individual Account, we do not deduct a withdrawal charge. We do
not exercise this right when the Individual Account value is equal
to or less than the amount shown on Contract Schedule I under
Individual Account Termination Amount due to investment
performance.
Section 9. Loans
- --------------------------------------------------------------------------------
9.01 Loan Availability
If loans are available under the Contract, a loan endorsement is
attached.
Section 10. Death Benefit During the Accumulation Phase
- --------------------------------------------------------------------------------
10.01 Death Benefit
If you die during the Accumulation Phase, we pay a death benefit.
The amount of the death benefit is the Individual Account value as
of the next Valuation Date following our receipt of acceptable
proof of death at our Home Office (see 7.08 for amounts in the
GAA).
10.02 Contract Beneficiary
The Contract beneficiary is shown on Contract Schedule I under
Contract beneficiary. Generally, you may name a beneficiary under
the Plan (the Plan beneficiary). If allowed by the Plan, when
designating the beneficiary, the Contract Holder or you, as
applicable, may specify, the form of payment as permitted by the
Code. The Contract beneficiary and the form of payment, if
applicable, may be designated or changed in writing or as we may
otherwise allow in our administrative procedures.
10.03 Distribution of Death Benefit
Generally, if the Plan beneficiary is your surviving spouse,
distribution of the death benefit must begin no later than the
year you would have attained age 70 1/2 or any other date allowed
under federal law or regulations.
If the Plan beneficiary is not your surviving spouse, generally,
the death benefit must be used to purchase Annuity payments within
one year of the year of your death or otherwise paid within five
years of the year of your death.
Annuity payments to a Plan beneficiary may not extend beyond the
period specified in the Code.
16
<PAGE>
Part II. Annuity Phase
Section 11. General Provisions
- --------------------------------------------------------------------------------
11.01 Election
The Contract Holder, you, Contract or Plan beneficiary, as
applicable, may elect an Annuity option by properly completing an
election form and forwarding it to our Home Office no later than
30 calendar days before the desired first Annuity payment date.
All Annuity option elections must comply with any Plan
requirements and regulatory requirements including the Code
minimum distribution requirements.
All or any portion of the Individual Account value (after the
deduction of any applicable premium tax) may be used to purchase
Annuity payments (for amounts from the GAA, see 7.08).
The Contract Holder, you, Contract or Plan beneficiary, as
applicable, must also select an Annuity option (see 11.03) and the
Investment Options (see 11.06).
Once payments begin, an Annuity option may not be revoked, nor may
any amount be withdrawn except as noted below.
11.02 Change of Annuity Provisions
We reserve the right to change or eliminate Annuity options (see
11.03) and to change the mortality table (see 11.04) we use to
calculate payment rates for life-contingent Annuity payments. If
we do this, any change will not take effect until at least 12
months after the Contract Effective Date, or until at least 12
months after any previous change. A change to Annuity options or
the mortality table used to calculate payment rates will not apply
to Individual Accounts established before the date the change
becomes effective.
11.03 Annuity Options
The Contract Holder, you, Contract or Plan beneficiary, as
applicable, must elect one of the following:
Option 1: Payments for a Stated Period
---------------------------------------
This option provides payments for a stated period. The number of
years in the stated period must fall within the range shown on
Contract Schedule II under Payment Period.
If payments for this option are under a Variable Annuity, the
present value of any remaining payments may be withdrawn at any
time. If a withdrawal is requested within five years of the first
payment, the lump-sum payment is treated as a withdrawal during
the Accumulation Phase and any applicable withdrawal charge
applies (see 8.04).
If the payments are fixed-only, an annual increase of one, two or
three percent (compounded annually) may be elected at the time the
Annuity option is chosen (if permitted by the Code).
Option 2: Life Income for One Annuitant
----------------------------------------
This option provides payments for the life of the Annuitant. If
this option is elected, the Contract Holder, you or Contract
beneficiary, as applicable, must also choose one of the following:
(a) Payments cease at the death of the Annuitant; or
(b) Payments are guaranteed for a period within the range shown
on Contract Schedule II under Payment Period; or
(c) Fixed-only cash refund: at the death of the Annuitant, the
beneficiary receives a lump-sum payment in an amount equal
to the amount applied to the Annuity (minus any applicable
premium tax), minus the amount of payments made to the
Annuitant.
Under (a) or (b), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
17
<PAGE>
Option 3: Life Income for Two Annuitants
-----------------------------------------
This option provides payments for the lives of the Annuitant and a
second Annuitant. Payments continue until both Annuitants have
died. If this option is elected, the Contract Holder, you,
Contract or Plan beneficiary as applicable, must also choose one
of the following:
(a) 100% of the payment amount to continue after the first
death; or
(b) 66 2/3% of the payment amount to continue after the first
death; or
(c) 50% of the payment amount to continue after the first
death; or
(d) 100% of the payment amount to continue after the first
death with payments guaranteed to the beneficiary after the
second death for a period within the range shown on
Contract Schedule II under Payment Period; or
(e) 100% of the payment amount to continue at the death of the
specified second Annuitant and 50% of the payment amount to
continue at the death of the specified Annuitant; or
(f) 100% of the fixed-only payment amount to continue after the
first death with a cash refund to the Contract beneficiary
after the second death. The amount of the cash refund is
equal to the amount applied to the Annuity (minus any
applicable premium tax), minus the amount of payments made.
Under (a) or (d), if the payments are fixed-only, an annual
increase of one, two or three percent (compounded annually) may be
elected at the time the Annuity option is chosen (if permitted by
the Code).
Other Options
-------------
As allowed under applicable state law, we reserve the right to
make other options available.
11.04 Mortality Table
The mortality table for this Contract is shown on Contract
Schedule II under Mortality Table.
11.05 Payments
The first payment amount must be at least $50 per month or $250
per year. We reserve the right to increase the minimum first
payment amount, if allowed by state law, based on increases
reflected in the Consumer Price Index-Urban (CPI-U) since July 1,
1993.
To calculate the guaranteed first payment of a variable Annuity or
the payments for a fixed Annuity, we will use the Annuitant's
adjusted age and, if applicable, the second Annuitant's adjusted
age. The Annuitant's adjusted age and, if applicable, the second
Annuitant's adjusted age is the person's age as of the birthday
closest to the day Annuity payments begin, reduced as follows:
(a) Reduced by one year for payments before January 31, 2000;
(b) Reduced by two years for payments beginning during the
period from January 1, 2000 through December 31, 2009;
(c) Starting on January 1, 2010, reduced by one additional year
for payments beginning in each succeeding decade.
If a fixed Annuity is elected, we will use the applicable current
settlement option rates if they will provide higher fixed Annuity
payments.
11.06 Investment Options
When an Annuity option is elected, the Contract Holder, you,
Contract or Plan beneficiary, as applicable, must elect:
(a) A fixed Annuity for which the underlying investment is our
General Account;
18
<PAGE>
(b) A variable Annuity for which the underlying investment is
one or more of the available Funds; or
(c) A combination of (a) and (b).
For a variable Annuity, the maximum number of Funds available
during the Annuity Phase is shown on Contract Schedule II under
Maximum Number of Funds. The Funds available during the Annuity
Phase may not be the same as those available during the
Accumulation Phase.
11.07 Fixed Annuity Minimum Guaranteed Interest Rate
For a fixed Annuity, the interest rate will never be less than the
minimum guaranteed rate shown on Contract Schedule II under Fixed
Annuity Minimum Guaranteed Interest Rate.
11.08 Variable Annuity Assumed Annual Net Return Rate Election
If a variable Annuity is elected, the Contract Holder, or you, as
applicable must also elect an assumed annual net return rate of
3.5% or 5%. The initial Annuity payment for the option elected
will reflect the assumed annual net return rate. If subsequent
Annuity payments are to remain level, the Separate Account must
earn this rate, plus enough to cover the mortality and expense
risk charge shown on Contract Schedule II under Maximum Daily
Charges to the Separate Account plus any applicable administrative
charge.
11.09 Variable Annuity Transfers
If a variable Annuity is elected, the Contract Holder, you,
Contract or Plan beneficiary, as applicable, may request that we
transfer all or a portion of the amount allocated to a Fund to any
other available Fund. Transfer requests must be expressed as a
percentage of the allocation among the Funds on which the variable
payment is based. The number of transfers allowed each calendar
year is shown on Contract Schedule II under Number of Annual
Transfers Among Funds. We reserve the right to allow additional
transfers. Transfers are effective as of the next Valuation Date
following our receipt of a transfer request in Good Order at our
Home Office.
11.10 Fund Annuity Units
The number of Fund Annuity units is based on the amount of the
first variable Annuity payment which is equal to:
(a) The portion of the Individual Account value (minus any
applicable premium tax) used to purchase a variable
Annuity; divided by
(b) One thousand; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion of the variable payment will be divided by
the appropriate Fund's, or Funds', Annuity unit value (see 11.11)
on the tenth Valuation Date before the due date of the first
payment to determine the number of Fund Annuity units. The number
of each Fund's Annuity units remains fixed unless changed by a
subsequent Fund transfer or if the Annuity option provides for a
change in units (i.e., under life income for two annuitants option
after the first death). Each future payment is equal to the sum of
the products of each Fund's Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity unit value on the
tenth Valuation Date before the payment due date is used.
11.11 Fund Annuity Unit Value
For any Valuation Date, a Fund's Annuity unit value is equal to:
(a) The Annuity unit value for the prior Valuation Date;
multiplied by
(b) The Annuity unit net return factor (see 11.12) for the
current Valuation Date; multiplied by
(c) A factor to reflect the assumed annual net return rate. The
factor for an assumed annual net return rate of 5% is
0.9998663; for 3.5% it is 0.9999058.
19
<PAGE>
The dollar value of a Fund Annuity unit and the amount of a
variable Annuity payment may increase or decrease due to
investment gain or loss. We will not change the payment amount due
to changes in mortality, expense results, or the administrative
charge.
11.12 Fund Annuity Net Return Factor
The Annuity net return factor(s) are used to compute all variable
Annuity payments for any Fund.
The net return factor(s) for each Fund is equal to 1.0000000 plus
the net return rate.
The net return rate equals:
[a - b - c]
------------- - e
d
Where:
a is the value of the shares of the Fund held by the Separate
Account on the current Valuation Date;
b is the value of the shares of the Fund held by the Separate
Account on the prior Valuation Date;
c is taxes or provisions for taxes, if any, on the Separate
Account (with any federal income tax liability offset by
foreign tax credits to the extent allowed);
d is the total value of the accumulation units and Annuity units
of the Separate Account on the current Valuation Date;
e is Separate Account daily charges for mortality and expense
risk and a daily administrative charge as shown on Contract
II under Maximum Daily Charges to the Separate Account.
A net return rate may be more or less than 0%. The value of a
share of a Fund is equal to the net assets of the Fund divided by
the number of shares outstanding.
11.13 Death Benefit During the Annuity Phase
The Contract Holder or you, as applicable, must name a beneficiary
for the Annuity Phase. Unless not allowed by the Plan, or
restricted by the Contract Holder, or you, as applicable, the
beneficiary may name a beneficiary.
If an Annuitant(s) dies, any remaining guaranteed payments
continue to the beneficiary. Payments are made at least as rapidly
as provided by the option in effect at the death of the Annuitant.
Annuity payments to an beneficiary may not extend beyond (1) the
life of the beneficiary, or (2) any period certain greater than
the beneficiary's life expectancy as determined by the Code.
The beneficiary may also elect a lump-sum payment equal to the
present value of any remaining payments.
The interest rate used to determine the first Annuity payment is
used to calculate the present value. The present value is
determined as of the next Valuation Date following our receipt of
acceptable proof of death and a written claim for the death
benefit.
Unless not allowed by the Plan or restricted by the Contract
Holder, or you, as applicable, if the beneficiary dies while
receiving payments, the present value of any remaining guaranteed
payments is paid in a lump-sum to the beneficiary's beneficiary or
to the beneficiary's estate.
20
<PAGE>
OPTION 1: Payments for a Specified Period
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $17.91 20 $5.51
10 9.61 25 4.71
15 6.87 30 4.18
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.12 20 $5.75
10 9.83 25 4.96
15 7.10 30 4.45
- --------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
First Monthly Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate (AIR)
- --------------------------------------------------------------------------------
Years Payment Years Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.74 20 $6.51
10 10.51 25 5.76
15 7.82 30 5.28
- --------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
21
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
Adjusted payments for payments payments payments payments Cash Refund
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 4.44 4.42 4.39 4.32 4.22 4.19
60 4.95 4.93 4.86 4.73 4.55 4.57
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
70 6.64 6.54 6.23 5.76 5.19 5.70
75 8.06 7.82 7.14 6.25 5.38 6.51
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 4.72 4.71 4.67 4.60 4.50
60 5.23 5.21 5.13 5.00 4.82
65 5.94 5.89 5.73 5.48 5.15
70 6.92 6.81 6.49 6.00 5.43
75 8.35 8.08 7.38 6.48 5.62
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
-------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Adjusted payments for payments payments payments payments
Age of life guaranteed guaranteed guaranteed guaranteed
Annuitant 5 years 10 years 15 years 20 years
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 5.63 5.61 5.56 5.47 5.36
60 6.12 6.09 6.00 5.85 5.65
65 6.82 6.75 6.57 6.30 5.95
70 7.80 7.67 7.30 6.78 6.21
75 9.23 8.93 8.16 7.23 6.38
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
22
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
- --------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67
55 60 3.99 4.44 4.71 3.98 4.20 3.94
65 60 4.38 4.97 5.32 4.38 4.93 4.29
65 70 4.93 5.68 6.15 4.91 5.27 4.74
75 70 5.69 6.68 7.32 5.62 6.67 5.29
75 80 6.78 8.11 8.99 6.54 7.36 5.93
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $3.97 $4.35 $4.56 $3.97 $4.31
55 60 4.27 4.73 5.00 4.26 4.48
65 60 4.66 5.25 5.61 4.65 5.22
65 70 5.19 5.97 6.44 5.17 5.54
75 70 5.95 6.96 7.61 5.87 6.95
75 80 7.04 8.39 9.29 6.79 7.64
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
First Monthly Payment Amount for Each $1,000*
Rates for a Variable Annuity Payment with 5% Assumed Interest Rate
--------------------------------------------------------------------------------------------------------------------------
Adjusted Ages payments
---------------------------------- guaranteed
Primary Secondary 10 years
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 60 5.15 5.63 5.91 5.14 5.38
65 60 5.52 6.14 6.51 5.51 6.10
65 70 6.04 6.84 7.34 6.00 6.41
75 70 6.77 7.84 8.51 6.68 7.81
75 80 7.86 9.28 10.20 7.57 8.49
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
23
<PAGE>
- --------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
Group Combination, Deferred Annuity Contract
(Nonparticipating)
- --------------------------------------------------------------------------------
C-CDA-99
Exhibit 99-B.4.23
Aetna Life Insurance and Annuity Company
Customer Relations Department, PFSD
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Herein called Aetna.
Group Annuity Certificate
This Certificate describes the Group Annuity Contract issued to the Contract
Holder to meet the liabilities of its Deferred Compensation Plan. All data shown
here is taken from Aetna records and is based upon information furnished by the
Contract Holder.
The Certificate replaces any and all certificates, riders or amendments thereto
issued under the stated Contract and Certificate number.
See the inside page of this Certificate for a summary of other Contract
provisions.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND IV.
RIGHT TO CANCEL
The Contract Holder may cancel this Certificate within 10 days of receiving it,
by returning it along with a written notice to Aetna at the above address or to
the agent from whom it was purchased. Within 7 days after receiving the notice
of cancellation and this Certificate at its Home Office, Aetna will return the
entire consideration paid; plus any increase or minus any decrease in the cash
value of any funds allocated to the Separate Account.
/s/ George N. Gingold /s/ Dean E. Wolcott
Secretary President
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
GDCC-HF 39362
Cat. 711926
PRINTEDIN U.S.A.
<PAGE>
SPECIFICATIONS
- --------------------------------------------------------------------------------
PLAN
- --------------------------------------------------------------------------------
CONTRACT HOLDER GROUP ANNUITY CONTRACT NO.
- --------------------------------------------------------------------------------
PARTICIPANT CERTIFICATE NO.
- --------------------------------------------------------------------------------
GDCC-HF
<PAGE>
Summary of Certain Provisions
of the Group Annuity Contract
1. GENERAL. Subject to the specific terms of the Plan identified on the
Specifications Page, Aetna will pay the Contract Holder (or the
Participant if so directed by the Contract Holder), an Annuity commencing
on the Participant's retirement date. The Plan determines the retirement
date and the amount and terms of payment of the Annuity.
All rights in the Contract rest with the Contract Holder, or authorized
designee of the Contract Holder (as allowed by law). The rights of the
Participants are described in the Plan.
2. MISSTATEMENT AND ADJUSTMENTS. If Aetna finds the age of the payee to be
misstated, the correct facts will be used to adjust payments.
3. VARIABLE BENEFITS - SEPARATE ACCOUNT. The dollar amount of variable
payments or values shall be computed by multiplying the number of Fund(s)
Record Units by the Fund(s) Record Unit Value. The Fund(s) Record Unit
Value is computed by multiplying the Net Return Factor for the current
Valuation Period by the Fund(s) Record Unit Value for the previous Period.
Calculations to determine the Net Return Factor include deductions from
investment resulting totaling 1.25% on an annual basis for Annuity
mortality and expense risks and profit and a daily administrative charge
which will not exceed .25% on an annual basis. An annual maintenance fee
may be deducted from account reserves.
The dollar value of Fund(s) Record Unit, Separate Account assets, and
Variable Annuity payments may go up or down due to investment gain or
loss.
4. SURRENDER FEE. Any amount paid in a lump sum as a surrender under the
terms of the Contract may be reduced by a Surrender Fee. During the first
5 years, the Surrender Fee will be 5%. Amounts surrendered after the first
5 years may be subject to a lesser fee. Further details may be found in
Parts III, V and VI of the Contract.
5. BENEFICIARY. The beneficiary shall be the Contract Holder.
6. EXAMINATION OF GROUP CONTRACT. The Contract Holder will inform the
Participant as to when and where the Group Contract may be examined.
GDCC-HF
<PAGE>
Aetna Life Insurance and Annuity Company
Customer Relations Department, PFSD
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Group Annuity Certificate
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT
GDCC-HF
Exhibit 99-B.4.26
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Herein called Aetna.
Group Annuity Certificate
This Certificate describes the Group Annuity Contract issued to the Contract
Holder to meet the liabilities of its Deferred Compensation Plan. All data shown
here are taken from Aetna records and are based upon information furnished by
the Contract Holder.
The Certificate replaces any and all certificates, riders or amendments thereto,
issued under the stated Contract and Certificate number.
See the inside page of this Certificate for a summary of other Contract
provisions.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND IV.
RIGHT TO CANCEL
The Contract Holder may cancel this Certificate within 10 days of receiving it,
by returning it along with a written notice to Aetna at the above address or to
the agent from whom it was purchased. Within 7 days after receiving the notice
of cancellation and this Certificate at its Home Office, Aetna will return the
entire consideration paid; plus any increase or minus any decrease in the cash
value of any funds allocated to the Separate Account.
/s/ William O. Bailey
President
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
GDCC-HD (5/84)
Cat. 574341
PRINTED IN U.S.A.
<PAGE>
SPECIFICATIONS
- --------------------------------------------------------------------------------
PLAN
- --------------------------------------------------------------------------------
CONTRACT HOLDER GROUP ANNUITY CONTRACT NO.
- --------------------------------------------------------------------------------
PARTICIPANT CERTIFICATE NO.
- --------------------------------------------------------------------------------
GDCC-HD
<PAGE>
Summary of certain provisions
of the Group Annuity contract
1. GENERAL. Subject to the specific terms of the Plan identified on the
Specifications Page, Aetna will pay the Contract Holder (or the
Participant if so directed by the Contract Holder), an Annuity commencing
on the Participant's retirement date. The Plan determines the retirement
date and the amount and terms of payment of the Annuity.
All rights in the Contract rest with the Contract Holder or authorized
designee of the Contract Holder as allowed by law. The rights of the
Participants are described in the Plan.
2. MISSTATEMENT OF FACT. If Aetna finds the age, or any other relevant facts
to be misstated, the correct facts will be used to adjust payments.
3. VARIABLE BENEFITS - SEPARATE ACCOUNT. The dollar amount of variable
payments or values shall be computed by multiplying the number of Record
Units by the Record Unit Value. The Record Unit Value is computed by
multiplying the Net Return Factor for the current Valuation Period by the
Record Unit Value for the previous Period. Calculations to determine the
Net Return Factor include deductions from investment resulting totaling
1.25% on an annual basis for annuity mortality and expense risks and
profit; and a daily administrative charge which will not exceed .25% on an
annual basis. An annual maintenance fee may be deducted from account
reserves.
The dollar value of Records Units, Separate Account assets, and Variable
Annuity payments may go up or down due to investment gains or losses.
4. SURRENDER FEE. Any amount paid in a lump sum as a surrender under the
terms of the Contract may be reduced by a surrender fee. During the first
5 years, the surrender fee will be 5%. Amounts surrendered after the first
5 years may be subject to a lesser fee. Further details may be found in
Parts III, V and VI of the Contract.
5. BENEFICIARY. The beneficiary shall be the Contract Holder.
6. EXAMINATION OF GROUP CONTRACT. The Contract Holder will inform the
Participant as to when and where the Group contract may be examined.
GDCC-HD
<PAGE>
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Group Annuity Certificate
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT
GDCC-HD
Exhibit 99-B.4.30
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Herein called Aetna
Agrees to pay the benefits stated in this Contract.
THE VARIABLE FEATURES OF THIS CONTRACT ARE DESCRIBED IN PARTS III AND IV.
RIGHT TO CANCEL
The Contract Holder may cancel this Contract within 10 days of receiving it, by
returning this Contract along with a written notice to Aetna at the above
address or to the agent from whom it was purchased. Within 7 days after it
receives the notice of cancellation and this Contract at its Home Office, Aetna
will return the entire consideration paid; plus any increase or minus any
decrease in the cash value of any funds allocated to the Separate Accounts.
This page, the following pages, and the application make up the entire Contract.
Signed at the Home Office on the Effective Date.
/s/ George N. Gingold /s/ William O. Bailey
Secretary President
INDIVIDUAL VARIABLE, FIXED, OR COMBINATION ANNUITY CONTRACT
NON-PARTICIPATING
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
G-CDA-HD (XC)
<PAGE>
SPECIFICATIONS
PLAN
TYPE OF PLAN
CONTRACT HOLDER
GROUP CONTRACT NO.
EFFECTIVE DATE
THIS CONTRACT IS DELIVERED IN
AND IS SUBJECT TO THE LAWS OF THAT JURISDICTION
THIS CONTRACT MAY NOT BE SUITABLE IF ONLY ONE (1) LARGE PURCHASE PAYMENT IS
MADE.
Guaranteed Interest Rate - There is a guaranteed interest rate for Purchase
Payment(s) held in the General Account. (See 3.03.)
Surrender Fee - There will be a charge deducted for early surrender.
(See Part V.)
Deductions from the Separate Account - There will be deductions for mortality
and expense risks and administrative fees. (See 3.07.)
Deduction from Purchase Payment(s) - Purchase Payment(s) are subject to a
deduction for premium taxes, if any. (See 3.01.)
This Contract is a legal contract and constitutes the entire legal relationship
between Aetna and the Contract Holder.
READ THIS CONTRACT CAREFULLY. This Contract sets forth, in detail, all of the
rights and obligations of both you and Aetna. IT IS THEREFORE IMPORTANT THAT YOU
READ THIS CONTRACT CAREFULL.
2
<PAGE>
TABLE OF CONTENTS
I. GENERAL DEFINITIONS
Page
1.01. Annuitant............................................................5
1.02. Annuity..............................................................5
1.03. Fixed Account........................................................5
1.04. Fixed Annuity........................................................5
1.05. Fund(s)..............................................................5
1.06. General Account......................................................5
1.07. Participant..........................................................5
1.08. Plan.................................................................5
1.09. Purchase Payments....................................................5
1.10. Separate Accounts....................................................5
1.11. Valuation Period (Period)............................................5
1.12. Variable Annuity.....................................................5
II. GENERAL PROVISIONS
2.01. Change of Contract...................................................6
2.02. Change of Fund(s)....................................................6
2.03. Non-Participating Contract...........................................7
2.04. Payments.............................................................7
2.05. State Laws...........................................................7
2.06. Control of Contract..................................................7
2.07. Designation of Beneficiary...........................................7
2.08. Misstatements and Adjustments........................................7
2.09. Incontestability.....................................................7
2.10. Grace Period.........................................................7
2.11 Individual Certificates..............................................7
III. PURCHASE PAYMENT, CURRENT VALUE AND SURRENDER PROVISIONS
3.01. Net Purchase Payment(s):.............................................8
3.02. Individual Accounts..................................................8
3.03. Guaranteed Interest Rate - Fixed Account.............................8
3.04. Experience Credits...................................................8
3.05. Maintenance Fee......................................................8
3.06. Fund(s) Record Units - Separate Account..............................8
3.07. Net Return Factor(s) - Separate Account..............................8
3.08. Fund(s) Record Unit Value - Separate Account.........................9
3.09 Current Value........................................................9
3.10. Transfer of Current Value from the Funds.............................9
3.11. Transfer of Current Value from the Fixed Account.....................9
3.12. Notice to the Contract Holder.......................................10
3.13 Sum Payable at Death (Before Annuity Payments Start)................10
3.14. Surrender Value.....................................................10
3.15. Payment of Surrender Value..........................................10
3.16. Reinstatement.......................................................10
3.17. Reinstatement.......................................................10
3
<PAGE>
IV. ANNUITY PROVISIONS
4.01. Choices to be Made..................................................11
4.02. Terms of Annuity Options............................................11
4.03. Death of Annuitant/Beneficiary......................................12
4.04. Fund(s) Annuity Units - Separate Account............................12
4.05. Fund(s) Annuity Unit Value - Separate Account.......................12
4.06. Annuity Options.....................................................13
V. SPECIAL PROVISIONS
5.01 Deferred Compensation Plan..........................................21
5.02. Allocated Pension or Profit Sharing Plan............................22
5.03. Unallocated Pension or Profit Sharing Plan..........................23
5.04. Tax Deferred Annuity Plan...........................................24
VI. FEE SCHEDULE
6.01. Maintenance Fee.....................................................26
6.02. Surrender Fee.......................................................26
6.03 Table of Values - Fixed Account.....................................27
4
<PAGE>
I. GENERAL DEFINITIONS
1.01. Annuitant - A person on whose life an Annuity has been effected under this
Contract.
1.02. Annuity - Payment of an income:
(a) for the life of one or two persons;
(b) for a stated period, or amount; or,
(c) for some mix of (a) and (b).
1.03. Fixed Account - An accumulation option with a guaranteed minimum interest
rate. Aetna may credit a higher rate which is not guaranteed.
1.04. Fixed Annuity - An Annuity with payments which do not vary in amount.
1.05. Fund(s) - The open-end registered management investment companies (mutual
funds) made available by Aetna under this Contract.
1.06. General Account - The Account holding the assets of Aetna, other than
those assets held in the Separate Accounts.
1.07. Participant - A person who participates in the Plan named on the
Specifications page of this Contract.
1.08. Plan - The Plan named on the Specifications page. The term includes all
written documents describing the Plan. The Plan is not a part of the
Contract. Aetna is not bound by the terms of the Plan.
1.09. Purchase Payments - Payments made to Aetna.
1.10. Separate Accounts - Accounts set up by Aetna under the Connecticut
Insurance Laws which purchase shares of the Fund(s).
1.11. Valuation Period (Period) - The period of time from the end of one
business day on the New York Stock Exchange to the end of the next
business day.
1.12. Variable Annuity - An Annuity with payments which vary with the net
investment results of a Separate Account.
5
<PAGE>
II. GENERAL PROVISIONS
2.01. Change of Contract: Only an authorized officer of Aetna may change the
terms of this Contract. Aetna will notify the Contract Holder in writing
at least 30 days before the effective date of any change. Any change will
not affect the amount of terms of any Annuity which begins before the
change.
Any change that affects the following provisions of this Contract will not
apply to any individual participating under this Contract before the
effective date of the change:
(a) Net Purchase Payment(s);
(b) Guaranteed Interest Rate - Fixed Account;
(c) Net Return Factor(s) - Separate Account;
(d) Current Value;
(e) Surrender Value;
(f) Fund(s) Annuity Unit Value - Separate Account.
(g) Fixed Annuity minimum interest rate; and
(h) Maximum transfer, maintenance or surrender fees.
Any change that affects the Annuity Options, and the Tables for the
Options, can only be made:
(a) no earlier than 12 months after the Effective Date of this Contract;
and
(b) no earlier than 12 months after the effective date of any such prior
change.
New Participants covered under this Contract on or after the effective
date of any change will be subject to the change. If the Contract Holder
does not agree to any change under this provision, no new Participants
will be covered under this Contract. Aetna will continue to accept
Purchase Payments for the Participants covered under this Contract before
the change. This Contract may also be changed as required by federal or
state law.
2.02. Change of Fund(s): Aetna, or the Separate Account and the Fund(s), may:
(a) change the Fund(s) which may be invested in by the Separate Account;
and
(b) replace the shares of any Fund(s) held in the Separate Account with
shares of any other Fund(s).
Changes must be:
(1) approved by a majority vote of persons having an interest in the
Separate Account and the Fund(s); or
(2) deemed necessary by Aetna under the Investment Company Act of 1940;
or
(3) deemed necessary by Aetna to accomplish the purpose of the Separate
Account.
Aetna will notify the Contract Holder of any change.
2.03. Non-Participating Contract: The Contract Holder, Participants, or
beneficiaries will not have a right to share in the earnings of Aetna.
6
<PAGE>
2.04. Payments: Aetna will make Annuity payments as and when due. Aetna will
make other payments within 7 days of receipt at its Home Office of a
written claim for payment which is in good order, except as provided in
3.15.
2.05. State Laws: This Contract complies with the laws of the state in which it
is delivered. Any cash, death or Annuity payments are equal to or greater
than the minimum required by such laws. Annuity tables for legal reserve
valuation shall be as required by state law. Such tables may be different
from annuity tables used to determine Annuity payments.
2.06. Control of Contract: See Part V.
2.07. Designation of Beneficiary: See Part V. The beneficiary may be changed at
any time.
2.08. Misstatements and Adjustments: If Aetna finds the age, or any other
relevant facts to be misstated, the correct facts will be used to adjust
payments.
2.09. Incontestability: Aetna cannot cancel this Contract because of any error
of fact on the application.
2.10. Grace Period: This Contract will remain in effect even if Purchase
Payments are not continued.
2.11 Individual Certificates: Aetna shall issue certificates to the Contract
Holder or Participants as required by the State in which this Contract is
delivered. The certificate will summarize certain provisions of the
Contract. Certificates are for information only and are not a part of the
Contract.
7
<PAGE>
III. PURCHASE PAYMENT, CURRENT VALUE AND SURRENDER PROVISIONS
3.01. Net Purchase Payment(s): The actual Purchase Payment less any premium tax.
As a rule, Aetna will deduct the premium tax when Annuity benefits are
purchased (see Part IV). If Aetna determines that it must pay a premium
tax when Purchase Payments are received or at any other time, it will
deduct the tax at that time.
The Net Purchase Payment(s) will be credited to:
(a) the Fixed Account;
(b) the Fund(s) in which the Separate Account invests.
Aetna must be told the percentage of the Net Purchase Payment(s) to be
applied to each investment above.
During any calendar year, Aetna may be told to change the investment mix
four times. If additional changes are allowed, each may be subject to a
fee of up to $10.
3.02. Individual Accounts: See Part V.
3.03. Guaranteed Interest Rate - Fixed Account: On any Purchase Payment(s) made
to the Fixed Account, Aetna will add interest daily at any annual rate no
less than 4%. Aetna may add interest daily at any higher rate determined
by its Board of Directors.
3.04. Experience Credits: Aetna may apply Experience Credits under this
Contract. Any such Credit will be computed as decided by Aetna.
3.05. Maintenance Fee: See Part V.
3.06. Fund(s) Record Units - Separate Account: The portion of the Net Purchase
Payment(s) applied to the Separate Account will determine the number of
Fund(s) Record Units. This number is equal to a Net Purchase Payment
divided by the Fund(s) Record Unit Value (see 3.08) for the Valuation
Period in which the Purchase Payment is received in good order.
3.07. Net Return Factor(s) - Separate Account: The Net Return Factors are used
to compute all Separate Account values and payments for any Fund.
The Net Return Factor for each Fund is equal to 1.0000000 plus the Net
Return Rate.
The Net Return Rate is equal to:
(a) The value of the shares of the Fund held by the Separate Account at
the end of a Valuation Period; minus
(b) the value of the shares of the Fund held by the Separate Account at
the start of the Valuation Period; plus or minus
(c) taxes (or reserves for taxes) on the Separate Account (if any);
divided by
(d) the total value of the Fund Record Units and Fund Annuity Units of
the Separate Account (see 3.08 and 4.05) at the start of the
Valuation Period; minus
(e) a daily actuarial charge at an annual rate of 1.25% for annuity
8
<PAGE>
mortality and expense risks and profit; and a daily administrative
charge which will not exceed .25% on an annual basis.
A Net Return Rate may be more or less than 0.
The value of a share of the Fund is equal to the net assets of the Fund
divided by the number of shares outstanding.
The administrative charge may be changed annually except for amounts which
have been used to purchase an annuity. This charge will not exceed .25%.
3.08. Fund(s) Record Unit Value - Separate Account: The Fund(s) Record Unit
Value is computed by multiplying the Net Return Factor for the current
Valuation Period by the Fund(s) Record Unit Value for the previous Period.
The dollar value of the Fund(s) Record Units, Separate Account assets, and
Variable Annuity payments may go up or down due to investment gain or
loss.
3.09 Current Value: The Current Value (See Part V) is equal to:
(a) Any amounts in the Fixed Account, including Fixed Account interest
added by Aetna; plus
(b) The sum of any Separate Account Record Unit value(s); plus
(c) Any amount due to Experience Credits; less
(d) Any Maintenance Fee(s) due.
Current Value does not include amounts used to purchase an Annuity.
3.10. Transfer of Current Value from the Funds: Before an annuity option is
elected, all or any portion of the Current Value may be transferred from
any Fund to any other Fund or to the Fixed Account
Four transfers of Current Value can be made during a calendar year period.
If additional transfers are allowed, each may be subject to a fee of up to
$10.
3.11. Transfer of Current Value from the Fixed Account: 10% of the Current Value
held in the Fixed Account may be transferred to any Fund(s). Such transfer
will be:
(a) without charge;
(b) allowed once per calendar year;
(c) not allowed under an annuity option.
Aetna may, on a temporary basis, allow any larger percent to be
transferred.
The Current Value of the Fixed Account, as used above, is the value when
the request is received at the Home Office of Aetna.
3.12. Notice to the Contract Holder: Aetna will notify the Contract Holder each
year of:
(a) The value of any amounts held in:
(1) the Fixed Account; and
(3) the Fund(s) for the Separate Account; and
(b) the number of any Fund(s) Record Units; and
(c) the Fund(s) Record Unit Value(s); and
(d) the Surrender Value of these amounts.
9
<PAGE>
Such number or values will be as of a date no more than 60 days before the
date of the notice.
If this Contract is issued for a Tax Deferred Annuity Plan, the above
notice will be sent to each Participant.
3.13. Sum Payable at Death (Before Annuity Payments Start): See Part V.
3.14. Surrender Value: See Part V.
3.15. Payment of Surrender Value: Under certain emergency conditions, Aetna may
defer payment:
(a) for a period of up to 6 months (unless not allowed by state law);
and
(b) as provided by federal law.
3.16. Reinstatement: All or a portion of the proceeds of a full surrender of
this Contract may be reinvested within 30 days after the surrender if
allowed by law. Any Maintenance Fee and Surrender Fee charged at the time
of surrender on the amount being reinvested will be included in the
reinstatement. Amounts will be reinstated among the Fixed Account and
Separate Account in the same proportion as they were at the time of
surrender. The number of Record Units reinstated will be based on the
Record Unit Value(s) next computed after receipt at Aetna's Home Office of
the reinstatement request and the amount to be reinvested.
Any Maintenance Fee which falls due after the surrender and before the
reinstatement will be deducted from the amount reinstated.
Reinstatement is permitted only once.
3.17 Payment of Current Value: Aetna may pay in a lump sum any Current Value if
Purchase Payments have not been received for three full years and the
Current Value is less than $2,000. Such Current Value paid may not be
reinstated.
10
<PAGE>
IV. ANNUITY PROVISIONS
4.01. Choices to be Made: Aetna will pay the Current Value (minus any premium
tax) as a premium for an Annuity under Option 4 with no guaranteed period.
Any other Annuity Option may be elected by telling Aetna to pay all or any
portion of the Current Value (minus any premium tax) as a premium for an
Annuity under Option 2, 3, 4 or 5 (see 4.06). The first Annuity payment
must generally be made no later than the first day of the month following
the Annuitant's 75th birthday. Aetna may be told to make the first Annuity
payment during any prior month.
When an Option is chosen, Aetna must also be told whether payments are to
be made other than monthly and (except for Option 2) to pay:
(a) a Fixed Annuity using the General Account; or
(b) a Variable Annuity using any of the Fund(s) made available by Aetna
for Annuity purposes; or
(c) a mix of (a) and (b).
If a Fixed Annuity is chosen, Aetna will add interest daily at an annual
rate no less than 3.5%. Aetna may add interest daily at any higher rate.
If a Variable Annuity is chosen, an Assumed Annual Net Return Rate of 5%
may be chosen. If not chosen, Aetna will use an Assumed Annual Net Return
Rate of 3.5%.
4.02. Terms of Annuity Options:
(a) When payments start, the age of the Annuitant plus the number of
years for which payments are guaranteed must not exceed 95.
(b) The present value of the expected payments to the Annuitant when
payments start shall be more than 50% of the present value of the
total expected payments to be made; this restriction does not apply
if Option 5 is chosen and the second Annuitant is the spouse of the
Annuitant.
(c) No choice of any Annuity Option may be made if the first payment
would be less than $20 or if the total payments in a year would be
less than $100.
(d) If a Fixed Annuity under Option 3, 4 or 5 is chosen and a larger
payment would result from applying the surrender value to a single
premium immediate annuity currently offered by Aetna to the same
class of Annuitants, Aetna will make the larger payment.
(e) Age, where used in the following tables, means age on the birthday
closest to the date of the first payment.
The annuity rates for Options 4 and 5 are percentages blended of the
male and female mortality rates from 1983 Table a, based on upon
Aetna experience. The annuity rates do not differ by sex. A more
complete description of the rates has been filed with the office of
the New York Department of Insurance.
(f) Assumed Annual Net Return Rate is the interest rate used to
determine the amount of the first Annuity payment under a Variable
11
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Annuity. The Separate Account must earn this rate plus enough to
cover the mortality and expense risk and administrative fee charges
if future Variable Annuity payments are to remain level.
4.03. Death of Annuitant/Beneficiary: When an Annuitant dies any remaining
payments will be continued to the beneficiary. If the beneficiary is not a
person or persons, the present value of any remaining payments will be
paid in one sum. If no beneficiary exists, the present value of any
remaining payments will be paid in one sum to the estate of the Annuitant.
If a beneficiary dies while under Option 1; or while receiving Annuity
payments, the present value of any remaining payments will be paid in one
sum to the estate of the beneficiary. The interest rate used to determine
the first payment will be used to calculate the present value.
4.04. Fund(s) Annuity Units - Separate Account: The number of Fund(s) Annuity
Units is based on the amount of the first Variable Annuity payment which
is equal to:
(a) the portion of the Current Value (minus any premium tax) applied to
pay a Variable Annuity; divided by
(b) 1,000; times
(c) the payment rate for the Option chosen.
Such amount, or portion, of the variable payment will be divided by the
Fund(s) Annuity Unit Value (see 4.05) on the tenth Valuation Period before
the due date of the first payment to determine the number of Fund(s)
Annuity Units. The number of Fund(s) Annuity Units remains fixed. Each
future payment is equal to this number times the Fund(s) Annuity Unit
Value on the tenth Valuation Period prior to the due date of the payment.
4.05. Fund(s) Annuity Unit Value - Separate Account: For any Valuation Period
the Fund(s) Annuity Unit Value is equal to:
(a) the Value for the previous Period; times
(b) the Net Return Factor(s) (see 3.07) for the Period; times
(c) a factor to reflect the Assumed Annual Net Return Rate.
The factor for 3.5% per year is .9999058; for 5% per year it is .9998663.
The dollar value of the Fund(s) Annuity Unit Values and payments may go up
or down due to investment gain or loss.
If Variable Annuity payments are not to decrease, Aetna must earn a gross
return on the assets of the Separate Account of:
o 4.75% on an annual basis, plus an annual return of up to .25% needed
to offset the administrative charge set at the time Annuity payments
commenced, if an Assumed Annual Net Return Rate of 3.5% is chosen;
or,
o 6.25% on an annual basis, plus an annual return of up to .25% needed
to offset the administrative charge set at the time Annuity payments
commence, if an Assumed Annual Net Return Rate of 5% is chosen.
Payments shall not be changed due to changes in the mortality or expense
results or administrative charges.
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4.06. Annuity Options:
Option 1 - Payment of Interest on Sum Left with Aetna - This Option may be
used only by the beneficiary when the Participant dies before Aetna has
started paying an Annuity. A portion or all of the sum paid upon death may
be held under this Option and will be held in the General Account of Aetna
at interest (see 4.01). The beneficiary may later tell Aetna to:
(a) pay a portion, or all, of the sum held by Aetna; or
(b) apply a portion, or all, of the sum held by Aetna to any Annuity
Option below.
Option 2 - Payments of a Stated Dollar Amount - This Option may only be
elected as a Fixed Annuity. An Annuity of a chosen amount will be paid
until no funds are left. The payments to be made in a year must be greater
than $65 for each $1,000 applied to this Option, but cannot exceed an
amount which would deplete the funds in less than 3 years.
During any year, Aetna reserves the right to make as a minimum payment an
amount equal to 105% of the interest for that year.
Option 3 - Payments for a Stated Period of Time - An Annuity will be paid
for the number of years chosen.
The number of years must be at least 3 and not more than 30.
If payments for this Option are made under a Variable Annuity, the present
value of any remaining payments may be withdrawn at any time. If a
withdrawal is requested within 3 years after the start of payments, it
will be treated as a surrender (see Part V).
Option 4 - Life Income - An Annuity will be paid for the life of the
Annuitant. If also chosen, Aetna will guarantee payments for 60, 120, 180,
or 240 months.
Option 5 - Life Income for Two Payees - An Annuity will be paid during the
lives of the Annuitant and a second Annuitant. At the death of either,
payments will continue to the survivor. When this Option is chosen, a
choice must be made of:
(a) 100% of the payment to continue to the survivor;
(b) 662/3% of the payment to continue to the survivor;
(c) 50% of the payment to continue to the survivor; or
(d) Payments for a minimum of 120 months, with 100% of the payment to
continue to the survivor.
Other Options - Aetna may make other options available as allowed by the
laws of the state in which this Contract is delivered.
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OPTION 3
PAYMENTS FOR A STATED PERIOD OF TIME
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%; and
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Years of Amount of Years of Amount of Years of Amount of
Payments Payments Payments Payments Payments Payments
- -------- -------- -------- -------- -------- --------
3 $29.19 13 $7.94 22 $5.39
4 22.27 14 7.49 23 5.24
5 18.12 15 7.10 24 5.09
6 15.35 16 6.76 25 4.96
7 13.38 17 6.47 26 4.84
8 11.90 18 6.20 27 4.73
9 10.75 19 5.97 28 4.63
10 9.83 20 5.75 29 4.53
11 9.09 21 5.56 30 4.45
12 8.46
Rates for a Variable Annuity with Assumed Net Return Rate of 5%
Years of Amount of Years of Amount of Years of Amount of
Payments Payments Payments Payments Payments Payments
- -------- -------- -------- -------- -------- --------
3 $29.80 13 $8.64 22 $6.17
4 22.89 14 8.20 23 6.02
5 18.74 15 7.82 24 5.88
6 15.99 16 7.49 25 5.76
7 14.02 17 7.20 26 5.65
8 12.56 18 6.94 27 5.54
9 11.42 19 6.71 28 5.45
10 10.51 20 6.51 29 5.36
11 9.77 21 6.33 30 5.28
12 9.16
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OPTION 4
LIFE INCOME
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%; and
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Months
Age of
Annuitant None 60 120 180 240
- --------- ---- ------ ------- ------- -------
50 $4.34 $4.34 $4.31 $4.27 $4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
Rate for ages not shown will be provided on request and will be
computed on a basis consistent with the rates in the above tables.
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OPTION 4
LIFE INCOME
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Months
Age of
Annuitant None 60 120 180 240
- --------- ---- ------ ------- ------- -------
50 $5.26 $5.25 $5.22 $5.17 $5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 5.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
Rates for ages not shown will be provided on request and will be
computed on a basis consistent with the rates in the above tables.
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OPTION 5
LIFE INCOME FOR TWO PAYEES
JOINT AND LAST SURVIVOR ANNUITY
100% TO THE SURVIVOR
NO MINIMUM PERIOD
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%; and
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
- --------- -- -- -- -- -- -- -- -- --
45 $3.69 $3.75 $3.81 $3.84 $3.87 $3.90 $3.91 $3.92 $3.92
50 3.75 3.89 3.97 4.04 4.09 4.13 4.15 4.17 4.18
55 3.81 3.97 4.16 4.27 4.35 4.42 4.47 4.50 4.51
60 3.84 4.04 4.27 4.51 4.66 4.78 4.86 4.92 4.95
65 3.87 4.09 4.35 4.66 4.99 5.19 5.35 5.46 5.53
70 3.90 4.13 4.42 4.78 5.19 5.67 5.95 6.17 6.31
75 3.91 4.15 4.47 4.86 5.35 5.95 6.64 7.04 7.34
80 3.92 4.17 4.50 4.92 5.46 6.17 7.04 8.04 8.63
85 3.92 4.18 4.51 4.95 5.53 6.31 7.34 8.63 10.05
Rates for a Variable Annuity with Assumed Net Return Rate of 5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
- --------- -- -- -- -- -- -- -- -- --
45 $4.63 $4.68 $4.73 $4.77 $4.80 $4.82 $4.84 $4.85 $4.86
50 4.68 4.80 4.88 4.95 5.00 5.04 5.06 5.08 5.10
55 4.73 4.88 5.04 5.15 5.24 5.30 5.35 5.39 5.41
60 4.77 4.95 5.15 5.37 5.52 5.63 5.72 5.79 5.83
65 4.80 5.00 5.24 5.52 5.83 6.04 6.20 6.31 6.39
70 4.82 5.04 5.30 5.63 6.04 6.49 6.77 6.99 7.15
75 4.84 5.06 5.35 5.72 6.20 6.77 7.45 7.86 8.16
80 4.85 5.08 5.39 5.79 6.31 6.99 7.86 8.84 9.43
85 4.86 5.10 5.41 5.83 6.39 7.15 8.16 9.43 10.86
Rates for ages not shown will be provided on request and will be
computed on a basis consistent with the rates in the above tables.
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OPTION 5
LIFE INCOME FOR TWO PAYEES
JOINT AND LAST SURVIVOR ANNUITY
66 2/3% TO THE SURVIVOR
NO MINIMUM PERIOD
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%; and
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
- --------- -- -- -- -- -- -- -- -- --
45 $3.94 $4.05 $4.18 $4.32 $4.48 $4.66 $4.84 $5.02 $5.19
50 4.05 4.20 4.35 4.51 4.69 4.89 5.09 5.30 5.49
55 4.18 4.35 4.54 4.73 4.95 5.18 5.42 5.65 5.87
60 4.32 4.51 4.73 4.99 5.25 5.53 5.82 6.11 6.37
65 4.48 4.69 4.95 5.25 5.61 5.97 6.33 6.69 7.02
70 4.66 4.89 5.18 5.53 5.97 6.49 6.96 7.43 7.88
75 4.84 5.09 5.42 5.82 6.33 6.96 7.73 8.39 9.02
80 5.02 5.30 5.65 6.11 6.69 7.43 8.39 9.54 10.46
85 5.19 5.49 5.87 6.37 7.02 7.88 9.02 10.46 12.15
Rates for a Variable Annuity with Assumed Net Return Rate of 5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
- --------- -- -- -- -- -- -- -- -- --
45 $4.87 $4.99 $5.12 $5.27 $5.44 $5.64 $5.86 $6.09 $6.30
50 4.99 5.12 5.26 5.43 5.63 5.85 6.09 6.33 6.57
55 5.12 5.26 5.44 5.63 5.85 6.11 6.38 6.65 6.92
60 5.27 5.43 5.63 5.87 6.14 6.44 6.75 7.07 7.38
65 5.44 5.63 5.85 6.14 6.49 6.84 7.23 7.62 8.00
70 5.64 5.85 6.11 6.44 6.84 7.35 7.84 8.34 8.83
75 5.86 6.09 6.38 6.75 7.23 7.84 8.60 9.28 9.93
80 6.09 6.33 6.65 7.07 7.62 8.34 9.28 10.42 11.35
85 6.30 6.57 6.92 7.38 8.00 8.83 9.93 11.35 13.04
Rates for ages not shown will be provided on request and will be
computed on a basis consistent with the rates in the above tables.
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OPTION 5
LIFE INCOME FOR TWO PAYEES
JOINT AND LAST SURVIVOR ANNUITY
50% TO THE SURVIVOR
NO MINIMUM PERIOD
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%; and
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
- --------- -- -- -- -- -- -- -- -- --
45 $4.07 $4.22 $4.40 $4.61 $4.87 $5.17 $5.49 $5.84 $6.18
50 4.22 4.37 4.56 4.79 5.06 5.39 5.75 6.13 6.51
55 4.40 4.56 4.76 5.00 5.31 5.66 6.06 6.49 6.91
60 4.61 4.79 5.00 5.27 5.61 6.01 6.46 6.95 7.43
65 4.87 5.06 5.31 5.61 5.99 6.44 6.96 7.54 8.11
70 5.17 5.39 5.66 6.01 6.44 6.99 7.61 8.29 9.00
75 5.49 5.75 6.06 6.46 6.96 7.61 8.43 9.29 10.17
80 5.84 6.13 6.49 6.95 7.54 8.29 9.29 10.54 11.71
85 6.18 6.51 6.91 7.43 8.11 9.00 10.17 11.71 13.57
Rates for a Variable Annuity with Assumed Net Return Rate of 5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
- --------- -- -- -- -- -- -- -- -- --
45 $5.01 $5.15 $5.33 $5.56 $5.83 $6.17 $6.55 $6.98 $7.40
50 5.15 5.29 5.48 5.71 6.01 6.36 6.78 7.23 7.68
55 5.33 5.48 5.66 5.91 6.23 6.61 7.05 7.54 8.05
60 5.56 5.71 5.91 6.16 6.51 6.93 7.42 7.96 8.53
65 5.83 6.01 6.23 6.51 6.87 7.34 7.89 8.51 9.16
70 6.17 6.36 6.61 6.93 7.34 7.87 8.51 9.23 10.00
75 6.55 6.78 7.05 7.42 7.89 8.51 9.33 10.20 11.14
80 6.98 7.23 7.54 7.96 8.51 9.23 10.20 11.44 12.64
85 7.40 7.68 8.05 8.53 9.16 10.00 11.14 12.64 14.51
Rates for ages not shown will be provided on request and will be
computed on a basis consistent with the rates in the above tables.
19
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OPTION 5
LIFE INCOME FOR TWO PAYEES
JOINT AND LAST SURVIVOR ANNUITY
100% TO THE SURVIVOR
120 MONTHS MINIMUM PERIOD
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%; and
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
- --------- -- -- -- -- -- -- -- -- --
45 $3.69 $3.75 $3.80 $3.84 $3.87 $3.89 $3.91 $3.91 $3.92
50 3.75 3.89 3.97 4.04 4.09 4.13 4.15 4.16 4.17
55 3.80 3.97 4.15 4.26 4.35 4.41 4.46 4.48 4.49
60 3.84 4.04 4.26 4.50 4.65 4.76 4.84 4.89 4.91
65 3.87 4.09 4.35 4.65 4.98 5.17 5.31 5.41 5.46
70 3.89 4.13 4.41 4.76 5.17 5.62 5.87 6.05 6.15
75 3.91 4.15 4.46 4.84 5.31 5.87 6.48 6.79 6.98
80 3.91 4.16 4.48 4.89 5.41 6.05 6.79 7.50 7.83
85 3.92 4.17 4.49 4.91 5.46 6.15 6.98 7.83 8.50
Rates for a Variable Annuity with Assumed Net Return Rate of 5%6
Age of Second Annuitant
Age of
Annuitant 45 50 55 60 65 70 75 80 85
--------- -- -- -- -- -- -- -- -- --
45 $4.63 $4.68 $4.73 $4.77 $4.80 $4.82 $4.84 $4.85 $4.85
50 4.68 4.80 4.88 4.94 4.99 5.03 5.06 5.07 5.08
55 4.73 4.88 5.04 5.14 5.23 5.29 5.34 5.37 5.38
60 4.77 4.94 5.14 5.37 5.51 5.62 5.70 5.75 5.78
65 4.80 4.99 5.23 5.51 5.82 6.00 6.15 6.24 6.30
70 4.82 5.03 5.29 5.62 6.00 6.44 6.68 6.86 6.96
75 4.84 5.06 5.34 5.70 6.15 6.68 7.27 7.57 7.76
80 4.85 5.07 5.37 5.75 6.24 6.86 7.57 8.26 8.58
85 4.85 5.08 5.38 5.78 6.30 6.96 7.76 8.58 9.23
Rates for ages not shown will be provided on request and will be
computed on a basis consistent with the rates in the above tables.
20
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V. SPECIAL PROVISIONS
The Special Provisions section which applies to this Contract is shown on
the Specifications page under Type of Plan. The other sections under
Special Provisions do not apply.
5.01. Deferred Compensation Plan
(a) Control of Contract: All rights in this Contract rest with the
Contract Holder, who is entitled to all amounts held under this
Contract. The Contract Holder, or authorized designee of the
Contract Holder (as allowed by law), may make any choices allowed by
this Contract with respect to Individual Accounts. Any choices made
under this Contract must be in writing. Until receipt of such
choices in its Home Office, Aetna may rely on any prior choices
made. This Contract, and any Individual Accounts, are not subject to
the claims of any creditors of Participant except to the extent
permitted by law.
(b) Designation of Beneficiary: The beneficiary shall be the Contract
Holder.
(c) Individual Accounts: Aetna will maintain Individual Account(s) as
instructed by the Contract Holder.
(d) Maintenance Fee: The Maintenance Fee (see 6.01) will be deducted
from the Current Value on the anniversary of the Individual Account
effective date and on surrender of the entire Individual Account.
Any portion of the Maintenance Fee deducted from the Fixed Account
will not exceed the interest in excess of 4% and Net Purchase
Payments credited to the Fixed Account during the 12 months prior to
the deduction.
(e) Current Value: The Current Value as determined in 3.09 of an
Individual Account at the end of a Valuation Period.
(f) Sum Payable at Death (Before Annuity Payments Start): Aetna will pay
to the Beneficiary the Current Value if:
(1) The Participant dies before Annuity payments start; and
(2) The notice of death is received in good order by Aetna.
The sum paid will be the Current Value on the date the notice is
received at Aetna's Home Office. The amount paid from the Fixed
Account will not be less than the Net Purchase Payments allocated to
the Fixed Account for the Participant (less any prior transfers (see
3.11) or surrenders). The beneficiary may choose to apply all or any
part of the proceeds to an Annuity Option (see Part IV).
(g) Surrender Value: After deduction of the Maintenance Fee (if any),
Aetna will reduce the amount payable upon surrender of any portion
of the Individual Account(s) by a Surrender Fee. The Surrender Fee
will be in
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accordance with the Surrender Fee table in 6.02.
The total deductions made on surrender of an entire Individual
Account will not exceed 7% of the Current Value as of the date of
surrender and the Surrender Fee will not exceed 8.5% of the Purchase
Payments made to that Account.
(h) The following sections 5.02, 5.03, and 5.04 of the Special
Provisions do not apply to this Contract.
5.02. Allocated Pension or Profit Sharing Plan
(a) The preceding section 5.01 of the Special Provisions does not apply
to this Contract.
(b) Control of Contract: All rights in this Contract rest with the
Contract Holder. The Contract Holder owns all amounts held under
this Contract. The Contract Holder (or authorized designee,) may
make any choices allowed by this Contract with respect to Individual
Accounts. Any choices under this Contract must be in writing. Until
receipt of such choices in its Home Office, Aetna may rely on any
prior choices made. This Contract and any Individual Accounts are
not subject to the claims of any creditors except to the extent
permitted by law.
(c) Designation of Beneficiary: The Contract Holder shall name the
beneficiary for each Participant.
(d) Individual Accounts: If instructed by the Contract Holder, Aetna
will maintain two Individual accounts for each Participant: a
Participant's Individual Account for crediting employee Purchase
Payments and a Plan Individual Account for crediting employer
Purchase Payments.
(e) Maintenance Fee: The Maintenance Fee (see 6.01) will be deducted
from the Current Value on each anniversary of the Individual Account
effective date and upon surrender of the entire Individual Account.
Any portion of the Maintenance Fee deducted from the Fixed Account
will not exceed the interest in excess of 4% and Net Purchase
Payments credited to the Fixed Account during the 12 months prior to
the deduction.
(f) Current Value: The Current Value as determined in 3.09 of an
Individual Account at the end of a Valuation Period.
(g) Sum Payable at Death (Before Annuity Payments Start): Aetna will pay
the Current Value to the beneficiary if:
(1) the Participant dies before Annuity payments start; and
(2) the notice of death is received in good order by Aetna.
The sum paid will be the Current Value of the Participant's
Individual Account on the date when the notice is received at
Aetna's Home Office. The amount paid from the Fixed Account will not
be less than the Net Purchase Payments allocated to the Fixed
Account under the Participant's Individual Account (less any prior
transfers (see 3.11) or surrenders). The Contract Holder will
determine if any additional
22
<PAGE>
amounts are payable to the beneficiary. The beneficiary may choose
to apply all or part of the payment to an Annuity Option (see Part
IV). If no beneficiary exists, the payment will be made to the
estate of the Participant.
(h) Surrender Value: After deduction of the Maintenance Fee (if any)
Aetna will reduce the amount payable upon surrender of any portion
of the Individual Account(s) by a Surrender Fee. The Surrender Fee
will be in accordance with the Surrender Fee table in 6.02.
The total deductions made on surrender of an entire Individual
Account will not exceed 7% of the Current Value as of the date of
surrender and the Surrender Fee will not exceed 8.5% of the Purchase
Payments made to that Account.
(i) The following Sections 5.03 and 5.04 of the Special Provisions do
not apply to this Contract.
5.03. Unallocated Pension or Profit Sharing Plan
(a) The preceding Sections 5.01 and 5.02 of the Special Provisions do
not apply to this Contract.
(b) Control of Contract: All rights in this Contract rest with the
Contract Holder. The Contract Holder owns all amounts held under
this Contract. The Contract Holder may make any choices allowed by
this Contract. Any choice made by any party to this Contract must be
in writing. Until receipt of such choices in its Home Office of
Aetna, Aetna may rely on any prior choices made. This Contract is
not subject to the claims of any creditor except to the extent
permitted by law.
(c) Designation of Beneficiary: The Contract Holder shall name the
beneficiary for each Participant.
(d) Individual Accounts: There are no Individual Accounts under this
Contract. Aetna will maintain one unallocated Plan Account in the
name of the Contract Holder to which Net Purchase Payment(s) will be
credited.
(e) Maintenance Fee: The Maintenance Fee (see 6.01) will be deducted
from the Plan Account Current Value on each anniversary of the Plan
Account effective date and on surrender of the entire Plan Account.
Any portion of the Maintenance Fee deducted from the Fixed Account
will not exceed the interest in excess of 4% and Net Purchase
Payments credited to the Fixed Account during the 12 months prior to
the deduction.
(f) Current Value: The Current Value as determined in 3.09 of the Plan
Account at the end of a Valuation Period.
(g) Sum Payable at Death (Before Annuity Payments Start): Aetna will pay
to the beneficiary any portion of the Plan Account as directed by
the Contract Holder if:
(1) the Participant dies before Annuity payments start; and
(2) the notice of death is received in good order by Aetna.
23
<PAGE>
The beneficiary may choose to apply all or any part of the payment
to an Annuity Option (see Part IV). If no beneficiary exists, the
payment will be made to the estate of the Participant
(h) Surrender Value: After deduction of the Maintenance Fee (if any) the
amount paid by Aetna upon surrender of any portion of the Plan
Account will be reduced by a Surrender Fee. The Surrender Fee will
be in accordance with the Surrender Fee table in 6.02.
The total deductions made on surrender of an entire Plan Account
will not exceed 7% of the Current Value as of the date of surrender
and the Surrender Fee will not exceed 8.5% of the Purchase Payments
made to that Account.
(i) The following Sections 5.04 of the Special Provisions does not apply
to this Contract.
5.04. Tax Deferred Annuity Plan
(a) The preceding Sections 5.01, 5.02, and 5.03 of the Special
Provisions do not apply to this Contract.
(b) Control of Contract: This is a Contract between the Contract Holder
and Aetna only to satisfy the "purchase" requirements of Section
403(b)(1) of the Internal Revenue Code of 1954, as amended. The
Contract Holder has no right, title, or interest in the amounts held
under the Contract either by reason of remitting Purchase Payments
or applying for this Contract.
Each Participant shall own all amounts held in their Individual
Account. Each Participant may make any choices allowed by this
Contract for their Individual Account. Choices made under this
Contract must be in writing. Until receipt of such choices in its
Home Office, Aetna may rely on any previous choices made. This
Contract and any Individual Accounts shall not be subject to the
claims of any creditors. This Contract and any Individual Accounts
are non-assignable and non-transferable.
(c) Designation of Beneficiary: Each Participant shall name their
beneficiary.
(d) Individual Accounts: Aetna will maintain an Individual Account for
each Participant.
(e) Maintenance Fee: The Maintenance Fee (see 6.01) will be deducted
from the Current Value on each anniversary of the Individual Account
effective date and upon surrender of the entire Individual Account.
Any portion of the Maintenance Fee deducted from the Fixed Account
will not exceed the interest in excess of 4% and Net Purchase
Payments credited to the Fixed Account during the 12 months prior to
the deduction.
(f) Current Value: The Current Value as determined in 3.09 of a
Participant's Individual Account at the end of a Valuation Period.
(g) Sum Payable at Death (Before Annuity Payments Start): Aetna will pay
the Current Value to the beneficiary if:
24
<PAGE>
(1) The Participant dies before Annuity payments start; and
(2) The notice of death is received in good order by Aetna.
The sum paid will be the Current Value on the date the notice is
received at Aetna's Home Office. The amount paid from the Fixed
Account will not be less than the Net Purchase Payment(s) allocated
to the Fixed Account under the Participant's Individual Account
(less any prior transfers (see 3.11) or surrenders). The beneficiary
may choose to apply all or any portion of the payment to an Annuity
Option (see Part IV). If no beneficiary exists, the payment will be
made to the estate of the Participant.
(h) Surrender Value: After deduction of the Maintenance Fee (if any),
the amount paid by Aetna upon the surrender of any portion of the
Individual Account(s) shall be reduced by a Surrender Fee. The
Surrender Fee will be in accordance with the Surrender Fee table in
6.02.
The total deductions made on surrender of an entire Individual
Account will not exceed 7% of the Current Value as of the date of
surrender and the Surrender Fee will not exceed 8.5% of the actual
Purchase Payments made to that Account.
25
<PAGE>
VI. FEE SCHEDULE
DEFERRED COMPENSATION PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $0 per.
6.02. Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will vary
according to the period of time between the effective date of the
Individual Account and the date of surrender. The Surrender Fee will be as
follows:
If Period of Time is Surrender Fee
5 year or less 5%
More than 5 years but not more than 6 years 4%
More than 6 years but not more than 7 years 3%
More than 7 years but not more than 8 years 2%
More than 8 years but not more than 9 years 1%
More than 9 years 0%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract;
or
(3) Under a Section 457 Plan which meets the following criteria:
(a) The Contract Holder and Aetna agree in writing to have this
section apply when the Contract is purchased; and
(b) The Contract Holder certifies to Aetna that the surrender is
due to either a permanent disability, or unforeseen emergency
as specified under Section 457(b)(5) of the Internal Revenue
Code.
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $10,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payment is credited to the Fixed
Account at the Guaranteed Interest Rate at the beginning of the first
Contract year. The applicable Surrender Fees are deducted.
Values would be different for other Purchase Payment amounts, if made at
another time, if partial surrenders are made, if Aetna adds interest at a
rate greater than the Guaranteed Interest Rate-Fixed Account or if the
Annuity payment rates change.
26
<PAGE>
Table of Values
For A $10,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $185.85 $ 9,880.
2 185.85 10,275.
3 185.85 10,686
4 185.85 11,114.
5 185.85 11,558.
6 185.85 12,147
7 185.85 12,765.
8 185.85 13,412.
9 185.85 14,091.
10 185.85 14,802.
11 185.85 15,395.
12 185.85 16,010.
13 185.85 16,651.
14 185.85 17,317.
15 185.85 18,009.
16 185.85 18,730.
17 185.85 19,479.
18 185.85 20,258.
19 185.85 21,068.
20 185.85 21,911.
25 185.85 26,658.
30 185.85 32,434.
27
<PAGE>
VI. FEE SCHEDULE
QUALIFIED PENSION/PROFIT SHARING PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $20 per Individual Account.
6.02. Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will vary
according to the number of Purchase Payment Cycles completed for the
Individual Account being surrendered. The number and amount of Purchase
Payments to be made in a year is chosen by the Contract Holder. A Purchase
Payment Cycle is completed when this number and amount of Purchase
Payments have been made. The number of Purchase Payment Cycles completed
may not be greater than the number of whole years since the Individual
Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 years 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more 2%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract.
(3) After a Participant has reached age 59 1/2 and 9 or more Purchase
Payment Cycles have been completed for the Individual Account being
surrendered; or
(4) Under a Section 457 Plan which meets the following criteria:
(a) The Contract Holder and Aetna agree in writing to have this
section apply when the Contract is purchased; and
(b) The Contract Holder certifies to Aetna that the surrender is
due to either a permanent disability, or unforeseen emergency
as specified under Section 457(b)(5) of the Internal Revenue
Code.
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months. The Surrender
Value assumes the Purchase Payment is credited to the Fixed Account at the
Guaranteed Interest Rate at the beginning of the first Contract year. The
Maintenance Fee and applicable Surrender Fee are deducted. The values
would be different for other Purchase Payment
26
<PAGE>
amounts, if Purchase Payments are not made when due, if partial surrenders
are made, if Aetna adds interest at a rate greater than the Guaranteed
Interest Rate-Fixed Account or if the Annuity payment rates change.
27
<PAGE>
Table of Values
For A $1,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $ 18.23 $ 969.
2 35.75 1,977.
3 52.61 3,025.
4 68.81 4,115.
5 84.39 5,304.
6 99.37 6,495.
7 113.78 7,815.
8 127.63 9,117.
9 140.95 10,579.
10 153.75 12,001.
11 166.07 13,481.
12 177.91 15,020.
13 189.29 16,620.
14 200.24 18,285.
15 210.76 20,016.
16 220.89 21,816.
17 230.62 23,688.
18 239.97 25,635.
19 248.97 27,660.
20 257.62 29,766.
25 296.14 41,629.
30 327.79 56,063.
28
<PAGE>
VI. FEE SCHEDULE
QUALIFIED PENSION/PROFIT SHARING PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $15 per Individual Account.
6.02. Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will vary
according to the number of Purchase Payment Cycles completed for the
Individual Account being surrendered. The number and amount of Purchase
Payments to be made in a year is chosen by the Contract Holder. A Purchase
Payment Cycle is completed when this number and amount of Purchase
Payments have been made. The number of Purchase Payment Cycles completed
may not be greater than the number of whole years since the Individual
Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more but less than 19 2%
19 or more 0%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract;
or
(3) After a Participant has reached age 59 1/2 and 9 or more Purchase
Payment Cycles have been completed for the Individual Account being
surrendered.
(4) Under a Section 457 Plan which meets the following criteria:
(a) The Contract Holder and Aetna agree in writing to have this
section apply when the Contract is purchased; and
(b) The Contract Holder certifies to Aetna that the surrender is
due to either a permanent disability, or unforeseen emergency
as specified under Section 457(b)(5) of the Internal Revenue
Code.
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months. The Surrender
Value assumes the Purchase Payment is credited to the Fixed Account at the
Guaranteed Interest Rate at the beginning of the first Contract year. The
Maintenance Fee and applicable Surrender Fee are deducted. The values
would be different for other Purchase Payment
26
<PAGE>
amounts, if Purchase Payments are not made when due, if partial surrenders
are made, if Aetna adds interest at a rate greater than the Guaranteed
Interest Rate-Fixed Account or if the Annuity payment rates change.
27
<PAGE>
Table of Values
For A $1,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $ 18.32 $ 974.
2 35.93 1,986.
3 52.86 3,040.
4 69.15 4,135.
5 84.80 5,330.
6 99.86 6,527.
7 114.33 7,853.
8 128.25 9,161.
9 141.64 10,630.
10 154.51 12,060.
11 166.88 13,547.
12 178.78 15,093.
13 190.22 16,702.
14 201.22 18,374.
15 211.80 20,114.
16 221.97 21,923.
17 231.75 23,804.
18 241.15 25,761.
19 250.19 28,363.
20 258.89 30,523.
25 297.59 42,687.
30 329.40 57,487.
28
<PAGE>
VI. FEE SCHEDULE
QUALIFIED PENSION/PROFIT SHARING PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $30 per Participant.
6.02. Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will vary
according to the number of Purchase Payment Cycles completed for the
Contract. The number and amount of Purchase Payments to be made in a year
is chosen by the Contract Holder. A Purchase Payment Cycle is completed
when this number and amount of Purchase Payments have been made. The
number of Purchase Payment Cycles completed may not be greater than the
number of whole years since the Contract was established. For each
surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more 2%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract;
or
(3) After a Participant has reached age 59 1/2 and 9 or more Purchase
Payment Cycles have been completed on behalf of the Participant.
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payments are credited to the
Fixed Account at the Guaranteed Interest Rate at the beginning of each
Contract year. The Maintenance Fee and applicable Surrender Fee are
deducted.
The values would be different for other Purchase Payment amounts, if
Purchase Payments are not made when due, if partial surrenders are made,
if Aetna adds interest at a rate greater than the Guaranteed Interest
Rate-Fixed Account or if the Annuity payment rates change.
26
<PAGE>
Table of Values
For A $1,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $ 18.05 $ 959.
2 35.40 1,957.
3 52.09 2,995.
4 68.14 4,074.
5 83.56 5,252.
6 98.40 6,431.
7 112.66 7,738.
8 126.38 9,027.
9 139.56 10,475.
10 152.25 11,884.
11 164.44 13,349.
12 176.16 14,873.
13 198.28 16,457.
14 208.70 18,105.
15 218.72 19,819.
16 228.36 21,602.
17 237.62 23,456.
18 246.53 25,384.
19 255.10 27,389.
20 293.23 29,474
25 293.23 41,221.
30 324.58 55,513.
27
<PAGE>
VI. FEE SCHEDULE
QUALIFIED PENSION/PROFIT SHARING PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $30 per Participant.
6.02. Surrender Fee:
For each surrender from a Plan Account, the Surrender Fee will vary
according to the number of Purchase Payment Cycles completed for the Plan
Account. The number and amount of Purchase Payments to be made in a year
is chosen by the Contract Holder. A Purchase Payment Cycle is completed
when this number and amount of Purchase Payments have been made. The
number of Purchase Payment Cycles completed may not be greater than the
number of whole years since the Plan Account was established. For each
surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more 2%
No Surrender Fee is deducted from any portion of the Plan Account which is
paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract;
or
(3) After a Participant has reached age 59 1/2 and 9 or more Purchase
Payment Cycles have been completed on behalf of the Participant.
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payments are credited to the
Fixed Account at the Guaranteed Interest Rate at the beginning of each
Contract year. The Maintenance Fee and applicable Surrender Fee are
deducted.
The values would be different for other Purchase Payment amounts, if
Purchase Payments are not made when due, if partial surrenders are made,
if Aetna adds interest at a rate greater than the Guaranteed Interest
Rate-Fixed Account or if the Annuity payment rates change.
26
<PAGE>
Table of Values
For A $1,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $ 18.05 $ 959.
2 35.40 1,957.
3 52.09 2,995.
4 68.14 4,074.
5 83.56 5,252.
6 98.40 6,431.
7 112.66 7,738.
8 126.38 9,027.
9 139.56 10,475.
10 152.25 11,884.
11 164.44 13,349.
12 176.16 14,873.
13 187.44 16,457.
14 198.28 18,105.
15 208.70 19,819.
16 218.72 21,602.
17 228.36 23,456.
18 237.62 25,384.
19 246.53 27,389.
20 255.10 29,474.
25 293.23 41,221.
30 324.58 55,513.
27
<PAGE>
VI. FEE SCHEDULE
TAX DEFERRED ANNUITY PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $0.
6.02. Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will vary
according to the period of time between the effective date of the
Individual Account and the date of surrender. The Surrender Fee will be
determined as follows:
If Period of Time is Surrender Fee
5 year or less 5%
More than 5 years but not more than 6 years 4%
More than 6 years but not more than 7 years 3%
More than 7 years but not more than 8 years 2%
More than 8 years but not more than 9 years 1%
More than 9 years 0%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract;
or
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $10,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payments are credited to the
Fixed Account at the Guaranteed Interest Rate at the beginning of each
Contract year. The applicable Surrender Fee are deducted.
Values would be different for other Purchase Payment amounts, if made at
another time, if partial surrenders are made, if Aetna adds interest at a
rate greater than the Guaranteed Interest Rate-Fixed Account or if the
Annuity payment rates change.
26
<PAGE>
Table of Values
For A $10,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $185.85 $ 9,880.
2 185.85 10,275.
3 185.85 10,686
4 185.85 11,114.
5 185.85 11,558.
6 185.85 12,147
7 185.85 12,765.
8 185.85 13,412.
9 185.85 14,091.
10 185.85 14,802.
11 185.85 15,395.
12 185.85 16,010.
13 185.85 16,651.
14 185.85 17,317.
15 185.85 18,009.
16 185.85 18,730.
17 185.85 19,479.
18 185.85 20,258.
19 185.85 21,068.
20 185.85 21,911.
25 185.85 26,658.
30 185.85 32,434.
27
<PAGE>
VI. FEE SCHEDULE
TAX DEFERRED ANNUITY PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $15 per Individual Account.
6.02. Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will vary
according to the number of Purchase Payment Cycles completed for the
Individual Account being surrendered. The number and amount of Purchase
Payments to be made in a year is chosen by the Participant. A Purchase
Payment Cycle is completed when this number and amount of Purchase
Payments have been made. The number of Purchase Payment Cycles completed
may not be greater than the number of whole years since the Individual
Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more 2%
19 or more 0%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract;
or
(3) After a Participant has reached age 59 1/2 and 9 or more Purchase
Payment Cycles have been completed for the Individual Account being
surrendered.
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payments are credited to the
Fixed Account at the Guaranteed Interest Rate at the beginning of each
Contract year. The Maintenance Fee and applicable Surrender Fee are
deducted.
The values would be different for other Purchase Payment amounts, if
Purchase Payments are not made when due, if partial surrenders are made,
if Aetna adds interest at a rate greater than the Guaranteed Interest
Rate-Fixed Account or if the Annuity payment rates change.
26
<PAGE>
Table of Values
For A $1,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $ 18.32 $ 974.
2 35.93 1,986.
3 52.86 3,040.
4 69.15 4,135.
5 84.80 5,330.
6 99.86 6,527.
7 114.33 7,853.
8 128.25 9,161.
9 141.64 10,630.
10 154.51 12,060.
11 166.88 13,547.
12 178.78 15,093.
13 190.22 16,702.
14 201.22 18,374.
15 211.80 20,114.
16 221.97 21,923.
17 231.75 23,804.
18 241.15 25,761.
19 250.19 28,363.
20 258.89 30,523.
25 297.59 42,687.
30 329.40 57,487.
26
<PAGE>
VI. FEE SCHEDULE
DEFERRED COMPENSATION PLAN
6.01. Maintenance Fee: The Maintenance Fee will be $20 per Individual Account.
6.02. Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will
vary according to the number of Purchase Payment Cycles completed for
the Individual Account being surrendered. The number and amount of
Purchase Payments to be made in a year is chosen by the Participant. A
Purchase Payment Cycle is completed when this number and amount of
Purchase Payments have been made. The number of Purchase Payment Cycles
completed may not be greater than the number of whole years since the
Individual Account was established. For each surrender, the Fee will be
as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more 0%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At the death of a Participant before Annuity payments start; or
(2) As a premium for an Annuity for a Participant under this Contract;
or
(3) After a Participant has reached age 59 1/2 and 9 or more Purchase
Payment Cycles have been completed for the Individual Account being
surrendered; or
6.03 Table of Values - Fixed Account:
The values in the following table only apply to a single Purchase Payment
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payments are credited to the
Fixed Account at the Guaranteed Interest Rate at the beginning of each
Contract year. The Maintenance Fee and applicable Surrender Fee are
deducted.
The values would be different for other Purchase Payment amounts, if
Purchase Payments are not made when due, if partial surrenders are made,
if Aetna adds interest at a rate greater than the Guaranteed Interest
Rate-Fixed Account or if the Annuity payment rates change.
26
<PAGE>
Table of Values
For A $1,000 Single Purchase Payment
Applied at the Guaranteed Interest Rate-Fixed Account
Age of Issue: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
1 $ 18.23 $ 969.
2 35.75 1,977.
3 52.61 3,025.
4 68.81 4,115.
5 84.39 5,304.
6 99.37 6,495.
7 113.78 7,815.
8 127.63 9,117.
9 140.95 10,579.
10 153.75 12,001.
11 166.07 13,481.
12 177.91 15,020.
13 189.29 16,620.
14 200.24 18,285.
15 210.76 20,016.
16 220.89 21,816.
17 230.62 23,688.
18 239.97 25,635.
19 248.97 27,660.
20 257.62 29,766.
25 296.14 41,629.
30 327.79 56,063.
27
<PAGE>
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
INDIVIDUAL VARIABLE, FIXED, OR COMBINATION CONTRACT
NON-PARTICIPATING
G-CDA-HD(XC)
EX-99.B.4.31
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Herein called Aetna.
Certificate of Group Annuity Coverage
To the Employee:
AEtna certifies that coverage is in force for you under the stated group annuity
contract and certificate number. All data shown here is taken from AEtna records
and is based upon information furnished by the Contract Owner.
This certificate of coverage replaces any and all certificates, riders or
amendments thereto, issued to you under the stated contract and certificate
number.
See the back page of this certificate for a summary of other contract
provisions.
DETAILS OF VARIABLE FEATURES OF THE GROUP CONTRACT ARE IN THE DEPOSIT, RESERVE,
AND SURRENDER PROVISIONS, AND ANNUITY PROVISIONS.
RIGHT TO CANCEL
You may cancel this Certificate within 10 days of receiving it, by sending a
written notice to AEtna at the above address or to the agent from whom it was
purchased. Aetna will return all payments made for this Certificate within 7
days after it receives the notice of cancellation and this Certificate.
/s/ William O. Baily
President
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR
AMOUNT.
GDCC-HO
<PAGE>
SPECIFICATIONS
- --------------------------------------------------------------------------------
PLAN
- --------------------------------------------------------------------------------
CONTRACT OWNER GROUP ANNUITY CONTRACT NO.
- --------------------------------------------------------------------------------
YOUR NAME CERTIFICATE NO.
- --------------------------------------------------------------------------------
GDCC-HO
<PAGE>
Summary of certain provisions
of the Group Annuity contract
1. GENERAL. Subject to the specific terms of the Plan identified on the
Specifications Page, AEtna will pay you an annuity commencing on your retirement
date. The Plan determines your retirement date and the amount and terms of
payment of the annuity.
2. MISSTATEMENT OF FACT. The amount of any payment to any payee may be
adjusted on an equitable basis if the amount of the payment was determined by
AEtna on the basis of incorrect facts.
3. VARIABLE BENEFITS. The Group Contract provides for variable benefits. That
is, benefits which fluctuate up and down with the performance of various mutual
funds held by AEtna. Variable benefits may be elected as an option if the Plan
to which the Group Contract is issued so provides.
GDCC-HO
<PAGE>
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Certificate of Group Annuity Coverage
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT
GDCC-HO
Exhibit 99-B.4.32
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Herein called Aetna.
Certificate of Group Annuity Coverage
This Certificate describes the Group Annuity Contract issued to the Contract
Holder to meet the liabilities of its Deferred Compensation Plan. All data shown
here are taken from Aetna records and are based upon information furnished by
the Contract Holder.
This Certificate is a summary of the Group Annuity Contract provisions. It
replaces any and all prior certificates, riders or amendments issued under the
stated Contract and Certificate numbers. This Certificate is for information
only and is not a part of the Contract.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND IV.
RIGHT TO CANCEL
The Contract Holder may cancel this Certificate within 10 days of receiving it,
by returning this Certificate along with a written notice to Aetna at the above
address or to the agent from whom it was purchased. Within 7 days after it
receives the notice of cancellation and this Certificate at its Home Office,
Aetna will return the entire consideration paid; plus any increase or minus any
decrease in the cash value of any funds allocated to the Separate Account or
attributable to the Market Value Adjustment provision of the Guaranteed
Accumulation Account.
/s/ John J. Martin
President
GDCC-HD (XC)
<PAGE>
SPECIFICATIONS
Guaranteed Interest Rate -- There are guaranteed interest rates for Purchase
Payment(s) held in the General Account. (See 1.03 and 1.04).
Surrender Fee -- There will be a charge deducted for early surrender. (See
3.11.)
Deductions from the Separate Account -- There will be deductions for mortality
and expense risks and administrative fees. (See 3.05.)
Deduction from Purchase Payment(s) -- Purchase Payment(s) are subject to a
deduction for premium taxes, if any. (See 3.01.)
- --------------------------------------------------------------------------------
PLAN
- --------------------------------------------------------------------------------
CONTRACT HOLDER GROUP ANNUITY CONTRACT NO.
- --------------------------------------------------------------------------------
PARTICIPANT CERTIFICATE NO.
- --------------------------------------------------------------------------------
2
<PAGE>
TABLE OF CONTENTS
I. GENERAL DEFINITIONS
Page
1.01 Annuitant......................................................... 5
1.02 Annuity........................................................... 5
1.03 Fixed Account..................................................... 5
1.04 Guaranteed Accumulation Account (GA Account)...................... 5
1.05 Fixed Annuity..................................................... 5
1.06 Fund(s)........................................................... 5
1.07 General Account................................................... 5
1.08 Participant....................................................... 5
1.09 Plan.............................................................. 5
1.10 Purchase Payments................................................. 5
1.11 Separate Accounts................................................. 5
1.12 Valuation Period.................................................. 5
1.13 Variable Annuity.................................................. 5
II. GENERAL PROVISIONS
2.01 Change of Contract................................................ 6
2.02 Non-Participating Contract........................................ 6
2.03 Payments.......................................................... 6
2.04 Control of Contract............................................... 6
2.05 Designation of Beneficiary........................................ 6
2.06 Misstatements and Adjustments..................................... 6
2.07 Incontestability.................................................. 6
2.08 Grace Period...................................................... 6
2.09 Compliance........................................................ 6
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
3.01 Net Purchase Payment(s)........................................... 7
3.02 Individual Account(s)............................................. 7
3.03 Maintenance Fee................................................... 7
3.04 Fund(s) Record Units -- Separate Account.......................... 7
3.05 Fund(s) Record Unit Value -- Separate Account..................... 7
3.06 Current Value..................................................... 7
3.07 Transfer of Current Value from the Funds.......................... 7
3.08 Transfer of Current Value from the Fixed Account.................. 8
3.09 Transfer of Current Value from the GA Account..................... 8
3.10 Notice to the Contract Holder..................................... 8
3.11 Sum Payable at Death (Before Annuity Payments Start).............. 8
3.12 Surrender Value................................................... 8
3.13 Payment of Surrender Value........................................ 8
3.14 Reinstatement..................................................... 8
3.15 Payment of Current Value.......................................... 8
3
<PAGE>
IV. ANNUITY PROVISIONS
4.01 Choices to be Made................................................ 9
4.02 Terms of Annuity Options.......................................... 9
4.03 Variable Annuity Payments......................................... 9
4.04 Annuity Options................................................... 9
V. FEE SCHEDULE
5.01 Maintenance Fee................................................... 11
5.02 Surrender Fee..................................................... 11
5.03 Table of Values -- Fixed Account.................................. 11
4
<PAGE>
I. GENERAL DEFINITIONS
1.01 Annuitant -- A person on whose life an Annuity has been effected under the
Contract.
1.02 Annuity -- Payment of an income for a stated period or amount.
1.03 Fixed Account -- An accumulation option with a guaranteed minimum interest
rate of 4%. Aetna may credit a higher rate which is not guaranteed.
1.04 Guaranteed Accumulation Account (GA Account) -- An accumulation option
which guarantees to credit interest daily at an annual rate never less
than 4% on amounts received during a Deposit Period (usually a calendar
quarter) and held in the GA Account until the end of a specified period,
usually one to five years (Guaranteed Term).
Amounts withdrawn from the GA Account are subject to the Withdrawals and
Market Value Adjustment (MVA) provisions. The MVA may increase or decrease
the amount being withdrawn from the GA Account. The MVA will not apply to
withdrawals made:
(a) at the end of the Guaranteed Term;
(b) in the event of death; or
(c) to pay an Annuity premium under the Contract.
1.05 Fixed Annuity -- An Annuity with payments which do not vary in amount.
1.06 Fund(s) -- The open-end registered management investment companies (mutual
funds) made available by Aetna under the Contract.
1.07 General Account -- The Account holding the assets of Aetna, other than
those assets held in the Separate Accounts.
1.08 Participant -- You, a person who participates in the Plan named on the
Specifications page of the Contract.
1.09 Plan -- The Plan named on the Specifications page of the Contract. The
term includes all written documents describing the Plan. The Plan is not a
part of the Contract. Aetna is not bound by the terms of the Plan.
1.10 Purchase Payments -- Payments made to Aetna.
1.11 Separate Accounts -- Accounts set up by Aetna under the Connecticut
Insurance Laws which purchase shares of the Fund(s).
1.12 Valuation Period (Period) -- The period of time from the end of one
business day on the New York Stock Exchange to the end of the next
business day.
1.13 Variable Annuity -- An Annuity with payments which vary with the net
investment results of a Separate Account.
5
<PAGE>
II. GENERAL PROVISIONS
2.01 Change of Contract: Only an authorized officer of Aetna may change the
terms of the Group Annuity Contract. Aetna will notify the Contract Holder
in writing at least 30 days before the effective date of any change. Any
change will not affect the amount or terms of any Annuity which begins
before the change.
2.02 Non-Participating Contract: You or the Contract Holder will not have a
right to share in the earnings of Aetna.
2.03 Payments: Aetna will make Annuity payments as and when due. Aetna will
make other payments within 7 days of receipt at its Home Office of a
written claim for payment which is in good order, except as provided in
3.12.
2.04 Control of Contract: All rights in the Contract rest with the Contract
Holder, who is entitled to all amounts held under the Contract. The
Contract Holder, or authorized designee of the Contract Holder (as allowed
by law), may make any choices allowed by the Contract with respect to an
Individual Account. Choices made under the Contract must be in writing.
Until receipt of such choices in the Home Office of Aetna, Aetna may rely
on any previous choices made. The Contract, this Certificate and any
Individual Account shall not be subject to the claims of any creditors of
a Participant except to the extent permitted by law. All amounts held
under the Contract are owned solely by the Contract Holder without being
restricted by the provisions of the Plan subject only to the claims of
general creditors of the Contract Holder. The Contract, this Certificate
and an Individual Account are non-assignable and non-transferable. The
Contract Holder will inform Participants as to when and where the Contract
may be examined.
2.05 Designation of Beneficiary: The beneficiary shall be the Contract Holder.
2.06 Misstatements and Adjustments: If Aetna finds the age, or any other
relevant facts to be misstated, the correct facts will be used to adjust
payments.
2.07 Incontestability: Aetna cannot cancel the Contract or this Certificate
because of any error of fact on the application.
2.08 Grace Period: The Contract and this Certificate will remain in effect even
if Purchase Payments are not continued.
2.09 Compliance: The Contract is fully subject to and incorporates by reference
the Rules and Regulations promulgated by the New York State Deferred
Compensation Board for Plans of deferred compensation established in
accord with Internal Revenue Code Section 457.
6
<PAGE>
III. PURCHASE PAYMENT, CURRENT VALUE AND SURRENDER PROVISIONS
3.01 Net Purchase Payment(s): The actual Purchase Payment less any state
premium tax.
The Net Purchase Payment(s) will be credited to:
(a) the Fixed Account;
(b) the Guaranteed Accumulation Account;
(c) the Fund(s) in which the Separate Account invests.
Aetna must be told the percentage of the Net Purchase Payment(s) to be
applied to each investment above.
During any calendar year, Aetna may be told to change the investment mix
four times. If additional changes are allowed, each may be subject to a
fee of up to $10.
3.02 Individual Account: Aetna will maintain an Individual Account as
instructed by the Contract Holder.
3.03 Maintenance Fee: The Maintenance Fee (see 5.01) will be deducted from the
Current Value on each anniversary of an Individual Account effective date
and upon surrender of an entire Individual Account.
Any portion of the Maintenance Fee deducted from the Fixed Account or GA
Account will not exceed the interest in excess of 4% and any Net Purchase
Payment(s) credited to the Account during the 12 months prior to the
deduction.
3.04 Fund(s) Record Units -- Separate Account: The portion of the Net Purchase
Payment(s) applied to the Separate Account will determine the number of
Fund(s) Record Units. This number is equal to a Net Purchase Payment
divided by the Fund(s) Record Unit Value (see 3.05) for the Valuation
Period in which the Purchase Payment is received in good order.
3.05 Fund(s) Record Unit Value -- Separate Account: The Fund(s) Record Unit
Value is computed by multiplying the Net Return Factor for the current
Valuation Period by the Fund(s) Record Unit Value for the previous Period.
The dollar value of the Fund(s) Record Units, Separate Account assets, and
Variable Annuity payments may go up or down due to investment gain or
loss.
The calculation to determine the Net Return Factor includes deductions
totaling 1.25% on an annual basis for annuity expense risks and profit;
and a daily administrative charge which will not exceed .25% on an annual
basis. The administrative charge may be changed annually except for
amounts which have been used to purchase an Annuity.
3.06 Current Value: The Current Value is the value of an Individual Account at
the end of a Valuation Period and is equal to:
(a) Any amounts in the Fixed Account, including Fixed Account interest
added by Aetna; plus
(b) Any amounts in the GA Account, including GA Account interest added
by Aetna; plus
(c) The sum of any Separate Account Record Unit value(s); less
(d) Any Maintenance Fee(s) due.
Current Value does not include amounts used to purchase an Annuity.
3.07 Transfer of Current Value from the Funds: Before an annuity option is
elected, all or any portion of the Current Value may be transferred from
any Fund to any other Fund; to the Fixed Account or to the current Deposit
Period in the GA Account.
Four transfers of Current Value can be made during a calendar year period.
If additional transfers are allowed, each may be subject to a fee up to
$10.
7
<PAGE>
3.08 Transfer of Current Value from the Fixed Account: 10% of the Current Value
held in the Fixed Account may be transferred to any Fund(s) or to the
current Deposit Period in the GA Account. Such transfer will be:
(a) without charge;
(b) allowed once per calendar year;
(c) not allowed under an annuity option.
Aetna may, on a temporary basis, allow any larger percent to be
transferred.
The Current Value of the Fixed Account, as used above, is the value when
the request is received at the Home Office of Aetna.
3.09 Transfer of Current Value from the GA Account: At the end of a Guaranteed
Term, amounts in that Term may be transferred without Market Value
Adjustment to any Fund(s) or to the Fixed Account. Transfers are not
permitted from the GA Account at any other time.
3.10 Notice to the Contract Holder: Aetna will notify the Contract Holder each
year of:
(a) The value of any amounts held in:
(1) the Fixed Account; and
(2) the GA Account; and
(3) the Fund(s) for the Separate Account; and
(b) the number of any Fund(s) Record Units; and
(c) the Fund(s) Record Unit Value(s); and
(d) the Surrender Value of these amounts.
Such number of values will be as of a date no more than 60 days before the
date of the notice.
Pursuant to the Plan, you will receive a Quarterly Report of the above
information.
3.11 Sum Payable at Death (Before Annuity Payments Start): Aetna will pay the
Current Value to the beneficiary if:
(a) You die before Annuity Payments start; and
(b) The notice of your death is received in good order by Aetna.
The sum paid will be the Current Value on the date the notice is received
at Aetna's Home Office. The amount paid from the Fixed Account or GA
Account will not be less the Net Purchase Payment(s) allocated to the
Account for you under an Individual Account (less any prior transfers (see
3.08 and 3.09) or surrenders). The beneficiary may choose to apply all or
any portion of the payment to an Annuity Option (see Part IV).
3.12 Surrender Value: After deduction of the Maintenance Fee (if any), the
amount paid by Aetna upon the surrender of any portion of an Individual
Account shall be reduced by a Surrender Fee. The Surrender Fee will be in
accordance with the Surrender Fee table in 5.02.
The total deductions made on surrender of an entire Individual Account
(including any negative MVA under the GA Account) will not exceed 7% of
the Current Value as of the date of surrender and the Surrender Fee will
not exceed 8.5% of the actual Purchase Payments made to the Account.
3.13 Payment of Surrender Value: Under certain emergency conditions, Aetna may
defer payment:
(a) for a period of up to 6 months (unless not allowed by state law);
and
(b) as provided by federal law.
3.14 Reinstatement: Certain surrendered amounts may be reinstated to the
Contract according to the terms stated in the Contract.
3.15 Payment of Current Value: Aetna may pay in a lump sum any Current Value if
Purchase Payments have not been received for three
8
<PAGE>
full years and the Current Value is less than $2,000. Such Current Value
paid may not be reinstated.
9
<PAGE>
IV. ANNUITY PROVISIONS
4.01 Choices to be Made: An Annuity Option may be elected by telling Aetna to
pay all or any portion of the Current Value (minus any premium tax) as a
premium for an Annuity under Option 2 or 3 (see 4.04). The first Annuity
payment must generally be made no later than the first day of the month
following your 75th birthday. Aetna may be told to make the first Annuity
payment during any prior month.
When an Option is chosen, Aetna must also be told whether payments are to
be made other than monthly and (except for Option 2) to pay:
(a) a Fixed Annuity using the General Account; or
(b) a Variable Annuity using any of the Fund(s) made available by Aetna
for Annuity purposes; or
(c) a mix of (a) and (b).
If a Fixed Annuity is chosen, Aetna will add interest daily at an annual
rate no less than 3.5%. Aetna may add interest daily at any higher rate.
If a Variable Annuity is chosen, an Assumed Annual Net Return Rate of 5%
may be chosen. If not chosen, Aetna will use an Assumed Annual Net Return
Rate of 3.5%.
4.02 Terms of Annuity Options: Specific terms governing the Annuity Options can
be found in the Contract.
If a Fixed Annuity under Option 3 is chosen and a larger payment would
result from applying the surrender value to a single premium immediate
annuity currently offered by Aetna to the same class of Annuitants, Aetna
will make the larger payment.
4.03. Variable Annuity Payments: The amount of the first Variable Annuity
Payment will be divided by the Fund(s) Annuity Unit Value on the tenth
Valuation Period before the date the first payment is due to determine the
number of Fund(s) Annuity Units. The number of Fund(s) Annuity Units
remains fixed. Each future payment is equal to this number times the
Fund(s) Annuity Unit Value on the tenth Valuation Period prior to the due
date of the payment.
Payments shall not be changed due to changes in the mortality or expense
results or administrative charges.
4.04 Annuity Options:
Option 1 - Payment of Interest on Sum Left with Aetna - This Option may be
used only by the beneficiary if you die before Aetna has started paying an
Annuity. A portion or all of the sum paid upon your death may be held
under this Option and will be held in the General Account of Aetna at
interest (see 4.01). The beneficiary may later tell Aetna to:
(a) pay a portion, or all, of the sum held by Aetna; or
(b) apply a portion, or all, of the sum held by Aetna to an Annuity
Option below.
Option 2 - Payments of a Stated Dollar Amount - This Option may only be
elected as a Fixed Annuity. An Annuity of a chosen amount will be paid
until no funds are left. The payments to be made in a year must be greater
than $65 for each $1,000 applied to this Option, but cannot exceed an
amount which would deplete the funds in less than 3 years. If GA Account
funds are used to purchase this Option, Annuity payments from those funds
must be paid for not less than 5 years. During any year, Aetna reserves
the right to make as a minimum payment an amount equal to 105% of the
interest for that year.
10
<PAGE>
Option 3 - Payments for a Stated Period of Time - An Annuity will be paid
for the number of years chosen.
The number of years must be at least 3 and not more than the lesser of 15
years or the life expectancy of the Annuitant. If GA Account funds are
used to purchase this Option, Annuity payments from those funds must be
paid for not less than 5 years and not more than the lesser of 15 years or
the life expectancy of the Annuitant.
If payments for this Option are made under a Variable Annuity, the present
value of any remaining payments may be withdrawn at any time. If a
withdrawal is requested within 3 years after the start of payments, it
will be treated as a surrender (see 3.12).
Other Options - Aetna may make other options available as allowed by the
laws of the state in which the Contract is delivered.
11
<PAGE>
V. FEE SCHEDULE
DEFERRED COMPENSATION PLAN
5.01 Maintenance Fee: The Maintenance Fee will be $15.
5.02 Surrender Fee:
For each surrender from an Individual Account, the Surrender Fee will vary
according to the number of Purchase Payment Cycles completed for the
Individual Account being surrendered. The number and amount of Purchase
Payments to be made in a year is chosen by the Contract Holder. A Purchase
Payment Cycle is completed when this number and amount of Purchase
Payments have been made. When a particular Purchase Payment is intended to
include more than one regular Purchase Payment, Aetna will credit the
number of Purchase Payments represented by such Purchase Payment when
determining the number of Purchase Payment Cycles completed. The number of
Purchase Payment Cycles completed may not be greater than the number of
whole years since the Individual Account was established. For each
surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more but less than 19 2%
19 or more 0%
No Surrender Fee is deducted from any portion of the Individual Account
which is paid:
(1) At your death before Annuity payments start; or
(2) As a premium for an Annuity under the Contract; or
(3) After you have reached age 59 1/2 or such earlier retirement age
permitted by the Plan, and 9 or more Purchase Payment Cycles have
been completed for you under the Individual Account being
surrendered; or
(4) After you separate from service with the Contract Holder and 9 or
more Purchase Payment Cycles have been completed for you under the
Individual Account being surrendered; or
(5) After 10 years from the effective date of the Individual Account
being surrendered; or
(6) The Contract Holder certifies to Aetna that the surrender is due to
either a permanent disability, or unforeseen emergency as specified
under Section 457(b)(5) of the Internal Revenue Code.
5.03 Table of Values - Fixed Account:
The values in the following table only apply to annual Purchase Payments
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months. The Surrender
Value assumes the Purchase Payments are credited to the Fixed Account at
the Guaranteed Interest Rate at the beginning of each Contract year. The
Maintenance Fee and applicable Surrender Fee are deducted. The values
would be different for other Purchase Payment amounts, if Purchase
Payments are not made when due, if partial surrenders are made, if Aetna
adds interest at a rate greater than the Guaranteed Interest Rate-Fixed
Account or if the Annuity payment rates change.
12
<PAGE>
TABLE OF VALUES
FOR A $1,000 ANNUAL PURCHASE PAYMENT
APPLIED AT THE GUARATNEED INTEREST RATE-FIXED ACCOUNT
AGE OF ISSUE: 35
End of Paid-Up Annuity
Contract Benefit at Age 65 Surrender
Year (Monthly Income) Value
---- ---------------- -----
1 $ 18.32 $ 974.
2 35.93 1,986.
3 52.86 3,040.
4 69.15 4,135.
5 84.80 5,274
6 99.86 6,527
7 114.33 7,772.
8 128.25 9,161.
9 141.64 10,522.
10 154.51 12,060.
11 166.88 13,824
12 178.78 15,401.
13 190.22 17,043
14 201.22 18,749.
15 211.80 20,524.
16 221.97 22,370.
17 231.75 24,290.
18 241.15 26,287.
19 250.19 28,363.
20 258.89 30,523.
25 297.59 42,687.
30 329.40 57,487.
GDCC-HD (XC)
<PAGE>
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
14
Exhibit 99-B.4.33
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
1-800-525-4225
Herein called Aetna.
Certificate of Group Annuity Coverage
To the Employee:
Aetna certifies that coverage is in force for you under the stated Group Annuity
Contract and Certificate numbers. All data shown here are taken from Aetna
records and are based upon information furnished by you.
This Certificate is a summary of the Group Annuity Contract provisions. It
replaces any and all prior certificates, riders or amendments issued to you
under the stated Contract and Certificate numbers. This Certificate is for
information only and is not a part of the Contract.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III and IV.
RIGHT TO CANCEL
You may cancel this Certificate within 10 days of receiving it, by returning
this Certificate along with a written notice to Aetna at the above address or to
the agent from whom it was purchased. Within 7 days after it receives the notice
of cancellation and this Certificate at its Home Office, Aetna will return the
entire consideration paid; plus any increase or minus any decrease in the cash
value of any funds allocated to the Separate Account.
/s/ Lucille M. Nickerson /s/ Dan Kearney
Secretary President
GTCC-HD (XC) 39322
<PAGE>
SPECIFICATIONS
Guaranteed Interest Rate - There is a guaranteed interest rate for Purchase
Payment(s) held in the General Account. (See 1.03.)
Surrender Fee - There will be a charge deducted for early surrender. (See 3.11.)
Deductions from the Separate Account - There will be deductions for mortality
and expense risks and administrative fees. (See 3.05.)
Deduction from Purchase Payment(s) - Purchase Payment(s) are subject to a
deduction for premium taxes, if any. (See 3.01.)
- --------------------------------------------------------------------------------
CONTRACT HOLDER GROUP ANNUITY CONTRACT NO.
- --------------------------------------------------------------------------------
YOUR NAME CERTIFICATE NO.
- --------------------------------------------------------------------------------
2
<PAGE>
TABLE OF CONTENTS
I. GENERAL DEFINITIONS
Page
----
1.01 Annuitant ............................................................ 5
1.02 Annuity............................................................... 5
1.03 Fixed Account......................................................... 5
1.04 Fixed Annuity......................................................... 5
1.05 Fund(s)............................................................... 5
1.06 General Account....................................................... 5
1.07 Plan.................................................................. 5
1.08 Purchase Payments..................................................... 5
1.09 Separate Accounts..................................................... 5
1.10 Valuation Period...................................................... 5
1.11 Variable Annuity...................................................... 5
II. GENERAL PROVISIONS
2.01 Change of Contract.................................................... 6
2.02 Non-Participating Contract............................................ 6
2.03 Payments.............................................................. 6
2.04 Control of Contract................................................... 6
2.05 Designation of Beneficiary.............................................6
2.06 Misstatements and Adjustments..........................................6
2.07 Incontestability.......................................................6
2.08 Grace Period...........................................................6
III. PURCHASE PAYMENT, CURRENT VALUE, AND
SURRENDER PROVISIONS
3.01 Net Purchase Payment(s)................................................7
3.02 Individual Account.....................................................7
3.03 Maintenance Fee........................................................7
3.04 Fund(s) Record Units - Separate Account................................7
3.05 Fund(s) Record Unit Value - Separate Account...........................7
3.06 Current Value..........................................................7
3.07 Transfer of Current Value from the Funds...............................7
3.08 Transfer of Current Value from the Fixed Account.......................8
3.09 Notice to You..........................................................8
3.10 Sum Payable at Death (Before Annuity Payments Start)...................8
3.11 Surrender Value........................................................8
3.12 Payment of Surrender Value.............................................8
3.13 Reinstatement..........................................................8
3.14 Payment of Current Value...............................................8
3
<PAGE>
IV. ANNUITY PROVISIONS
Page
----
4.01 Choices to be Made.....................................................9
4.02 Terms of Annuity Options...............................................9
4.03 Variable Annuity Payments..............................................9
4.04 Annuity Options........................................................9
V. FEE SCHEDULE
5.01 Maintenance Fee........................................................11
5.02 Surrender Fee..........................................................11
5.03 Table of Values - Fixed Account........................................11
I. GENERAL DEFINITIONS
1.01 Annuitant - A person on whose life an Annuity has been effected under the
Contract.
1.02 Annuity - Payment of an income:
(a) for the life of one or two persons;
(b) for a stated period, or amount; or,
(c) for some mix of (a) and (b).
1.03 Fixed Account - An Accumulation option with a guaranteed minimum interest
rate of 4%. Aetna may credit a higher rate which is not guaranteed.
1.04 Fixed Annuity - An Annuity with payments which do not vary in amount.
1.05 Fund(s) - The open-end registered management investment companies (mutual
funds) made available by Aetna under the Contract.
1.06 General Account - The Account holding the assets of Aetna, other than
those assets held in the Separate Accounts.
1.07 Plan - The Plan named on the Specifications page of the Contract. The term
includes all written documents describing the Plan. The Plan is not a part
of the Contract. Aetna is not bound by the terms of the Plan.
1.08 Purchase Payments - Payments made to Aetna.
1.09 Separate Accounts - Accounts set up by Aetna under the Connecticut
Insurance Laws which purchase shares of the Fund(s).
1.10 Valuation Period (Period) - The period of time from the end of one
business day on the New York Stock Exchange to the end of the next
business day.
1.11 Variable Annuity - An Annuity with payments which vary with the net
investment results of a Separate Account.
4
<PAGE>
II. GENERAL PROVISIONS
2.01 Change of Contract: Only an authorized officer of Aetna may change the
terms of the Group Annuity Contract. Aetna will notify the Contract Holder
in writing at least 30 days before the effective date of any change. Any
change will not affect the amount or terms of any Annuity which begins
before the change.
2.02 Non-Participating Contract: You, your beneficiary or the Contract Holder
will not have a right to share in the earnings of Aetna.
2.03 Payments: Aetna will make Annuity payments as and when due. Aetna will
make other payments within 7 days of receipt at its Home Office of a
written claim for payment which is in good order, except as provided in
3.12.
2.04 Control of Contract: You own all amounts held in your Individual Account.
You may make any choices allowed by the Contract for your Individual
Account. Choices made under the Contract must be in writing. Until receipt
of such choices in the Home Office of Aetna, Aetna may rely on any
previous choices made. The Contract, this Certificate and your Individual
Account shall not be subject to the claims of any creditors. The Contract,
this Certificate and your Individual Account are non-assignable and
non-transferable. The Contract Holder will inform you as to when and where
the Contract may be examined.
2.05 Designation of Beneficiary: Your beneficiary shall be as named by you and
may be changed at any time.
2.06 Misstatements and Adjustments: If Aetna finds the age, or any other
relevant facts to be misstated, the correct facts will be used to adjust
payments.
2.07 Incontestability: Aetna cannot cancel the Contract or this Certificate
because of any error of fact on the application.
2.08 Grace Period: The Contract and this Certificate will remain in effect even
if Purchase Payments are not continued.
5
<PAGE>
III. PURCHASE PAYMENT, CURRENT VALUE AND SURRENDER PROVISIONS
3.01 Net Purchase Payment(s): The actual Purchase Payment less any state
premium tax.
The Net Purchase Payment(s) will be credited to:
(a) the Fixed Account;
(b) the Fund(s) in which the Separate Account invests.
Aetna must be told by you the percentage of the Net Purchase Payment(s) to
be applied to each investment above.
During any calendar year, you may tell Aetna to change the investment mix
four times. If additional changes are allowed, each may be subject to a
fee of up to $10.
3.02 Individual Account: Aetna will maintain an Individual Account for you.
3.03 Maintenance Fee: The Maintenance Fee (see 5.01) will be deducted from the
Current Value on each anniversary of your Individual Account effective
date and upon surrender of your entire Individual Account.
Any portion of the Maintenance Fee deducted from the Fixed Account will
not exceed the interest in excess of 4% and Net Purchase Payments credited
to the Fixed Account during the 12 months prior to the deduction.
3.04 Fund(s) Record Units - Separate Account: The portion of the Net Purchase
Payment(s) applied to the Separate Account will determine the number of
Fund(s) Record Units. This number is equal to a Net Purchase Payment
divided by the Fund(s) Record Unit Value (see 3.05) for the Valuation
Period in which the Purchase Payment is received in good order.
3.05 Fund(s) Record Unit Value - Separate Account: The Fund(s) Record Unit
Value is computed by multiplying the Net Return Factor for the current
Valuation Period by the Fund(s) Record Unit Value for the previous Period.
The dollar value of the Fund(s) Record Units, Separate Account assets, and
Variable Annuity payments may go up or down due to investment gain or
loss.
The calculation to determine the Net Return Factor includes deductions
totaling 1.25% on an annual basis for annuity mortality and expense risks
and profit; and a daily administrative charge which will not exceed .25%
on an annual basis. The administrative charge may be changed annually
except for amounts which have been used to purchase an Annuity.
3.06 Current Value: The Current Value is the value of your Individual Account
at the end of a Valuation Period and is equal to:
(a) Any amounts in the Fixed Account, including Fixed Account interest
added by Aetna; plus
(b) The sum of any Separate Account Record Unit value(s); less
(c) Any Maintenance Fee(s) due.
6
<PAGE>
Current Value does not include amounts used to purchase an Annuity.
3.07 Transfer of Current Value from the Funds: Before an annuity option is
elected, all or any portion of the Current Value may be transferred from
any Fund to any other Fund or to the Fixed Account.
Four transfers of Current Value can be made during a calendar year period.
If additional transfers are allowed, each may be subject to a fee of up to
$10.
3.08 Transfer of Current Value from the Fixed Account: 10% of the Current Value
held in the Fixed Account may be transferred to any Fund(s). Such transfer
will be:
(a) without charge;
(b) allowed once per calendar year;
(c) not allowed under an annuity option.
Aetna may, on a temporary basis, allow any larger percent to be
transferred.
The Current Value of the Fixed Account, as used above, is the value when
the request is received at the Home Office of Aetna.
3.09 Notice to You: Aetna will notify you each year of:
(a) The value of any amounts held in:
(1) the Fixed Account; and
(2) the Fund(s) for the Separate Account; and
(b) the number of any Fund(s) Record Units; and
(c) the Fund(s) Record Unit Value(s); and
(d) the Surrender Value of these amounts.
Such number or values will be as of a date no more than 60 days before the
date of the notice.
3.10 Sum Payable at Death (Before Annuity Payments Start): Aetna will pay the
Current Value to your beneficiary if:
(a) You die before Annuity Payments start; and
(b) The notice of your death is received in good order by Aetna.
The sum paid will be the Current Value on the date the notice is received
at Aetna's Home Office. The amount paid from the Fixed Account will not be
less than the Net Purchase Payment(s) allocated to the Fixed Account under
your Individual Account (less any prior transfers (see 3.08) or
surrenders). Your beneficiary may choose to apply all or any portion of
the payment to an Annuity Option (see Part IV). If no beneficiary exists,
the payment will be made to your estate.
3.11 Surrender Value: After deduction of the Maintenance Fee (if any), the
amount paid by Aetna upon the surrender of any portion of your Individual
Account shall be reduced by a Surrender Fee. The Surrender Fee will be in
accordance with the Surrender Fee table in 5.02.
The total deductions made on surrender of your entire Individual Account
will not exceed 7% of the
7
<PAGE>
Current Value as of the date of surrender and the Surrender Fee will not
exceed 8.5% of the actual Purchase Payments made to your Account.
3.12 Payment of Surrender Value: Under certain emergency conditions, Aetna may
defer payment:
(a) for a period of up to 6 months (unless not allowed by state law); and
(b) as provided by federal law.
3.13 Reinstatement: Certain surrendered amounts may be reinstated to the
Contract according to the terms stated in the Contract.
3.14 Payment of Current Value: Aetna may pay in a lump sum any Current Value if
Purchase Payments have not been received for three full years and the
Current Value is less than $2,000. Such Current Value paid may not be
reinstated.
8
<PAGE>
IV. ANNUITY PROVISIONS
4.01 Choices to be Made: Aetna will pay the Current Value (minus any premium
tax) as a premium for an Annuity under Option 4 with no guaranteed period.
You may elect any other Annuity Option by telling Aetna to pay all or any
portion of the Current Value (minus any premium tax) as a premium for an
Annuity under Option 2, 3, 4 or 5 (see 4.04). The first Annuity payment
must generally be made no later than the first day of the month following
your 75th birthday. Aetna may be told to make the first Annuity payment
during any prior month.
When an Option is chosen, Aetna must also be told whether payments are to
be made other than monthly and (except for Option 2) to pay:
(a) a Fixed Annuity using the General Account; or
(b) a Variable Annuity using any of the Fund(s) made available by Aetna
for Annuity purposes; or
(c) a mix of (a) and (b).
If a Fixed Annuity is chosen, Aetna will add interest daily at an annual
rate no less than 3.5%. Aetna may add interest daily at any higher rate.
If a Variable Annuity is chosen, an Assumed Annual Net Return Rate of 5%
may be chosen. If not chosen Aetna will use an Assumed Annual Net Return
Rate of 3.5%.
4.02 Terms of Annuity Options: Specific terms governing the Annuity Options and
a table of annuity rates for each Annuity Option can be found in the
Contract. The annuity rates do not differ by sex.
If a Fixed Annuity under Option 3, 4 or 5 is chosen and a larger payment
would result from applying the surrender value to a single premium
immediate annuity currently offered by Aetna to the same class of
Annuitants, Aetna will make the larger payment.
4.03 Variable Annuity Payments: The amount of the first Variable Annuity
Payment will be divided by the Fund(s) Annuity Unit Value on the tenth
Valuation Period before the date the first payment is due to determine the
number of Fund(s) Annuity Units. The number of Fund(s) Annuity Units
remains fixed. Each future payment is equal to this number times the
Fund(s) Annuity Unit Value on the tenth Valuation Period prior to the due
date of the payment.
Payments shall not be changed due to changes in the mortality or expense
results or administrative charges.
4.04 Annuity Options:
Option 1 - Payment of Interest on Sum left with Aetna - This Option may be
used only by your beneficiary if you die before Aetna has started paying
an Annuity. A portion or all of the sum paid upon your death may be held
under this Option and will be held in the General Account of Aetna at
interest (see 4.01). Your beneficiary may later tell Aetna to:
(a) pay a portion, or all, of the sum held by Aetna; or
9
<PAGE>
(b) apply a portion, or all, of the sum held by Aetna to any Annuity
Option below.
Option 2 - Payments of a Stated Dollar Amount - This Option may only be
elected as a Fixed Annuity. An Annuity of a chosen amount will be paid
until no funds are left. The payments to be made in a year must be greater
than $65 for each $1,000 applied to this Option, but cannot exceed an
amount which would deplete the funds in less than 3 years. During any
year, Aetna reserves the right to make as a minimum payment an amount
equal to 105% of the interest for that year.
Option 3 - Payments for a Stated Period of Time - An Annuity will be paid
for the number of years chosen.
The number of years must be at least 3 and not more than 30.
If payments for this Option are made under a Variable Annuity, the present
value of any remaining payments may be withdrawn at any time. If a
withdrawal is requested within 3 years after the start of payments, it
will be treated as a surrender (see 3.11).
Option 4 - Life Income - An Annuity will be paid for the life of the
Annuitant. If also chosen, Aetna will guarantee payments for 60, 120, 180,
or 240 months.
Option 5 - Life Income for Two Payees - An Annuity will be paid during the
lives of the Annuitant and a second Annuitant. At the death of either,
payments will continue to the survivor. When this Option is chosen, a
choice must be made of:
(a) 100% of the payment to continue to the survivor;
(b) 66 2/3% of the payment to continue to the survivor;
(c) 50% of the payment to continue to the survivor; or
(d) Payments for a minimum of 120 months, with 100% of the payment to
continue to the survivor.
Other Options - Aetna may make other options available as allowed by the
laws of the state in which the Contract is delivered.
10
<PAGE>
V. FEE SCHEDULE
TAX DEFERRED ANNUITY PLAN
5.01 Maintenance Fee: The Maintenance Fee will be $15.
5.02 Surrender Fee:
For each surrender from your Individual Account, the Surrender Fee will
vary according to the number of Purchase Payment Cycles completed for your
Individual Account being surrendered. The number and amount of Purchase
Payments to be made in a year is chosen by you. A Purchase Payment Cycle
is completed when this number and amount of Purchase Payments have been
made. The number of Purchase Payment Cycles completed may not be greater
than the number of whole years since your Individual Account was
established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more but less than 19 2%
19 or more 0%
No Surrender Fee is deducted from any portion of your Individual Account
which is paid:
(1) At your death before Annuity payments start; or
(2) As a premium for an Annuity under the Contract; or
(3) After you have reached age 59 1/2 and 9 or more Purchase Payment
Cycles have been completed for your Individual Account being
surrendered.
5.03 Table of Values - Fixed Account:
The values in the following table only apply to annual Purchase Payments
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payments are credited to the
Fixed Account at the Guaranteed Interest Rate at the beginning of each
Contract year. The Maintenance Fee and applicable Surrender Fee are
deducted.
The values would be different for other Purchase Payment amounts, if
Purchase Payments are not made when due, if partial surrenders are made,
if Aetna adds interest at a rate greater than the Guaranteed Interest
Rate-Fixed Account or if the Annuity payment rates change.
GTCC-GLIT-HD(XC) 11
<PAGE>
VI. FEE SCHEDULE
TAX DEFERRED ANNUITY PLAN
5.01 Maintenance Fee: The Maintenance Fee will be $20.
5.02 Surrender Fee:
For each surrender from your Individual Account, the Surrender Fee will
vary according to the number of Purchase Payment Cycles completed for your
Individual Account being surrendered. The number and amount of Purchase
Payments to be made in a year is chosen by you. A Purchase Payment Cycle
is completed when this number and amount of Purchase Payments have been
made. The number of Purchase Payment Cycles completed may not be greater
than the number of whole years since your Individual Account was
established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more 2%
No Surrender Fee is deducted from any portion of your Individual Account
which is paid:
(1) At your death before Annuity payments start; or
(2) As a premium for an Annuity under the Contract; or
(3) After you have reached age 59 1/2 and 9 or more Purchase Payment
Cycles have been completed for your Individual Account being
surrendered.
5.03 Table of Values - Fixed Account:
The values in the following table only apply to annual Purchase Payments
of $1,000.
The Paid-Up Annuity Benefit assumes the Current Value has accumulated in
the Fixed Account at the Guaranteed Interest Rate until age 65 and is
applied to Option 4 with a stated period of 120 months.
The Surrender Value assumes the Purchase Payments are credited to the
Fixed Account at the Guaranteed Interest Rate at the beginning of each
Contract year. The Maintenance Fee and applicable Surrender Fee are
deducted.
The values would be different for other Purchase Payment amounts, if
Purchase Payments are not made when due, if partial surrenders are made,
if Aetna adds interest at a rate greater than the Guaranteed Interest
Rate-Fixed Account or if the Annuity payment rates change.
GTCC-GIT-HD(XC) 11
<PAGE>
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
1-800-525-4225
Certificate of Group Annuity Coverage
GTCC-HD(XC)
B-99-4.34
Variable Annuity Contract Certificate
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Herein called Aetna.
Certificate of Group Annuity Coverage
To the Employee:
AEtna certifies that coverage is in force for you under the stated group annuity
contract and certificate number. All data shown here is taken from AEtna records
and is based upon information furnished by the Contract Owner.
This Certificate of coverage replaces any and all certificates, riders or
amendments thereto, issued to you under the state contract and certificate
number.
See the back page of this certificate for a summary of other contract
provisions.
DETAILS OF VARIABLE FEATURES OF THE GROUP CONTRACT ARE IN THE DEPOSIT, RESERVE,
AND SURRENDER PROVISIONS, AND ANNUITY PROVISIONS.
RIGHT TO CANCEL
You may cancel this Certificate within 10 days of receiving it, by sending a
written notice to AEtna at the above address or to the agent from whom it was
purchased. Aetna will return all payments made for this Certificate within 7
days after it receives the notice of cancellation and this Certificate.
/s/ William O. Baily
President
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT.
GTCC-HO
<PAGE>
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR
AMOUNT.
<PAGE>
SPECIFICATIONS
- --------------------------------------------------------------------------------
CONTRACT OWNER GROUP ANNUITY CONTRACT NO.
- --------------------------------------------------------------------------------
YOUR NAME CERTIFICATE NO.
- --------------------------------------------------------------------------------
<PAGE>
Summary of certain provisions
of the Group Annuity contract
1. GENERAL. Subject to the specific terms of the Group Contract, Aetna will pay
you and annuity commencing on your retirement date. The Group Contract
determines the amount and terms of payment of the annuity.
2. MISSTATEMENT OF FACT. The amount of any payment under the Group Contract to
any payee may be adjusted on an equitable basis if the amount of the payment was
determined by AEtna on the basis of incorrect facts.
3. RIGHTS OF CREDITORS. The benefits provided under the Group Contract are not
assignable except to the extent required by law, and are exempt from the claims
of creditors to the maximum extent permitted by law.
4. VARIABLE BENEFITS. The Group Contract provides for variable benefits. That
is, benefits which fluctuate up and down with the performance of various mutual
funds held by AEtna.
<PAGE>
Aetna Life Insurance and Annuity Company
Home Office: 151 FARMINGTON AVE.
HARTFORD, CONNECTICUT 06156
(203) 273-0123
Certificate of Group Annuity Coverage
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT,
WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT,
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT
GTCC-HO
99-B.4.35
Variable Annuity Contract Certificate
-----------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
You may call the toll-free number shown above to get
answers to your questions or help to resolve a complaint.
Aetna Life Insurance and Annuity Company, herein called
Aetna, agrees to pay the benefits stated in this Contract.
- --------------------------------------------------------------------------------
Certificate of To the Certificate Holder:
Group Annuity
Coverage Aetna certifies that coverage is in force for you under the
stated Group Annuity Contract and Certificate numbers. All
data shown here is taken from Aetna records and is based
upon information furnished by you.
This Certificate is a summary of the Group Annuity Contract
provisions. It replaces any and all prior certificates,
riders, or amendments issued to you under the stated
Contract and Certificate numbers. This Certificate is for
information only and is not a part of the Contract.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED
IN PARTS III AND V.
- --------------------------------------------------------------------------------
Right to Cancel You may cancel this Certificate within 10 days of receiving
it by returning this Certificate along with a written
notice to Aetna at the above address or to the agent from
whom it was purchased. Within 7 days after it receives the
notice of cancellation and this Certificate at its Home
Office, Aetna will return the entire consideration paid
plus any increase or minus any decrease in the current
value of any funds allocated to the Separate Account.
/s/ Dan Kearney /s/ Susan E. Schechter
President Secretary
- --------------------------------------------------------------------------------
Contract Holder Group Annuity Contract No.
Specimen Specimen
- --------------------------------------------------------------------------------
Your Name Certificate No.
Specimen Specimen
- --------------------------------------------------------------------------------
Type of Plan
Retirement Plan for Higher Education
- --------------------------------------------------------------------------------
The underlying group combination annuity contract is delivered in Anystate
and is subject to the laws of that jurisdiction.
GTCC-96(ORP)
<PAGE>
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP ANNUITY CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED
AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN
INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA
DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
2
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed There is a guaranteed interest rate for Contribution(s)
Interest Rate held in the Fixed Plus Account and the GA Account. (See
Contract Schedule I.)
- --------------------------------------------------------------------------------
Deductions from There will be deductions for mortality and expense risks.
the Separate There also may be deductions for administrative charges and
Account asset based sales charges. (See 3.05 and 5.06.)
- --------------------------------------------------------------------------------
Deduction from Contribution(s) are subject to a deduction for premium
Contribution(s) taxes, if any. (See 3.01.)
3
<PAGE>
Contract Schedule I
Accumulation Period
Separate Account
- --------------------------------------------------------------------------------
Separate Account: Variable Annuity Account C
Charges to Separate Account: A daily charge is deducted from any portion of
the Current Value allocated to the Separate
Account. The daily charge is at an annual
effective rate of [1.25%] for Annuity mortality
and expense risks, [0.15%] for asset based sales
charge and a daily administrative charge which
will not exceed [0.25%] on an annual basis.
The daily charge for the Aetna GET Fund
Guarantee will be at an annual rate of [0.25%.]
Fixed Plus Account [Is Available]
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest [3%] (effective annual rate of return).
Rate:
Partial Withdrawal: The [20%] limit applicable to partial withdrawal
from the Fixed Plus Account will be waived when
the withdrawal is:
(a) due to the Participant's death, (and made
within [six (6)] months of the
Participant's date of death), before
Annuity payments begin. This partial
withdrawal may only be exercised once; or
(b) used to purchase Annuity benefits.
Guaranteed Accumulation Account (GA Account) [Is Available]
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest [3%] (effective annual rate of return).
Rate:
i
<PAGE>
Contract Schedule I
Accumulation Period (Cont'd)
Separate Account, Fixed Plus Account and GA Account
- --------------------------------------------------------------------------------
Loans: [Are Available]
Loan Interest Rate: (a) Plans subject to Title I of the Employee
Retirement Income Security Act of 1974
(ERISA): A Loan Interest Rate is set on the
first business day of each month. For each
loan, the initial Loan Interest Rate is
equal to the Monthly Average Corporates for
the calendar month beginning two months
before the calendar month in which the Loan
Effective Date occurs. The initial Loan
Interest Rate is effective for a period of
not less than three months and not more
than one year. The period is specified in
the loan agreement. For each period, the
Loan Interest Rate is adjusted if the new
rate is at least [0.5%] higher or lower
than the previous rate. The Participant
will receive reasonable notification of any
change to the Loan Interest Rate.
(b) Plans not subject to ERISA: [6%] on an
annual basis.
Systematic Withdrawal Option [Is Available]
(SWO):
The Specified Payment may not be greater than
[20%] of the Individual Account's Current Value
at the time of election.
The Specified Period may not be less than [five
years.]
The Specified Percentage may not be greater than
[20%.]
Estate Conservation Option [Is Available]
(ECO):
Life Expectancy Option (LEO): [Is Available]
See Section 1. - DEFINITIONS for explanations.
ii
<PAGE>
Contract Schedule II
Annuity Period
Separate Account
- --------------------------------------------------------------------------------
Fund Transfers: Maximum number of allowable transfers in the
Annuity Period is [4.]
Charges to Separate A daily charge at an annual effective rate of
Account: [1.25%] for Annuity mortality and expense risks.
The administrative charge is established upon
election of an Annuity option. This charge will not
exceed [0.25%.]
Variable Annuity Assumed If a Variable Annuity is chosen, an assumed annual
Annual Net Return Rate: net return rate of [5.0%] may be elected. If [5.0%]
is not elected, Aetna will use an assumed annual
net return rate of [3.5%.]
The assumed annual net return rate factor for
[3.5%] per year is [0.9999058.]
The assumed annual net return rate factor for
[5.0%] per year is [0.9998663.]
If the portion of a Variable Annuity payment for
any Fund is not to decrease, the Annuity return
factor under the Separate Account for that Fund
must be:
(a) [4.75%] on an annual basis plus an annual
return of up to [0.25%] to offset the
administrative charge set at the time Annuity
payments commence if an assumed annual net
return rate of [3.5%] is chosen; or
(b) [6.25%] on an annual basis plus an annual
return of up to [0.25%] to offset the
administrative charge set at the time Annuity
payments commence, if an assumed annual net
return rate of [5%] is chosen.
Annuity Option: Under the option "Payments for a Stated Period of
Time":
For amounts invested in the GA Account or one or
more of the Fund(s), the number of years must be at
least [five (5)] and not more than [thirty (30)]
and the Annuity may be a Fixed or Variable Annuity.
For amounts invested in the Fixed Plus Account, the
number of years must be at least [five (5)] and not
more than [thirty (30)] and the Annuity must be a
Fixed Annuity.
Fixed Annuity
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest [3%] (effective annual rate of return).
Rate:
See Section 1. - DEFINITIONS for explanations.
iii
<PAGE>
TABLE OF CONTENTS
I. DEFINITIONS
- ------------------------------------------------------------------------------
Page
1.01 Accumulation Period.....................................................6
1.02 Adjusted Current Value..................................................6
1.03 Aetna GET Fund Offering Period..........................................6
1.04 Aetna GET Fund Guaranteed Period........................................6
1.05 Aetna GET Fund Maturity Date............................................6
1.06 Annuitant...............................................................6
1.07 Annuity.................................................................6
1.08 Beneficiary.............................................................7
1.09 Code....................................................................7
1.10 Contract Holder.........................................................7
1.11 Contribution............................................................7
1.12 Current Value...........................................................7
1.13 Deposit Period..........................................................7
1.14 Fixed Plus Account......................................................7
1.15 Fixed Plus Account Guaranteed Interest Rate.............................7
1.16 Fixed Annuity...........................................................8
1.17 Fund(s).................................................................8
1.18 Fund Transfer(s)........................................................8
1.19 General Account.........................................................8
1.20 Guaranteed Accumulation Account (GA Account)............................8
1.21 GA Account Guaranteed Interest Rate.....................................8
1.22 Guaranteed Term.........................................................9
1.23 Individual Account......................................................9
1.24 Loan Account............................................................9
1.25 Loan Effective Date.....................................................9
1.26 Loan Interest Rate......................................................9
1.27 Market Value Adjustment (MVA)..........................................10
1.28 Matured Term Value.....................................................10
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1.29 Matured Term Value Transfer............................................10
1.30 Maturity Date..........................................................10
1.31 Monthly Average Corporates.............................................10
1.32 Net Contribution.......................................................10
1.33 Nonunitized Separate Account...........................................10
1.34 Participant............................................................10
1.35 Plan...................................................................10
1.36 Reinvestment...........................................................11
1.37 Separate Account.......................................................11
1.38 Valuation Date.........................................................11
1.39 Valuation Period.......................................................11
1.40 Variable Annuity.......................................................11
II. GENERAL PROVISIONS
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2.01 Change of Contract.....................................................12
2.02 Change of Fund.........................................................12
2.03 Nonparticipating Contract..............................................12
2.04 Payments...............................................................12
2.05 State Laws.............................................................13
2.06 Control of Contract....................................................13
2.07 Designation of Beneficiary.............................................14
2.08 Misstatements and Adjustments..........................................14
2.09 Incontestability.......................................................14
2.10 Grace Period...........................................................14
2.11 Individual Certificates................................................14
III. CONTRIBUTIONS, CURRENT VALUE, and WITHDRAWAL PROVISIONS
- ------------------------------------------------------------------------------
3.01 Net Contribution(s)....................................................14
3.02 Experience Credits.....................................................15
3.03 Fund Record Units......................................................15
3.04 Fund Record Unit Value.................................................15
3.05 Fund Net Return Factors................................................15
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3.06 Market Value Adjustment................................................16
3.07 Fund Transfer(s).......................................................18
3.08 Aetna GET Fund Offering Period.........................................19
3.09 Aetna GET Fund Guarantee...............................................19
3.10 Aetna GET Fund Maturity Date...........................................20
3.11 Loans..................................................................20
3.12 Notice to the Participant..............................................23
3.13 Manner and Timing of Distributions.....................................23
3.14 Withdrawal.............................................................24
3.15 Partial Withdrawal from the Fixed Plus Account.........................25
3.16 Payment of Fixed Plus Account Full Withdrawal..........................25
3.17 Payment of Minimum Current Value.......................................26
3.18 Amount Payable at Death (Before Annuity Payments Start)................26
3.19 Reinstatement..........................................................28
IV. NON-ANNUITY DISTRIBUTION OPTIONS
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4.01 Distribution Options...................................................29
4.02 Estate Conservation Option.............................................30
4.03 Life Expectancy Option.................................................31
4.04 Systematic Withdrawal Option...........................................31
V. ANNUITY PROVISIONS
- ------------------------------------------------------------------------------
5.01 General Provisions.....................................................33
5.02 Annuity Options........................................................34
5.03 Payments...............................................................35
5.04 Investment Option......................................................36
5.05 Fund Annuity Units.....................................................37
5.06 Fund Annuity Unit Value................................................37
5.07 Fund Annuity Net Return Factor.........................................37
5.08 Fund Transfers During the Annuity Period...............................38
5.09 Death Benefit..........................................................39
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I. DEFINITIONS
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1.01 Accumulation Period: The period during which Net Contribution(s) are
applied to an Individual Account.
1.02 Adjusted Current The Current Value (See 1.12) of an Individual
Value: Account (See 1.23) plus or minus any applicable
aggregate GA Account Market Value Adjustment. (See
3.07).
1.03 Aetna GET Fund The period, usually from one to three months, during
Offering Period: which Participants may transfer or deposit amounts
(Offering Period) to an Aetna GET Fund series. Each Aetna GET Fund
series has a specified Offering Period. Amounts
transferred or deposited prior to the date on which
the Guaranteed Period begins are invested in money
market instruments.
Aetna reserves the right to state the minimum
amount a Participant may transfer or deposit to
each Offering Period. Aetna also reserves the right
to extend an Offering Period or accept Fund
transfers or deposits to an Aetna GET Fund series
during the series' Guaranteed Period.
1.04 Aetna GET Fund For each Aetna GET Fund series, the period for which
Guaranteed Period: the Aetna Get Fund Guarantee applies. The
(Guaranteed Period) Guaranteed Period ends on the Maturity Date.
1.05 Aetna GET Fund The date on which a series' Guaranteed Period ends
Maturity Date: and GET Fund Record Units for the series are
(Maturity Date) liquidated.
1.06 Annuitant: If an Annuity provides lifetime benefits, the person
whose life expectancy determines the amount and/or
duration of Annuity benefit payments.
1.07 Annuity: Payment of an income under the Annuity Provisions of
Section V:
(a) For the life of one or two persons;
(b) For a stated period; or
(c) For some combination of (a) and (b).
1.08 Beneficiaries: The person(s) named to receive any benefits which
remain under the Contract after the Participant's
death. Participant(s) designate a Beneficiary for
their Individual Account(s). (See 2.07)
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1.09 Code: The Internal Revenue Code of 1986, as amended.
1.10 Contract Holder: The entity, named on the cover of this Contract, to
which the Contract is issued.
1.11 Contribution: A payment received at Aetna's Home Office and
allocated to this Contract.
1.12 Current Value: For an Individual Account (See 1.23), the Current
Value is the total of:
(a) The amount, if any, in the Fixed Plus Account,
with interest earned to date;
(b) The amount, if any, in the GA Account, with
interest earned to date; and
(c) The value of all Fund record units (See 3.03),
if any, as of the most recent Valuation
Period.
1.13 Deposit Period: A calendar month, a calendar quarter, or any other
period of time specified by Aetna during which Net
Contribution(s), Fund Transfers and Reinvestments
are accepted into the GA Account for one or more
Guaranteed Terms.
1.14 Fixed Plus Account: If offered as an investment option under the
Contract (see Contract Schedule I) the Fixed Plus
Account is an accumulation option with a guaranteed
minimum interest rate. Aetna may credit a higher
rate which is not guaranteed. The portion that may
be withdrawn or transferred in a 12 month period is
restricted (See 3.07, 3.15 and 3.16).
1.15 Fixed Plus Account If the Fixed Plus Account is an investment option
Guaranteed Interest under the Plan (see Contract Schedule I) then Aetna
Rate: will add interest at an annual rate no less than
that shown on Contract Schedule I on any Net
Contribution(s) to the Fixed Plus Account. Aetna
may add interest at a higher rate determined by its
Board of Directors.
1.16 Fixed Annuity: An Annuity with payments that do not vary in amount.
1.17 Fund(s): The open-end registered management investment
companies whose shares are purchased by the Separate
Account to fund the benefits provided by the
Contract. Each Aetna GET Fund series is a separate
Fund.
1.18 Fund Transfers: The movement of invested amounts among the available
Fund(s); the Fixed Plus Account (if available) and
the GA Account (if available).
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1.19 General Account: The account holding the assets of Aetna, other than
those assets held in Aetna's Separate Account(s) and
Nonunitized Separate Account(s).
1.20 Guaranteed If offered as an investment option under the
Accumulation Account Contract (see Contract Schedule I) the Guaranteed
(GA Account): Accumulation Account (GA Account) is an accumulation
option where Aetna guarantees stipulated rate(s) of
interest for a specified period of time. All assets
of Aetna, including amounts in the Nonunitized
Separate Account, are available to meet the
guarantees for the GA Account.
1.21 GA Account Guaranteed If the GA Account is an investment option under the
Interest Rate: Contract (see Contract Schedule I) then Aetna will
declare the interest rate(s) applicable to a
specific Guaranteed Term at the start of the
Deposit Period for that Guaranteed Term. The
rate(s) are guaranteed by Aetna for that Deposit
Period and the ensuing Guaranteed Term. The
Guaranteed Interest Rates are annual effective
yields. That is, interest is credited at a rate
that will produce the Guaranteed Interest Rate over
the period of a year. No Guaranteed Interest Rate
will ever be less than the Minimum Guaranteed
Interest Rate shown on Contract Schedule I.
For Guaranteed Terms of one year or less, one
Guaranteed Interest Rate is credited for the full
Guaranteed Term. For longer Guaranteed Terms, an
initial Guaranteed Interest Rate is credited from
the date of deposit to the end of a specified
period within the Guaranteed Term. There may be
different Guaranteed Interest Rate(s) declared for
subsequent specified time intervals throughout the
Guaranteed Term.
1.22 Guaranteed Term: The period of time for which GA Account Guaranteed
Interest Rates are guaranteed on Net Contributions,
Fund Transfers and Reinvestments made into a current
Deposit Period for the GA Account. Such period
begins on the day following the close of the Deposit
Period and ends on the designated Maturity Date.
Guaranteed Terms are offered at Aetna's discretion
for various lengths of time ranging up to and
including ten years and are classified as follows:
Short-term. Three (3) or fewer years. Amounts
allocated to a short-term Term are held in the
General Account. Long-term. More than three (3)
years, but not more than ten (10). Amounts allocated
to a long-term Term are held in the Nonunitized
Separate Account.
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1.22 Guaranteed Term During a Deposit Period, Aetna may make available
(Cont'd): any number of Guaranteed Terms. The Participant may
allocate Net Contributions and Fund Transfers into
any or all of the available Guaranteed Terms.
1.23 Individual Account: This Contract is issued to the Contract Holder.
However, Aetna will maintain Individual Accounts for
each Participant to keep a record of Current Value
(See 1.12) and transactions. These may include:
(a) An Employer Account: This Individual Account
will be credited with employer Net
Contribution(s) and transferred amounts of
401(a) funds, attributable to employer
contributions; and
(b) An Employee Account: This Individual Account
will be credited with employee Net
Contribution(s) specifically amounts subject
to Code Section 414(H) and transferred amounts
of 401(a) funds, attributable to 414(H)
contributions and any after tax contributions.
1.24 Loan Account: For each loan taken by a Participant, the loan
amount transferred from the investment options is
credited to the Loan Account.
1.25 Loan Effective Date: The date on which Aetna receives a loan agreement in
good order at its home office.
1.26 Loan Interest Rate: The interest rate Aetna charges on a loan. (see
Contract Schedule I).
1.27 Market Value An adjustment to the amount withdrawn or transferred
Adjustment (MVA): from an GA Account Guaranteed Term prior to the end
of that Guaranteed Term. The adjustment reflects
the change in the value of the investment due to
changes in interest rates since the date of deposit
and is computed using the formula given in 3.06.
The adjustment is expressed as a percentage of each
dollar being withdrawn.
1.28 Matured Term Value: The amount payable on a GA Account Guaranteed Term's
Maturity Date.
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1.29 Matured Term Value During the calendar month following a GA Account
Transfer: Maturity Date, the Participant may notify Aetna's
Home Office in writing to transfer or withdraw all
or part of the Matured Term Value, plus interest at
the new Guaranteed Rate accrued thereon, from the
GA Account without an MVA. This provision only
applies to the first such written request received
from the Participant during this period for any
Matured Term Value.
1.30 Maturity Date: The last day of a GA Account Guaranteed Term.
1.31 Monthly Average Moody's Corporate Bond Yield Average-Monthly Average
Corporates: Corporates published by Moody's Investors Service,
or its successor, or a substantially similar average
as may be allowed by law or regulation.
1.32 Net Contribution: A Contribution less any applicable premium taxes.
1.33 Nonunitized Separate An account established by Aetna under Section
Account: 38a-433 of the Connecticut General Statutes that
holds assets for GA Account Terms (See 1.21)
greater than three years. The Contract Holder or
Participant does not participate in the investment
gain or loss from the assets held in the
Nonunitized Separate Account. Such gain or loss is
borne entirely by Aetna. Assets in this account may
be charged with liabilities arising out of any
other Aetna business.
1.34 Participant: A person who participates in the Plan named on the
cover of this Contract.
1.35 Plan: The Plan named on the cover of this Contract and
established under Section 401(a) of the Code. The
Plan is not a part of the Contract and Aetna is not
bound by its terms.
10
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1.36 Reinvestment: Aetna will mail a notice to the Participant at least
18 calendar days before a Guaranteed Term's Maturity
Date. This notice will contain the Guaranteed Terms
available during the current Deposit Periods with
their Guaranteed Interest Rate(s) and projected
Matured Term Value. If no specific direction is
given by the Participant prior to the Maturity Date,
each Matured Term Value will be reinvested in the
current Deposit Period for a Guaranteed Term of the
same duration. If a Guaranteed Term of the same
duration is unavailable, each Matured Term Value
will automatically be reinvested in the current
Deposit Period for the next shortest Guaranteed Term
available in the same classification. If no shorter
Guaranteed Term is available, the next longer
Guaranteed Term will be used. Aetna will mail a
confirmation statement to the Participant, the next
business day after the Maturity Date. This notice
will state the Guaranteed Term and Guaranteed
Interest Rate(s) which will apply to the reinvested
Matured Term Value.
1.37 Separate Account: An account, established by Aetna under Section
38a-433 of the Connecticut General Statutes, that
buys and holds shares of the Fund(s) available under
this Contract. Income, gains or losses, realized or
unrealized are credited or charged to the Separate
Account without regard to other income, gains or
losses of Aetna. Aetna owns the assets held in the
Separate Account and is not a trustee of such
amounts. Amounts in the Separate Account are not
generally guaranteed and are held at market value.
The assets of the Separate Account, to the extent of
reserves and other contract liabilities of the
Account, cannot be charged with other Aetna
liabilities.
1.38 Valuation Date: The date and time on which a Fund annuity unit value
and a Fund record unit value are calculated.
Currently, this calculation will be determined at
the close of business of the New York Stock Exchange
on any normal business day, Monday through Friday,
that the New York Stock Exchange is open.
1.39 Valuation Period: The period of time commencing at the end of one
Valuation Date and ending at the end of the next
Valuation Date.
1.40 Variable Annuity: An Annuity with payments that vary with the net
investment results of the Funds available during the
Annuity period.
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II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract: Only an authorized officer of Aetna may change the
terms of this Contract. Aetna reserves the right to
modify this Contract to meet the requirements of
applicable state and federal laws or regulations.
Aetna will notify the Contract Holder in writing of
any changes.
Aetna may change the tables for determining the
amount of Annuity benefit payments attributable
only to Contributions accepted after the effective
date of change, without Contract Holder consent.
Such a change will not become effective earlier
than twelve months after (1) the effective date of
the Contract, or (2) the effective date of a
previous change. Aetna will notify the Contract
Holder in writing at least thirty days before the
effective date of the change. Aetna may not make
Contract changes which adversely affect the Annuity
benefits attributable to Contributions already made
to the Contract.
2.02 Change of Fund: The assets of the Separate Account are segregated by
Fund. If the shares of any Fund are no longer
available for investment by the Separate Account or
if in our judgment, further investment in such
shares should become inappropriate in view of the
purpose of the Contract, Aetna may cease to make
such Fund shares available for investment under the
Contract prospectively, or Aetna may substitute
shares of another Fund for shares already acquired.
Aetna may also, from time to time, add additional
Funds. Any elimination, substitution or addition of
Funds will be done in accordance with applicable
state and federal securities laws. Aetna reserves
the right to substitute shares of another Fund for
shares already acquired without a proxy vote.
2.03 Nonparticipating The Contract Holder, Participants, or Beneficiaries
Contract: will not have a right to share in the earnings of
Aetna.
2.04 Payments: (a) Aetna will make distributions as directed by
the Contract Holder. Aetna will determine the
amount of payments based on the Individual
Account's Current Value as of the date on which
a request is received in good order at Aetna's
Home Office. Payments will be made within
seven (7) calendar days of receipt of a written
request in good order at Aetna's Home Office.
(b) Aetna may defer payments: (1) for a period of
up to six (6) months (unless not allowed by
state law); and (2) as allowed by federal law.
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2.05 State Laws: This Contract complies with the laws of the state in
which it is delivered. Any cash, death or Annuity
payments are equal to or greater than the minimum
required by such laws. Annuity tables for legal
reserve valuation shall be as required by state
law. Such tables may be different from Annuity
tables used to determine Annuity payments.
2.06 Control of Contract: This Contract is designed to fund a plan which
provides for retirement income.
The Contract Holder may, by written direction to
Aetna, allow Participants to select the investment
options of their Employer and/or Employee Accounts.
Choices made under this Contract must be in writing
or in a form satisfactory to Aetna. Until receipt
of such choices in its Home Office, Aetna may rely
on any previous choices made.
(a) Nontransferable and Nonassignable: This
Contract and any Individual Accounts are
nontransferable and nonassignable, except to
Aetna in the event of a loan, or pursuant to a
"qualified domestic relations order" as set
forth under the Internal Revenue Code of 1986,
as it may be amended from time to time.
(b) ERISA/REA Requirements: The Contract Holder
shall notify Aetna in writing of the
applicability of ERISA, as amended by
subsequent law including REA, to the Plan.
Aetna shall rely on the Contract Holder's
determination and representation of
applicability. With respect to any
distribution made from an Employee or Employer
Account from a Contract subject to ERISA, the
Contract Holder must certify in writing that
all the appropriate REA requirements have been
met and that distribution is in accordance
with the terms of the Plan.
(c) Distributions: A Participant may apply for a
distribution from his or her Employee Account
or Employer Account. However, the Contract
Holder must certify in writing that the
distribution is in accordance with the terms
of the Plan.
(d) Participant Rights/Employee Account: The
Participant has a nonforfeitable right to the
value of his or her Employee Account pursuant
to the terms of the Plan as interpreted by the
Contract Holder.
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2.06 Control of Contract (e) Participant Rights/Employer Account: The
(Cont'd): Participant has a nonforfeitable right to the
value of his or her Employer Account pursuant
to the terms of, and to the extent of his or
her vested percentage under, the Plan as
interpreted by the Contract Holder. It is the
Contract Holder's responsibility to maintain
records of the Participant's vesting
percentages. Aetna will not maintain nor keep
such records.
2.07 Designation of The Participant shall designate a Beneficiary. If
Beneficiary: the Plan is subject to ERISA, the Contract Holder
must certify in writing that the designation is in
accordance with the appropriate REA requirements
and the terms of the Plan.
2.08 Misstatements and If Aetna finds the age of any payee to be misstated,
Adjustments: the correct facts will be used to adjust payments.
2.09 Incontestability: Aetna cannot cancel this Contract because of any
error of fact.
2.10 Grace Period: This Contract will remain in effect even if
Contributions are not continued except as provided
in 3.17.
2.11 Individual Aetna shall issue certificates to Participants as
Certificates: required by the state in which this Contract is
delivered. The certificate will summarize certain
provisions of the Contract. Certificates are for
information only and are not a part of the Contract.
III. CONTRIBUTIONS, CURRENT VALUE, AND WITHDRAWAL PROVISIONS
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3.01 Net Contribution(s): The Net Contribution equals the actual Contribution
less any applicable premium tax. Generally, Aetna
will deduct the premium tax when Annuity benefits
are purchased (See Section V). If Aetna determines
that under applicable state law, it must pay a
premium tax when the Contribution is received, or at
any other time, it may deduct the tax at that time.
The Net Contribution(s) may be allocated among the
following investment options:
(a) The Fixed Plus Account (if available); and
(b) The current Deposit Period(s) for Guaranteed
Terms under the GA Account (if available); and
(c) The Fund(s) in which the Separate Account
invests.
Aetna must be told the percentage of all Net
Contributions to allocate to one or more of the
investment options. Aetna reserves the right to
require a minimum Contribution amount per
Individual Account.
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3.01 Net Contribution(s) Aetna reserves the right not to accept any
(Cont'd): Contribution.
3.02 Experience Credits: Aetna may apply experience credits under this
Contract. Any such credits will be computed as
decided by Aetna.
3.03 Fund Record Units: The portion of the Net Contribution(s) applied to
each Fund under the Separate Account will determine
the number of Fund record units credited to the
Individual Account for that Fund. This number is
equal to the Net Contribution applied to the Fund
divided by the Fund record unit value (See 3.04) for
the Valuation Period in which the Contribution is
received in good order.
3.04 Fund Record Unit A Fund record unit value is computed by multiplying
Value: the net return factor (See 3.05) for the current
Valuation Date by the Fund record unit value for
the previous Date. The dollar value of a Fund
record unit, Separate Account assets, and Variable
Annuity payments may go up or down due to
investment gain or loss.
3.05 Fund Net Return The net return factor(s) are used to compute all
Factors: Separate Account record units for any Fund. The net
return factor for each Fund is equal to 1.0000000
plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by the
Separate Account at the end of a Valuation
Period, minus
(b) The value of the shares of the Fund held by the
Separate Account at the start of the Valuation
Period, plus or minus
(c) Taxes (or reserves for taxes) on the Separate
Account (if any); divided by
(d) The total value of the Fund record units and
Fund annuity units of the Separate Account at
the start of the Valuation Period; minus
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3.05 Fund Net Return (e) A Separate Account charge at an annual
Factors (Cont'd): effective rate as shown on Contract Schedule I
for Annuity mortality and expense risks, asset
based sales charge, if any and a daily
administrative charge which will not exceed
the amount shown on Contract Schedule I on an
annual basis. The administrative charge may be
changed annually except for amounts which have
been used to purchase an Annuity; minus
(f) A fee for the Aetna GET Fund Guarantee which
is deducted daily during the Guaranteed
Period. The fee, which is determined prior to
the beginning of each series' Offering Period,
is as shown on Contract Schedule I.
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to the
net assets of the Fund divided by the number of
shares outstanding.
3.06 Market Value (a) An MVA will be applied to any withdrawal from a
Adjustment (MVA): GA Account Term before the Maturity Date due
to:
(1) A Fund Transfer;
(2) A full or partial withdrawal; or
(3) A payment of a premium for Annuity
Option 1.
The amount of the withdrawal will be adjusted to a
market value amount as described in (b).
(b) Market value adjusted amounts will be equal to
the amount withdrawn multiplied by the
following ratio:
(1 + i)^(x/365)
-------------------
(1 + j)^(x/365)
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days remaining,
(computed from Wednesday of the week of
withdrawal) in the Term.
(c) The Deposit Period Yield will be determined as
follows:
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3.06 Market Value (1) At the close of the last business day of
Adjustment (MVA) each week of the Deposit Period, a yield
(Cont'd): will be computed as the average of the
yields on that day of U.S. Treasury Notes
which mature in the last three months of
the Term.
(2) The Deposit Period Yield is the average of
those yields for the Deposit Period. If
withdrawal is made prior to the close of
the Deposit Period, it is the average of
those yields on each week preceding
withdrawal.
(3) The Current Yield is the average of the
yields on the last business day of the week
preceding withdrawal on the same U.S.
Treasury Notes included in the Deposit
Period Yield.
(4) In the event that no U.S. Treasury Notes
which mature in the last three months of
the Term exist, Aetna reserves the right
to use the U.S. Treasury Notes that mature
in a following quarter.
(d) If a lump-sum distribution or Annuity Option
is elected six months or more after your
death, the Beneficiary will receive the
Account Value, plus or minus any MVA that
would apply to any portion of the Account
allocated to GAA. If a full or partial
withdrawal is made within six months after
your death, the Beneficiary will receive the
Account Value, plus any positive MVA that
would apply to any portion of the Account
allocated to GAA. The value of the Account is
determined as of the Valuation Date on which
proof of death acceptable to us and a request
for payment are received at our Home Office.
(e) After the six month period, the withdrawal or
Fund Transfer will be the aggregate MVA amount
(i.e., including all MVAs).
(f) The greater of the aggregate MVA amount or the
applicable portion of the Current Value in the
GA Account is applied to amounts withdrawn
from the GA Account for payment of a premium
under Annuity options 2 or 3.
3.07 Fund Transfer(s): All or any portion of the Adjusted Current Value of
the Individual Account (subject to the limitations
described below) may be transferred from any Fund,
the Fixed Plus Account (if available) or the GA
Account (if available):
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3.07 Fund Transfer(s) (a) To any Fund; or
(Cont'd): (b) To the Fixed Plus Account (if available); or
(c) To any Guaranteed Term of the GA Account (if
available) with a different classification
available in the Current Deposit Period.
Fund Transfer requests can be submitted as a
percentage or as a dollar amount. Aetna may
establish a minimum Fund Transfer amount. Within a
Guaranteed Term classification, the amount
transferred will be withdrawn from the oldest
Deposit Period, then from the next oldest, and so
on until the amount requested is satisfied.
Amounts applied to Guaranteed Terms of the GA
Account may not be transferred to the Funds, the
Fixed Plus Account or to another Guaranteed Term
during the Deposit Period or 90 days after the
close of the Deposit Period except for Matured Term
Value(s) during the calendar month following the
Term's Maturity Date.
Fund Transfers from Guaranteed Terms of the GA
Account are subject to the MVA provisions of 3.06.
During each rolling twelve (12) month period, up to
20% of the Fixed Plus Account value may be
transferred to one or more of the Fund(s), and/or
the GA Account's then-current Deposit Period. The
20% limit is reduced by any partial withdrawals,
Fund Transfers or amounts taken as a loan or used
to purchase an Annuity during the twelve (12) month
period. Aetna reserves the right to include amounts
paid under ECO, LEO and SWO provisions for purposes
of applying this 20% limit. This limit is waived
when the balance in the Fixed Plus Account is
$1,000 or less on the date the Fund Transfer
request is received in good order at Aetna's Home
Office.
The Participant may make an unlimited number of
Fund Transfers during the Accumulation Period.
A Fund Transfer or withdrawal from an Aetna GET
Fund series before the Maturity Date will be based
on the GET Fund Record Unit Value for the next
Valuation Period following the date on which Aetna
receives a transfer request in good order at its
home office.
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3.08 Aetna GET Fund Aetna will specify a minimum total asset amount
Offering Period: required at the end of an Offering Period to offer
an Aetna GET Fund series. If the minimum is not
achieved, Aetna reserves the right to not start the
Guaranteed Period.
If an Aetna GET Fund series is terminated, Aetna
will send written notification of the termination
to all Participants who have made Fund Transfers or
deposits to that Aetna GET Fund Series. Notice will
be mailed no later than 15 calendar days after the
end of the Offering Period. Participants then have
45 days from the end of the Offering Period to
redirect amounts in the terminated Aetna GET Fund
series to one or more investment options available
under the Contract. During this time, Funds are
invested in money market instruments. If no
election is made by the end of the 45-day period,
at the next Valuation Period, Aetna will transfer
the amount in the terminated Aetna GET Fund series
to the (Aetna Variable Encore Fund).
Aetna reserves the right to specify a maximum total
asset amount for an Aetna GET Fund series. If the
maximum is achieved, Aetna also reserves the right
to set a date on which it will stop accepting Fund
Transfers or deposits for that Aetna GET Fund
series. Aetna will announce the date on which it
will stop accepting Fund Transfers and deposits ten
calendar days prior to that date.
3.09 Aetna GET Fund On the Maturity Date of each Aetna GET Fund series,
Guarantee: the GET Fund Record Unit Value for that series will
not be less than the GET Fund Record Unit Value
determined at the beginning of the Guaranteed
Period. If necessary, Aetna will transfer funds
from its General Account to the Aetna GET Fund
series to offset any shortfall in the GET Fund
Record Unit Value. The Aetna GET Fund Guarantee
does not apply to withdrawals or Transfers made
before the Maturity Date.
If Aetna GET Fund Record Units are adjusted at any
time during an Aetna GET Fund Guaranteed Period,
the Aetna GET Fund Guarantee will be restated. The
restated Aetna GET Fund Guarantee will be
calculated so that it is equivalent to the original
Aetna GET Fund Guarantee for that series.
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3.10 Aetna GET Fund Prior to the Maturity Date for each Aetna GET Fund
Maturity Date: series, Aetna sends a written notice of the date to
all participants who have Current Value in that
series. Participants must then inform Aetna of the
investment option(s) to which to transfer that
Current Value. If a Participant does not make an
election, on the Maturity Date Aetna will transfer
the Current Value to the then available Aetna GET
Fund series' Offering Period. If no Offering Period
is available, Aetna will transfer 50% of the amount
to the (Aetna Variable Fund) and 50% to the (Aetna
Income Shares).
3.11 Loans: If loans are included as an option under the
Contract, (see Contract Schedule I) then the
following will apply.
During the accumulation period, loans are granted
(1) as permitted under applicable law; (2) subject
to the terms and conditions of the loan agreement;
and, (3) in accordance with the following
provisions.
(a) Amount available for loan: The amount
available for loan is limited to the vested
Individual Account Current Value attributable
to Participant Contributions, plus any amounts
allowed by the employers Plan. Amounts
available from some investment options may be
subject to limitations specified in the loan
agreement. To obtain the loan amount
requested, these limitations may require the
Participant to transfer funds. A Market Value
Adjustment may apply to amounts transferred.
For plans subject to ERISA, the minimum loan
amount is $1,000. For plans not subject to
ERISA, the minimum loan amount is defined in
the loan agreement. The maximum loan amount is
the lesser of:
(1) Fifty percent (50%) of the vested
Individual Account Current Value,
including any Loan Account, reduced by the
amount of any outstanding loan balance on
the Loan Effective Date; or
(2) Fifty thousand dollars ($50,000) reduced
by the highest outstanding loan balance
for the preceding 12 months.
The amount of all outstanding loans cannot
exceed $50,000.
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3.11 Loans (Cont'd): (b) Loan Interest Rate: For Plans subject to Title
I of the Employee Retirement Income Security
Act of 1974 (ERISA), a Loan Interest Rate is
set on the first business day of each month.
For each loan, the initial Loan Interest Rate
is the rate for the calendar month in which the
Loan Effective Date occurs. The initial Loan
Interest Rate is effective for a period of not
less than three months and not more than one
year. The period is specified in the loan
agreement. For each period, the Loan Interest
Rate is adjusted if the new rate is at least
0.5% higher or lower than the previous rate.
The Participant will receive reasonable
notification of any change to the Loan Interest
Rate.
As applicable, the Loan Interest Rate is:
(1) Plans subject to ERISA: equal to the
Monthly Average Corporates for the calendar
month beginning two months before the Loan
Interest Rate is effective.
(2) Plans not subject to ERISA: not greater
than 8% on an annual basis (see Contract
Schedule I).
(c) Earned interest: The Loan Account is credited
with interest at a rate which is not less than
the Loan Interest Rate, less 3%, on an annual
basis.
(d) Loan repayment: Repayment is as set forth in
the loan agreement, or a Participant may repay
a loan in full at any time.
(e) Amount available for partial surrender while a
loan is outstanding: While a loan is
outstanding, the amount available for partial
surrender is equal to the vested Individual
Account Current Value, including the Loan
Account, minus 125% of the outstanding loan
balance.
(f) Full surrenders while a loan is outstanding:
If the Participant requests a full surrender
from the vested Individual Account Current
Value while a loan is outstanding, one of the
following occurs:
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3.11 Loans (Cont'd): (1) If the amount of the vested Individual
Account Current Value available for
distribution is sufficient to repay (a) the
outstanding loan balance, plus (b) any
applicable Fixed Plus Account default
charge, then that amount, minus the Loan
Account balance, is deducted from the
vested Individual Account Current Value and
the loan is canceled.
(2) If the amount of the vested Individual
Account Current Value available for
distribution is not sufficient to repay
(a) the outstanding loan balance, plus (b)
any applicable Fixed Plus Account default
charge, then the surrender amount cannot
exceed the vested Individual Account
Current Value, including the Loan Account,
reduced by 125% of the outstanding loan
balance.
(g) Electing an Annuity option while a loan is
outstanding: Before all or any portion of the
vested Individual Account Current Value is
applied to an Annuity option, the Participant
may repay any outstanding loan balance, or the
vested Individual Account Current Value is
adjusted as described in (f).
(h) Death of the Participant while a loan is
outstanding: If a death benefit claim is
submitted for an Individual Account with an
outstanding loan, the Individual Account
Current Value, including the amount of the
Loan Account, is reduced by the amount of the
outstanding loan balance before the death
benefit amount is determined.
(i) Loan payment default: If Aetna does not
receive a loan payment when due, the defaulted
payment is treated as follows:
(1) If the amount of the vested Individual
Account Current Value available for
distribution is sufficient to repay (a)
the amount of the defaulted payment, plus
(b) any applicable Fixed Plus Account
default charge, then that amount is
deducted from the vested Individual
Account Current Value.
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3.11 Loans (Cont'd): (2) If the amount of the vested Individual
Account Current Value available for
distribution is not sufficient to repay
(a) the amount of the defaulted payment,
plus (b) any applicable Fixed Plus Account
default charge, until such time that the
amount due can be distributed, the Loan
Account continues to earn interest, and
interest is charged on the defaulted
payment. At that time, the amount due is
surrendered from the vested Individual
Account Current Value.
3.12 Notice to the Each year, Aetna will notify the Participant of:
Participant:
(a) The value of any amounts held in:
(i) The Fixed Plus Account (if available),
(ii) The GA Account (if available),
(iii) The Fund(s) for the Separate Account;
(b) The number of any fund(s) record units;
(c) The fund(s) record unit value(s);
(d) The amount available for withdrawal; and
(e) The Loan Account value.
This information will be as of a date no more than
sixty (60) days before the date of the notice.
3.13 Manner and Timing of (a) As directed by the Contract Holder, a
Distributions: distribution to a Participant or Beneficiary
may be made in a lump sum, as one of the
Distribution Options described in Section IV,
or as one of the Annuity options in Section V.
The Participant or Beneficiary may elect the
form of distribution subject to certification
in writing by the Contract Holder that the
Participant or Beneficiary is eligible both as
to the timing and form of distribution. All
distributions must satisfy the minimum
distribution rules set forth in Code Section
401(a)(9).
(b) The distribution of benefits from the Employee
and Employer Accounts must generally begin no
later than April 1 of the calendar year
following the calendar year in which the
Participant attains age 70 1/2 or in the case
of a governmental or church plan the calendar
year in which the Participant attains age 70
1/2 or retires, whichever occurs later. For a
Participant who attained age 70 1/2 before
January 1, 1988, the distribution of such
benefits must be made or must begin not later
than the April 1 of the calendar year
following the calendar year in which the
Participant retires.
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3.13 Manner and Timing of The entire value of the Individual Account must
Distributions be distributed, or distribution must be made
(Cont'd): over the life of the Participant, the joint
lives of the Participant and Beneficiary or
over a period that does not extend beyond the
life expectancy of the Participant or the
joint life expectancies of the Participant and
Beneficiary.
(c) If the Participant does not request
commencement of benefits from the Employee and
Employer Accounts as described above, Aetna
will not be responsible for compliance with
the Code Section 401(a)(9) minimum
distribution requirements or for any adverse
tax or other consequences that may result.
3.14 Withdrawal: (a) The Participant may withdraw any portion or all
of an Individual Account Adjusted Current Value
and transfer such amount to another investment
provider under the Plan. The withdrawal and
transfer request must be submitted in writing
to Aetna.
(b) Except as described in Section 3.17, unless
the Participant specifies otherwise, partial
withdrawals are satisfied by withdrawing
amounts on a pro rata basis from each of the
investment options in which the Individual
Account is invested.
(c) When amounts are withdrawn from the GA
Account, amounts in Short-Term and Long-Term
Classifications are treated as separate
investment options and amounts are taken on a
pro rata basis. Within a Classification,
amounts will be withdrawn starting with the
Term still in effect with the oldest Deposit
Period.
(d) Any amount withdrawn from the Fixed Plus
Account will be subject to the limitations in
3.15, 3.16 and 3.17.
3.15 Partial Withdrawal The amount eligible for partial withdrawal is 20% of
from the Fixed Plus the Current Value of the amount held in the Fixed
Account: Plus Account on the day Aetna's Home Office receives
a written request, reduced by any previous Fund
Transfer, partial withdrawal or amounts taken as a
loan or used to purchase Annuity benefits during
the prior 12 months. Aetna reserves the right to
include amounts paid under ECO, LEO and SWO for
purposes of applying this 20% limit. However, SWO
and LEO are unavailable if a Fixed Plus Account
Transfer or withdrawal is requested within the
current 12 month Period.
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3.15 Partial Withdrawal The 20% limit applicable to partial withdrawals from
from the Fixed Plus the Fixed Plus Account will be waived under certain
Account (Cont'd): conditions and will apply when the partial
withdrawal is made on a pro rata basis from all
options used under the Participant's Individual
Account. (See Contract Schedule I).
3.16 Payment of Fixed Plus When Aetna receives a full withdrawal request, no
Account Full additional partial withdrawals or Fund Transfers
Withdrawal: from the Fixed Plus Account are permitted during the
payout period. If a full withdrawal is requested,
Aetna will pay any Current Value from the Fixed
Plus Account in five payments as follows:
(a) One-fifth of the Current Value on the day the
request is received in good order at Aetna's
Home Office, reduced by any amount from the
Fixed Plus Account that was transferred,
withdrawn or used for a loan or to purchase
Annuity benefits during the prior 12 months;
(b) One-fourth of the remaining Current Value 12
months later;
(c) One-third of the remaining Current Value 12
months later;
(d) One-half of the remaining Current Value 12
months later; and
(e) The balance of the Current Value 12 months
later.
The Fixed Plus Account full withdrawal payment
provision will be waived when a withdrawal is:
(a) Due to the Participant's death before Annuity
benefit payments begin;
(b) Used to purchase Annuity benefits;
(c) When the amount in the Fixed Plus Account is
$3,500 or less and no amount has been
withdrawn, transferred, taken as a loan or
used to purchase Annuity benefits during the
previous 12 months;
(d) Due to hardship when the following conditions
are met:
(1) the withdrawal is due to an employer
certified hardship;
(2) the amount withdrawn is paid directly to
the Participant; and
(3) the amount paid for all partial and full
withdrawals due to hardship during the
previous 12-month period does not exceed
10% of the average Current Value for all
Individual Accounts during the same period
of time; or
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3.16 Payment of Fixed Plus (e) Due to separation from service provided that:
Account Full (1) the withdrawal is due to the Participant's
Withdrawal (Cont'd): separation from service with the employer;
(2) the employer certifies that the Participant
has separated from service;
(3) the amount withdrawn is paid directly to
the Participant; and
(4) the amount paid for all partial and full
withdrawals due to separation from service
during the previous 12-month period does
not exceed 20% of the average Current
Value of all Individual Accounts during
that same period of time.
Any full withdrawal from the Fixed Plus Account may
be cancelled at any time before the end of the
payment period.
3.17 Payment of Minimum If the Individual Accounts Current Value is less
Current Value: than $3,500, and no Contributions have been received
for three (3) years, Aetna may close the Account
and pay the Current Value as directed by the
Contract Holder in one lump sum.
3.18 Amount Payable at Aetna will pay any portion of the Individual
Death (Before Annuity Account(s) Current Value, to the Beneficiary when:
Payments Start):
(a) The Participant dies before Annuity payments
start; and
(b) The certified copy of the death certificate is
received by Aetna; and
(c) A completed and signed election form is
submitted to the Home Office. The form must
include Contract Holder certification that the
Beneficiary is eligible for a distribution
under the terms of the Plan.
A guaranteed death benefit is available if the
Beneficiary requests either a lump-sum payment or
an Annuity option within six months of the
Participant's death.
For each Individual Account, the death benefit is
guaranteed to be the greater of:
(a) The Current Value of the Individual Account
plus aggregate positive MVA, as applicable, on
the date the notice of death and the request
for payment are received in good order at
Aetna's Home Office; or
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3.18 Amount Payable at (b) The total of Net Contribution(s) made to the
Death (Before Annuity Individual Account minus the total of all
Payments Start) partial withdrawals, annuitizations made from
(Cont'd): the Individual Account and any amount allocated
from the Individual Account to the Loan
Account.
If the Participant dies before distributions begin
in accordance with the provisions of Code Section
401(a)(9), the entire value of the Account must be
distributed by December 31 of the calendar year
containing the fifth anniversary of the date of the
Participant's death. Alternatively, if the
Participant has a designated Beneficiary, payments
may be made over the life of the Beneficiary or
over a period not extending beyond the life
expectancy of the Beneficiary provided distribution
to a non-spouse Beneficiary begins by December 31
of the calendar year following the calendar year of
the Participant's death. For a spousal Beneficiary,
such payments must begin by the later of December
31 of the calendar year of the Participant's death
or December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant dies after distributions begin
in accordance with the provisions of Code Section
401(a)(9), payments to the Beneficiary must be made
at least as rapidly as the method of distribution
in effect at the time of the Participant's death.
If the minimum distribution requirements have been
met by partial withdrawals based on the
participant's life expectancy or the joint life
expectancies of the Participant and Beneficiary,
death benefit payments to the Beneficiary must also
satisfy any additional requirements of Code Section
401(a)(9).
Amounts in the GA Account will be payable as
described in Section 3.07(d).
3.19 Reinstatement: All or a portion of the proceeds of a full
withdrawal of an Individual Account may be
reinvested within 30 days after the surrender if
allowed by law. Any Market Value Adjustment
deducted from GA Account withdrawals will not be
included in the reinstatement. Amounts will be
reinstated among the Fixed Plus Account, GA Account,
and the Fund(s) in the same proportion as they were
at the time of withdrawal. Any amount reinstated to
the GA Account will be credited to the current
Deposit Period. The number of record units
reinstated will be based on the record unit value(s)
next computed after receipt at Aetna's Home Office
of the reinstatement request and the amount to be
reinvested.
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3.19 Reinstatement Amounts attributable to an Aetna GET Fund series
(Cont'd): will be reinstated to the current Offering Period of
the Aetna GET Fund series. If no Aetna GET Fund
series Offering Period is available, amounts
withdrawn from the Aetna GET Fund series will be
allocated, pro rata, among all other investment
options in which the Individual Account is
invested.
Any Individual Account(s) closed because the
Current Value was less than $3,500 may not be
reinstated (see 3.17).
A Reinstatement is permitted only once per
Individual Account.
IV. NON-ANNUITY DISTRIBUTION OPTIONS
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4.01 Distribution Options: Distribution Options: ECO, LEO and SWO are
distribution options under which a portion of the
Individual Account Current Value will automatically
be surrendered and distributed each calendar year.
The distributed amount is withdrawn pro rata from
each investment option under the Individual Account.
The Contract Holder must certify in writing that
distributions are being made in accordance with the
Plan.
Market Value Adjustment: A Market Value Adjustment
will not be applied to any portion of the Current
Value which is paid under ECO.
Minimum Current Value: At its discretion, Aetna may
require a minimum initial Current Value for
election of a distribution option. If after
election of the option the Current Value is
insufficient to make a scheduled payment, Aetna
will distribute the entire Individual Account
balance.
Reservations of Rights: Aetna reserves the right to
change the terms of ECO, LEO or SWO for future
elections, to discontinue the availability of these
options after proper notification, or to make other
distribution options available as allowed by the
state in which this Contract is delivered. Aetna
also reserves the right to allow ECO and LEO
payments to be made more frequently than annually.
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4.01 Distribution Options Election and Revocation: The Participant or
(Cont'd): Beneficiary may elect a distribution option by
submitting a completed and signed election form to
Aetna's Home Office. However, the Contract Holder
must certify in writing that the distribution
option is in accordance with the terms of the Plan.
If the Individual Account is subject to ERISA, the
Contract Holder must certify in writing that the
waiver and spousal consent requirements of Code
Section 417 have been satisfied.
Once elected, the Participant or Beneficiary may
revoke the option by submitting a written request
to Aetna's Home Office. Any revocation will apply
only to amounts not yet paid.
Availability of ECO, LEO and SWO: The Participant
may elect any one of the following three
distribution options, if they are available as an
option under the Contract (see Contract Schedule I)
and if the Contract Holder certifies that the
election is in accordance with the terms of the
Plan. The Beneficiary may elect either ECO or SWO,
if they are available as an option under the
Contract (see Contract Schedule I) and if the
Contract Holder certifies that the election is in
accordance with the terms of the Plan.
An individual who has revoked ECO, LEO or SWO may
not subsequently elect that option again, nor may
the individual elect another withdrawal option
unless permitted under the Code minimum
distribution rules.
LEO and SWO are not available if there is an
outstanding loan under the Individual Account, or
if a Fixed Plus Account transfer or surrender has
occurred within the prior 12 month period. Payments
will cease if a loan is granted while LEO or SWO is
in effect.
If LEO is in effect and the Participant dies, or if
ECO or SWO is in effect and the Participant dies
before the required beginning date for minimum
distributions, payments will cease. A Beneficiary
may elect ECO or SWO provided the election
satisfies the Code minimum distribution rules.
If ECO or SWO is in effect and the Participant dies
after the required beginning date for minimum
distributions, payments will continue as permitted
under the Code minimum distribution rules, unless
revoked.
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4.02 Estate Conservation Amount of Distribution: Each year that ECO is in
Option (ECO): effect, Aetna will calculate and distribute an
amount equal to the minimum required distribution
under the Code. The annual distribution will be
determined by dividing the Individual Account
Current Value as of December 31 of the year prior
to the year for which payment is to be made by a
life expectancy factor based on expected return
multiples in Table V and VI of Section 1.72-9 of
the Income Tax Regulations.
The Participant may elect either the single or
joint life expectancy factor. If the joint life
expectancy factor is elected, the second life must
be the Beneficiary under the Plan. If the
Beneficiary selects ECO after the Participant's
death, only a single life expectancy factor may be
used. The life expectancy or joint life expectancy
factor will be recalculated each year in accordance
with the rules under Code Section 401(a)(9).
Date of Distribution: The Participant shall specify
the initial distribution date. The earliest date is
the first day of the calendar year in which the
Participant attains age 70 1/2 or, for plans of
government or church employers, the date the
Participant retires, whichever is later. If a
Beneficiary elects ECO, the earliest date is the
date of the Participant's death. Subsequent
distribution will be made annually on such date as
Aetna may designate or allow.
4.03 Life Expectancy Amount of Distribution: Each year that LEO is in
Option (LEO): effect, Aetna will calculate and distribute an
amount determined by dividing the Individual
Account Current Value as of December 31 of the year
prior to the year for which payment is to be made
by a life expectancy factor based on expected
return multiples in Table V and VI of Section
1.72-9 of the Income Tax Regulations. Payments will
be made each year until the year the Participant
attains age 70 1/2, or until the Participant dies,
if earlier.
The Participant may elect either the single or
joint life expectancy factor. If the joint life
expectancy factor is elected, the second life must
be the Beneficiary under the Plan. The life
expectancy or joint life expectancy factor will be
recalculated each year in accordance with the rules
under Code Section 401(a)(9), or reduced by one for
each calendar year which has elapsed since the life
expectancy was first calculated, as elected by the
Participant
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4.03 Life Expectancy Date of Distribution: The Participant shall specify
Option (LEO) the initial distribution date. The earliest date is
(Cont'd): the date on which the Participant separates from
service with the employer. Subsequent distribution
will be made annually on such date as Aetna may
designate or allow.
4.04 Systematic Withdrawal Amount of Distribution: The Participant may elect
Option (SWO): one of the three payment methods described below.
(1) Specified Payment: Payments of a designated
dollar amount. The annual amount may not be
greater than the percentage of the Current
Value at time of election as shown in Contract
Schedule I. This annual dollar amount will
remain constant, unless a higher amount is
required under Code minimum distribution
rules. At its discretion, Aetna may require a
minimum initial payment amount; or
(2) Specified Period: Payments which are made over
a period of time which must be at least the
minimum number of years shown in Contract
Schedule I. The annual amount paid each year
is calculated by dividing the Current Value as
of December 31 of the prior year by the number
of payment years remaining; or
(3) Specified Percentage: Payment of a designated
percentage which cannot be greater than the
percentage of the Current Value at the time of
election as shown in Contract Schedule I. The
percentage may be changed by written request.
Aetna reserves the right to limit the number
of times the percentage may be changed. The
annual amount is calculated by multiplying the
Current Value as of December 31 of the year
prior to the payment by the designated
percentage. Payments will be made each year
until the year the Participant attains age 70
1/2.
Minimum Distribution Requirements: If distributions
are made under SWO after payments are required to
begin under the minimum distribution requirements
of Code Section 401(a)(9), the amount distributed
in any year will be increased if required under the
Code minimum distribution rules.
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4.04 Systematic Withdrawal For this purpose, the minimum required distribution
Option (SWO) will be determined each year by dividing the
(Cont'd): Individual Account Current Value as of December 31
of the year prior to the year for which payment is
to be made by a life expectancy factor, which for
the initial distribution year shall be based on
either the single life expectancy factor or joint
life expectancy factor in Table V or VI of Section
1.72.9 of the Income Tax Regulations, as elected by
the Participant. If the joint life expectancy
factor is elected, the second life must be the
Beneficiary under the Plan. If a Beneficiary elects
SWO after the Participant's death, only a single
life expectancy factor may be used. Minimum
distributions for any subsequent year will be
calculated based on such life expectancy factor
reduced by one for each calendar year which has
elapsed since the life expectancy was first
calculated. If the specified period method is
elected, the maximum specified period will be
limited by the single life expectancy factor or
joint life expectancy factor in Table V or VI of
Section 1.72-9 of the Income Tax Regulations, as
elected by the Participant. If elected by a
Beneficiary, only a single life expectancy may be
used.
Date of Distribution: The Participant shall specify
the initial distribution date. The earliest date is
the date on which the Participant attains age 59
1/2 or age 55, if separated from service with the
employer at or after age 55. If a Beneficiary
elects SWO, the earliest date is the date of the
Participant's death.
SWO payments will be made on a monthly, quarterly,
semi-annual or annual basis, as elected by the
Participant or Beneficiary. If SWO payments are
made more frequently than annually, the designated
annual amount is divided by the number of payments
due each calendar year. Subsequent distribution
will be made periodically on such date as Aetna may
designate or allow.
V. ANNUITY PROVISIONS
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5.01 General Provisions: (a) Upon certification by the Contract Holder of
the Participant's total disability, acceptance
of retirement or separation from service, the
Participant has the right to elect an Annuity
option. The Participant must transfer any
portion of the Current Value held in an Aetna
GET Fund series to another investment option
before an Annuity option is elected.
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5.01 General Provisions (b) The Participant may elect an Annuity option by
(Cont'd): telling Aetna to pay all or any portion of the
Individual Account(s) Current Value (minus any
applicable premium tax if not previously
deducted) as a premium for an Annuity under
Option 1, 2, or 3 (See 5.02).
(c) A completed and signed election form must be
submitted to the Home Office. The form must
include Contract Holder certification that the
Participant is eligible for a distribution
under the terms of the Plan and that the
Annuity option chosen is permitted under the
terms of the Plan.
(d) Any election of an Annuity option must comply
with the minimum distribution requirements of
Code Section 401(a)(9), including the
incidental death benefit rule, and the
regulations thereunder. This restriction does
not apply if Option 3 is chosen and the second
Annuitant is the spouse of the Participant.
(e) Once elected, an Annuity option may not be
revoked, except for Option 1 when elected on a
variable basis.
5.02 Annuity Options: Option 1 - Payments for a Stated Period of Time - An
Annuity will be paid for the number of years chosen
(See Contract Schedule II). If payments for this
option are made under a variable Annuity, the
present value of any remaining payments may be
withdrawn at any time.
Option 2 - Life Income based on the life of the
Annuitant. Payments will be made until the death of
the Annuitant. When this option is chosen, a choice
of the following must be made:
(a) Payments cease at the death of the Annuitant;
(b) Payments may be guaranteed for 5-30 years; or
(c) Payments may be guaranteed for the amount
applied to the Annuity option. If the
Annuitant dies prior to the payment of the
amount applied to the Annuity option (less any
premium tax), any remaining balance will be
paid in one sum to the Beneficiary. This
option is only available on a fixed basis.
Option 3 - Life Income based upon the lives of two
Annuitants. An Annuity will be paid during the
lives of the Annuitant and a second Annuitant.
Payments will continue until both Annuitants have
died. When this option is chosen, a choice of the
following must be made:
33
<PAGE>
5.02 Annuity Options (a) 100% of the payment to continue after the first
(Cont'd): death;
(b) 66 2/3% of the payment to continue after the
first death;
(c) 50% of the payment to continue after the first
death;
(d) 100% of the payment to continue after the first
death with a guarantee of 5-30 years;
(e) 100% of the payment to continue at the death
of the second Annuitant and 50% of the payment
to continue at the death of the Annuitant; or
(f) 100% of the payment to continue after the
first death. Payments are guaranteed for the
amount applied to the Annuity option. If both
Annuitants die prior to the total payment of
the amount applied to the Annuity option (less
any premium tax), any remaining balance will
be paid in one sum to the Beneficiary. This
option is only available on a fixed basis.
If a fixed Annuity option is chosen under Option 1,
Option 2 (a) or (b) or Option 3 (a) or (d), then
the Participant may elect a payment increase of 1,
2 or 3%, compounded annually. An election of such a
payment increase will result in a adjustment of the
policy guarantees by an actuarially equivalent
payment factor.
Other Options - Aetna may make other options
available as allowed by the laws of the state in
which this Contract is delivered.
5.03 Payments: (a) Upon written direction from the Contract
Holder, Aetna will pay Annuity benefits
directly to the Participant and as payor, Aetna
will be responsible for withholding any
applicable federal or state taxes and reporting
such sums and filing any related forms with the
Internal Revenue Service and/or to any
applicable state taxing authorities.
(b) Generally, the first Annuity payment must be
made by April 1 of the calendar year following
the year in which the Participant turns age 70
1/2, or in the case of a governmental or
church plan, the year in which the Participant
attains age 70 1/2 or retires, whichever
occurs later. For a Participant who attained
age 70 1/2 before January 1, 1988, the
distribution of such benefits must be made or
must begin not later than April 1 of the
calendar year following the calendar year in
which the Participant retires.
34
<PAGE>
5.03 Payments (Cont'd): (c) Payments will be made on a monthly basis unless
the Participant requests otherwise. If
payments are made on a quarterly, semi-annual
or annual basis, Aetna will calculate an
actuarially equivalent payment factor.
(d) No choice of any Annuity option may be made if
the first payment would be less than $50 per
month or if the total payments in a year would
be less than $250.
(e) For purposes of calculating the guaranteed
first payment of a variable Annuity or the
payments for a fixed Annuity, the Annuitants
and second Annuitants adjusted age will be
used.
The Annuitants and second Annuitants adjusted
age is his or her age as of the birthday
closest to the Annuity commencement date
reduced by one year for Annuity commencement
dates occurring during the period of time from
July 1, 1992 through December 31, 1999. The
Annuitants and second Annuitants age will be
reduced by two years for Annuity commencement
dates occurring during the period of time from
January 1, 2000 through December 31, 2009. The
Annuitants and second Annuitants age will be
reduced by one additional year for Annuity
commencement dates occurring in each
succeeding decade.
(f) If a Fixed Annuity under Option 1, 2 or 3 is
elected, Aetna will use the applicable current
settlement option rates if these will provide
higher fixed Annuity payments.
5.04 Investment Option: (a) When an Annuity option is chosen the
Participant must designate whether the Annuity
will be fixed or variable and whether the
underlying investment will be:
(1) The General Account;
(2) One or more of the available Fund(s) ; or
(3) A combination of (1) and (2).
If a fixed Annuity is chosen, the Annuity purchase
rate for the option chosen reflects at least the
Minimum Guaranteed Interest Rate (See Contract
Schedule II), but may reflect a higher interest
rate.
35
<PAGE>
5.04 Investment Option If a variable Annuity is chosen, the initial Annuity
(Cont'd): payment for the option chosen reflects the Assumed
Annual Net Return Rate elected (See Contract
Schedule II). The Assumed Annual Net Return Rate is
the interest rate used to determine the amount of
the first Annuity payment under a variable Annuity.
The Separate Account must earn this rate plus
enough to cover the mortality and expense risks
charges (which may include profit) (at the annual
rate shown on Contract Schedule II) and a daily
administrative charge if future variable Annuity
payments are to remain level.
5.05 Fund Annuity Units: The number of Fund(s) annuity units is based on the
amount of the first variable Annuity payment which
is equal to:
(a) The portion of the Current Value (minus any
premium tax) applied to pay a variable
Annuity; divided by (b) 1,000; multiplied by
(c) the payment rate for the option chosen.
Such amount, or portion, of the variable payment
will be divided by the appropriate Fund(s) Annuity
unit value (See 5.06) on the tenth Valuation Date
before the due date of the first payment to
determine the number of each Fund Annuity units.
The number of each Fund Annuity units remains
fixed. Each future payment is equal to the sum of
the products of each Fund Annuity unit value
multiplied by the appropriate number of Units. The
Fund Annuity unit value on the tenth Valuation Date
prior to the due date of the payment is used.
5.06 Fund Annuity Unit For any Valuation Date, a Fund(s) Annuity unit value
Value: is equal to:
(a) The value for the previous Valuation Date;
multiplied by
(b) The Annuity net return factor(s) (See 5.07) for
the Period; multiplied by
(c) A factor to reflect the assumed annual net
return rate. (See Contract Schedule II).
The dollar value of a Fund Annuity unit values and
Annuity payments may go up or down due to
investment gain or loss. Payments shall not be
changed due to changes in the mortality or expense
results or administrative charges.
5.07 Fund Annuity Net The Annuity net return factor(s) are used to compute
Return Factor: all Separate Account Annuity payments for any Fund.
The Annuity net return factor(s) for each Fund is
equal to 1.0000000 plus the net return rate.
36
<PAGE>
5.07 Fund Annuity Net The net return rate is equal to:
Return Factor
(Cont'd):
(a) The value of the shares of the Fund held by the
Separate Account at the end of a Valuation
Period, minus
(b) The value of the shares of the Fund held by the
Separate Account at the start of the Valuation
Period, plus or minus
(c) Taxes (or reserves for taxes) on the Separate
Account (if any); divided by
(d) The total value of the Fund(s) record units
and Fund(s) Annuity units of the Separate
Account at the start of the Valuation Period;
minus
(e) A daily charge for Annuity mortality and
expense risks, which may include a profit, (at
the annual rate as shown on Contract Schedule
II), and a daily administrative charge.
A net return rate may be more or less than 0%. The
value of a share of the Fund is equal to the net
assets of the Fund divided by the number of shares
outstanding.
5.08 Fund Transfers During At the request of the Contract Holder or the
the Annuity Period: Participant if the Contract Holder has directed
Aetna to accept such a request from the
Participant, all or any portion of the Current
Value may be transferred from any variable Fund to
any other allowable Fund. Aetna reserves the right
to allow no more than four Funds to be selected at
any one time. Fund Transfers will be processed as
of the Valuation Date next following when a
transfer request is received in good order at
Aetna's Home Office. The maximum number of
allowable transfers (during the Annuity period) in
a calendar year is shown on Contract Schedule II.
Fund Transfer requests must be expressed as a
percentage of each Funds allocation to the Annuity
payment. Aetna may establish a minimum transfer
amount.
5.09 Death Benefit: Upon the death of the Annuitant(s), any remaining
guaranteed payments will continue to the Beneficiary
unless the Beneficiary elects to receive the present
value of any remaining guaranteed payments in a lump
sum. Such payments will be paid at least as rapidly
as under the method of distribution then in effect.
If the Beneficiary dies while receiving payments,
the present value of any remaining guaranteed
payments will be paid in one sum to the
Beneficiary's estate.
The interest rate used to determine the first
Annuity payment will be used to calculate the
present value. The present value will be determined
as of the Valuation Period in which proof of death
acceptable to Aetna and a request for payment is
received at Aetna's Home Office.
37
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- --------------------------------------------------------------------------------
38
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- --------------------------------------------------------------------------------
39
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20 Cash
Annuitant Refund
- --------------------------------------------------------------------------------
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89
51 4.12 4.11 4.09 4.05 3.99 3.94
52 4.19 4.19 4.16 4.11 4.04 4.00
53 4.27 4.26 4.23 4.18 4.10 4.06
54 4.35 4.34 4.31 4.25 4.16 4.12
55 4.44 4.42 4.39 4.32 4.22 4.19
56 4.53 4.51 4.47 4.40 4.29 4.26
57 4.62 4.61 4.56 4.48 4.35 4.33
58 4.72 4.71 4.65 4.56 4.42 4.41
59 4.83 4.81 4.75 4.64 4.49 4.49
60 4.95 4.93 4.86 4.73 4.55 4.57
61 5.07 5.05 4.97 4.83 4.62 4.66
62 5.20 5.17 5.08 4.92 4.69 4.76
63 5.34 5.31 5.20 5.02 4.76 4.85
64 5.49 5.45 5.33 5.12 4.83 4.96
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
67 6.01 5.94 5.75 5.44 5.02 5.30
68 6.20 6.13 5.91 5.54 5.08 5.42
69 6.41 6.33 6.07 5.65 5.14 5.56
70 6.64 6.54 6.23 5.76 5.19 5.70
71 6.88 6.76 6.41 5.86 5.24 5.84
72 7.14 7.00 6.59 5.97 5.28 6.00
73 7.43 7.26 6.77 6.06 5.32 6.16
74 7.73 7.53 6.96 6.16 5.35 6.33
75 8.06 7.82 7.14 6.25 5.38 6.51
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
40
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- --------------------------------------------------------------------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
41
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- --------------------------------------------------------------------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 5.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
42
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Adjusted Ages
- ------------------------ Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e Option 3f
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69
55 55 3.88 4.25 4.47 3.87 4.14 3.87
55 60 3.99 4.44 4.71 3.98 4.20 3.98
60 55 3.99 4.44 4.71 3.98 4.42 3.98
60 60 4.24 4.71 4.99 4.23 4.57 4.23
60 65 4.38 4.97 5.32 4.38 4.65 4.38
65 60 4.38 4.97 5.32 4.38 4.93 4.38
65 65 4.72 5.33 5.70 4.71 5.14 4.72
65 70 4.93 5.68 6.15 4.91 5.27 4.91
70 65 4.93 5.68 6.15 4.91 5.66 4.91
70 70 5.40 6.21 6.70 5.36 5.96 5.38
70 75 5.69 6.68 7.32 5.62 6.13 5.66
75 70 5.69 6.68 7.32 5.62 6.67 5.66
75 75 6.37 7.45 8.15 6.23 7.12 6.33
75 80 6.78 8.11 8.99 6.54 7.36 6.71
- ---------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
43
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Adjusted Ages
- ------------------------ Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e
- --------------------------------------------------------------------------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
44
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Adjusted Ages
- ------------------------ Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e
- --------------------------------------------------------------------------------
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
45
<PAGE>
- --------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
Certificate of Group Annuity Coverage
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP ANNUITY CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED
AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN
INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA
DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
GTCC-96(ORP)
99-B.4.36
Variable Annuity Contract
---------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
You may call the toll-free number shown above to get
answers to your questions or help to resolve a complaint.
Aetna Life Insurance and Annuity Company, herein called
Aetna, agrees to pay the benefits stated in this
Contract.
Specifications
- ------------------------------------------------------------------------------
Plan
Higher Education
- ------------------------------------------------------------------------------
Type of Plan
Retirement Plan for Higher Education
- ------------------------------------------------------------------------------
Contract Holder
Specimen
- ------------------------------------------------------------------------------
Contract No.
Specimen
- ------------------------------------------------------------------------------
Effective Date
Specimen
- ------------------------------------------------------------------------------
This Contract is Delivered in Anystate and is Subject to the Laws of
that Jurisdiction
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND V.
Right to Cancel
- ------------------------------------------------------------------------------
The Contract Holder may cancel this Contract within 10 days of receiving it by
returning this Contract along with a written notice to Aetna at the above
address or to the agent from whom it was purchased. Within 7 days after it
receives the notice of cancellation and this Contract at its Home Office, Aetna
will return the entire consideration paid plus any increase or minus any
decrease in the current value of any funds allocated to the Separate Account.
Signed at the Home Office on the Effective Date.
/s/ Dan Kearney /s/ Susan E. Schechter
President Secretary
Group Combination Annuity Contract
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP ANNUITY CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED
AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET
G-CDA-96(ORP)
<PAGE>
VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN
EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT
FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
2
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed There is a guaranteed interest rate for Contribution(s)
Interest Rate held in the Fixed Plus Account and the GA Account. (See
Contract Schedule I.)
- --------------------------------------------------------------------------------
Deductions from There will be deductions for mortality and expense
the Separate risks. There also may be deductions for administrative
Account charges and asset based sales charges. (See 3.05 and
5.06.)
- --------------------------------------------------------------------------------
Deduction from Contribution(s) are subject to a deduction for premium
Contribution(s) taxes, if any. (See 3.01.)
This Contract is a legal contract. This Contract and any attached document and
subsequent endorsements constitutes the entire legal relationship between Aetna
and the Contract Holder.
This Contract sets forth, in detail, all of the rights and obligations of both
you and Aetna. IT IS, THEREFORE, IMPORTANT THAT YOU READ THIS CONTRACT
CAREFULLY.
3
<PAGE>
Contract Schedule I
Accumulation Period
Separate Account
- --------------------------------------------------------------------------------
Separate Account: Variable Annuity Account C
Charges to Separate A daily charge is deducted from any portion of the
Account: Current Value allocated to the Separate Account. The
daily charge is at an annual effective rate of
[1.25%] for Annuity mortality and expense risks,
[0.15%] for asset based sales charge and a daily
administrative charge which will not exceed
[0.25%] on an annual basis.
The daily charge for the Aetna GET Fund Guarantee
will be at an annual rate of [0.25%].
Fixed Plus Account [Is Available]
- --------------------------------------------------------------------------------
Minimum Guaranteed [3%] (effective annual rate of return).
Interest Rate:
Partial Withdrawal: The [20%] limit applicable to partial withdrawal
from the Fixed Plus Account will be waived when the
withdrawal is:
(a) due to the Participant's death, (and made
within [six (6)] months of the Participant's
date of death), before Annuity payments begin.
This partial withdrawal may only be exercised
once; or
(b) used to purchase Annuity benefits.
Guaranteed Accumulation Account (GA Account) [Is Available]
- --------------------------------------------------------------------------------
Minimum Guaranteed [3%] (effective annual rate of return).
Interest Rate:
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Contract Schedule I
Accumulation Period (Cont'd)
Separate Account, Fixed Plus Account and GA Account
- --------------------------------------------------------------------------------
Loans: [Are Available]
Loan Interest Rate: (a) Plans subject to Title I of the Employee
Retirement Income Security Act of 1974
(ERISA): A Loan Interest Rate is set on the
first business day of each month. For each
loan, the initial Loan Interest Rate is equal
to the Monthly Average Corporates for the
calendar month beginning two months before the
calendar month in which the Loan Effective
Date occurs. The initial Loan Interest Rate is
effective for a period of not less than three
months and not more than one year. The period
is specified in the loan agreement. For each
period, the Loan Interest Rate is adjusted if
the new rate is at least [0.5%] higher or
lower than the previous rate. The Participant
will receive reasonable notification of any
change to the Loan Interest Rate.
(b) Plans not subject to ERISA: [6%] on an annual
basis.
Systematic Withdrawal [Is Available]
Option (SWO):
The Specified Payment may not be greater than [20%]
of the Individual Account's Current Value at the
time of election.
The Specified Period may not be less than [five
years].
The Specified Percentage may not be greater than
[20%].
Estate Conservation Option [Is Available]
(ECO):
Life Expectancy Option [Is Available]
(LEO):
See Section 1. - DEFINITIONS for explanations.
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Contract Schedule II
Annuity Period
Separate Account
- --------------------------------------------------------------------------------
Fund Transfers: Maximum number of allowable transfers in the Annuity
Period is [4].
Charges to Separate A daily charge at an annual effective rate of [1.25%]
Account: for Annuity mortality and expense risks. The
administrative charge is established upon election of
an Annuity option. This charge will not exceed [0.25%].
Variable Annuity If a Variable Annuity is chosen, an assumed annual net
Assumed Annual Net return rate of [5.0%] may be elected. If [5.0%] is not
Return Rate: elected, Aetna will use an assumed annual net return
rate of [3.5%].
The assumed annual net return rate factor for [3.5%]
per year is [0.9999058].
The assumed annual net return rate factor for [5.0%]
per year is [0.9998663].
If the portion of a Variable Annuity payment for any
Fund is not to decrease, the Annuity return factor
under the Separate Account for that Fund must be:
(a) [4.75%] on an annual basis plus an annual return
of up to [0.25%] to offset the administrative
charge set at the time Annuity payments commence
if an assumed annual net return rate of [3.5%] is
chosen; or
(b) [6.25%] on an annual basis plus an annual return
of up to [0.25%] to offset the administrative
charge set at the time Annuity payments commence,
if an assumed annual net return rate of [5%] is
chosen.
Annuity Option: Under the option "Payments for a Stated Period of
Time":
For amounts invested in the GA Account or one or more
of the Fund(s), the number of years must be at least
[five (5)] and not more than [thirty (30)] and the
Annuity may be a Fixed or Variable Annuity.
For amounts invested in the Fixed Plus Account, the
number of years must be at least [five (5)] and not
more than [thirty (30)] and the Annuity must be a Fixed
Annuity.
Fixed Annuity
- --------------------------------------------------------------------------------
Minimum Guaranteed [3%] (effective annual rate of return).
Interest Rate:
See Section 1. - DEFINITIONS for explanations.
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TABLE OF CONTENTS
I. DEFINITIONS
- ------------------------------------------------------------------------------
Page
1.01 Accumulation Period...................................................6
1.02 Adjusted Current Value................................................6
1.03 Aetna GET Fund Offering Period........................................6
1.04 Aetna GET Fund Guaranteed Period......................................6
1.05 Aetna GET Fund Maturity Date..........................................6
1.06 Annuitant.............................................................6
1.07 Annuity...............................................................6
1.08 Beneficiary...........................................................7
1.09 Code..................................................................7
1.10 Contract Holder.......................................................7
1.11 Contribution..........................................................7
1.12 Current Value.........................................................7
1.13 Deposit Period........................................................7
1.14 Fixed Plus Account....................................................7
1.15 Fixed Plus Account Guaranteed Interest Rate...........................7
1.16 Fixed Annuity.........................................................7
1.17 Fund(s)...............................................................7
1.18 Fund Transfer(s)......................................................7
1.19 General Account.......................................................8
1.20 Guaranteed Accumulation Account (GA Account)..........................8
1.21 GA Account Guaranteed Interest Rate...................................8
1.22 Guaranteed Term.......................................................8
1.23 Individual Account....................................................8
1.24 Loan Account..........................................................9
1.25 Loan Effective Date...................................................9
1.26 Loan Interest Rate....................................................9
1.27 Market Value Adjustment (MVA).........................................9
1.28 Matured Term Value....................................................9
1.29 Matured Term Value Transfer...........................................9
1.30 Maturity Date.........................................................9
1.31 Monthly Average Corporates............................................9
1.32 Net Contribution......................................................9
1.33 Nonunitized Separate Account.........................................10
1.34 Participant..........................................................10
1.35 Plan.................................................................10
3
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Page
1.36 Reinvestment.........................................................10
1.37 Separate Account.....................................................10
1.38 Valuation Date.......................................................10
1.39 Valuation Period.....................................................10
1.40 Variable Annuity.....................................................11
II. GENERAL PROVISIONS
- ------------------------------------------------------------------------------
2.01 Change of Contract...................................................11
2.02 Change of Fund.......................................................11
2.03 Nonparticipating Contract............................................11
2.04 Payments.............................................................11
2.05 State Laws...........................................................12
2.06 Control of Contract..................................................12
2.07 Designation of Beneficiary...........................................13
2.08 Misstatements and Adjustments........................................13
2.09 Incontestability.....................................................13
2.10 Grace Period.........................................................13
2.11 Individual Certificates..............................................13
III. CONTRIBUTIONS, CURRENT VALUE, and WITHDRAWAL PROVISIONS
- ------------------------------------------------------------------------------
3.01 Net Contribution(s)..................................................13
3.02 Experience Credits...................................................13
3.03 Fund Record Units....................................................14
3.04 Fund Record Unit Value...............................................14
3.05 Fund Net Return Factors..............................................14
3.06 Market Value Adjustment..............................................15
3.07 Fund Transfer(s).....................................................16
3.08 Aetna GET Fund Offering Period.......................................17
3.09 Aetna GET Fund Guarantee.............................................18
3.10 Aetna GET Fund Maturity Date.........................................18
3.11 Loans................................................................18
3.12 Notice to the Participant............................................20
3.13 Manner and Timing of Distributions...................................21
3.14 Withdrawal...........................................................21
3.15 Partial Withdrawal from the Fixed Plus Account.......................22
3.16 Payment of Fixed Plus Account Full Withdrawal........................22
3.17 Payment of Minimum Current Value.....................................23
3.18 Amount Payable at Death (Before Annuity Payments Start)..............23
3.19 Reinstatement........................................................25
4
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IV. NON-ANNUITY DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
Page
4.01 Distribution Options.................................................25
4.02 Estate Conservation Option...........................................26
4.03 Life Expectancy Option...............................................27
4.04 Systematic Withdrawal Option.........................................27
V. ANNUITY PROVISIONS
- ------------------------------------------------------------------------------
5.01 General Provisions...................................................29
5.02 Annuity Options......................................................29
5.03 Payments.............................................................30
5.04 Investment Option....................................................31
5.05 Fund Annuity Units...................................................31
5.06 Fund Annuity Unit Value..............................................32
5.07 Fund Annuity Net Return Factor.......................................32
5.08 Fund Transfers During the Annuity Period.............................33
5.09 Death Benefit........................................................33
5
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I. DEFINITIONS
- --------------------------------------------------------------------------------
1.01 Accumulation Period: The period during which Net Contribution(s) are
applied to an Individual Account.
1.02 Adjusted Current The Current Value (See 1.12) of an Individual
Value: Account (See 1.23) plus or minus any applicable
aggregate GA Account Market Value Adjustment. (See
3.07).
1.03 Aetna GET Fund The period, usually from one to three months,
Offering Period: during which Participants may transfer or deposit
(Offering Period) amounts to an Aetna GET Fund series. Each Aetna GET
Fund series has a specified Offering Period.
Amounts transferred or deposited prior to the date
on which the Guaranteed Period begins are invested
in money market instruments.
Aetna reserves the right to state the minimum
amount a Participant may transfer or deposit to
each Offering Period. Aetna also reserves the right
to extend an Offering Period or accept Fund
transfers or deposits to an Aetna GET Fund series
during the series' Guaranteed Period.
1.04 Aetna GET Fund For each Aetna GET Fund series, the period for
Guaranteed Period: which the Aetna Get Fund Guarantee applies. The
(Guaranteed Period) Guaranteed Period ends on the Maturity Date.
1.05 Aetna GET Fund The date on which a series' Guaranteed Period ends
Maturity Date: and GET Fund Record Units for the series are
(Maturity Date) liquidated.
1.06 Annuitant: If an Annuity provides lifetime benefits, the
person whose life expectancy determines the amount
and/or duration of Annuity benefit payments.
1.07 Annuity: Payment of an income under the Annuity Provisions
of Section V:
(a) For the life of one or two persons;
(b) For a stated period; or
(c) For some combination of (a) and (b).
1.08 Beneficiaries: The person(s) named to receive any benefits which
remain under the Contract after the Participant's
death. Participant(s) designate a Beneficiary for
their Individual Account(s). (See 2.07)
1.09 Code: The Internal Revenue Code of 1986, as amended.
1.10 Contract Holder: The entity, named on the cover of this Contract, to
which the Contract is issued.
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1.11 Contribution: A payment received at Aetna's Home Office and
allocated to this Contract.
1.12 Current Value: For an Individual Account (See 1.23), the Current
Value is the total of:
(a) The amount, if any, in the Fixed Plus
Account, with interest earned to date;
(b) The amount, if any, in the GA Account, with
interest earned to date; and
(c) The value of all Fund record units (See
3.03), if any, as of the most recent
Valuation Period.
1.13 Deposit Period: A calendar month, a calendar quarter, or any other
period of time specified by Aetna during which Net
Contribution(s), Fund Transfers and Reinvestments
are accepted into the GA Account for one or more
Guaranteed Terms.
1.14 Fixed Plus Account: If offered as an investment option under the
Contract (see Contract Schedule I) the Fixed Plus
Account is an accumulation option with a guaranteed
minimum interest rate. Aetna may credit a higher
rate which is not guaranteed. The portion that may
be withdrawn or transferred in a 12 month period is
restricted (See 3.07, 3.15 and 3.16).
1.15 Fixed Plus Account If the Fixed Plus Account is an investment option
Guaranteed Interest under the Plan (see Contract Schedule I) then Aetna
Rate: will add interest at an annual rate no less than
that shown on Contract Schedule I on any Net
Contribution(s) to the Fixed Plus Account. Aetna may
add interest at a higher rate determined by its
Board of Directors.
1.16 Fixed Annuity: An Annuity with payments that do not vary in amount.
1.17 Fund(s): The open-end registered management investment
companies whose shares are purchased by the Separate
Account to fund the benefits provided by the
Contract. Each Aetna GET Fund series is a separate
Fund.
1.18 Fund Transfers: The movement of invested amounts among the available
Fund(s); the Fixed Plus Account (if available) and
the GA Account (if available).
1.19 General Account: The account holding the assets of Aetna, other than
those assets held in Aetna's Separate Account(s) and
Nonunitized Separate Account(s).
1.20 Guaranteed If offered as an investment option under the
Accumulation Account Contract (see Contract Schedule I) the Guaranteed
(GA Account): Accumulation Account (GA Account) is an accumulation
option where Aetna guarantees stipulated rate(s) of
interest for a specified period of time. All assets
of Aetna, including amounts in the Nonunitized
Separate Account, are available to meet the
guarantees for the GA Account.
7
<PAGE>
1.21 GA Account If the GA Account is an investment option under the
Guaranteed Interest Contract (see Contract Schedule I) then Aetna will
Rate: declare the interest rate(s) applicable to a
specific Guaranteed Term at the start of the Deposit
Period for that Guaranteed Term. The rate(s) are
guaranteed by Aetna for that Deposit Period and the
ensuing Guaranteed Term. The Guaranteed Interest
Rates are annual effective yields. That is, interest
is credited at a rate that will produce the
Guaranteed Interest Rate over the period of a year.
No Guaranteed Interest Rate will ever be less than
the Minimum Guaranteed Interest Rate shown on
Contract Schedule I.
For Guaranteed Terms of one year or less, one
Guaranteed Interest Rate is credited for the full
Guaranteed Term. For longer Guaranteed Terms, an
initial Guaranteed Interest Rate is credited from
the date of deposit to the end of a specified period
within the Guaranteed Term. There may be different
Guaranteed Interest Rate(s) declared for subsequent
specified time intervals throughout the Guaranteed
Term.
1.22 Guaranteed Term: The period of time for which GA Account Guaranteed
Interest Rates are guaranteed on Net Contributions,
Fund Transfers and Reinvestments made into a current
Deposit Period for the GA Account. Such period
begins on the day following the close of the Deposit
Period and ends on the designated Maturity Date.
Guaranteed Terms are offered at Aetna's discretion
for various lengths of time ranging up to and
including ten years and are classified as follows:
Short-term. Three (3) or fewer years. Amounts
allocated to a short-term Term are held in the
General Account.
Long-term. More than three (3) years, but not more
than ten (10). Amounts allocated to a long-term Term
are held in the Nonunitized Separate Account.
During a Deposit Period, Aetna may make available
any number of Guaranteed Terms. The Participant may
allocate Net Contributions and Fund Transfers into
any or all of the available Guaranteed Terms.
1.23 Individual Account: This Contract is issued to the Contract Holder.
However, Aetna will maintain Individual Accounts for
each Participant to keep a record of Current Value
(See 1.12) and transactions. These may include:
(a) An Employer Account: This Individual Account
will be credited with employer Net
Contribution(s) and transferred amounts of
401(a) funds, attributable to employer
contributions; and
(b) An Employee Account: This Individual Account
will be credited with employee Net
Contribution(s) specifically amounts subject
to Code Section 414(H) and transferred
amounts of 401(a) funds, attributable to
414(H) contributions and any after tax
contributions.
8
<PAGE>
1.24 Loan Account: For each loan taken by a Participant, the loan
amount transferred from the investment options is
credited to the Loan Account.
1.25 Loan Effective Date: The date on which Aetna receives a loan agreement in
good order at its home office.
1.26 Loan Interest Rate: The interest rate Aetna charges on a loan. (see
Contract Schedule I).
1.27 Market Value An adjustment to the amount withdrawn or transferred
Adjustment (MVA): from an GA Account Guaranteed Term prior to the end
of that Guaranteed Term. The adjustment reflects the
change in the value of the investment due to changes
in interest rates since the date of deposit and is
computed using the formula given in 3.06. The
adjustment is expressed as a percentage of each
dollar being withdrawn.
1.28 Matured Term Value: The amount payable on a GA Account Guaranteed Term's
Maturity Date.
1.29 Matured Term Value During the calendar month following a GA Account
Transfer: Maturity Date, the Participant may notify Aetna's
Home Office in writing to transfer or withdraw all
or part of the Matured Term Value, plus interest at
the new Guaranteed Rate accrued thereon, from the GA
Account without an MVA. This provision only applies
to the first such written request received from the
Participant during this period for any Matured Term
Value.
1.30 Maturity Date: The last day of a GA Account Guaranteed Term.
1.31 Monthly Average Moody's Corporate Bond Yield Average-Monthly Average
Corporates: Corporates published by Moody's Investors Service,
or its successor, or a substantially similar average
as may be allowed by law or regulation.
1.32 Net Contribution: A Contribution less any applicable premium taxes.
1.33 Nonunitized Separate An account established by Aetna under Section
Account: 38a-433 of the Connecticut General Statutes that
holds assets for GA Account Terms (See 1.21) greater
than three years. The Contract Holder or Participant
does not participate in the investment gain or loss
from the assets held in the Nonunitized Separate
Account. Such gain or loss is borne entirely by
Aetna. Assets in this account may be charged with
liabilities arising out of any other Aetna business.
1.34 Participant: A person who participates in the Plan named on the
cover of this Contract.
1.35 Plan: The Plan named on the cover of this Contract and
established under Section 401(a) of the Code. The
Plan is not a part of the Contract and Aetna is not
bound by its terms.
9
<PAGE>
1.36 Reinvestment: Aetna will mail a notice to the Participant at least
18 calendar days before a Guaranteed Term's Maturity
Date. This notice will contain the Guaranteed Terms
available during the current Deposit Periods with
their Guaranteed Interest Rate(s) and projected
Matured Term Value. If no specific direction is
given by the Participant prior to the Maturity Date,
each Matured Term Value will be reinvested in the
current Deposit Period for a Guaranteed Term of the
same duration. If a Guaranteed Term of the same
duration is unavailable, each Matured Term Value
will automatically be reinvested in the current
Deposit Period for the next shortest Guaranteed Term
available in the same classification. If no shorter
Guaranteed Term is available, the next longer
Guaranteed Term will be used. Aetna will mail a
confirmation statement to the Participant, the next
business day after the Maturity Date. This notice
will state the Guaranteed Term and Guaranteed
Interest Rate(s) which will apply to the reinvested
Matured Term Value.
1.37 Separate Account: An account, established by Aetna under Section
38a-433 of the Connecticut General Statutes, that
buys and holds shares of the Fund(s) available under
this Contract. Income, gains or losses, realized or
unrealized are credited or charged to the Separate
Account without regard to other income, gains or
losses of Aetna. Aetna owns the assets held in the
Separate Account and is not a trustee of such
amounts. Amounts in the Separate Account are not
generally guaranteed and are held at market value.
The assets of the Separate Account, to the extent of
reserves and other contract liabilities of the
Account, cannot be charged with other Aetna
liabilities.
1.38 Valuation Date: The date and time on which a Fund annuity unit value
and a Fund record unit value are calculated.
Currently, this calculation will be determined at
the close of business of the New York Stock Exchange
on any normal business day, Monday through Friday,
that the New York Stock Exchange is open.
1.39 Valuation Period: The period of time commencing at the end of one
Valuation Date and ending at the end of the next
Valuation Date.
1.40 Variable Annuity: An Annuity with payments that vary with the net
investment results of the Funds available during the
Annuity period.
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract: Only an authorized officer of Aetna may change the
terms of this Contract. Aetna reserves the right to
modify this Contract to meet the requirements of
applicable state and federal laws or regulations.
Aetna will notify the Contract Holder in writing of
any changes.
10
<PAGE>
2.01 Change of Contract Aetna may change the tables for determining the
(Cont'd): amount of Annuity benefit payments attributable only
to Contributions accepted after the effective date
of change, without Contract Holder consent. Such a
change will not become effective earlier than twelve
months after (1) the effective date of the Contract,
or (2) the effective date of a previous change.
Aetna will notify the Contract Holder in writing at
least thirty days before the effective date of the
change. Aetna may not make Contract changes which
adversely affect the Annuity benefits attributable
to Contributions already made to the Contract.
2.02 Change of Fund: The assets of the Separate Account are segregated by
Fund. If the shares of any Fund are no longer
available for investment by the Separate Account or
if in our judgment, further investment in such
shares should become inappropriate in view of the
purpose of the Contract, Aetna may cease to make
such Fund shares available for investment under the
Contract prospectively, or Aetna may substitute
shares of another Fund for shares already acquired.
Aetna may also, from time to time, add additional
Funds. Any elimination, substitution or addition of
Funds will be done in accordance with applicable
state and federal securities laws. Aetna reserves
the right to substitute shares of another Fund for
shares already acquired without a proxy vote.
2.03 Nonparticipating The Contract Holder, Participants, or Beneficiaries
Contract: will not have a right to share in the earnings of
Aetna.
2.04 Payments: (a) Aetna will make distributions as directed by
the Contract Holder. Aetna will determine the
amount of payments based on the Individual
Account's Current Value as of the date on
which a request is received in good order at
Aetna's Home Office. Payments will be made
within seven (7) calendar days of receipt of
a written request in good order at Aetna's
Home Office.
(b) Aetna may defer payments: (1) for a period of
up to six (6) months (unless not allowed by
state law); and (2) as allowed by federal
law.
2.05 State Laws: This Contract complies with the laws of the state in
which it is delivered. Any cash, death or Annuity
payments are equal to or greater than the minimum
required by such laws. Annuity tables for legal
reserve valuation shall be as required by state law.
Such tables may be different from Annuity tables
used to determine Annuity payments.
2.06 Control of Contract: This Contract is designed to fund a plan which
provides for retirement income.
The Contract Holder may, by written direction to
Aetna, allow Participants to select the investment
options of their Employer and/or Employee Accounts.
Choices made under this Contract must be in writing
or in a form satisfactory to Aetna. Until receipt of
such choices in its Home Office, Aetna may rely on
any previous choices made.
11
<PAGE>
2.06 Control of Contract (a) Nontransferable and Nonassignable: This
(Cont'd): Contract and any Individual Accounts are
nontransferable and nonassignable, except to
Aetna in the event of a loan, or pursuant to
a "qualified domestic relations order" as set
forth under the Internal Revenue Code of
1986, as it may be amended from time to time.
(b) ERISA/REA Requirements: The Contract Holder
shall notify Aetna in writing of the
applicability of ERISA, as amended by
subsequent law including REA, to the Plan.
Aetna shall rely on the Contract Holder's
determination and representation of
applicability. With respect to any
distribution made from an Employee or
Employer Account from a Contract subject to
ERISA, the Contract Holder must certify in
writing that all the appropriate REA
requirements have been met and that
distribution is in accordance with the terms
of the Plan.
(c) Distributions: A Participant may apply for a
distribution from his or her Employee Account
or Employer Account. However, the Contract
Holder must certify in writing that the
distribution is in accordance with the terms
of the Plan.
(d) Participant Rights/Employee Account: The
Participant has a nonforfeitable right to the
value of his or her Employee Account pursuant
to the terms of the Plan as interpreted by
the Contract Holder.
(e) Participant Rights/Employer Account: The
Participant has a nonforfeitable right to the
value of his or her Employer Account pursuant
to the terms of, and to the extent of his or
her vested percentage under, the Plan as
interpreted by the Contract Holder. It is the
Contract Holder's responsibility to maintain
records of the Participant's vesting
percentages. Aetna will not maintain nor keep
such records.
2.07 Designation of The Participant shall designate a Beneficiary. If
Beneficiary: the Plan is subject to ERISA, the Contract Holder
must certify in writing that the designation is in
accordance with the appropriate REA requirements and
the terms of the Plan.
2.08 Misstatements and If Aetna finds the age of any payee to be misstated,
Adjustments: the correct facts will be used to adjust payments.
2.09 Incontestability: Aetna cannot cancel this Contract because of any
error of fact.
2.10 Grace Period: This Contract will remain in effect even if
Contributions are not continued except as provided
in 3.17.
2.11 Individual Aetna shall issue certificates to Participants as
Certificates: required by the state in which this Contract is
delivered. The certificate will summarize certain
provisions of the Contract. Certificates are for
information only and are not a part of the Contract.
12
<PAGE>
III. CONTRIBUTIONS, CURRENT VALUE, AND WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------
3.01 Net Contribution(s): The Net Contribution equals the actual Contribution
less any applicable premium tax. Generally, Aetna
will deduct the premium tax when Annuity benefits
are purchased (See Section V). If Aetna determines
that under applicable state law, it must pay a
premium tax when the Contribution is received, or at
any other time, it may deduct the tax at that time.
The Net Contribution(s) may be allocated among the
following investment options:
(a) The Fixed Plus Account (if available); and
(b) The current Deposit Period(s) for Guaranteed
Terms under the GA Account (if available);
and
(c) The Fund(s) in which the Separate Account
invests.
Aetna must be told the percentage of all Net
Contributions to allocate to one or more of the
investment options. Aetna reserves the right to
require a minimum Contribution amount per Individual
Account.
Aetna reserves the right not to accept any
Contribution.
3.02 Experience Credits: Aetna may apply experience credits under this
Contract. Any such credits will be computed as
decided by Aetna.
3.03 Fund Record Units: The portion of the Net Contribution(s) applied to
each Fund under the Separate Account will determine
the number of Fund record units credited to the
Individual Account for that Fund. This number is
equal to the Net Contribution applied to the Fund
divided by the Fund record unit value (See 3.04) for
the Valuation Period in which the Contribution is
received in good order.
3.04 Fund Record Unit A Fund record unit value is computed by multiplying
Value: the net return factor (See 3.05) for the current
Valuation Date by the Fund record unit value for the
previous Date. The dollar value of a Fund record
unit, Separate Account assets, and Variable Annuity
payments may go up or down due to investment gain or
loss.
3.05 Fund Net Return The net return factor(s) are used to compute all
Factors: Separate Account record units for any Fund. The net
return factor for each Fund is equal to 1.0000000
plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by
the Separate Account at the end of a
Valuation Period, minus
(b) The value of the shares of the Fund held by
the Separate Account at the start of the
Valuation Period, plus or minus
13
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3.05 Fund Net Return (c) Taxes (or reserves for taxes) on the Separate
Factors (Cont'd): Account (if any); divided by
(d) The total value of the Fund record units and
Fund annuity units of the Separate Account at
the start of the Valuation Period; minus
(e) A Separate Account charge at an annual
effective rate as shown on Contract Schedule
I for Annuity mortality and expense risks,
asset based sales charge, if any and a daily
administrative charge which will not exceed
the amount shown on Contract Schedule I on an
annual basis. The administrative charge may
be changed annually except for amounts which
have been used to purchase an Annuity; minus
(f) A fee for the Aetna GET Fund Guarantee which
is deducted daily during the Guaranteed
Period. The fee, which is determined prior to
the beginning of each series' Offering
Period, is as shown on Contract Schedule I.
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to the net
assets of the Fund divided by the number of shares
outstanding.
3.06 Market Value (a) An MVA will be applied to any withdrawal from
Adjustment (MVA): a GA Account Term before the Maturity Date
due to:
(1) A Fund Transfer;
(2) A full or partial withdrawal; or
(3) A payment of a premium for Annuity
Option 1.
The amount of the withdrawal will be adjusted to a
market value amount as described in (b).
(b) Market value adjusted amounts will be equal
to the amount withdrawn multiplied by the
following ratio:
(1 + i)^(x/365)
-------------------
(1 + j)^(x/365)
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3.06 Market Value Where:
Adjustment (MVA)
(Cont'd): i is the Deposit Period Yield
j is the Current Yield
x is the number of days remaining, (computed
from Wednesday of the week of withdrawal)
in the Term.
(c) The Deposit Period Yield will be determined
as follows:
(1) At the close of the last business day
of each week of the Deposit Period, a
yield will be computed as the average
of the yields on that day of U.S.
Treasury Notes which mature in the
last three months of the Term.
(2) The Deposit Period Yield is the
average of those yields for the
Deposit Period. If withdrawal is made
prior to the close of the Deposit
Period, it is the average of those
yields on each week preceding
withdrawal.
(3) The Current Yield is the average of
the yields on the last business day of
the week preceding withdrawal on the
same U.S. Treasury Notes included in
the Deposit Period Yield.
(4) In the event that no U.S. Treasury
Notes which mature in the last three
months of the Term exist, Aetna
reserves the right to use the U.S.
Treasury Notes that mature in a
following quarter.
(d) If a lump-sum distribution or Annuity Option
is elected six months or more after your
death, the Beneficiary will receive the
Account Value, plus or minus any MVA that
would apply to any portion of the Account
allocated to GAA. If a full or partial
withdrawal is made within six months after
your death, the Beneficiary will receive the
Account Value, plus any positive MVA that
would apply to any portion of the Account
allocated to GAA. The value of the Account is
determined as of the Valuation Date on which
proof of death acceptable to us and a request
for payment are received at our Home Office.
(e) After the six month period, the withdrawal or
Fund Transfer will be the aggregate MVA
amount (i.e., including all MVAs).
(f) The greater of the aggregate MVA amount or
the applicable portion of the Current Value
in the GA Account is applied to amounts
withdrawn from the GA Account for payment of
a premium under Annuity options 2 or 3.
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3.07 Fund Transfer(s): All or any portion of the Adjusted Current Value of
the Individual Account (subject to the limitations
described below) may be transferred from any Fund,
the Fixed Plus Account (if available) or the GA
Account (if available):
(a) To any Fund; or
(b) To the Fixed Plus Account (if available); or
(c) To any Guaranteed Term of the GA Account (if
available) with a different classification
available in the Current Deposit Period.
Fund Transfer requests can be submitted as a
percentage or as a dollar amount. Aetna may
establish a minimum Fund Transfer amount. Within a
Guaranteed Term classification, the amount
transferred will be withdrawn from the oldest
Deposit Period, then from the next oldest, and so on
until the amount requested is satisfied.
Amounts applied to Guaranteed Terms of the GA
Account may not be transferred to the Funds, the
Fixed Plus Account or to another Guaranteed Term
during the Deposit Period or 90 days after the close
of the Deposit Period except for Matured Term
Value(s) during the calendar month following the
Term's Maturity Date.
Fund Transfers from Guaranteed Terms of the GA
Account are subject to the MVA provisions of 3.06.
During each rolling twelve (12) month period, up to
20% of the Fixed Plus Account value may be
transferred to one or more of the Fund(s), and/or
the GA Account's then-current Deposit Period. The
20% limit is reduced by any partial withdrawals,
Fund Transfers or amounts taken as a loan or used to
purchase an Annuity during the twelve (12) month
period. Aetna reserves the right to include amounts
paid under ECO, LEO and SWO provisions for purposes
of applying this 20% limit. This limit is waived
when the balance in the Fixed Plus Account is $1,000
or less on the date the Fund Transfer request is
received in good order at Aetna's Home Office.
The Participant may make an unlimited number of Fund
Transfers during the Accumulation Period.
A Fund Transfer or withdrawal from an Aetna GET Fund
series before the Maturity Date will be based on the
GET Fund Record Unit Value for the next Valuation
Period following the date on which Aetna receives a
transfer request in good order at its home office.
3.08 Aetna GET Fund Aetna will specify a minimum total asset amount
Offering Period: required at the end of an Offering Period to offer
an Aetna GET Fund series. If the minimum is not
achieved, Aetna reserves the right to not start the
Guaranteed Period.
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3.08 Aetna GET Fund If an Aetna GET Fund series is terminated, Aetna
Offering Period will send written notification of the termination to
(Cont'd): all Participants who have made Fund Transfers or
deposits to that Aetna GET Fund Series. Notice will
be mailed no later than 15 calendar days after the
end of the Offering Period. Participants then have
45 days from the end of the Offering Period to
redirect amounts in the terminated Aetna GET Fund
series to one or more investment options available
under the Contract. During this time, Funds are
invested in money market instruments. If no election
is made by the end of the 45-day Period, at the next
Valuation Period, Aetna will transfer the amount in
the terminated Aetna GET Fund series to the (Aetna
Variable Encore Fund).
Aetna reserves the right to specify a maximum total
asset amount for an Aetna GET Fund series. If the
maximum is achieved, Aetna also reserves the right
to set a date on which it will stop accepting Fund
Transfers or deposits for that Aetna GET Fund
series. Aetna will announce the date on which it
will stop accepting Fund Transfers and deposits ten
calendar days prior to that date.
3.09 Aetna GET Fund On the Maturity Date of each Aetna GET Fund series,
Guarantee: the GET Fund Record Unit Value for that series will
not be less than the GET Fund Record Unit Value
determined at the beginning of the Guaranteed
Period. If necessary, Aetna will transfer funds from
its General Account to the Aetna GET Fund series to
offset any shortfall in the GET Fund Record Unit
Value. The Aetna GET Fund Guarantee does not apply
to withdrawals or Transfers made before the Maturity
Date.
If Aetna GET Fund Record Units are adjusted at any
time during an Aetna GET Fund Guaranteed Period, the
Aetna GET Fund Guarantee will be restated. The
restated Aetna GET Fund Guarantee will be calculated
so that it is equivalent to the original Aetna GET
Fund Guarantee for that series.
3.10 Aetna GET Fund Prior to the Maturity Date for each Aetna GET Fund
Maturity Date: series, Aetna sends a written notice of the date to
all participants who have Current Value in that
series. Participants must then inform Aetna of the
investment option(s) to which to transfer that
Current Value. If a Participant does not make an
election, on the Maturity Date Aetna will transfer
the Current Value to the then available Aetna GET
Fund series' Offering Period. If no Offering Period
is available, Aetna will transfer 50% of the amount
to the (Aetna Variable Fund) and 50% to the (Aetna
Income Shares).
3.11 Loans: If loans are included as an option under the
Contract, (see Contract Schedule I) then the
following will apply.
During the accumulation period, loans are granted
(1) as permitted under applicable law; (2) subject
to the terms and conditions of the loan agreement;
and, (3) in accordance with the following
provisions.
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3.11 Loans (Cont'd): (a) Amount available for loan: The amount
available for loan is limited to the vested
Individual Account Current Value attributable
to Participant Contributions, plus any
amounts allowed by the employers Plan.
Amounts available from some investment
options may be subject to limitations
specified in the loan agreement. To obtain
the loan amount requested, these limitations
may require the Participant to transfer
funds. A Market Value Adjustment may apply to
amounts transferred.
For plans subject to ERISA, the minimum loan
amount is $1,000. For plans not subject to
ERISA, the minimum loan amount is defined in
the loan agreement. The maximum loan amount
is the lesser of:
(1) Fifty percent (50%) of the vested
Individual Account Current Value,
including any Loan Account, reduced by
the amount of any outstanding loan
balance on the Loan Effective Date; or
(2) Fifty thousand dollars ($50,000)
reduced by the highest outstanding
loan balance for the preceding 12
months.
The amount of all outstanding loans cannot
exceed $50,000.
(b) Loan Interest Rate: For Plans subject to
Title I of the Employee Retirement Income
Security Act of 1974 (ERISA), a Loan Interest
Rate is set on the first business day of each
month. For each loan, the initial Loan
Interest Rate is the rate for the calendar
month in which the Loan Effective Date
occurs. The initial Loan Interest Rate is
effective for a period of not less than three
months and not more than one year. The period
is specified in the loan agreement. For each
period, the Loan Interest Rate is adjusted if
the new rate is at least 0.5% higher or lower
than the previous rate. The Participant will
receive reasonable notification of any change
to the Loan Interest Rate.
As applicable, the Loan Interest Rate is:
(1) Plans subject to ERISA: equal to the
Monthly Average Corporates for the
calendar month beginning two months
before the Loan Interest Rate is
effective.
(2) Plans not subject to ERISA: not
greater than 8% on an annual basis
(see Contract Schedule I).
(c) Earned interest: The Loan Account is credited
with interest at a rate which is not less
than the Loan Interest Rate, less 3%, on an
annual basis.
(d) Loan repayment: Repayment is as set forth in
the loan agreement, or a Participant may
repay a loan in full at any time.
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3.11 Loans (Cont'd): (e) Amount available for partial surrender while
a loan is outstanding: While a loan is
outstanding, the amount available for partial
surrender is equal to the vested Individual
Account Current Value, including the Loan
Account, minus 125% of the outstanding loan
balance.
(f) Full surrenders while a loan is outstanding:
If the Participant requests a full surrender
from the vested Individual Account Current
Value while a loan is outstanding, one of the
following occurs:
(1) If the amount of the vested Individual
Account Current Value available for
distribution is sufficient to repay
(a) the outstanding loan balance, plus
(b) any applicable Fixed Plus Account
default charge, then that amount,
minus the Loan Account balance, is
deducted from the vested Individual
Account Current Value and the loan is
canceled.
(2) If the amount of the vested Individual
Account Current Value available for
distribution is not sufficient to
repay (a) the outstanding loan
balance, plus (b) any applicable Fixed
Plus Account default charge, then the
surrender amount cannot exceed the
vested Individual Account Current
Value, including the Loan Account,
reduced by 125% of the outstanding
loan balance.
(g) Electing an Annuity option while a loan is
outstanding: Before all or any portion of the
vested Individual Account Current Value is
applied to an Annuity option, the Participant
may repay any outstanding loan balance, or
the vested Individual Account Current Value
is adjusted as described in (f).
(h) Death of the Participant while a loan is
outstanding: If a death benefit claim is
submitted for an Individual Account with an
outstanding loan, the Individual Account
Current Value, including the amount of the
Loan Account, is reduced by the amount of the
outstanding loan balance before the death
benefit amount is determined.
(i) Loan payment default: If Aetna does not
receive a loan payment when due, the
defaulted payment is treated as follows:
(1) If the amount of the vested Individual
Account Current Value available for
distribution is sufficient to repay
(a) the amount of the defaulted
payment, plus (b) any applicable Fixed
Plus Account default charge, then that
amount is deducted from the vested
Individual Account Current Value.
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<PAGE>
3.11 Loans (Cont'd): (2) If the amount of the vested Individual
Account Current Value available for
distribution is not sufficient to
repay (a) the amount of the defaulted
payment, plus (b) any applicable Fixed
Plus Account default charge, until
such time that the amount due can be
distributed, the Loan Account
continues to earn interest, and
interest is charged on the defaulted
payment. At that time, the amount due
is surrendered from the vested
Individual Account Current Value.
3.12 Notice to the Each year, Aetna will notify the Participant of:
Participant:
(a) The value of any amounts held in:
(i) The Fixed Plus Account (if available),
(ii) The GA Account (if available),
(iii) The Fund(s) for the Separate Account;
(b) The number of any fund(s) record units;
(c) The fund(s) record unit value(s);
(d) The amount available for withdrawal; and
(e) The Loan Account value.
This information will be as of a date no more than
sixty (60) days before the date of the notice.
3.13 Manner and Timing of (a) As directed by the Contract Holder, a
Distributions: distribution to a Participant or Beneficiary
may be made in a lump sum, as one of the
Distribution Options described in Section IV,
or as one of the Annuity options in Section
V. The Participant or Beneficiary may elect
the form of distribution subject to
certification in writing by the Contract
Holder that the Participant or Beneficiary is
eligible both as to the timing and form of
distribution. All distributions must satisfy
the minimum distribution rules set forth in
Code Section 401(a)(9).
(b) The distribution of benefits from the
Employee and Employer Accounts must generally
begin no later than April 1 of the calendar
year following the calendar year in which the
Participant attains age 70 1/2 or in the case
of a governmental or church plan the calendar
year in which the Participant attains age 70
1/2 or retires, whichever occurs later. For a
Participant who attained age 70 1/2 before
January 1, 1988, the distribution of such
benefits must be made or must begin not later
than the April 1 of the calendar year
following the calendar year in which the
Participant retires.
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3.13 Manner and Timing of The entire value of the Individual Account
Distributions must be distributed, or distribution must be
(Cont'd): made over the life of the Participant, the
joint lives of the Participant and
Beneficiary or over a period that does not
extend beyond the life expectancy of the
Participant or the joint life expectancies of
the Participant and Beneficiary.
(c) If the Participant does not request
commencement of benefits from the Employee
and Employer Accounts as described above,
Aetna will not be responsible for compliance
with the Code Section 401(a)(9) minimum
distribution requirements or for any adverse
tax or other consequences that may result.
3.14 Withdrawal: (a) The Participant may withdraw any portion or
all of an Individual Account Adjusted Current
Value and transfer such amount to another
investment provider under the Plan. The
withdrawal and transfer request must be
submitted in writing to Aetna.
(b) Except as described in Section 3.17, unless
the Participant specifies otherwise, partial
withdrawals are satisfied by withdrawing
amounts on a pro rata basis from each of the
investment options in which the Individual
Account is invested.
(c) When amounts are withdrawn from the GA
Account, amounts in Short-Term and Long-Term
Classifications are treated as separate
investment options and amounts are taken on a
pro rata basis. Within a Classification,
amounts will be withdrawn starting with the
Term still in effect with the oldest Deposit
Period.
(d) Any amount withdrawn from the Fixed Plus
Account will be subject to the limitations in
3.15, 3.16 and 3.17.
3.15 Partial Withdrawal The amount eligible for partial withdrawal is 20% of
from the Fixed Plus the Current Value of the amount held in the Fixed
Account: Plus Account on the day Aetna's Home Office receives
a written request, reduced by any previous Fund
Transfer, partial withdrawal or amounts taken as a
loan or used to purchase Annuity benefits during the
prior 12 months. Aetna reserves the right to include
amounts paid under ECO, LEO and SWO for purposes of
applying this 20% limit. However, SWO and LEO are
unavailable if a Fixed Plus Account Transfer or
withdrawal is requested within the current 12 month
Period.
The 20% limit applicable to partial withdrawals from
the Fixed Plus Account will be waived under certain
conditions and will apply when the partial
withdrawal is made on a pro rata basis from all
options used under the Participant's Individual
Account. (See Contract Schedule I).
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<PAGE>
3.16 Payment of Fixed When Aetna receives a full withdrawal request, no
Plus Account Full additional partial withdrawals or Fund Transfers
Withdrawal: from the Fixed Plus Account are permitted during the
payout period. If a full withdrawal is requested,
Aetna will pay any Current Value from the Fixed Plus
Account in five payments as follows:
(a) One-fifth of the Current Value on the day the
request is received in good order at Aetna's
Home Office, reduced by any amount from the
Fixed Plus Account that was transferred,
withdrawn or used for a loan or to purchase
Annuity benefits during the prior 12 months;
(b) One-fourth of the remaining Current Value 12
months later;
(c) One-third of the remaining Current Value 12
months later;
(d) One-half of the remaining Current Value 12
months later; and
(e) The balance of the Current Value 12 months
later.
The Fixed Plus Account full withdrawal payment
provision will be waived when a withdrawal is:
(a) Due to the Participant's death before Annuity
benefit payments begin;
(b) Used to purchase Annuity benefits;
(c) When the amount in the Fixed Plus Account is
$3,500 or less and no amount has been
withdrawn, transferred, taken as a loan or
used to purchase Annuity benefits during the
previous 12 months;
(d) Due to hardship when the following conditions
are met:
(1) the withdrawal is due to an employer
certified hardship;
(2) the amount withdrawn is paid directly
to the Participant; and
(3) the amount paid for all partial and
full withdrawals due to hardship
during the previous 12-month period
does not exceed 10% of the average
Current Value for all Individual
Accounts during the same period of
time; or
(e) Due to separation from service provided that:
(1) the withdrawal is due to the
Participant's separation from service
with the employer;
(2) the employer certifies that the
Participant has separated from
service;
(3) the amount withdrawn is paid directly
to the Participant; and
(4) the amount paid for all partial and
full withdrawals due to separation
from service during the previous
12-month period does not exceed 20% of
the average Current Value of all
Individual Accounts during that same
period of time.
Any full withdrawal from the Fixed Plus Account may
be cancelled at any time before the end of the
payment period.
3.17 Payment of Minimum If the Individual Accounts Current Value is less
Current Value: than $3,500, and no Contributions have been received
for three (3) years, Aetna may close the Account and
pay the Current Value as directed by the Contract
Holder in one lump sum.
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3.18 Amount Payable at Aetna will pay any portion of the Individual
Death (Before Account(s) Current Value, to the Beneficiary when:
Annuity Payments
Start): (a) The Participant dies before Annuity payments
start; and
(b) The certified copy of the death certificate
is received by Aetna; and
(c) A completed and signed election form is
submitted to the Home Office. The form must
include Contract Holder certification that
the Beneficiary is eligible for a
distribution under the terms of the Plan.
A guaranteed death benefit is available if the
Beneficiary requests either a lump-sum payment or an
Annuity option within six months of the
Participant's death.
For each Individual Account, the death benefit is
guaranteed to be the greater of:
(a) The Current Value of the Individual Account
plus aggregate positive MVA, as applicable,
on the date the notice of death and the
request for payment are received in good
order at Aetna's Home Office; or
(b) The total of Net Contribution(s) made to the
Individual Account minus the total of all
partial withdrawals, annuitizations made from
the Individual Account and any amount
allocated from the Individual Account to the
Loan Account.
If the Participant dies before distributions begin
in accordance with the provisions of Code Section
401(a)(9), the entire value of the Account must be
distributed by December 31 of the calendar year
containing the fifth anniversary of the date of the
Participant's death. Alternatively, if the
Participant has a designated Beneficiary, payments
may be made over the life of the Beneficiary or over
a period not extending beyond the life expectancy of
the Beneficiary provided distribution to a
non-spouse Beneficiary begins by December 31 of the
calendar year following the calendar year of the
Participant's death. For a spousal Beneficiary, such
payments must begin by the later of December 31 of
the calendar year of the Participant's death or
December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant dies after distributions begin in
accordance with the provisions of Code Section
401(a)(9), payments to the Beneficiary must be made
at least as rapidly as the method of distribution in
effect at the time of the Participant's death. If
the minimum distribution requirements have been met
by partial withdrawals based on the participant's
life expectancy or the joint life expectancies of
the Participant and Beneficiary, death benefit
payments to the Beneficiary must also satisfy any
additional requirements of Code Section 401(a)(9).
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Amounts in the GA Account will be payable as
described in Section 3.07(d).
3.19 Reinstatement: All or a portion of the proceeds of a full
withdrawal of an Individual Account may be
reinvested within 30 days after the surrender if
allowed by law. Any Market Value Adjustment deducted
from GA Account withdrawals will not be included in
the reinstatement. Amounts will be reinstated among
the Fixed Plus Account, GA Account, and the Fund(s)
in the same proportion as they were at the time of
withdrawal. Any amount reinstated to the GA Account
will be credited to the current Deposit Period. The
number of record units reinstated will be based on
the record unit value(s) next computed after receipt
at Aetna's Home Office of the reinstatement request
and the amount to be reinvested.
Amounts attributable to an Aetna GET Fund series
will be reinstated to the current Offering Period of
the Aetna GET Fund series. If no Aetna GET Fund
series Offering Period is available, amounts
withdrawn from the Aetna GET Fund series will be
allocated, pro rata, among all other investment
options in which the Individual Account is invested.
Any Individual Account(s) closed because the Current
Value was less than $3,500 may not be reinstated
(see 3.17).
A Reinstatement is permitted only once per
Individual Account.
IV. NON-ANNUITY DISTRIBUTION OPTIONS
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4.01 Distribution Distribution Options: ECO, LEO and SWO are
Options: distribution options under which a portion of the
Individual Account Current Value will automatically
be surrendered and distributed each calendar year.
The distributed amount is withdrawn pro rata from
each investment option under the Individual Account.
The Contract Holder must certify in writing that
distributions are being made in accordance with the
Plan.
Market Value Adjustment: A Market Value Adjustment
will not be applied to any portion of the Current
Value which is paid under ECO.
Minimum Current Value: At its discretion, Aetna may
require a minimum initial Current Value for election
of a distribution option. If after election of the
option the Current Value is insufficient to make a
scheduled payment, Aetna will distribute the entire
Individual Account balance.
Reservations of Rights: Aetna reserves the right to
change the terms of ECO, LEO or SWO for future
elections, to discontinue the availability of these
options after proper notification, or to make other
distribution options available as allowed by the
state in which this Contract is delivered. Aetna
also reserves the right to allow ECO and LEO
payments to be made more frequently than annually.
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4.01 Distribution Options Election and Revocation: The Participant or
(Cont'd): Beneficiary may elect a distribution option by
submitting a completed and signed election form to
Aetna's Home Office. However, the Contract Holder
must certify in writing that the distribution option
is in accordance with the terms of the Plan. If the
Individual Account is subject to ERISA, the Contract
Holder must certify in writing that the waiver and
spousal consent requirements of Code Section 417
have been satisfied.
Once elected, the Participant or Beneficiary may
revoke the option by submitting a written request to
Aetna's Home Office. Any revocation will apply only
to amounts not yet paid.
Availability of ECO, LEO and SWO: The Participant
may elect any one of the following three
distribution options, if they are available as an
option under the Contract (see Contract Schedule I)
and if the Contract Holder certifies that the
election is in accordance with the terms of the
Plan. The Beneficiary may elect either ECO or SWO,
if they are available as an option under the
Contract (see Contract Schedule I) and if the
Contract Holder certifies that the election is in
accordance with the terms of the Plan.
An individual who has revoked ECO, LEO or SWO may
not subsequently elect that option again, nor may
the individual elect another withdrawal option
unless permitted under the Code minimum distribution
rules.
LEO and SWO are not available if there is an
outstanding loan under the Individual Account, or if
a Fixed Plus Account transfer or surrender has
occurred within the prior 12 month period. Payments
will cease if a loan is granted while LEO or SWO is
in effect.
If LEO is in effect and the Participant dies, or if
ECO or SWO is in effect and the Participant dies
before the required beginning date for minimum
distributions, payments will cease. A Beneficiary
may elect ECO or SWO provided the election satisfies
the Code minimum distribution rules.
If ECO or SWO is in effect and the Participant dies
after the required beginning date for minimum
distributions, payments will continue as permitted
under the Code minimum distribution rules, unless
revoked.
4.02 Estate Conservation Amount of Distribution: Each year that ECO is in
Option (ECO): effect, Aetna will calculate and distribute an
amount equal to the minimum required distribution
under the Code. The annual distribution will be
determined by dividing the Individual Account
Current Value as of December 31 of the year prior to
the year for which payment is to be made by a life
expectancy factor based on expected return multiples
in Table V and VI of Section 1.72-9 of the Income
Tax Regulations.
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4.02 Estate Conservation The Participant may elect either the single or joint
Option (ECO) life expectancy factor. If the joint life expectancy
(Cont'd): factor is elected, the second life must be the
Beneficiary under the Plan. If the Beneficiary
selects ECO after the Participant's death, only a
single life expectancy factor may be used. The life
expectancy or joint life expectancy factor will be
recalculated each year in accordance with the rules
under Code Section 401(a)(9).
Date of Distribution: The Participant shall specify
the initial distribution date. The earliest date is
the first day of the calendar year in which the
Participant attains age 70 1/2 or, for plans of
government or church employers, the date the
Participant retires, whichever is later. If a
Beneficiary elects ECO, the earliest date is the
date of the Participant's death. Subsequent
distribution will be made annually on such date as
Aetna may designate or allow.
4.03 Life Expectancy Amount of Distribution: Each year that LEO is in
Option (LEO): effect, Aetna will calculate and distribute an
amount determined by dividing the Individual Account
Current Value as of December 31 of the year prior to
the year for which payment is to be made by a life
expectancy factor based on expected return multiples
in Table V and VI of Section 1.72-9 of the Income
Tax Regulations. Payments will be made each year
until the year the Participant attains age 70 1/2,
or until the Participant dies, if earlier.
The Participant may elect either the single or joint
life expectancy factor. If the joint life expectancy
factor is elected, the second life must be the
Beneficiary under the Plan. The life expectancy or
joint life expectancy factor will be recalculated
each year in accordance with the rules under Code
Section 401(a)(9), or reduced by one for each
calendar year which has elapsed since the life
expectancy was first calculated, as elected by the
Participant.
Date of Distribution: The Participant shall specify
the initial distribution date. The earliest date is
the date on which the Participant separates from
service with the employer. Subsequent distribution
will be made annually on such date as Aetna may
designate or allow.
4.04 Systematic Amount of Distribution: The Participant may elect
Withdrawal Option one of the three payment methods described below.
(SWO):
(1) Specified Payment: Payments of a designated
dollar amount. The annual amount may not be
greater than the percentage of the Current
Value at time of election as shown in
Contract Schedule I. This annual dollar
amount will remain constant, unless a higher
amount is required under Code minimum
distribution rules. At its discretion, Aetna
may require a minimum initial payment amount;
or
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4.04 Systematic (2) Specified Period: Payments which are made
Withdrawal Option over a period of time which must be at least
(SWO) (Cont'd): the minimum number of years shown in Contract
Schedule I. The annual amount paid each year
is calculated by dividing the Current Value
as of December 31 of the prior year by the
number of payment years remaining; or
(3) Specified Percentage: Payment of a designated
percentage which cannot be greater than the
percentage of the Current Value at the time
of election as shown in Contract Schedule I.
The percentage may be changed by written
request. Aetna reserves the right to limit
the number of times the percentage may be
changed. The annual amount is calculated by
multiplying the Current Value as of December
31 of the year prior to the payment by the
designated percentage. Payments will be made
each year until the year the Participant
attains age 70 1/2.
Minimum Distribution Requirements: If distributions
are made under SWO after payments are required to
begin under the minimum distribution requirements of
Code Section 401(a)(9), the amount distributed in
any year will be increased if required under the
Code minimum distribution rules.
For this purpose, the minimum required distribution
will be determined each year by dividing the
Individual Account Current Value as of December 31
of the year prior to the year for which payment is
to be made by a life expectancy factor, which for
the initial distribution year shall be based on
either the single life expectancy factor or joint
life expectancy factor in Table V or VI of Section
1.72.9 of the Income Tax Regulations, as elected by
the Participant. If the joint life expectancy factor
is elected, the second life must be the Beneficiary
under the Plan. If a Beneficiary elects SWO after
the Participant's death, only a single life
expectancy factor may be used. Minimum distributions
for any subsequent year will be calculated based on
such life expectancy factor reduced by one for each
calendar year which has elapsed since the life
expectancy was first calculated. If the specified
period method is elected, the maximum specified
period will be limited by the single life expectancy
factor or joint life expectancy factor in Table V or
VI of Section 1.72-9 of the Income Tax Regulations,
as elected by the Participant. If elected by a
Beneficiary, only a single life expectancy may be
used.
Date of Distribution: The Participant shall specify
the initial distribution date. The earliest date is
the date on which the Participant attains age 59 1/2
or age 55, if separated from service with the
employer at or after age 55. If a Beneficiary elects
SWO, the earliest date is the date of the
Participant's death.
SWO payments will be made on a monthly, quarterly,
semi-annual or annual basis, as elected by the
Participant or Beneficiary. If SWO payments are made
more frequently than annually, the designated annual
amount is divided by the number of payments due each
calendar year. Subsequent distribution will be made
periodically on such date as Aetna may designate or
allow.
27
<PAGE>
V. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
5.01 General Provisions: (a) Upon certification by the Contract Holder of
the Participant's total disability,
acceptance of retirement or separation from
service, the Participant has the right to
elect an Annuity option. The Participant must
transfer any portion of the Current Value
held in an Aetna GET Fund series to another
investment option before an Annuity option is
elected.
(b) The Participant may elect an Annuity option
by telling Aetna to pay all or any portion of
the Individual Account(s) Current Value
(minus any applicable premium tax if not
previously deducted) as a premium for an
Annuity under Option 1, 2, or 3 (See 5.02).
(c) A completed and signed election form must be
submitted to the Home Office. The form must
include Contract Holder certification that
the Participant is eligible for a
distribution under the terms of the Plan and
that the Annuity option chosen is permitted
under the terms of the Plan.
(d) Any election of an Annuity option must comply
with the minimum distribution requirements of
Code Section 401(a)(9), including the
incidental death benefit rule, and the
regulations thereunder. This restriction does
not apply if Option 3 is chosen and the
second Annuitant is the spouse of the
Participant.
(e) Once elected, an Annuity option may not be
revoked, except for Option 1 when elected on
a variable basis.
5.02 Annuity Options: Option 1 - Payments for a Stated Period of Time - An
Annuity will be paid for the number of years chosen
(See Contract Schedule II). If payments for this
option are made under a variable Annuity, the
present value of any remaining payments may be
withdrawn at any time.
Option 2 - Life Income based on the life of the
Annuitant. Payments will be made until the death of
the Annuitant. When this option is chosen, a choice
of the following must be made:
(a) Payments cease at the death of the Annuitant;
(b) Payments may be guaranteed for 5-30 years; or
(c) Payments may be guaranteed for the amount
applied to the Annuity option. If the
Annuitant dies prior to the payment of the
amount applied to the Annuity option (less
any premium tax), any remaining balance will
be paid in one sum to the Beneficiary. This
option is only available on a fixed basis.
28
<PAGE>
5.02 Annuity Options Option 3 - Life Income based upon the lives of two
(Cont'd): Annuitants. An Annuity will be paid during the lives
of the Annuitant and a second Annuitant. Payments
will continue until both Annuitants have died. When
this option is chosen, a choice of the following
must be made:
(a) 100% of the payment to continue after the
first death;
(b) 66 2/3% of the payment to continue after the
first death;
(c) 50% of the payment to continue after the
first death;
(d) 100% of the payment to continue after the
first death with a guarantee of 5-30 years;
(e) 100% of the payment to continue at the death
of the second Annuitant and 50% of the
payment to continue at the death of the
Annuitant; or
(f) 100% of the payment to continue after the
first death. Payments are guaranteed for the
amount applied to the Annuity option. If both
Annuitants die prior to the total payment of
the amount applied to the Annuity option
(less any premium tax), any remaining balance
will be paid in one sum to the Beneficiary.
This option is only available on a fixed
basis.
If a fixed Annuity option is chosen under Option 1,
Option 2 (a) or (b) or Option 3 (a) or (d), then the
Participant may elect a payment increase of 1, 2 or
3%, compounded annually. An election of such a
payment increase will result in a adjustment of the
policy guarantees by an actuarially equivalent
payment factor.
Other Options - Aetna may make other options
available as allowed by the laws of the state in
which this Contract is delivered.
5.03 Payments: (a) Upon written direction from the Contract
Holder, Aetna will pay Annuity benefits
directly to the Participant and as payor,
Aetna will be responsible for withholding any
applicable federal or state taxes and
reporting such sums and filing any related
forms with the Internal Revenue Service
and/or to any applicable state taxing
authorities.
(b) Generally, the first Annuity payment must be
made by April 1 of the calendar year
following the year in which the Participant
turns age 70 1/2, or in the case of a
governmental or church plan, the year in
which the Participant attains age 70 1/2 or
retires, whichever occurs later. For a
Participant who attained age 70 1/2 before
January 1, 1988, the distribution of such
benefits must be made or must begin not later
than April 1 of the calendar year following
the calendar year in which the Participant
retires.
(c) Payments will be made on a monthly basis
unless the Participant requests otherwise. If
payments are made on a quarterly, semi-annual
or annual basis, Aetna will calculate an
actuarially equivalent payment factor.
29
<PAGE>
5.03 Payments (Cont'd): (d) No choice of any Annuity option may be made
if the first payment would be less than $50
per month or if the total payments in a year
would be less than $250.
(e) For purposes of calculating the guaranteed
first payment of a variable Annuity or the
payments for a fixed Annuity, the Annuitants
and second Annuitants adjusted age will be
used.
The Annuitants and second Annuitants adjusted
age is his or her age as of the birthday
closest to the Annuity commencement date
reduced by one year for Annuity commencement
dates occurring during the period of time
from July 1, 1992 through December 31, 1999.
The Annuitants and second Annuitants age will
be reduced by two years for Annuity
commencement dates occurring during the
period of time from January 1, 2000 through
December 31, 2009. The Annuitants and second
Annuitants age will be reduced by one
additional year for Annuity commencement
dates occurring in each succeeding decade.
(f) If a Fixed Annuity under Option 1, 2 or 3 is
elected, Aetna will use the applicable
current settlement option rates if these will
provide higher fixed Annuity payments.
5.04 Investment Option: (a) When an Annuity option is chosen the
Participant must designate whether the
Annuity will be fixed or variable and whether
the underlying investment will be:
(1) The General Account;
(2) One or more of the available Fund(s);
or
(3) A combination of (1) and (2).
If a fixed Annuity is chosen, the Annuity purchase
rate for the option chosen reflects at least the
Minimum Guaranteed Interest Rate (See Contract
Schedule II), but may reflect a higher interest
rate.
If a variable Annuity is chosen, the initial Annuity
payment for the option chosen reflects the Assumed
Annual Net Return Rate elected (See Contract
Schedule II). The Assumed Annual Net Return Rate is
the interest rate used to determine the amount of
the first Annuity payment under a variable Annuity.
The Separate Account must earn this rate plus enough
to cover the mortality and expense risks charges
(which may include profit) (at the annual rate shown
on Contract Schedule II) and a daily administrative
charge if future variable Annuity payments are to
remain level.
5.05 Fund Annuity Units: The number of Fund(s) annuity units is based on the
amount of the first variable Annuity payment which
is equal to:
30
<PAGE>
5.05 Fund Annuity Units (a) The portion of the Current Value (minus any
(Cont'd): premium tax) applied to pay a variable
Annuity; divided by (b) 1,000; multiplied by
(c) the payment rate for the option chosen.
Such amount, or portion, of the variable payment
will be divided by the appropriate Fund(s) Annuity
unit value (See 5.06) on the tenth Valuation Date
before the due date of the first payment to
determine the number of each Fund Annuity units. The
number of each Fund Annuity units remains fixed.
Each future payment is equal to the sum of the
products of each Fund Annuity unit value multiplied
by the appropriate number of Units. The Fund Annuity
unit value on the tenth Valuation Date prior to the
due date of the payment is used.
5.06 Fund Annuity Unit For any Valuation Date, a Fund(s) Annuity unit value
Value: is equal to:
(a) The value for the previous Valuation Date;
multiplied by
(b) The Annuity net return factor(s) (See 5.07)
for the Period; multiplied by
(c) A factor to reflect the assumed annual net
return rate. (See Contract Schedule II).
The dollar value of a Fund Annuity unit values and
Annuity payments may go up or down due to investment
gain or loss. Payments shall not be changed due to
changes in the mortality or expense results or
administrative charges.
5.07 Fund Annuity Net The Annuity net return factor(s) are used to compute
Return Factor: all Separate Account Annuity payments for any Fund.
The Annuity net return factor(s) for each Fund is
equal to 1.0000000 plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by
the Separate Account at the end of a
Valuation Period, minus
(b) The value of the shares of the Fund held by
the Separate Account at the start of the
Valuation Period, plus or minus
(c) Taxes (or reserves for taxes) on the Separate
Account (if any); divided by
(d) The total value of the Fund(s) record units
and Fund(s) Annuity units of the Separate
Account at the start of the Valuation Period;
minus
(e) A daily charge for Annuity mortality and
expense risks, which may include a profit,
(at the annual rate as shown on Contract
Schedule II), and a daily administrative
charge.
A net return rate may be more or less than 0%. The
value of a share of the Fund is equal to the net
assets of the Fund divided by the number of shares
outstanding.
31
<PAGE>
5.08 Fund Transfers At the request of the Contract Holder or the
During the Annuity Participant if the Contract Holder has directed
Period: Aetna to accept such a request from the Participant,
all or any portion of the Current Value may be
transferred from any variable Fund to any other
allowable Fund. Aetna reserves the right to allow no
more than four Funds to be selected at any one time.
Fund Transfers will be processed as of the Valuation
Date next following when a transfer request is
received in good order at Aetna's Home Office. The
maximum number of allowable transfers (during the
Annuity period) in a calendar year is shown on
Contract Schedule II.
Fund Transfer requests must be expressed as a
percentage of each Funds allocation to the Annuity
payment. Aetna may establish a minimum transfer
amount.
5.09 Death Benefit: Upon the death of the Annuitant(s), any remaining
guaranteed payments will continue to the Beneficiary
unless the Beneficiary elects to receive the present
value of any remaining guaranteed payments in a lump
sum. Such payments will be paid at least as rapidly
as under the method of distribution then in effect.
If the Beneficiary dies while receiving payments,
the present value of any remaining guaranteed
payments will be paid in one sum to the
Beneficiary's estate.
The interest rate used to determine the first
Annuity payment will be used to calculate the
present value. The present value will be determined
as of the Valuation Period in which proof of death
acceptable to Aetna and a request for payment is
received at Aetna's Home Office.
32
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- --------------------------------------------------------------------------------
33
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- --------------------------------------------------------------------------------
34
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20 Cash
Annuitant Refund
- --------------------------------------------------------------------------------
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89
51 4.12 4.11 4.09 4.05 3.99 3.94
52 4.19 4.19 4.16 4.11 4.04 4.00
53 4.27 4.26 4.23 4.18 4.10 4.06
54 4.35 4.34 4.31 4.25 4.16 4.12
55 4.44 4.42 4.39 4.32 4.22 4.19
56 4.53 4.51 4.47 4.40 4.29 4.26
57 4.62 4.61 4.56 4.48 4.35 4.33
58 4.72 4.71 4.65 4.56 4.42 4.41
59 4.83 4.81 4.75 4.64 4.49 4.49
60 4.95 4.93 4.86 4.73 4.55 4.57
61 5.07 5.05 4.97 4.83 4.62 4.66
62 5.20 5.17 5.08 4.92 4.69 4.76
63 5.34 5.31 5.20 5.02 4.76 4.85
64 5.49 5.45 5.33 5.12 4.83 4.96
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
67 6.01 5.94 5.75 5.44 5.02 5.30
68 6.20 6.13 5.91 5.54 5.08 5.42
69 6.41 6.33 6.07 5.65 5.14 5.56
70 6.64 6.54 6.23 5.76 5.19 5.70
71 6.88 6.76 6.41 5.86 5.24 5.84
72 7.14 7.00 6.59 5.97 5.28 6.00
73 7.43 7.26 6.77 6.06 5.32 6.16
74 7.73 7.53 6.96 6.16 5.35 6.33
75 8.06 7.82 7.14 6.25 5.38 6.51
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
35
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- --------------------------------------------------------------------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
36
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- --------------------------------------------------------------------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 5.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
37
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e Option 3f
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69
55 55 3.88 4.25 4.47 3.87 4.14 3.87
55 60 3.99 4.44 4.71 3.98 4.20 3.98
60 55 3.99 4.44 4.71 3.98 4.42 3.98
60 60 4.24 4.71 4.99 4.23 4.57 4.23
60 65 4.38 4.97 5.32 4.38 4.65 4.38
65 60 4.38 4.97 5.32 4.38 4.93 4.38
65 65 4.72 5.33 5.70 4.71 5.14 4.72
65 70 4.93 5.68 6.15 4.91 5.27 4.91
70 65 4.93 5.68 6.15 4.91 5.66 4.91
70 70 5.40 6.21 6.70 5.36 5.96 5.38
70 75 5.69 6.68 7.32 5.62 6.13 5.66
75 70 5.69 6.68 7.32 5.62 6.67 5.66
75 75 6.37 7.45 8.15 6.23 7.12 6.33
75 80 6.78 8.11 8.99 6.54 7.36 6.71
- -------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
38
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e
- --------------------------------------------------------------------------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
39
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e
- --------------------------------------------------------------------------------
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
40
<PAGE>
- --------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
Group Combination Annuity Contract
Nonparticipating
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP ANNUITY CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED
AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN
INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA
DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
G-CDA-96(ORP)
99-B.4.37
Variable Annuity Contract Certificate
-------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
You may call the toll-free number shown above to get
answers to your questions or help to resolve a
complaint.
Aetna Life Insurance and Annuity Company, herein
called Aetna, agrees to pay the benefits stated in the
Contract.
- --------------------------------------------------------------------------------
Certificate of Group To the Certificate Holder:
Annuity Coverage
Aetna certifies that coverage is in force for you
under the stated Group Annuity Contract and
Certificate numbers. All data shown here is taken from
Aetna records and is based upon information furnished
by you.
This Certificate is a summary of the Group Annuity
Contract provisions. It replaces any and all prior
certificates, riders, or amendments issued to you
under the stated Contract and Certificate numbers.
This Certificate is for information only and is not a
part of the Contract.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE
DESCRIBED IN PARTS III AND V.
- --------------------------------------------------------------------------------
Right to Cancel You may cancel this Certificate within 10 days of
receiving it by returning this Certificate along with a
written notice to Aetna at the above address or to the
agent from whom it was purchased. Within 7 days after
it receives the notice of cancellation and this
Certificate at its Home Office, Aetna will return the
entire consideration paid plus any increase or minus
any decrease in the current value of any funds
allocated to the Separate Account.
/s/ Dan Kearney /s/ Susan E. Schechter
President Secretary
- --------------------------------------------------------------------------------
Contract Holder Group Annuity Contract No.
Specimen Specimen
- --------------------------------------------------------------------------------
Your Name Certificate No.
Specimen Specimen
- --------------------------------------------------------------------------------
Type of Plan
Retirement Plan for Higher Education
- --------------------------------------------------------------------------------
The underlying group combination annuity Anystate
contract is delivered in and is subject
to the laws of that jurisdiction.
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP ANNUITY CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GTCC-96(TORP)
<PAGE>
GUARANTEED AS TO FIXED DOLLAR AMOUNT. THIS CERTIFICATE CONTAINS A MARKET VALUE
ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN
EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT
FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
2
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed There is a guaranteed interest rate for
Interest Rate Contribution(s) held in the Fixed Plus Account and
the GA Account. (See Certificate Schedule I).
- --------------------------------------------------------------------------------
Deductions from There will be deductions for mortality and expense
the Separate risks. There also may be deductions for
Account administrative charges and asset based sales
charges. (See 3.05 and 5.06.)
- --------------------------------------------------------------------------------
Deduction from Contribution(s) are subject to a deduction for
Contribution(s) premium taxes, if any. (See 3.02.)
3
<PAGE>
Contract Schedule I
Accumulation Period
Separate Account
- --------------------------------------------------------------------------------
Separate Account: Variable Annuity Account C
Charges to Separate Account: A daily charge is deducted from any portion of
the Current Value allocated to the Separate
Account. The daily charge is at an annual
effective rate of [1.25%] for Annuity mortality
and expense risks, [0.15%] for asset based sales
charge and a daily administrative charge which
will not exceed [0.25%] on an annual basis.
The daily charge for the Aetna GET Fund
Guarantee will be at an annual rate of [0.25%].
Fixed Plus Account [Is Available]
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest [3%] (effective annual rate of return).
Rate:
Partial Withdrawal: The [20%] limit applicable to partial withdrawal
from the Fixed Plus Account will be waived when
the withdrawal is:
(a) due to the Participant's death, (and
made within [six (6)] months of the
Participant's date of death), before
Annuity payments begin. This partial
withdrawal may only be exercised once;
or
(b) used to purchase Annuity benefits.
Guaranteed Accumulation Account (GA Account) [Is Available]
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest [3%] (effective annual rate of return).
Rate:
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Contract Schedule I
Accumulation Period (Cont'd)
Separate Account, Fixed Plus Account and GA Account
- --------------------------------------------------------------------------------
Loans: [Are Available]
Loan Interest Rate: (a) Plans subject to Title I of the Employee
Retirement Income Security Act of 1974
(ERISA): A Loan Interest Rate is set on
the first business day of each month.
For each loan, the initial Loan Interest
Rate is equal to the Monthly Average
Corporates for the calendar month
beginning two months before the calendar
month in which the Loan Effective Date
occurs. The initial Loan Interest Rate
is effective for a period of not less
than three months and not more than one
year. The period is specified in the
loan agreement. For each period, the
Loan Interest Rate is adjusted if the
new rate is at least [0.5%] higher or
lower than the previous rate. The
Participant will receive reasonable
notification of any change to the Loan
Interest Rate.
(b) Plans not subject to ERISA: [6%] on an
annual basis.
Systematic Withdrawal Option [Is Available]
(SWO):
The Specified Payment may not be greater than
[20%] of the Individual Account's Current Value
at the time of election.
The Specified Period may not be less than [five
years].
The Specified Percentage may not be greater than
[20%].
Estate Conservation Option [Is Available]
(ECO):
Life Expectancy Option (LEO): [Is Available]
See Section 1. - DEFINITIONS for explanations.
ii
<PAGE>
Contract Schedule II
Annuity Period
Separate Account
- --------------------------------------------------------------------------------
Fund Transfers: Maximum number of allowable transfers in the Annuity
Period is [4].
Charges to Separate A daily charge at an annual effective rate of
Account: [1.25%] for Annuity mortality and expense risks. The
administrative charge is established upon election
of an Annuity option. This charge will not exceed
[0.25%].
Variable Annuity Assumed If a Variable Annuity is chosen, an assumed annual
Annual Net Return Rate: net return rate of [5.0%] may be elected. If [5.0%]
is not elected, Aetna will use an assumed annual net
return rate of [3.5%].
The assumed annual net return rate factor for [3.5%]
per year is [0.9999058].
The assumed annual net return rate factor for [5.0%]
per year is [0.9998663].
If the portion of a Variable Annuity payment for any
Fund is not to decrease, the Annuity return factor
under the Separate Account for that Fund must be:
(a) [4.75%] on an annual basis plus an annual
return of up to [0.25%] to offset the
administrative charge set at the time Annuity
payments commence if an assumed annual net
return rate of [3.5%] is chosen; or
(b) [6.25%] on an annual basis plus an annual
return of up to [0.25%] to offset the
administrative charge set at the time Annuity
payments commence, if an assumed annual net
return rate of [5%] is chosen.
Annuity Option: Under the option "Payments for a Stated Period of
Time":
For amounts invested in the GA Account or one or
more of the Fund(s), the number of years must be at
least [five (5)] and not more than [thirty (30)] and
the Annuity may be a Fixed or Variable Annuity.
For amounts invested in the Fixed Plus Account, the
number of years must be at least [five (5)] and not
more than [thirty (30)] and the Annuity must be a
Fixed Annuity.
Fixed Annuity
- --------------------------------------------------------------------------------
Minimum Guaranteed [3%] (effective annual rate of return).
Interest Rate:
See Section 1. - DEFINITIONS for explanations.
iii
<PAGE>
TABLE OF CONTENTS
I. DEFINITIONS
- --------------------------------------------------------------------------------
Page
1.01 Accumulation Period......................................................6
1.02 Adjusted Current Value...................................................6
1.03 Aetna GET Fund Offering Period...........................................6
1.04 Aetna GET Fund Guaranteed Period.........................................6
1.05 Aetna GET Fund Maturity Date.............................................6
1.06 Annuitant................................................................6
1.07 Annuity..................................................................6
1.08 Beneficiary..............................................................7
1.09 Code.....................................................................7
1.10 Contract Holder..........................................................7
1.11 Contribution.............................................................7
1.12 Current Value............................................................7
1.13 Deposit Period...........................................................7
1.14 Fixed Plus Account.......................................................7
1.15 Fixed Plus Account Guaranteed Interest Rate..............................7
1.16 Fixed Annuity............................................................7
1.17 Fund(s)..................................................................7
1.18 Fund Transfer(s).........................................................7
1.19 General Account..........................................................8
1.20 Guaranteed Accumulation Account (GA Account).............................8
1.21 GA Account Guaranteed Interest Rate......................................8
1.22 Guaranteed Term..........................................................8
1.23 Individual Account.......................................................8
1.24 Loan Account.............................................................9
1.25 Loan Effective Date......................................................9
1.26 Loan Interest Rate.......................................................9
1.27 Market Value Adjustment (MVA)............................................9
1.28 Matured Term Value.......................................................9
1.29 Matured Term Value Transfer..............................................9
1.30 Maturity Date............................................................9
1.31 Monthly Average Corporates...............................................9
1.32 Net Contribution.........................................................9
1.33 Nonunitized Separate Account............................................10
1.34 Participant.............................................................10
1.35 Plan....................................................................10
3
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Page
1.36 Reinvestment............................................................10
1.37 Separate Account........................................................10
1.38 Valuation Date..........................................................10
1.39 Valuation Period........................................................10
1.40 Variable Annuity........................................................11
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract......................................................11
2.02 Change of Fund..........................................................11
2.03 Nonparticipating Contract...............................................11
2.04 Payments................................................................11
2.05 State Laws..............................................................12
2.06 Control of Contract.....................................................12
2.07 Designation of Beneficiary..............................................13
2.08 Misstatements and Adjustments...........................................13
2.09 Incontestability........................................................13
2.10 Grace Period............................................................13
2.11 Individual Certificates.................................................13
III. CONTRIBUTIONS, CURRENT VALUE, and WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------
3.01 Limitation on Contributions.............................................13
3.02 Net Contribution(s).....................................................13
3.03 Experience Credits......................................................14
3.04 Fund Record Units.......................................................14
3.05 Fund Record Unit Value..................................................14
3.06 Fund Net Return Factors.................................................14
3.07 Market Value Adjustment.................................................15
3.08 Fund Transfer(s)........................................................16
3.09 Aetna GET Fund Offering Period..........................................17
3.10 Aetna GET Fund Guarantee................................................18
3.11 Aetna GET Fund Maturity Date............................................18
3.12 Loans...................................................................18
3.13 Notice to the Participant...............................................21
3.14 Withdrawal Restrictions.................................................21
3.15 Manner and Timing of Distributions......................................22
3.16 Withdrawal..............................................................23
3.17 Partial Withdrawal from the Fixed Plus Account..........................23
3.18 Payment of Fixed Plus Account Full Withdrawal...........................24
3.19 Payment of Minimum Current Value........................................25
4
<PAGE>
Page
3.20 Amount Payable at Death (Before Annuity Payments Start).................25
3.21 Reinstatement...........................................................26
IV. NON-ANNUITY DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
4.01 Distribution Options....................................................26
4.02 Estate Conservation Option..............................................28
4.03 Life Expectancy Option..................................................28
4.04 Systematic Withdrawal Option............................................29
V. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
5.01 General Provisions......................................................30
5.02 Annuity Options.........................................................31
5.03 Payments................................................................32
5.04 Investment Option.......................................................33
5.05 Fund Annuity Units......................................................33
5.06 Fund Annuity Unit Value.................................................34
5.07 Fund Annuity Net Return Factor..........................................34
5.08 Fund Transfers During the Annuity Period................................35
5.09 Death Benefit...........................................................35
5
<PAGE>
I. DEFINITIONS
- --------------------------------------------------------------------------------
1.01 Accumulation Period: The period during which Net Contribution(s) are
applied to an Individual Account.
1.02 Adjusted Current The Current Value (See 1.12) of an Individual
Value: Account (See 1.19) plus or minus any applicable
aggregate GA Account Market Value Adjustment. (See
3.07).
1.03 Aetna GET Fund The period, usually from one to three months, during
Offering Period: which Participants may transfer or deposit amounts
(Offering Period) to an Aetna GET Fund series. Each Aetna GET Fund
series has a specified Offering Period. Amounts
transferred or deposited prior to the date on which
the Guaranteed Period begins are invested in money
market instruments.
Aetna reserves the right to state the minimum amount
a Participant may transfer or deposit to each
Offering Period. Aetna also reserves the right to
extend an Offering Period or accept Fund transfers
or deposits to an Aetna GET Fund series during the
series' Guaranteed Period.
1.04 Aetna GET Fund For each Aetna GET Fund series, the period for which
Guaranteed Period: the Aetna Get Fund Guarantee applies. The Guaranteed
(Guaranteed Period) Period ends on the Maturity Date.
1.05 Aetna GET Fund The date on which a series' Guaranteed Period ends
Maturity Date: and GET Fund Record Units for the series are
(Maturity Date) liquidated.
1.06 Annuitant: If an Annuity provides lifetime benefits, the person
whose life expectancy determines the amount and/or
duration of Annuity benefit payments.
1.07 Annuity: Payment of an income under the Annuity Provisions of
Section V:
(a) For the life of one or two persons;
(b) For a stated period; or
(c) For some combination of (a) and (b).
1.08 Beneficiaries: The person(s) named to receive any benefits which
remain under the Contract after the Participant's
death. Participant(s) designate a Beneficiary for
their Individual Account(s). (See 2.07)
1.09 Code: The Internal Revenue Code of 1986, as amended.
1.10 Contract Holder: The entity, named on the cover of this Contract, to
which the Contract is issued.
6
<PAGE>
1.11 Contribution: A payment received at Aetna's Home Office and
allocated to this Contract.
1.12 Current Value: For an Individual Account (See 1.23), the Current
Value is the total of:
(a) The amount, if any, in the Fixed Plus
Account, with interest earned to date;
(b) The amount, if any, in the GA Account, with
interest earned to date; and
(c) The value of all Fund record units (See
3.05), if any, as of the most recent
Valuation Period.
1.13 Deposit Period: A calendar month, a calendar quarter, or any other
period of time specified by Aetna during which Net
Contribution(s), Transfers and Reinvestments are
accepted into the GA Account for one or more
Guaranteed Terms.
1.14 Fixed Plus Account: If offered as an investment option under the
Contract (see Contract Schedule I) the Fixed Plus
Account is an accumulation option with a guaranteed
minimum interest rate. Aetna may credit a higher
rate which is not guaranteed. The portion that may
be withdrawn or transferred in a 12 month period is
restricted (See 3.08, 3.17 and 3.18).
1.15 Fixed Plus Account If the Fixed Plus Account is an investment option
Guaranteed Interest under the Plan (see Contract Schedule I) then Aetna
Rate: will add interest at an annual rate no less than
that shown on Contract Schedule I on any Net
Contribution(s) to the Fixed Plus Account. Aetna may
add interest at a higher rate determined by its
Board of Directors.
1.16 Fixed Annuity: An Annuity with payments that do not vary in amount.
1.17 Fund(s): The open-end registered management investment
companies whose shares are purchased by the Separate
Account to fund the benefits provided by the
Contract. Each Aetna GET Fund series is a separate
Fund.
1.18 Fund Transfers: The movement of invested amounts among the available
Fund(s); the Fixed Plus Account (if available) and
the GA Account (if available).
1.19 General Account: The account holding the assets of Aetna, other than
those assets held in Aetna's Separate Account(s) and
Nonunitized Separate Account(s).
1.20 Guaranteed If offered as an investment option under the
Accumulation Account Contract (see Contract Schedule I) the Guaranteed
(GA Account): Accumulation Account (GA Account) is an accumulation
option where Aetna guarantees stipulated rate(s) of
interest for a specified period of time. All assets
of Aetna, including amounts in the Nonunitized
Separate Account, are available to meet the
guarantees for the GA Account.
7
<PAGE>
1.21 GA Account If the GA Account is an investment option under the
Guaranteed Interest Contract (see Contract Schedule I) then Aetna will
Rate: declare the interest rate(s) applicable to a
specific Guaranteed Term at the start of the Deposit
Period for that Guaranteed Term. The rate(s) are
guaranteed by Aetna for that Deposit Period and the
ensuing Guaranteed Term. The Guaranteed Interest
Rates are annual effective yields. That is, interest
is credited at a rate that will produce the
Guaranteed Interest Rate over the period of a year.
No Guaranteed Interest Rate will ever be less than
the Minimum Guaranteed Interest Rate shown on
Contract Schedule I.
For Guaranteed Terms of one year or less, one
Guaranteed Interest Rate is credited for the full
Guaranteed Term. For longer Guaranteed Terms, an
initial Guaranteed Interest Rate is credited from
the date of deposit to the end of a specified period
within the Guaranteed Term. There may be different
Guaranteed Interest Rate(s) declared for subsequent
specified time intervals throughout the Guaranteed
Term.
1.22 Guaranteed Term: The period of time for which GA Account Guaranteed
Interest Rates are guaranteed on Net Contributions,
Fund Transfers and Reinvestments made into a current
Deposit Period for the GA Account. Such period
begins on the day following the close of the Deposit
Period and ends on the designated Maturity Date.
Guaranteed Terms are offered at Aetna's discretion
for various lengths of time ranging up to and
including ten years and are classified as follows:
Short-term. Three (3) or fewer years. Amounts
allocated to a short-term Term are held in the
General Account. Long-term. More than three (3)
years, but not more than ten (10). Amounts allocated
to a long-term Term are held in the Nonunitized
Separate Account.
During a Deposit Period, Aetna may make available
any number of Guaranteed Terms. The Participant may
allocate Net Contributions and Fund Transfers into
any or all of the available Guaranteed Terms.
1.23 Individual Account: This Contract is issued to the Contract Holder.
However, Aetna will maintain Individual Accounts for
each Participant to keep a record of Current Value
(See 1.12) and transactions. These may include:
(a) An Employer Account: This Individual Account
will be credited with employer Net
Contribution(s) and transferred amounts of
403(b) funds, attributable to employer
contributions; and
(b) An Employee Account: This Individual Account
will be credited with employee Net
Contribution(s) and transferred amounts of
403(b) funds, attributable to employee
contributions including after tax
contributions.
1.24 Loan Account: For each loan taken by a Participant, the loan
amount transferred from the investment options is
credited to the Loan Account.
8
<PAGE>
1.25 Loan Effective Date: The date on which Aetna receives a loan agreement in
good order at its home office.
1.26 Loan Interest Rate: The interest rate Aetna charges on a loan. (see
Contract Schedule I).
1.27 Market Value An adjustment to the amount withdrawn or transferred
Adjustment (MVA): from an GA Account Guaranteed Term prior to the end
of that Guaranteed Term. The adjustment reflects the
change in the value of the investment due to changes
in interest rates since the date of deposit and is
computed using the formula given in 3.07. The
adjustment is expressed as a percentage of each
dollar being withdrawn.
1.28 Matured Term Value: The amount payable on a GA Account Guaranteed Term's
Maturity Date.
1.29 Matured Term Value During the calendar month following a GA Account
Transfer: Maturity Date, the Participant may notify Aetna's
Home Office in writing to transfer or withdraw all
or part of the Matured Term Value, plus interest at
the new Guaranteed Rate accrued thereon, from the GA
Account without an MVA. This provision only applies
to the first such written request received from the
Participant during this period for any Matured Term
Value.
1.30 Maturity Date: The last day of a GA Account Guaranteed Term.
1.31 Monthly Average Moody's Corporate Bond Yield Average-Monthly Average
Corporates: Corporates published by Moody's Investors Service,
or its successor, or a substantially similar average
as may be allowed by law or regulation.
1.32 Net Contribution: A Contribution less any applicable premium taxes.
1.33 Nonunitized Separate An account established by Aetna under Section
Account: 38a-433 of the Connecticut General Statutes that
holds assets for GA Account Terms (See 1.21) greater
than three years. The Contract Holder or Participant
does not participate in the investment gain or loss
from the assets held in the Nonunitized Separate
Account. Such gain or loss is borne entirely by
Aetna. Assets in this account may be charged with
liabilities arising out of any other Aetna business.
1.34 Participant: A person who participates in the Plan named on the
cover of this Contract.
1.35 Plan: The Plan named on the cover of this Contract and
established under Section 403(b) of the Code. The
Plan is not a part of the Contract and Aetna is not
bound by its terms.
9
<PAGE>
1.36 Reinvestment: Aetna will mail a notice to the Participant at least
18 calendar days before a Guaranteed Term's Maturity
Date. This notice will contain the Guaranteed Terms
available during the current Deposit Periods with
their Guaranteed Interest Rate(s) and projected
Matured Term Value. If no specific direction is
given by the Participant prior to the Maturity Date,
each Matured Term Value will be reinvested in the
current Deposit Period for a Guaranteed Term of the
same duration. If a Guaranteed Term of the same
duration is unavailable, each Matured Term Value
will automatically be reinvested in the current
Deposit Period for the next shortest Guaranteed Term
available in the same classification. If no shorter
Guaranteed Term is available, the next longer
Guaranteed Term will be used. Aetna will mail a
confirmation statement to the Participant, the next
business day after the Maturity Date. This notice
will state the Guaranteed Term and Guaranteed
Interest Rate(s) which will apply to the reinvested
Matured Term Value.
1.37 Separate Account: An account, established by Aetna under Section
38a-433 of the Connecticut General Statutes, that
buys and holds shares of the Fund(s) available under
this Contract. Income, gains or losses, realized or
unrealized are credited or charged to the Separate
Account without regard to other income, gains or
losses of Aetna. Aetna owns the assets held in the
Separate Account and is not a trustee of such
amounts. Amounts in the Separate Account are not
generally guaranteed and are held at market value.
The assets of the Separate Account, to the extent of
reserves and other contract liabilities of the
Account, cannot be charged with other Aetna
liabilities.
1.38 Valuation Date: The date and time on which a Fund annuity unit value
and a Fund record unit value are calculated.
Currently, this calculation will be determined at
the close of business of the New York Stock Exchange
on any normal business day, Monday through Friday,
that the New York Stock Exchange is open.
1.39 Valuation Period: The period of time commencing at the end of one
Valuation Date and ending at the end of the next
Valuation Date.
1.40 Variable Annuity: An Annuity with payments that vary with the net
investment results of the Funds available during the
Annuity period.
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract: Only an authorized officer of Aetna may change the
terms of this Contract. Aetna reserves the right to
modify this Contract to meet the requirements of
applicable state and federal laws or regulations.
Aetna will notify the Contract Holder in writing of
any changes.
10
<PAGE>
2.01 Change of Contract Aetna may change the tables for determining the
(Cont'd): amount of Annuity benefit payments attributable only
to Contributions accepted after the effective date
of change, without Contract Holder consent. Such a
change will not become effective earlier than twelve
months after (1) the effective date of the Contract,
or (2) the effective date of a previous change.
Aetna will notify the Contract Holder in writing at
least thirty days before the effective date of the
change. Aetna may not make Contract changes which
adversely affect the Annuity benefits attributable
to Contributions already made to the Contract.
2.02 Change of Fund: The assets of the Separate Account are segregated by
Fund. If the shares of any Fund are no longer
available for investment by the Separate Account or
if in our judgment, further investment in such
shares should become inappropriate in view of the
purpose of the Contract, Aetna may cease to make
such Fund shares available for investment under the
Contract prospectively, or Aetna may substitute
shares of another Fund for shares already acquired.
Aetna may also, from time to time, add additional
Funds. Any elimination, substitution or addition of
Funds will be done in accordance with applicable
state and federal securities laws. Aetna reserves
the right to substitute shares of another Fund for
shares already acquired without a proxy vote.
2.03 Nonparticipating The Contract Holder, Participants, or Beneficiaries
Contract: will not have a right to share in the earnings of
Aetna.
2.04 Payments: (a) Aetna will make distributions as directed by
the Contract Holder. Aetna will determine the
amount of payments based on the Individual
Account's Current Value as of the date on
which a request is received in good order at
Aetna's Home Office. Payments will be made
within seven (7) calendar days of receipt of
a written request in good order at Aetna's
Home Office.
(b) Aetna may defer payments: (1) for a period of
up to six (6) months (unless not allowed by
state law); and (2) as allowed by federal
law.
2.05 State Laws: This Contract complies with the laws of the state in
which it is delivered. Any cash, death or Annuity
payments are equal to or greater than the minimum
required by such laws. Annuity tables for legal
reserve valuation shall be as required by state law.
Such tables may be different from Annuity tables
used to determine Annuity payments.
2.06 Control of Contract: This Contract is designed to fund a plan which
provides for retirement income.
11
<PAGE>
2.06 Control of Contract The Contract Holder may, by written direction to
(Cont'd): Aetna, allow Participants to select the investment
options of their Employer and/or Employee Accounts.
Choices made under this Contract must be in writing
or in a form satisfactory to Aetna. Until receipt of
such choices in its Home Office, Aetna may rely on
any previous choices made. An in-service transfer
pursuant to IRS Revenue Ruling 90-24, may be made
only by written direction from the Contract Holder
and Participant to Aetna. Checks for in-service
transfers will be made payable only to the acquiring
investment provider.
(a) Nontransferable and Nonassignable: This
Contract and any Individual Accounts are
nontransferable and nonassignable, except to
Aetna in the event of a loan, or pursuant to
a "qualified domestic relations order" as set
forth under the Internal Revenue Code of
1986, as it may be amended from time to time.
(b) ERISA/REA Requirements: The Contract Holder
shall notify Aetna in writing of the
applicability of ERISA, as amended by
subsequent law including REA, to the Plan.
Aetna shall rely on the Contract Holder's
determination and representation of
applicability. With respect to any
distribution made from an Employee or
Employer Account from a Contract subject to
ERISA, the Contract Holder must certify in
writing that all the appropriate REA
requirements have been met and that
distribution is in accordance with the terms
of the Plan.
(c) Distributions: A Participant may apply for a
distribution from his or her Employee Account
or Employer Account. However, the Contract
Holder must certify in writing that the
distribution is in accordance with the terms
of the Plan.
(d) Participant Rights/Employee Account: The
Participant has a nonforfeitable right to the
value of his or her Employee Account pursuant
to the terms of the Plan as interpreted by
the Contract Holder.
(e) Participant Rights/Employer Account: The
Participant has a nonforfeitable right to the
value of his or her Employer Account pursuant
to the terms of, and to the extent of his or
her vested percentage under, the Plan as
interpreted by the Contract Holder. It is the
Contract Holder's responsibility to maintain
records of the Participant's vesting
percentages. Aetna will not maintain nor keep
such records.
2.07 Designation of The Participant shall designate a Beneficiary. If
Beneficiary: the Plan is subject to ERISA, the Contract Holder
must certify in writing that the designation is in
accordance with the appropriate REA requirements and
the terms of the Plan.
2.08 Misstatements and If Aetna finds the age of any payee to be misstated,
Adjustments: the correct facts will be used to adjust payments.
12
<PAGE>
2.09 Incontestability: Aetna cannot cancel this Contract because of any
error of fact.
2.10 Grace Period: This Contract will remain in effect even if
Contributions are not continued except as provided
in 3.19.
2.11 Individual Aetna shall issue certificates to Participants as
Certificates: required by the state in which this Contract is
delivered. The certificate will summarize certain
provisions of the Contract. Certificates are for
information only and are not a part of the Contract.
III. CONTRIBUTIONS, CURRENT VALUE, AND WITHDRAWAL PROVISIONS
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3.01 Limitation on The Contribution(s) made to the Employee and
Contributions: Employer Account in any year, other than transferred
amounts, cannot exceed the lesser of the amount
determined under the exclusion allowance of Code
Section 403(b)(2) or the annual additions limitation
of Code Section 415(c)(1). In addition, in no event
may the Contribution(s) attributable to elective
deferrals as defined in Code Section 402(g) exceed
$9,500 (or, such larger amount as adjusted by the
Secretary of the Treasury) during any calendar year,
unless the alternate limitation of Code Section
402(g)(8) applies.
3.02 Net Contribution(s): The Net Contribution equals the actual Contribution
less any applicable premium tax. Generally, Aetna
will deduct the premium tax when Annuity benefits
are purchased (See Section V). If Aetna determines
that under applicable state law, it must pay a
premium tax when the Contribution is received, or at
any other time, it may deduct the tax at that time.
The Net Contribution(s) may be allocated among the
following investment options:
(a) The Fixed Plus Account (if available); and
(b) The current Deposit Period(s) for Guaranteed
Terms under the GA Account (if available);
and
(c) The Fund(s) in which the Separate Account
invests. Aetna must be told the percentage of
all Net Contributions to allocate to one or
more of the investment options. Aetna
reserves the right to require a minimum
Contribution amount per Individual Account.
Aetna reserves the right not to accept any
Contribution.
3.03 Experience Credits: Aetna may apply experience credits under this
Contract. Any such credits will be computed as
decided by Aetna.
3.04 Fund Record Units: The portion of the Net Contribution(s) applied to
each Fund under the Separate Account will determine
the number of Fund record units credited to the
Individual Account for that Fund. This number is
equal to the Net Contribution applied to the Fund
divided by the Fund record unit value (See 3.05) for
the Valuation Period in which the Contribution is
received in good order.
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3.05 Fund Record Unit A Fund record unit value is computed by multiplying
Value: the net return factor (See 3.06) for the current
Valuation Date by the Fund record unit value for the
previous Date. The dollar value of a Fund record
unit, Separate Account assets, and Variable Annuity
payments may go up or down due to investment gain or
loss.
3.06 Fund Net Return The net return factor(s) are used to compute all
Factors: Separate Account record units for any Fund. The net
return factor for each Fund is equal to 1.0000000
plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by
the Separate Account at the end of a
Valuation Period, minus
(b) The value of the shares of the Fund held by
the Separate Account at the start of the
Valuation Period, plus or minus
(c) Taxes (or reserves for taxes) on the Separate
Account (if any); divided by
(d) The total value of the Fund record units and
Fund annuity units of the Separate Account at
the start of the Valuation Period; minus
(e) A Separate Account charge at an annual
effective rate as shown on Contract Schedule
I for Annuity mortality and expense risks,
asset based sales charge, if any and a daily
administrative charge which will not exceed
the amount shown on Contract Schedule I on an
annual basis. The administrative charge may
be changed annually except for amounts which
have been used to purchase an Annuity; minus
(f) A fee for the Aetna GET Fund Guarantee which
is deducted daily during the Guaranteed
Period. The fee, which is determined prior to
the beginning of each series' Offering
Period, is as shown on Contract Schedule I.
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to the net
assets of the Fund divided by the number of shares
outstanding.
3.07 Market Value (a) An MVA will be applied to any withdrawal from
Adjustment (MVA): a GA Account Term before the Maturity Date
due to:
(1) A Fund Transfer;
(2) A full or partial withdrawal; or
(3) A payment of a premium for Annuity
Option 1.
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3.07 Market Value The amount of the withdrawal will be adjusted to a
Adjustment (MVA) market value amount as described in (b).
(Cont'd):
(b) Market value adjusted amounts will be equal
to the amount withdrawn multiplied by the
following ratio:
(1 + i)^(x/365)
-------------------
(1 + j)^(x/365)
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days remaining, (computed
from Wednesday of the week of withdrawal)
in the Term.
(c) The Deposit Period Yield will be determined
as follows:
(1) At the close of the last business day
of each week of the Deposit Period, a
yield will be computed as the average
of the yields on that day of U.S.
Treasury Notes which mature in the
last three months of the Term.
(2) The Deposit Period Yield is the
average of those yields for the
Deposit Period. If withdrawal is made
prior to the close of the Deposit
Period, it is the average of those
yields on each week preceding
withdrawal.
(3) The Current Yield is the average of
the yields on the last business day of
the week preceding withdrawal on the
same U.S. Treasury Notes included in
the Deposit Period Yield.
(4) In the event that no U.S. Treasury
Notes which mature in the last three
months of the Term exist, Aetna
reserves the right to use the U.S.
Treasury Notes that mature in a
following quarter.
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3.07 Market Value (d) If a lump-sum distribution or Annuity Option
Adjustment (MVA) is elected six months or more after your
(Cont'd): death, the Beneficiary will receive the
Individual Account Current Value, plus or
minus any MVA that would apply to any portion
of the Account allocated to GAA. If a full or
partial withdrawal or Fund Transfer is made
within six months after your death, the
Beneficiary will receive the Individual
Account Current Value, plus any positive MVA
that would apply to any portion of the
Account allocated to GAA. The value of the
Account is determined as of the Valuation
Date on which proof of death acceptable to us
and a request for payment are received at our
Home Office.
(e) After the six month period, the withdrawal or
Fund Transfer will be the aggregate MVA
amount (i.e., including all MVAs).
(f) The greater of the aggregate MVA amount or
the applicable portion of the Current Value
in the GA Account is applied to amounts
withdrawn from the GA Account for payment of
a premium under Annuity options 2 or 3.
3.08 Fund Transfer(s): All or any portion of the Adjusted Current Value of
the Individual Account (subject to the limitations
described below) may be transferred from any Fund,
the Fixed Plus Account (if available) or the GA
Account (if available):
(a) To any Fund; or
(b) To the Fixed Plus Account (if available); or
(c) To any Guaranteed Term of the GA Account (if
available) with a different classification
available in the Current Deposit Period.
Fund Transfer requests can be submitted as a
percentage or as a dollar amount. Aetna may
establish a minimum Fund Transfer amount. Within a
Guaranteed Term classification, the amount
transferred will be withdrawn from the oldest
Deposit Period, then from the next oldest, and so on
until the amount requested is satisfied.
Amounts applied to Guaranteed Terms of the GA
Account may not be transferred to the Funds, the
Fixed Plus Account or to another Guaranteed Term
during the Deposit Period or 90 days after the close
of the Deposit Period except for Matured Term
Value(s) during the calendar month following the
Term's Maturity Date.
Fund Transfers from Guaranteed Terms of the GA
Account are subject to the MVA provisions of 3.07.
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3.08 Fund Transfers During each rolling twelve (12) month period, up to
(Cont'd): 20% of the Fixed Plus Account value may be
transferred to one or more of the Fund(s), and/or
the GA Account's then-current Deposit Period. The
20% limit is reduced by any partial withdrawals,
Fund Transfers or amounts taken as a loan or used to
purchase an Annuity during the twelve (12) month
period. Aetna reserves the right to include amounts
paid under ECO, LEO and SWO provisions for purposes
of applying this 20% limit. This limit is waived
when the balance in the Fixed Plus Account is $1,000
or less on the date the Fund Transfer request is
received in good order at Aetna's Home Office.
The Participant may make an unlimited number of Fund
Transfers during the Accumulation Period.
A Fund Transfer or withdrawal from an Aetna GET Fund
series before the Maturity Date will be based on the
GET Fund Record Unit Value for the next Valuation
Period following the date on which Aetna receives a
transfer request in good order at its home office.
3.09 Aetna GET Fund Aetna will specify a minimum total asset amount
Offering Period: required at the end of an Offering Period to offer
an Aetna GET Fund series. If the minimum is not
achieved, Aetna reserves the right to not start the
Guaranteed Period.
If an Aetna GET Fund series is terminated, Aetna
will send written notification of the termination to
all Participants who have made Fund Transfers or
deposits to that Aetna GET Fund Series. Notice will
be mailed no later than 15 calendar days after the
end of the Offering Period. Participants then have
45 days from the end of the Offering Period to
redirect amounts in the terminated Aetna GET Fund
series to one or more investment options available
under the Contract. During this time, Funds are
invested in money market instruments. If no election
is made by the end of the 45-day period, at the next
Valuation Period, Aetna will transfer the amount in
the terminated Aetna GET Fund series to the (Aetna
Variable Encore Fund).
Aetna reserves the right to specify a maximum total
asset amount for an Aetna GET Fund series. If the
maximum is achieved, Aetna also reserves the right
to set a date on which it will stop accepting Fund
Transfers or deposits for that Aetna GET Fund
series. Aetna will announce the date on which it
will stop accepting Fund Transfers and deposits ten
calendar days prior to that date.
3.10 Aetna GET Fund On the Maturity Date of each Aetna GET Fund series,
Guarantee: the GET Fund Record Unit Value for that series will
not be less than the GET Fund Record Unit Value
determined at the beginning of the Guaranteed
Period. If necessary, Aetna will transfer funds from
its General Account to the Aetna GET Fund series to
offset any shortfall in the GET Fund Record Unit
Value. The Aetna GET Fund Guarantee does not apply
to withdrawals or Transfers made before the Maturity
Date.
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3.10 Aetna GET Fund If Aetna GET Fund Record Units are adjusted at any
Guarantee (Cont'd): time during an Aetna GET Fund Guaranteed Period, the
Aetna GET Fund Guarantee will be restated. The
restated Aetna GET Fund Guarantee will be calculated
so that it is equivalent to the original Aetna GET
Fund Guarantee for that series.
3.11 Aetna GET Fund Prior to the Maturity Date for each Aetna GET Fund
Maturity Date: series, Aetna sends a written notice of the date to
all participants who have Current Value in that
series. Participants must then inform Aetna of the
investment option(s) to which to transfer that
Current Value. If a Participant does not make an
election, on the Maturity Date Aetna will transfer
the Current Value to the then available Aetna GET
Fund series' Offering Period. If no Offering Period
is available, Aetna will transfer 50% of the amount
to the (Aetna Variable Fund) and 50% to the (Aetna
Income Shares).
3.12 Loans: If loans are included as an option under the
Contract, (see Contract Schedule I) then the
following will apply.
During the accumulation period, loans are granted
(1) as permitted under applicable law; (2) subject
to the terms and conditions of the loan agreement;
and, (3) in accordance with the following
provisions.
(a) Amount available for loan: The amount
available for loan is limited to the vested
Individual Account Current Value attributable
to Participant Contributions, plus any
amounts allowed by the employers Plan.
Amounts available from some investment
options may be subject to limitations
specified in the loan agreement. To obtain
the loan amount requested, these limitations
may require the Participant to transfer
funds. A Market Value Adjustment may apply to
amounts transferred.
For plans subject to ERISA, the minimum loan
amount is $1,000. For plans not subject to
ERISA, the minimum loan amount is defined in
the loan agreement. The maximum loan amount
is the lesser of:
(1) Fifty percent (50%) of the vested
Individual Account Current Value,
including any Loan Account, reduced by
the amount of any outstanding loan
balance on the Loan Effective Date; or
(2) Fifty thousand dollars ($50,000)
reduced by the highest outstanding
loan balance for the preceding 12
months.
The amount of all outstanding loans cannot
exceed $50,000.
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3.12 Loans (Cont'd): (b) Loan Interest Rate: For Plans subject to
Title I of the Employee Retirement Income
Security Act of 1974 (ERISA), a Loan Interest
Rate is set on the first business day of each
month. For each loan, the initial Loan
Interest Rate is the rate for the calendar
month in which the Loan Effective Date
occurs. The initial Loan Interest Rate is
effective for a period of not less than three
months and not more than one year. The period
is specified in the loan agreement. For each
period, the Loan Interest Rate is adjusted if
the new rate is at least 0.5% higher or lower
than the previous rate. The Participant will
receive reasonable notification of any change
to the Loan Interest Rate.
As applicable, the Loan Interest Rate is:
(1) Plans subject to ERISA: equal to the
Monthly Average Corporates for the
calendar month beginning two months
before the Loan Interest Rate is
effective.
(2) Plans not subject to ERISA: not
greater than 8% on an annual basis
(see Contract Schedule I).
(c) Earned interest: The Loan Account is credited
with interest at a rate which is not less
than the Loan Interest Rate, less 3%, on an
annual basis.
(d) Loan repayment: Repayment is as set forth in
the loan agreement, or a Participant may
repay a loan in full at any time.
(e) Amount available for partial surrender while
a loan is outstanding: While a loan is
outstanding, the amount available for partial
surrender is equal to the vested Individual
Account Current Value, including the Loan
Account, minus 125% of the outstanding loan
balance.
(f) Full surrenders while a loan is outstanding:
If the Participant requests a full surrender
from the vested Individual Account Current
Value while a loan is outstanding, one of the
following occurs:
(1) If the amount of the vested Individual
Account Current Value available for
distribution is sufficient to repay
(a) the outstanding loan balance, plus
(b) any applicable Fixed Plus Account
default charge, then that amount,
minus the Loan Account balance, is
deducted from the vested Individual
Account Current Value and the loan is
canceled.
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3.12 Loans (Cont'd): (2) If the amount of the vested Individual
Account Current Value available for
distribution is not sufficient to
repay (a) the outstanding loan
balance, plus (b) any applicable Fixed
Plus Account default charge, then the
surrender amount cannot exceed the
vested Individual Account Current
Value, including the Loan Account,
reduced by 125% of the outstanding
loan balance.
(g) Electing an Annuity option while a loan is
outstanding: Before all or any portion of the
vested Individual Account Current Value is
applied to an Annuity option, the Participant
may repay any outstanding loan balance, or
the vested Individual Account Current Value
is adjusted as described in (f).
(h) Death of the Participant while a loan is
outstanding: If a death benefit claim is
submitted for an Individual Account with an
outstanding loan, the Individual Account
Current Value, including the amount of the
Loan Account, is reduced by the amount of the
outstanding loan balance before the death
benefit amount is determined.
(i) Loan payment default: If Aetna does not
receive a loan payment when due, the
defaulted payment is treated as follows:
(1) If the amount of the vested Individual
Account Current Value available for
distribution is sufficient to repay
(a) the amount of the defaulted
payment, plus (b) any applicable Fixed
Plus Account default charge, then that
amount is deducted from the vested
Individual Account Current Value.
(2) If the amount of the vested Individual
Account Current Value available for
distribution is not sufficient to
repay (a) the amount of the defaulted
payment, plus (b) any applicable Fixed
Plus Account default charge, until
such time that the amount due can be
distributed, the Loan Account
continues to earn interest, and
interest is charged on the defaulted
payment. At that time, the amount due
is surrendered from the vested
Individual Account Current Value.
3.13 Notice to the Each year, Aetna will notify the Participant of:
Participant:
(a) The value of any amounts held in:
(i) The Fixed Plus Account (if available),
(ii) The GA Account (if available),
(iii) The Fund(s) for the Separate Account;
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3.13 Notice to the (b) The number of any fund(s) record units;
Participant (c) The fund(s) record unit value(s);
(Cont'd): (d) The amount available for withdrawal; and
(e) The Loan Account value.
This information will be as of a date no more than
sixty (60) days before the date of the notice.
3.14 Withdrawal Limitations apply to withdrawals of any Restricted
Restrictions: Amount from this Contract, as required by Code
Section 403(b)(11). The Restricted Amount is the sum
of:
(a) Net Contributions attributable to Participant
salary reduction contributions made on and
after January 1, 1989 if any; plus
(b) The net increase, if any, in the Current
Value of the Employee Account after December
31, 1988 attributable to investment gains and
losses and credited interest.
The Restricted Amount may be fully or partially
surrendered only if one or more of the following
conditions are met:
(a) The Participant has reached age 59 1/2;
(b) The Participant has separated from service;
(c) The Participant has died;
(d) The Participant has become disabled, within
the meaning of Code Section 72 (m)(7); or
(e) The withdrawal is otherwise allowed by
federal law, regulations or rulings.
A full or partial withdrawal is also allowed if the
Participant incurs a "hardship" as that term is
defined in the Code or regulations under Code
Section 403(b).
However, the amount available for hardship is
limited to the lesser of the amount necessary to
satisfy the need, or the Net Contributions
attributable to Participant salary reduction
contributions made on and after January 1, 1989.
The Contract Holder must certify that one of these
conditions has been met before a withdrawal request
will be considered to be in good order. The Contract
Holder must notify Aetna in writing when a lump sum
payment is to be made or Annuity payments are to
commence. Also, for all withdrawals, the Contract
Holder must certify in writing that they are being
made in accordance with the Plan.
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3.14 Withdrawal If, pursuant to IRS Revenue Ruling 90-24, Aetna
Restrictions agrees to accept under this Contract amounts
(Cont'd): transferred from a Code Section 403(b)(7) custodial
account, such amounts will be subject to the
withdrawal restrictions set forth in Code Section
403(b)(7)(A)(ii).
3.15 Manner and Timing of (a) As directed by the Contract Holder, a
Distributions: distribution to a Participant or Beneficiary
may be made in a lump sum, as one of the
Distribution Options described in Section IV,
or as one of the Annuity options in Section
V. The Participant or Beneficiary may elect
the form of distribution subject to
certification in writing by the Contract
Holder that the Participant or Beneficiary is
eligible both as to the timing and form of
distribution. All distributions must satisfy
the minimum distribution rules set forth in
Code Section 401(a)(9).
(b) The distribution of benefits from the
Employee and Employer Accounts must generally
begin no later than April 1 of the calendar
year following the calendar year in which the
Participant attains age 70 1/2 or in the case
of a governmental or church plan the calendar
year in which the Participant attains age 70
1/2 or retires, whichever occurs later. For a
Participant who attained age 70 1/2 before
January 1, 1988, the distribution of such
benefits must be made or must begin not later
than the April 1 of the calendar year
following the calendar year in which the
Participant retires.
The entire value of the Individual Account
must be distributed, or distribution must be
made over the life of the Participant, the
joint lives of the Participant and
Beneficiary or over a period that does not
extend beyond the life expectancy of the
Participant or the joint life expectancies of
the Participant and Beneficiary.
(c) If the Participant does not request
commencement of benefits from the Employee
and Employer Accounts as described above,
Aetna will not be responsible for compliance
with the Code Section 401(a)(9) minimum
distribution requirements or for any adverse
tax or other consequences that may result.
If Aetna maintains separate records of the value as
of December 31, 1986, this value is not required to
be taken before the year the Participant attains the
age 75. Aetna will maintain separate records
provided the Participant does not take any
distribution other than the minimum distribution
required under Code Section 401(a)(9.)
3.16 Withdrawal: (a) The Participant may withdraw any portion or
all of an Individual Account Adjusted Current
Value and transfer such amount to another
investment provider under the Plan. The
withdrawal and transfer request must be
submitted in writing to Aetna.
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3.16 Withdrawal (Cont'd): (b) Except as described in Section 3.17, unless
the Participant specifies otherwise, partial
withdrawals are satisfied by withdrawing
amounts on a pro rata basis from each of the
investment options in which the Individual
Account is invested.
(c) When amounts are withdrawn from the GA
Account, amounts in Short-Term and Long-Term
Classifications are treated as separate
investment options and amounts are taken on a
pro rata basis. Within a Classification,
amounts will be withdrawn starting with the
Term still in effect with the oldest Deposit
Period.
(d) Any amount withdrawn from the Fixed Plus
Account will be subject to the limitations in
3.17, 3.18 and 3.19.
3.17 Partial Withdrawal The amount eligible for partial withdrawal is 20% of
from the Fixed Plus the Current Value of the amount held in the Fixed
Account: Plus Account on the day Aetna's Home Office receives
a written request, reduced by any previous Fund
Transfer, partial withdrawal or amounts taken as a
loan or used to purchase Annuity benefits during the
prior 12 months. Aetna reserves the right to include
amounts paid under ECO, LEO and SWO for purposes of
applying this 20% limit. However, SWO and LEO are
unavailable if a Fixed Plus Account Transfer or
withdrawal is requested within the current 12 month
period.
The 20% limit applicable to partial withdrawals from
the Fixed Plus Account will be waived under certain
conditions and will apply when the partial
withdrawal is made on a pro rata basis from all
options used under the Participant's Individual
Account. (See Contract Schedule I).
3.18 Payment of Fixed When Aetna receives a full withdrawal request, no
Plus Account Full additional partial withdrawals or Fund Transfers
Withdrawal: from the Fixed Plus Account are permitted during the
payout period. If a full withdrawal is requested,
Aetna will pay any Current Value from the Fixed Plus
Account in five payments as follows:
(a) One-fifth of the Current Value on the day the
request is received in good order at Aetna's
Home Office, reduced by any amount from the
Fixed Plus Account that was transferred,
withdrawn or used for a loan or to purchase
Annuity benefits during the prior 12 months;
(b) One-fourth of the remaining Current Value 12
months later;
(c) One-third of the remaining Current Value 12
months later;
(d) One-half of the remaining Current Value 12
months later; and
(e) The balance of the Current Value 12 months
later.
The Fixed Plus Account full withdrawal payment
provision will be waived when a withdrawal is:
(a) Due to the Participant's death before Annuity
benefit payments begin;
(b) Used to purchase Annuity benefits;
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3.18 Payment of Fixed (c) When the amount in the Fixed Plus Account is
Plus Account Full $3,500 or less and no amount has been
Withdrawal (Cont'd): withdrawn, transferred, taken as a loan or
used to purchase Annuity benefits during the
previous 12 months;
(d) Due to hardship when the following conditions
are met:
(1) the withdrawal is due to an employer
certified hardship;
(2) the amount withdrawn is paid directly
to the Participant; and
(3) the amount paid for all partial and
full withdrawals due to hardship
during the previous 12-month period
does not exceed 10% of the average
Current Value for all Individual
Accounts during the same period of
time; or
(e) Due to separation from service provided that:
(1) the withdrawal is due to the
Participant's separation from service
with the employer;
(2) the employer certifies that the
Participant has separated from
service;
(3) the amount withdrawn is paid directly
to the Participant; and
(4) the amount paid for all partial and
full withdrawals due to separation
from service during the previous
12-month period does not exceed 20% of
the average Current Value of all
Individual Accounts during that same
period of time.
Any full withdrawal from the Fixed Plus Account may
be cancelled at any time before the end of the
payment period.
3.19 Payment of Minimum If the Individual Accounts Current Value is less
Current Value: than $3,500, and no Contributions have been received
for three (3) years, Aetna may close the Account and
pay the Current Value as directed by the Contract
Holder in one lump sum.
3.20 Amount Payable at Aetna will pay any portion of the Individual
Death (Before Account(s) Current Value, to the Beneficiary when:
Annuity Payments
Start): (a) The Participant dies before Annuity payments
start; and
(b) The certified copy of the death certificate
is received by Aetna; and
(c) A completed and signed election form is
submitted to the Home Office. The form must
include Contract Holder certification that
the Beneficiary is eligible for a
distribution under the terms of the Plan.
A guaranteed death benefit is available if the
Beneficiary requests either a lump-sum payment or an
Annuity option within six months of the
Participant's death.
For each Individual Account, the death benefit is
guaranteed to be the greater of:
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3.20 Amount Payable at (a) The Current Value of the Individual Account
Death (Before plus aggregate positive MVA, as applicable,
Annuity Payments on the date the notice of death and the
Start) (Cont'd): request for payment are received in good
order at Aetna's Home Office; or
(b) The total of Net Contribution(s) made to the
Individual Account minus the total of all
partial withdrawals, annuitizations made from
the Individual Account and any amount
allocated from the Individual Account to the
Loan Account.
If the Participant dies before distributions begin
in accordance with the provisions of Code Section
401(a)(9), the entire value of the Account must be
distributed by December 31 of the calendar year
containing the fifth anniversary of the date of the
Participant's death. Alternatively, if the
Participant has a designated Beneficiary, payments
may be made over the life of the Beneficiary or over
a period not extending beyond the life expectancy of
the Beneficiary provided distribution to a
non-spouse Beneficiary begins by December 31 of the
calendar year following the calendar year of the
Participant's death. For a spousal Beneficiary, such
payments must begin by the later of December 31 of
the calendar year of the Participant's death or
December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant dies after distributions begin in
accordance with the provisions of Code Section
401(a)(9), payments to the Beneficiary must be made
at least as rapidly as the method of distribution in
effect at the time of the Participant's death. If
the minimum distribution requirements have been met
by partial withdrawals based on the participant's
life expectancy or the joint life expectancies of
the Participant and Beneficiary, death benefit
payments to the Beneficiary must also satisfy any
additional requirements of Code Section 401(a)(9).
Amounts in the GA Account will be payable as
described in Section 3.07(d).
3.21 Reinstatement: All or a portion of the proceeds of a full
withdrawal of an Individual Account may be
reinvested within 30 days after the surrender if
allowed by law. Any Market Value Adjustment deducted
from GA Account withdrawals will not be included in
the reinstatement. Amounts will be reinstated among
the Fixed Plus Account, GA Account, and the Fund(s)
in the same proportion as they were at the time of
withdrawal. Any amount reinstated to the GA Account
will be credited to the current Deposit Period. The
number of record units reinstated will be based on
the record unit value(s) next computed after receipt
at Aetna's Home Office of the reinstatement request
and the amount to be reinvested.
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3.21 Reinstatement Amounts attributable to an Aetna GET Fund series
(Cont'd): will be reinstated to the current Offering Period of
the Aetna GET Fund series. If no Aetna GET Fund
series Offering Period is available, amounts
withdrawn from the Aetna GET Fund series will be
allocated, pro rata, among all other investment
options in which the Individual Account is invested.
Any Individual Account(s) closed because the Current
Value was less than $3,500 may not be reinstated
(see 3.19).
A Reinstatement is permitted only once per
Individual Account.
IV. NON-ANNUITY DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
4.01 Distribution Options: Distribution Options: ECO, LEO and SWO are
distribution options under which a portion of the
Individual Account Current Value will automatically
be surrendered and distributed each calendar year.
The distributed amount is withdrawn pro rata from
each investment option under the Individual Account.
The Contract Holder must certify in writing that
distributions are being made in accordance with the
Plan.
Market Value Adjustment: A Market Value Adjustment
will not be applied to any portion of the Current
Value which is paid under ECO.
Minimum Current Value: At its discretion, Aetna may
require a minimum initial Current Value for election
of a distribution option. If after election of the
option the Current Value is insufficient to make a
scheduled payment, Aetna will distribute the entire
Individual Account balance.
Reservations of Rights: Aetna reserves the right to
change the terms of ECO, LEO or SWO for future
elections, to discontinue the availability of these
options after proper notification, or to make other
distribution options available as allowed by the
state in which this Contract is delivered. Aetna
also reserves the right to allow ECO and LEO
payments to be made more frequently than annually.
Election and Revocation: The Participant or
Beneficiary may elect a distribution option by
submitting a completed and signed election form to
Aetna's Home Office. However, the Contract Holder
must certify in writing that the distribution option
is in accordance with the terms of the Plan. If the
Individual Account is subject to ERISA, the Contract
Holder must certify in writing that the waiver and
spousal consent requirements of ERISA Code Section
205 have been satisfied.
Once elected, the Participant or Beneficiary may
revoke the option by submitting a written request to
Aetna's Home Office. Any revocation will apply only
to amounts not yet paid.
26
<PAGE>
4.01 Distribution Options Availability of ECO, LEO and SWO: The Participant
(Cont'd): may elect any one of the following three
distribution options, if they are available as an
option under the Contract (see Contract Schedule I)
and if the Contract Holder certifies that the
election is in accordance with the terms of the
Plan. The Beneficiary may elect either ECO or SWO,
if they are available as an option under the
Contract (see Contract Schedule I) and if the
Contract Holder certifies that the election is in
accordance with the terms of the Plan.
An individual who has revoked ECO, LEO or SWO may
not subsequently elect that option again, nor may
the individual elect another withdrawal option
unless permitted under the Code minimum distribution
rules.
LEO and SWO are not available if there is an
outstanding loan under the Individual Account, or if
a Fixed Plus Account transfer or surrender has
occurred within the prior 12 month period. Payments
will cease if a loan is granted while LEO or SWO is
in effect.
If LEO is in effect and the Participant dies, or if
ECO or SWO is in effect and the Participant dies
before the required beginning date for minimum
distributions, payments will cease. A Beneficiary
may elect ECO or SWO provided the election satisfies
the Code minimum distribution rules.
If ECO or SWO is in effect and the Participant dies
after the required beginning date for minimum
distributions, payments will continue as permitted
under the Code minimum distribution rules, unless
revoked.
4.02 Estate Conservation Amount of Distribution: Each year that ECO is in
Option (ECO): effect, Aetna will calculate and distribute an
amount equal to the minimum required distribution
under the Code. The annual distribution will be
determined by dividing the Individual Account
Current Value as of December 31 of the year prior to
the year for which payment is to be made by a life
expectancy factor based on expected return multiples
in Table V and VI of Section 1.72-9 of the Income
Tax Regulations.
If Aetna maintains separate records of the values as
of December 31, 1986, payments made during or after
the year in which the Participant attains age 70 1/2
and before the year the Participant attains age 75,
will only be calculated on amounts contributed after
December 31, 1986, plus all earnings on all amounts
after that date. If age 70 1/2 was attained prior to
1988, the Participant must be retired in order to
qualify for this exception.
The Participant may elect either the single or joint
life expectancy factor. If the joint life expectancy
factor is elected, the second life must be the
Beneficiary under the Plan. If the Beneficiary
selects ECO after the Participant's death, only a
single life expectancy factor may be used. The life
expectancy or joint life expectancy factor will be
recalculated each year in accordance with the rules
under Code Section 401(a)(9).
27
<PAGE>
4.02 Estate Conservation Date of Distribution: The Participant shall specify
Option (ECO) the initial distribution date. The earliest date is
(Cont'd): the first day of the calendar year in which the
Participant attains age 70 1/2 or, for plans of
government or church employers, the date the
Participant retires, whichever is later. If a
Beneficiary elects ECO, the earliest date is the
date of the Participant's death. Subsequent
distribution will be made annually on such date as
Aetna may designate or allow.
4.03 Life Expectancy Amount of Distribution: Each year that LEO is in
Option (LEO): effect, Aetna will calculate and distribute an
amount determined by dividing the Individual Account
Current Value as of December 31 of the year prior to
the year for which payment is to be made by a life
expectancy factor based on expected return multiples
in Table V and VI of Section 1.72-9 of the Income
Tax Regulations. Payments will be made each year
until the year the Participant attains age 70 1/2,
or until the Participant dies, if earlier.
The Participant may elect either the single or joint
life expectancy factor. If the joint life expectancy
factor is elected, the second life must be the
Beneficiary under the Plan. The life expectancy or
joint life expectancy factor will be recalculated
each year in accordance with the rules under Code
Section 401(a)(9), or reduced by one for each
calendar year which has elapsed since the life
expectancy was first calculated, as elected by the
Participant.
Date of Distribution: The Participant shall specify
the initial distribution date. The earliest date is
the date on which the Participant separates from
service with the employer. Subsequent distribution
will be made annually on such date as Aetna may
designate or allow.
4.04 Systematic Amount of Distribution: The Participant may elect
Withdrawal Option one of the three payment methods described below.
(SWO):
(1) Specified Payment: Payments of a designated
dollar amount. The annual amount may not be
greater than the percentage of the Current
Value at time of election as shown in
Contract Schedule I. This annual dollar
amount will remain constant, unless a higher
amount is required under Code minimum
distribution rules. At its discretion, Aetna
may require a minimum initial payment amount;
or
(2) Specified Period: Payments which are made
over a period of time which must be at least
the minimum number of years shown in Contract
Schedule I. The annual amount paid each year
is calculated by dividing the Current Value
as of December 31 of the prior year by the
number of payment years remaining; or
28
<PAGE>
4.04 Systematic (3) Specified Percentage: Payment of a designated
Withdrawal Option percentage which cannot be greater than the
(SWO) (Cont'd): percentage of the Current Value at the time
of election as shown in Contract Schedule I.
The percentage may be changed by written
request. Aetna reserves the right to limit
the number of times the percentage may be
changed. The annual amount is calculated by
multiplying the Current Value as of December
31 of the year prior to the payment by the
designated percentage. Payments will be made
each year until the year the Participant
attains age 70 1/2.
Minimum Distribution Requirements: If distributions
are made under SWO after payments are required to
begin under the minimum distribution requirements of
Code Section 401(a)(9), the amount distributed in
any year will be increased if required under the
Code minimum distribution rules.
For this purpose, the minimum required distribution
will be determined each year by dividing the
Individual Account Current Value as of December 31
of the year prior to the year for which payment is
to be made by a life expectancy factor, which for
the initial distribution year shall be based on
either the single life expectancy factor or joint
life expectancy factor in Table V or VI of Section
1.72.9 of the Income Tax Regulations, as elected by
the Participant. If the joint life expectancy factor
is elected, the second life must be the Beneficiary
under the Plan. If a Beneficiary elects SWO after
the Participant's death, only a single life
expectancy factor may be used. Minimum distributions
for any subsequent year will be calculated based on
such life expectancy factor reduced by one for each
calendar year which has elapsed since the life
expectancy was first calculated. If the specified
period method is elected, the maximum specified
period will be limited by the single life expectancy
factor or joint life expectancy factor in Table V or
VI of Section 1.72-9 of the Income Tax Regulations,
as elected by the Participant. If elected by a
Beneficiary, only a single life expectancy may be
used.
Date of Distribution: The Participant shall specify
the initial distribution date. The earliest date is
the date on which the Participant attains age 59 1/2
or age 55, if separated from service with the
employer at or after age 55. If a Beneficiary elects
SWO, the earliest date is the date of the
Participant's death.
SWO payments will be made on a monthly, quarterly,
semi-annual or annual basis, as elected by the
Participant or Beneficiary. If SWO payments are made
more frequently than annually, the designated annual
amount is divided by the number of payments due each
calendar year. Subsequent distribution will be made
periodically on such date as Aetna may designate or
allow.
29
<PAGE>
V. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
5.01 General Provisions: (a) Upon certification by the Contract Holder of
the Participants' total disability,
acceptance of retirement or separation from
service, the Participant has the right to
elect an Annuity option. The Participant must
transfer any portion of the Current Value
held in an Aetna GET Fund series to another
investment option before an Annuity option is
elected.
(b) The Participant may elect an Annuity option
by telling Aetna to pay all or any portion of
the Individual Account(s) Current Value
(minus any applicable premium tax if not
previously deducted) as a premium for an
Annuity under Option 1, 2, or 3 (See 5.02).
(c) A completed and signed election form must be
submitted to the Home Office. The form must
include Contract Holder certification that
the Participant is eligible for a
distribution under the terms of the Plan and
that the Annuity option chosen is permitted
under the terms of the Plan.
(d) Any election of an Annuity option must comply
with the minimum distribution requirements of
Code Section 401(a)(9), including the
incidental death benefit rule, and the
regulations thereunder. This restriction does
not apply if Option 3 is chosen and the
second Annuitant is the spouse of the
Participant.
(e) Once elected, an Annuity option may not be
revoked, except for Option 1 when elected on
a variable basis.
5.02 Annuity Options: Option 1 - Payments for a Stated Period of Time - An
Annuity will be paid for the number of years chosen
(See Contract Schedule II). If payments for this
option are made under a variable Annuity, the
present value of any remaining payments may be
withdrawn at any time.
Option 2 - Life Income based on the life of the
Annuitant. Payments will be made until the death of
the Annuitant. When this option is chosen, a choice
of the following must be made:
(a) Payments cease at the death of the Annuitant;
(b) Payments may be guaranteed for 5-30 years; or
(c) Payments may be guaranteed for the amount
applied to the Annuity option. If the
Annuitant dies prior to the payment of the
amount applied to the Annuity option (less
any premium tax), any remaining balance will
be paid in one sum to the Beneficiary. This
option is only available on a fixed basis.
30
<PAGE>
5.02 Annuity Options Option 3 - Life Income based upon the lives of two
(Cont'd): Annuitants. An Annuity will be paid during the lives
of the Annuitant and a second Annuitant. Payments
will continue until both Annuitants have died. When
this option is chosen, a choice of the following
must be made:
(a) 100% of the payment to continue after the
first death;
(b) 66 2/3% of the payment to continue after the
first death;
(c) 50% of the payment to continue after the
first death;
(d) 100% of the payment to continue after the
first death with a guarantee of 5-30 years;
(e) 100% of the payment to continue at the death
of the second Annuitant and 50% of the
payment to continue at the death of the
Annuitant; or
(f) 100% of the payment to continue after the
first death. Payments are guaranteed for the
amount applied to the Annuity option. If both
Annuitants die prior to the total payment of
the amount applied to the Annuity option
(less any premium tax), any remaining balance
will be paid in one sum to the Beneficiary.
This option is only available on a fixed
basis.
If a fixed Annuity option is chosen under Option 1,
Option 2 (a) or (b) or Option 3 (a) or (d), then the
Participant may elect a payment increase of 1, 2 or
3%, compounded annually. An election of such a
payment increase will result in a adjustment of the
policy guarantees by an actuarially equivalent
payment factor.
Other Options - Aetna may make other options
available as allowed by the laws of the state in
which this Contract is delivered.
5.03 Payments: (a) Upon written direction from the Contract
Holder, Aetna will pay Annuity benefits
directly to the Participant and as payor,
Aetna will be responsible for withholding any
applicable federal or state taxes and
reporting such sums and filing any related
forms with the Internal Revenue Service
and/or to any applicable state taxing
authorities.
(b) Generally, the first Annuity payment must be
made by April 1 of the calendar year
following the year in which the Participant
turns age 70 1/2, or in the case of a
governmental or church plan, the year in
which the Participant attains age 70 1/2 or
retires, whichever occurs later. For a
Participant who attained age 70 1/2 before
January 1, 1988, the distribution of such
benefits must be made or must begin not later
than April 1 of the calendar year following
the calendar year in which the Participant
retires.
31
<PAGE>
5.03 Payments (Cont'd): (c) Payments will be made on a monthly basis
unless the Participant requests otherwise. If
payments are made on a quarterly, semi-annual
or annual basis, Aetna will calculate an
actuarially equivalent payment factor.
(d) No choice of any Annuity option may be made
if the first payment would be less than $50
per month or if the total payments in a year
would be less than $250.
(e) For purposes of calculating the guaranteed
first payment of a variable Annuity or the
payments for a fixed Annuity, the Annuitants
and second Annuitants adjusted age will be
used.
The Annuitants and second Annuitants adjusted
age is his or her age as of the birthday
closest to the Annuity commencement date
reduced by one year for Annuity commencement
dates occurring during the period of time
from July 1, 1992 through December 31, 1999.
The Annuitants and second Annuitants age will
be reduced by two years for Annuity
commencement dates occurring during the
period of time from January 1, 2000 through
December 31, 2009. The Annuitants and second
Annuitants age will be reduced by one
additional year for Annuity commencement
dates occurring in each succeeding decade.
(f) If a Fixed Annuity under Option 1, 2 or 3 is
elected, Aetna will use the applicable
current settlement option rates if these will
provide higher fixed Annuity payments.
5.04 Investment Option: (a) When an Annuity option is chosen the
Participant must designate whether the
Annuity will be fixed or variable and whether
the underlying investment will be:
(1) The General Account;
(2) One or more of the available Fund(s);
or
(3) A combination of (1) and (2).
If a fixed Annuity is chosen, the Annuity purchase
rate for the option chosen reflects at least the
Minimum Guaranteed Interest Rate (See Contract
Schedule II), but may reflect a higher interest
rate.
If a variable Annuity is chosen, the initial Annuity
payment for the option chosen reflects the Assumed
Annual Net Return Rate elected (See Contract
Schedule II). The Assumed Annual Net Return Rate is
the interest rate used to determine the amount of
the first Annuity payment under a variable Annuity.
The Separate Account must earn this rate plus enough
to cover the mortality and expense risks charges
(which may include profit) (at the annual rate shown
on Contract Schedule II) and a daily administrative
charge if future variable Annuity payments are to
remain level.
32
<PAGE>
5.05 Fund Annuity Units: The number of Fund(s) annuity units is based on the
amount of the first variable Annuity payment which
is equal to:
(a) The portion of the Current Value (minus any
premium tax) applied to pay a variable
Annuity; divided by (b) 1,000; multiplied by
(c) the payment rate for the option chosen.
5.05 Fund Annuity Units Such amount, or portion, of the variable payment
(Cont'd): will be divided by the appropriate Fund(s) Annuity
unit value (See 5.06) on the tenth Valuation Date
before the due date of the first payment to
determine the number of each Fund Annuity units. The
number of each Fund Annuity units remains fixed.
Each future payment is equal to the sum of the
products of each Fund Annuity unit value multiplied
by the appropriate number of Units. The Fund Annuity
unit value on the tenth Valuation Date prior to the
due date of the payment is used.
5.06 Fund Annuity Unit For any Valuation Date, a Fund(s) Annuity unit value
Value: is equal to:
(a) The value for the previous Valuation Date;
multiplied by
(b) The Annuity net return factor(s) (See 5.07)
for the Period; multiplied by
(c) A factor to reflect the assumed annual net
return rate. (See Contract Schedule II).
The dollar value of a Fund Annuity unit values and
Annuity payments may go up or down due to investment
gain or loss. Payments shall not be changed due to
changes in the mortality or expense results or
administrative charges.
5.07 Fund Annuity Net The Annuity net return factor(s) are used to compute
Return Factor: all Separate Account Annuity payments for any Fund.
The Annuity net return factor(s) for each Fund is
equal to 1.0000000 plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by
the Separate Account at the end of a
Valuation Period, minus
(b) The value of the shares of the Fund held by
the Separate Account at the start of the
Valuation Period, plus or minus
(c) Taxes (or reserves for taxes) on the Separate
Account (if any); divided by
(d) The total value of the Fund(s) record units
and Fund(s) Annuity units of the Separate
Account at the start of the Valuation Period;
minus
(e) A daily charge for Annuity mortality and
expense risks, which may include a profit,
(at the annual rate as shown on Contract
Schedule II) and a daily administrative
charge.
33
<PAGE>
5.07 Fund Annuity Net A net return rate may be more or less than 0%. The
Return Factor value of a share of the Fund is equal to the net
(Cont'd): assets of the Fund divided by the number of shares
outstanding.
5.08 Fund Transfers At the request of the Contract Holder or the
During the Annuity Participant if the Contract Holder has directed
Period: Aetna to accept such a request from the Participant,
all or any portion of the Current Value may be
transferred from any variable Fund to any other
allowable Fund. Aetna reserves the right to allow no
more than four Funds to be selected at any one time.
Fund Transfers will be processed as of the Valuation
Date next following when a transfer request is
received in good order at Aetna's Home Office. The
maximum number of allowable transfers (during the
Annuity period) in a calendar year is shown on
Contract Schedule II.
Fund Transfer requests must be expressed as a
percentage of each Funds allocation to the Annuity
payment. Aetna may establish a minimum transfer
amount.
5.09 Death Benefit: Upon the death of the Annuitant(s), any remaining
guaranteed payments will continue to the Beneficiary
unless the Beneficiary elects to receive the present
value of any remaining guaranteed payments in a lump
sum. Such payments will be paid at least as rapidly
as under the method of distribution then in effect.
If the Beneficiary dies while receiving payments,
the present value of any remaining guaranteed
payments will be paid in one sum to the
Beneficiary's estate.
The interest rate used to determine the first
Annuity payment will be used to calculate the
present value. The present value will be determined
as of the Valuation Period in which proof of death
acceptable to Aetna and a request for payment is
received at Aetna's Home Office.
34
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- --------------------------------------------------------------------------------
35
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- --------------------------------------------------------------------------------
36
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20 Cash
Annuitant Refund
- --------------------------------------------------------------------------------
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89
51 4.12 4.11 4.09 4.05 3.99 3.94
52 4.19 4.19 4.16 4.11 4.04 4.00
53 4.27 4.26 4.23 4.18 4.10 4.06
54 4.35 4.34 4.31 4.25 4.16 4.12
55 4.44 4.42 4.39 4.32 4.22 4.19
56 4.53 4.51 4.47 4.40 4.29 4.26
57 4.62 4.61 4.56 4.48 4.35 4.33
58 4.72 4.71 4.65 4.56 4.42 4.41
59 4.83 4.81 4.75 4.64 4.49 4.49
60 4.95 4.93 4.86 4.73 4.55 4.57
61 5.07 5.05 4.97 4.83 4.62 4.66
62 5.20 5.17 5.08 4.92 4.69 4.76
63 5.34 5.31 5.20 5.02 4.76 4.85
64 5.49 5.45 5.33 5.12 4.83 4.96
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
67 6.01 5.94 5.75 5.44 5.02 5.30
68 6.20 6.13 5.91 5.54 5.08 5.42
69 6.41 6.33 6.07 5.65 5.14 5.56
70 6.64 6.54 6.23 5.76 5.19 5.70
71 6.88 6.76 6.41 5.86 5.24 5.84
72 7.14 7.00 6.59 5.97 5.28 6.00
73 7.43 7.26 6.77 6.06 5.32 6.16
74 7.73 7.53 6.96 6.16 5.35 6.33
75 8.06 7.82 7.14 6.25 5.38 6.51
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
37
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- --------------------------------------------------------------------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
38
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- --------------------------------------------------------------------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 5.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
39
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e Option 3f
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69
55 55 3.88 4.25 4.47 3.87 4.14 3.87
55 60 3.99 4.44 4.71 3.98 4.20 3.98
60 55 3.99 4.44 4.71 3.98 4.42 3.98
60 60 4.24 4.71 4.99 4.23 4.57 4.23
60 65 4.38 4.97 5.32 4.38 4.65 4.38
65 60 4.38 4.97 5.32 4.38 4.93 4.38
65 65 4.72 5.33 5.70 4.71 5.14 4.72
65 70 4.93 5.68 6.15 4.91 5.27 4.91
70 65 4.93 5.68 6.15 4.91 5.66 4.91
70 70 5.40 6.21 6.70 5.36 5.96 5.38
70 75 5.69 6.68 7.32 5.62 6.13 5.66
75 70 5.69 6.68 7.32 5.62 6.67 5.66
75 75 6.37 7.45 8.15 6.23 7.12 6.33
75 80 6.78 8.11 8.99 6.54 7.36 6.71
- ------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
40
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e
- --------------------------------------------------------------------------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
41
<PAGE>
OPTION 3
Life Income for Two Annuitants
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Second 10 Years
Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e
- --------------------------------------------------------------------------------
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
42
<PAGE>
- --------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
Certificate of Group Annuity Coverage
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP ANNUITY CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED
AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN
INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA
DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
GTCC-96(TORP)
---------------------------------------------------------
Exhibit 99-B.4.38
---------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
Aetna Life Insurance and Annuity Company, herein called
Aetna, agrees to pay the benefits stated in this
Contract.
- --------------------------------------------------------------------------------
Certificate of Group To the Employee:
Annuity Coverage
Aetna certifies that coverage is in force for you under
the stated Group Annuity Contract and Certificate
numbers. All data shown here is taken from Aetna records
and is based upon information furnished by you.
This Certificate is a summary of the Group Annuity
Contract provisions. It replaces any and all prior
certificates, riders, or amendments issued to you under
the stated Contract and Certificate numbers. This
Certificate is for information only and is not a part of
the Contract.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED
IN PARTS III AND IV.
- --------------------------------------------------------------------------------
Right to Cancel You may cancel this Certificate within 10 days of
receiving it by returning this Certificate along with a
written notice to Aetna at the above address or to the
agent from whom it was purchased. Within 7 days after it
receives the notice of cancellation and this Certificate
at its Home Office, Aetna will return the entire
consideration paid plus any increase or minus any
decrease in the current value of any funds allocated to
the Separate Account.
/s/ Thomas L. West /s/ George N. Gingold
Thomas L. West George N. Gingold
Senior Vice President, Annuity Secretary
- --------------------------------------------------------------------------------
Contract Holder Group Annuity Contract No
STATE UNIVERSITY SYSTEM SPECIMEN
- --------------------------------------------------------------------------------
Your Name Certificate No.
JOHN DOE SPECIMEN
- --------------------------------------------------------------------------------
Type of Plan
ORP subject to IRC Section 403(b)
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT
APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
GTCC-IB(ATORP)
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed There are guaranteed interest rates for amounts held in
Interest Rate the Fixed Account (See 3.05) and the GA Account (See
3.04(d)).
- --------------------------------------------------------------------------------
Deductions from There will be deductions for mortality and expense risks
the Separate and administrative fees. (See 3.08 and 4.06.)
Account
- --------------------------------------------------------------------------------
Deduction from Purchase Payment(s) are subject to a deduction for
Purchase Payment(s) premium taxes, if any. (See 3.01.)
2
<PAGE>
TABLE OF CONTENTS
Page
I. GENERAL DEFINITIONS
- --------------------------------------------------------------------------------
1.01 Annuitant.............................................................5
1.02 Annuity...............................................................5
1.03 Fixed Account.........................................................5
1.04 Fixed Annuity.........................................................5
1.05 Fund(s)...............................................................5
1.06 General Account.......................................................5
1.07 Guaranteed Accumulation Account (GA Account)..........................5
1.08 Matured Term Value....................................................5
1.09 Maturity Date.........................................................5
1.10 Nonunitized Separate Account..........................................5
1.11 Participant (You).....................................................5
1.12 Plan..................................................................5
1.13 Purchase Payment(s)...................................................5
1.14 Separate Account......................................................6
1.15 Valuation Period (Period).............................................6
1.16 Variable Annuity......................................................6
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract....................................................6
2.02 Change of Fund(s).....................................................7
2.03 Nonparticipating Contract.............................................7
2.04 Payments..............................................................7
2.05 State Laws............................................................7
2.06 Control of Contract...................................................8
2.07 Designation of Beneficiary............................................8
2.08 Misstatements and Adjustments.........................................8
2.09 Incontestability......................................................9
2.10 Grace Period..........................................................9
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- --------------------------------------------------------------------------------
3.01 Net Purchase Payment(s)...............................................9
3.02 Individual Account(s).................................................9
3.03 Limitation on Contributions...........................................10
3.04 Guaranteed Accumulation Account (GA Account)..........................10
3.05 Guaranteed Interest Rate -- Fixed Account.............................15
3.06 Experience Credits....................................................15
3.07 Fund Record Units -- Separate Account.................................15
3.08 Net Return Factor(s) -- Separate Account..............................15
3.09 Fund Record Unit Value -- Separate Account............................16
3.10 Current Value.........................................................16
3.11 Transfer of Current Value from the Funds or GA Account................16
3.12 Transfer of Current Value from the Fixed Account......................17
3.13 Notice to the Contract Holder.........................................17
3.14 Distribution Options..................................................17
3
<PAGE>
3.15 Sum Payable at Death (Before Annuity Payments Start)..................21
3.16 Surrender Value.......................................................22
3.17 Surrender Restrictions................................................22
3.18 Timing of Distributions...............................................23
3.19 Payment of Surrender Value............................................24
3.20 Reinstatement.........................................................25
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
4.01 Choices to be Made....................................................25
4.02 Annuity Payments to Annuitant.........................................26
4.03 Death of Annuitant....................................................26
4.04 Fund(s) Annuity Units -- Separate Account.............................26
4.05 Fund(s) Annuity Unit Value -- Separate Account........................27
4.06 Annuity Net Return Factor(s) -- Separate Account......................27
4.07 Annuity Options.......................................................28
4
<PAGE>
I. GENERAL DEFINITIONS
- --------------------------------------------------------------------------------
1.01 Annuitant: A person on whose life an Annuity has been
effected under the Contract and this
Certificate.
1.02 Annuity: Payment of an income for a stated period or
amount.
1.03 Fixed Account: An accumulation option with a guaranteed
minimum interest rate. Aetna may credit a
higher rate which is not guaranteed.
1.04 Fixed Annuity: An Annuity with payments which do not vary
in amount.
1.05 Fund(s): The open-end registered management
investment companies (mutual funds) made
available by Aetna under this Contract.
1.06 General Account: The Account holding the assets of Aetna,
other than those assets held in the
Separate Account or the Nonunitized
Separate Account.
1.07 Guaranteed Accumulation An accumulation option which guarantees a
Account (GA Account): stipulated rate of interest for a specified
period of time.
1.08 Matured Term Value: The amount payable on a GA Account Term's
Maturity Date.
1.09 Maturity Date: The last day of a GA Account Term.
1.10 Nonunitized Separate An Account set up by Aetna under Title 38a,
Account: Section 38a-433, of the Connecticut General
Statutes which is used to hold assets for
GA Account Terms greater than three years.
The Contract Holder does not participate in
the investment gain or loss from the assets
held in this Account.
1.11 Participant (You): A person who participates in the Plan named
on the cover of this Certificate.
1.12 Plan: The Plan named on the Certificate cover.
The Plan is not a part of the Contract.
Aetna is not bound by the terms of the
Plan.
1.13 Purchase Payment(s): Payments made to Aetna.
5
<PAGE>
1.14 Separate Account: An account which buys and holds shares of
the Fund(s). Income, gains or losses,
realized or unrealized are credited or
charged to this account without regard to
other income, gains or losses of Aetna.
Aetna owns the assets held in a separate
account and is not a trustee as to such
amounts. These accounts generally are not
guaranteed and are held at market value.
The assets of such accounts, to the extent
of reserves and other contract liabilities
of the account, shall not be charged with
other Aetna liabilities.
1.15 Valuation Period The period as of 4:00 p.m. Eastern time on
(Period): each day the New York Stock Exchange is
open for business to 4:00 p.m. Eastern time
of the next such business day, or such
other day that one or more of the Funds
determines its net asset value.
1.16 Variable Annuity: An Annuity with payments which vary with
the net investment results of a Separate
Account.
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract: Except as provided below, only an
authorized officer of Aetna may change the
terms of the Contract by notifying the
Contract Holder, in writing, at least 30
days before the effective date of the
change. Any change will not affect the
amount or terms of any Annuity which begins
before the change.
Aetna may make a change that affects the GA
Account Market Value Adjustment (see 3.04
(g)) with at least 30 days advance written
notice to the Contract Holder. Any such
change shall become effective for any
present or future Participant.
Any change that affects the following
provisions of the Contract will not apply
to existing Individual Accounts:
(a) Net Purchase Payment(s)
(b) Guaranteed GA Account Interest Rate
(c) Guaranteed Interest Rate -- Fixed
Account
(d) Net Return Factor(s) -- Separate
Account
(e) Current Value
(f) Surrender Value
(g) Fund(s) Annuity Unit Value --
Separate Account.
Any change that affects the Annuity Options
and the tables for the Options cannot be
made:
6
<PAGE>
2.01 Change of Contract (1) Until at least 12 months after the
(Cont'd): Effective Date of this Contract; and
(2) Until at least 12 months after the
effective date of any such prior
change.
New Participants covered under this
Contract on or after the effective date of
any change will be subject to the change.
If the Contract Holder does not agree to
any change under this provision, no new
Participants will be covered under the
Contract. Aetna reserves the right not to
accept Purchase Payments for the
Participants covered under this Contract
before the change. The Contract may also be
changed as required by federal or state
law.
2.02 Change of Fund(s): Aetna, or the Separate Account may:
(a) Change the Fund(s) which may be
invested in by the Separate Account;
and
(b) Replace the shares of any Fund(s)
held in the Separate Account with
shares of any other Fund(s).
Changes must be:
(a) Approved by a majority vote of
persons having an interest in the
Separate Account and the Fund(s);
(b) Deemed necessary by Aetna under the
Investment Company Act of 1940; or
(c) Deemed necessary by Aetna to
accomplish the purpose of the
Separate Account.
Aetna will notify the Contract Holder of
any change.
2.03 Nonparticipating You, your beneficiary or the Contract
Contract: Holder will not have a right to share in
the earnings of Aetna.
2.04 Payments: Aetna will make Annuity payments as and
when due, Aetna will make other payments
within 7 days of receipt at its Home Office
of a written claim for payment which is in
good order, except as provided in 3.19.
2.05 State Laws: The Contract and this Certificate complies
with the laws of the state in which the
Contract is delivered. Any cash, death or
Annuity payments are equal to or greater
than the minimum required by such laws.
Annuity tables for legal reserve valuation
shall be as required by state law. Such
tables may be different from Annuity tables
used to determine Annuity payments.
7
<PAGE>
2.06 Control of Contract: The Contract Holder may make any choices
allowed by the Contract for the Employer
Account and the Employee Account. Choices
made under the Contract must be in writing
or in a form satisfactory to Aetna. Until
receipt of such choices in its Home Office,
Aetna may rely on any previous choice made.
The Plan, however, may allow you to select
the investment option(s) of the Employer
Account and/or the Employee Account. No
distributions will be made from the
Employer Account or the Employee Account
without the Contract Holder's written
direction to Aetna. The Contract Holder may
direct Aetna to make an in-service transfer
pursuant to IRS Revenue Ruling 90-24.
Checks for in-service transfers will be
made payable only to the acquiring
investment provider.
(a) Nontransferable and Nonassignable:
The Contract, this Certificate and
any Individual Accounts are
nontransferable and nonassignable,
except to Aetna pursuant of a
"qualified domestic relations order"
as set forth under the Internal
Revenue Code of 1986, (Code), as it
may be amended from time to time.
(b) Distributions: With respect to any
distribution made from an Employee or
Employer Account, the Contract Holder
must certify in writing that the
distribution is in accordance with
the terms of the Plan.
(c) Participant Rights/Employee Account:
You have a nonforfeitable right to
the value of your Employee Account
pursuant to the Code Section 403(b)
and the terms of the Plan as
interpreted by the Contract Holder
(see 1.12).
(d) Participant Rights/Employer Account:
You have a nonforfeitable right to
the value of your Employer Account
pursuant to the terms of, and to the
extent of your vested percentage
under, the Plan as interpreted by the
Contract Holder. It is the Contract
Holder's responsibility to maintain
records of your vesting percentages.
Aetna will not maintain nor keep such
records.
2.07 Designation of You shall name the beneficiary of the
Beneficiary: Employer and Employee Account. Aetna will
pay any portion of the Individual
Account(s) Current Value to the beneficiary
as directed by the Contract Holder.
2.08 Misstatements and If Aetna finds the age of any payee to be
Adjustments: misstated, the correct facts will be used
to adjust payments.
8
<PAGE>
2.09 Incontestability: Aetna cannot cancel the Contract because of
any error of fact on the application. Aetna
cannot cancel this Certificate because of
any error of fact on the enrollment form.
2.10 Grace Period: This Contract will remain in effect even if
Purchase Payments are not continued.
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- --------------------------------------------------------------------------------
3.01 Net Purchase Payment(s): The actual Purchase Payment less any
premium tax. Generally, Aetna will deduct
the premium tax when Annuity benefits are
purchased (see Part IV). If Aetna
determines that a premium tax is due when
Purchase Payments are received or at any
other time, it will deduct the tax at that
time.
The Net Purchase Payment(s) may be credited
among:
(a) The Fixed Account; and
(b) The Guaranteed Accumulation Account;
and
(c) The Fund(s) in which the Separate
Account invests.
Aetna must be told the percentage of the
Net Purchase Payment(s) to be applied to
each investment above.
During any calendar year, the Contract
Holder or, if allowed by the Plan, you may
tell Aetna to change the investment mix
twelve times. Should Aetna allow additional
changes, each may be subject to a fee of up
to $10.
3.02 Individual Account(s): This Contract is issued to the Contract
Holder on your behalf. However,
Participant's Individual Accounts are
explained below:
Aetna may maintain two Individual Accounts
for each Participant. These will be:
(a) Employer Account: This Individual
Account will be credited with employer
Net Purchase Payment(s); and
(b) Employee Account: This Individual
Account will be credited with employee
Net Purchase Payment(s), specifically
employee salary reduction
contributions.
9
<PAGE>
3.02 Individual Account(s) In addition to any Purchase Payment(s)
(Cont'd): stated to be made to the Contract, a
lump-sum Purchase Payment(s), of not less
than a minimum amount stated by Aetna, may
be made on behalf of one or more
Participants. Aetna may maintain an
Individual Account for each lump sum
payment. Such Individual Account(s) will be
designated as an Employer Account(s) or an
Employee Account(s) as instructed by the
Contract Holder.
3.03 Limitation on The Purchases Payment(s) made to your
Contributions: Individual Account(s) in any year cannot
exceed the lesser of the amount determined
under the exclusion allowance of Code
Section 403(b)(2) or the annual additions
limitation of Code Section 415(c)(1). In
addition, in no event may the Purchase
Payment(s) attributable to elective
deferrals as defined in Code Section 402(g)
exceed $9,500 (or, such larger amount as
adjusted by the Secretary of the Treasury)
during any calendar year, unless the
alternate limitation of Code Section
402(g)(8) applies.
3.04 Guaranteed Accumulation The GA Account guarantees stipulated rates
Account (GA Account): of interest for stated periods of time (see
(a), (b), (c) and (d) below). Amounts
withdrawn before the end of a Guaranteed
Term may be subject to a Market Value
Adjustment (MVA)(see(g) below).
(a) Deposit Period -- A calendar month, a
calendar quarter, or any other period
of time specified by Aetna during
which Net Purchase Payment(s) and
transfers are accepted into the GA
Account for one or more Guaranteed
Terms.
(b) Guaranteed Term (Term) -- The period
of time for which interest rates are
guaranteed on Net Purchase Payment(s)
and on transfers made into the
Deposit Period of the GA Account.
Terms are offered at Aetna's
discretion for various lengths of
time ranging up to and including ten
years.
(c) Guaranteed Term Classifications --
The grouping of Terms according to
their time to maturity. The following
are the Classifications:
(1) Short-Term: Terms of up to and
including 3 years: or
(2) Long-Term: Terms of greater than
3 years and up to and including
10 years.
10
<PAGE>
3.04 Guaranteed Accumulation During a Deposit Period, Aetna may
Account (GA Account) make available one or more Terms
(Cont'd): within a Classification. The Contract
Holder or, if allowed by the Plan,
you have the option to allocate Net
Purchase Payment(s) and transfers
into any or all of the available
Deposit Period Terms.
If no specific direction is given,
Net Purchase Payment(s) and transfers
will go into available Terms on a pro
rata basis within the
Classification(s) previously chosen
by the Contract Holder. At least one
Term in the Short-Term Classification
will be available each Deposit
Period.
(d) Guaranteed GA Account Interest Rates
(Guaranteed Rates) -- Aetna will
declare all interest rate(s)
applicable to a specific Term at the
start of the Deposit Period for that
Term. These rate(s) are guaranteed by
Aetna for that Deposit Period and the
ensuing Term and are not based on the
actual investment experience of the
underlying assets in the GA Account.
The Guaranteed Rates are annual
effective yields. The interest is
credited daily at a rate that will
produce the guaranteed annual
effective yield over the period of a
year. No annual rate will ever be
less than 3%.
For Terms of one year or less, one
Guaranteed Interest Rate is set and
announced for that full Term. For
other Terms, there may be two or more
rates.
The rate(s) will be set and announced
prior to the Deposit Period for that
Term and will not be subject to
change.
(e) Withdrawals from GA Account -- Full
or partial surrenders may be
requested at any time from the GA
Account. However, amounts withdrawn
prior to the Maturity Date of a Term
to satisfy a surrender request may be
subject to an MVA (see (g) below).
Full and partial surrenders are
satisfied by withdrawing amounts from
each of the investment options in
which the Individual Account is
invested (the Fund(s), the Fixed
Account, the GA Account Short-Term
Classification and the GA Account
Long-Term Classification) on a pro
rata basis. However, the Contract
Holder may specify a particular order
in which investment options will be
liquidated in order to satisfy a
partial surrender request.
For purposes of withdrawals, Terms
within the GA Account Short-Term and
Long-Term Classifications are
considered as two separate investment
options. Amounts will be removed
within a GA Account Classification
starting with the Term still in
effect with the oldest Deposit
Period.
11
<PAGE>
3.04 Guaranteed Accumulation Amounts may be transferred at any
Account (GA Account) time subject to Contract
(Cont'd): specifications (see 3.11 or 3.12
below). Amounts transferred prior to
the Maturity Date of a Term are
subject to an MVA (See (g) below).
Fund(s) will be removed within the
elected Classification starting with
the Term still in effect with the
oldest Deposit Period.
During the Deposit Period and the 90
days following the close of the
Deposit Period, any amounts applied
to the GA Account during that Deposit
Period may not be withdrawn unless
due to:
(1) A full or partial surrender;
(2) A payment of a premium for an
Annuity Option; or
(3) The Sum Payable at Death
provision.
(f) Maturity Date/Reinvestment -- The
Contract Holder or you, as
applicable, will be mailed a notice
at least 18 calendar days before a
Term's Maturity Date. This notice
will contain the current Deposit
Period's Guaranteed Rate(s), Term(s)
and projected Matured Term Value.
The Matured Term Value may be
surrendered or transferred on the
Term's Maturity Date without an MVA.
If no specific direction is given by
the Contract Holder or you, as
applicable, prior to the Maturity
Date, each Matured Term Value will be
reinvested in a Term of the same
duration. In the event that a Term of
the same duration is unavailable,
each Matured Term Value will
automatically be reinvested in the
next shortest Term available in the
same Classification during the then
current Deposit Period. If however,
only one Term is available within the
Classification, then the Matured Term
Value will automatically be
reinvested in that Term. Within two
business days after the Maturity, the
Contract Holder or you, as
applicable, will be mailed a
confirmation statement. This
statement will state the Term and
Guaranteed Rate(s) which will apply
to the reinvested Matured Term Value.
During the calendar month following
the Term's Maturity Date, one
exception is allowed to the 90 day
transfer restriction and MVA under
(e) and (g). This exception is
applicable to each Matured Term Value
plus any interest accrued thereon,
provided no part of the Matured Term
Value was transferred on the Maturity
Date.
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3.04 Guaranteed Accumulation During this calendar month period,
Account (GA Account) the Contract Holder or you, as
(Cont'd): applicable, may notify Aetna's Home
Office to transfer or surrender all
or part of the Matured Term Value
plus any interest accrued thereon
from the GA Account without an MVA.
This provision only applies to the
first such request received from the
Contract Holder during this period
for any Matured Term Value. The
Matured Term Value plus any interest
accrued thereon may be transferred
upon such request without an MVA:
(1) To any other Terms of the GA
Account available in the current
Deposit Period; or
(2) To any other allowable Fund(s).
If no such notification is given, the
Matured Term Value will remain
subject to the terms and conditions
of the new Term. All surrender and
transfer requests will be processed
as of the date they are received in
good order at Aetna's Home Office.
(g) Market Value Adjustment (MVA) --
There will be an MVA for a withdrawal
from the GA Account before the end of
a Term when the withdrawal is due to:
(1) A transfer;
(2) A full or partial surrender; or
(3) A payment of a premium for
Annuity Option 2.
The amount of the withdrawal will be
adjusted to a market value amount as
described below.
The market value adjusted amount will
be equal to the amount withdrawn
multiplied by the following ratio:
(1+i)^(x/365)
--------------------
(1+j)^(x/365)
Where:
i is the Deposit Yield
j is the Current Yield
x is the number of days remaining,
(computed from Wednesday of the
week of withdrawal) in the
Guaranteed Term.
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3.04 Guaranteed Accumulation The Deposit Period Yield will be
Account (GA Account) determined as follows:
(Cont'd):
o At the close of the last business
day of each week of the Deposit
Period, a yield will be computed
as the average of the yields on
that day of U.S. Treasury Notes
which mature in the last three
months of the Guaranteed Term.
o The Deposit Period Yield is the
average of those yields for the
Deposit Period. If withdrawal is
made prior to the close of the
Deposit Period, it is the average
of those yields on each week
preceding withdrawal.
The Current Yield is the average of
the yields on the last business day
of the week preceding withdrawal on
the same U.S. Treasury Notes included
in the Deposit Period Yield.
In the event that no U.S. Treasury
Notes which mature in the last three
months of the Guaranteed Term exist,
Aetna reserves the right to use the
U.S. Treasury Notes that mature in a
following quarter.
Full and partial surrenders as well
as transfers made within six months
of your date of death under the Sum
Payable at Death provision will be
the greater of:
o The aggregate MVA amount which is
the sum of all market value
adjusted amounts calculated due to
a withdrawal of amounts (for
surrender or transfer) from Terms
prior to the end of those Terms.
The aggregate MVA may be either
positive or negative; or
o The applicable portion of the
Current Value in the GA Account.
After the six month period, the
surrender or transfer will be the
aggregate MVA amount (i.e., including
all MVAs).
The greater of the aggregate MVA
amount or the applicable portion of
the Current Value in the GA Account
is applied to amounts withdrawn from
the GA Account for payment of a
premium under Annuity Options 3 or 4.
Aetna may make any change to the MVA
with 30 days advance written notice
to the Contract Holder. Any such
change shall become effective for
Purchase Payment(s), transfers or
reinvestments made to any new Term by
any present or future Participant.
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3.04 Guaranteed Accumulation (h) Deposits to the GA Account -- All
Account (GA Account) amounts in the GA Account under the
(Cont'd): Short-Term Classification are made to
the General Account.
All amounts in the GA Account under
the Long-Term Classifications are
made to a Nonunitized Separate
Account. There are no discrete units
for this Nonunitized Separate
Account. You or the Contract Holder,
as applicable, do not participate in
the gain or loss from the assets held
in the Nonunitized Separate Account.
Such gain or loss is borne entirely
by Aetna. These assets may be
chargeable with liabilities arising
out of any other business of Aetna.
For Terms under both the Short-Term
and Long-Term Classifications, Aetna
guarantees stipulated interest rates
to be credited to the GA Account. All
assets of Aetna including amounts
made to the GA Account are available
to meet the guarantees under the GA
Account.
3.05 Guaranteed Interest On any Purchase Payment(s) made to the
Rate -- Fixed Account: Fixed Account, Aetna will add interest
daily at any annual rate no less than 3%.
Aetna may add interest daily at any higher
rate determined by its Board of Directors.
3.06 Experience Credits: Aetna may apply Experience Credits under
the Contract. Any such Credits will be
computed as decided by Aetna.
3.07 Fund Record Units -- The portion of the Net Purchase Payment(s)
Separate Account: applied to the Separate Account will
determine the number of each Fund's Record
Units. This number is equal to the Net
Purchase Payment applied to the Fund
divided by the Fund Record Unit Value (see
3.09) for the Valuation Period in which the
Purchase Payment is received in good order.
3.08 Net Return Factor(s) -- The Net Return Factors are used to compute
Separate Account: all Separate Account Values and payments
for any Fund.
The Net Return Factor for each Fund is
equal to 1.0000000 plus the Net Return
Rate.
The Net Return Rate is equal to:
(a) The value of the shares of the
Fund held by the Separate
Account at the end of a
Valuation Period; minus
(b) The value of the shares of the
Fund held by the Separate
Account at the start of the
Valuation Period; plus or minus
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<PAGE>
3.08 Net Return Factor(s) -- (c) Taxes (or reserves for taxes) on
Separate Account the Separate Account (if any);
(Cont'd): divided by
(d) The total value of the Fund
Record Units and Fund Annuity
Units of the Separate Account at
the start of the Valuation
Period; minus
(e) A daily actuarial charge at an
annual effective rate of 1.40%
for Annuity mortality and
expense risks and asset based
sales charge and profit and a
daily administrative charge
which will not exceed 0.25% on
an annual effective basis. The
administrative charge may be
changed annually except for
amounts, which have been used to
purchase an Annuity.
A Net Return Rate may be more or less than
0.
The value of a share of the Fund is equal
to the net assets of the Fund divided by
the number of shares outstanding.
3.09 Fund Record Unit Value Each Fund's Record Unit Value is computed
-- Separate Account: by multiplying the Net Return Factor for
the current Valuation Period by the Fund's
Record Unit Value for the previous Period.
The dollar value of a Fund's Record Unit,
Separate Account assets, and Variable
Annuity payments may go up or down due to
investment gain or loss.
3.10 Current Value: The Current Value is equal to:
(a) Any amounts in the Fixed
Account, including Fixed Account
interest added by Aetna; plus
(b) Any amounts in the GA Account,
including GA Account interest
added by Aetna; plus
(c) The sum of any Separate Account
Record Unit Value(s); plus
(d) Any amount due to Experience
Credits.
Current Value does not include amounts used
to elect Annuity.
3.11 Transfer of Current Before an Annuity Option is elected, all or
Value from the Funds any portion to the Current Value may be
or GA Account: transferred from any Fund or the GA Account
to:
(a) Any other Fund;
(b) The Fixed Account; or
(c) The GA Account's current Deposit
Period.
Amounts in a specific GA Account Term
cannot be transferred to the Deposit Period
of another Term within the same
Classification except at the Term's
Maturity.
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<PAGE>
3.11 Transfer of Current Amounts applied to Classifications of the
Value from the Funds GA Account may not be transferred to the
or GA Account Fund(s) or the Fixed Account during the
(Cont'd): Deposit Period or for 90 days after the
close of the Deposit Period.
Transfers from the GA Account are subject
to the Withdrawal and Market Value
Adjustment provisions. (See 3.04 (e) and
(g).)
For each Individual Account, twelve
transfers of Current Value (excluding
transfers from the GA Account at the end of
a Guaranteed Term) can be made during a
calendar year period. Should Aetna allow
additional transfers, each may be subject
to a fee of up to $10.
3.12 Transfer of Current Before an Annuity Option is elected, up to
Value from the Fixed 20% of the Current Value held in the Fixed
Account: Account may be transferred to any Fund(s)
or the GA Account's Current Deposit
Period(s). Such transfer will be:
(a) Without charge; and
(b) Allowed once per calendar year.
The Current Value of the Fixed Account, as
used above, is the value when the request
is received in good order at the Home
Office of Aetna.
3.13 Notice to the Contract Aetna will notify the Contract Holder or
Holder: you, as applicable, each year of:
(a) The value of any amounts held in:
(1) The Fixed Account;
(2) The GA Account;
(3) The Fund(s) for the Separate
Account;
(b) The number of any Fund(s) Record
Units; and
(c) The Fund(s) Record Unit Value(s).
Such number or values will be as of a date
no more than 60 days before the date of the
notice.
3.14 Distribution Options: The following distribution options may be
elected by the Contract Holder on your
behalf.
(a) Estate Conservation Option (ECO): A
distribution option under which a
portion of the Individual Account(s)
Current Value will automatically be
surrendered and distributed to you
each year.
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<PAGE>
3.14 Distribution Options (1) An ECO payment will be
(Cont'd): determined in the following
manner:
(a) Payments will commence no
earlier than the year in
which you attain age 70 1/2
and will be calculated on
the full Current Value of
the Individual Account(s),
except as provided in "b".
(b) If Aetna maintains separate
records to the value of the
Account as of December 31,
1986, (see below) and you
have retired, payments made
in or after the year age 70
1/2 was attained (or
retirement, if later) but
before the year age 75 is
attained will only be
calculated on amounts
contributed after December
31, 1986, plus all earnings
on all amounts after that
date. The method under this
rule is elected by the
Contract Holder and will no
longer be effective if the
Contract Holder submits a
withdrawal request in
addition to a scheduled ECO
payment from the Individual
Account(s), at which time
ECO payments will then be
determined under "a".
Aetna will maintain
separate records if the
Contract Holder has not
requested any withdrawals
from your Individual
Account(s) since December
31, 1986.
(2) Amount of Distribution: Each
year that ECO is in effect.
Aetna will calculate and
distribute an amount equal to
the minimum required
distribution under the Code. The
annual distribution will be
determined by dividing the
Individual Account(s) Current
Value, as of December 31 of the
year prior to the year for which
the payment is to be made, by a
life expectancy factor.
As elected by the Contract
Holder, the factor is either the
single life or joint life
expectancy based on tables in
Section 401(a)(9) of the Code or
related regulations. If joint
life expectancy is elected and
you or your spouse dies,
payments will be calculated
based on the survivor's life
expectancy.
These calculations may be
changed as necessary to comply
with the Code minimum
distribution rules. The joint
life expectancy factor can only
be elected based on the joint
life expectancy of you and your
spouse, and such spouse must be
named as the beneficiary of any
death benefits under the
Contract while ECO is in effect.
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<PAGE>
3.14 Distribution Options (3) Minimum Current Value: At its
(Cont'd): discretion, Aetna may require
a minimum initial Current Value
for election of this option. If
after election to this option
the Current Value is
insufficient to make a scheduled
ECO payment, Aetna will
distribute the entire balance of
the Individual Account(s).
(4) Date of Distribution: The
Contract Holder shall specify
the initial distribution date.
The earliest date is the first
day of the calendar year in
which you attain age 70 1/2.
Subsequent distributions will be
made annually on the 15th of the
month the initial payment was
made or such other date Aetna
may designate or allow.
(5) Elections and Revocation: ECO
may be elected by the Contract
Holder, on your behalf, by
submitting a completed and
signed election form to Aetna's
Home Office. The Contract Holder
must also certify in writing
that the distribution is in
accordance with the terms of the
Plan.
Once elected, this option may be
revoked by the Contract Holder
by submitting a written request
to Aetna at its Home Office. Any
revocation will apply only to
amounts not yet paid. ECO may be
elected only once on your
behalf.
(6) Reservation of Rights: Aetna
reserves the right to change the
terms of ECO for future
elections and discontinue the
availability of this option
after proper notification. Aetna
also reserves the right to allow
payments to be made more
frequently than annually.
(b) Systematic Withdrawal Option (SWO): A
distribution option under which a
portion of the Individual Account(s)
Current Value will automatically be
surrendered and distributed each
year.
(1) Amount of Distribution: The
Contract Holder may elect one of
the two Payment methods
described below.
(a) Specified Amount: Payments
of a designated dollar
amount which must be no
greater than 10% of the
initial Current Value and
shall remain constant
unless a higher amount is
required under Code minimum
distribution rules. Each
year that the Specified
Amount is in effect, Aetna
will calculate the minimum
required distribution under
the Code and distribute
this amount if it is larger
than the amount elected by
the Contract Holder.
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<PAGE>
3.14 Distribution Options The life expectancy factor
(Cont'd): for this purpose will be
your life expectancy at the
time of the election of
this option, and with each
subsequent calendar year
the factor will be reduced
by one. The minimum
required distribution will
be determined by dividing
the Individual Account(s)
Current Value as to
December 31 of the year
prior to the year for which
the payment is to be made,
by a life expectancy
factor. At its discretion,
Aetna may require a minimum
initial payment amount; or
(b) Specified Period: Payments
which are made over a
period of time which must
be at least 10 years,
unless otherwise required
by the Code minimum
distribution rules. The
maximum specified period
will be limited by the Code
minimum distribution rules.
The annual amount paid each
year is calculated by
dividing the Individual
Account(s) Current Value as
of December 31 of the prior
year, by the number of
payment years remaining.
The life expectancy factor
is either the single life,
or joint life expectancy,
as elected by the Contract
Holder, based on tables in
Section 401(a)(9) of the
Code or related
regulations. If the joint
life expectancy is elected,
upon your or your spouse's
death, the minimum required
distribution for the
Specified Amount payment
method will continue to be
calculated in the same
manner as described in
(b)(1). Payments upon your
death will continue to be
calculated in the same
manner described above,
unless the Contract Holder
on behalf of your spouse
elects an alternate payment
mode. Any mode elected must
provide payments to be made
at least as rapidly as
those made prior to your
death.
These calculations may be
changed as necessary to
comply with the Code
minimum distribution rules.
The joint life expectancy
factor can only be elected
based on the joint life
expectancy of you and your
spouse, and such spouse
must be named as the Plan
beneficiary of any death
benefits under the Contract
while SWO is in effect.
(2) Minimum Initial Current Value:
At its discretion, Aetna may
require a minimum initial
Current Value for election of
this option. If after election
of this option the Current Value
is insufficient to make a
scheduled SWO payment, Aetna
will distribute the entire
balance of the Individual
Account.
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<PAGE>
3.14 Distribution Options (3) Date of Distribution: The
(Cont'd): Contract Holder shall specify
the initial date. The earliest
date is the first day of the
calendar year in which you
attain age 70 1/2. Subsequent
distributions will be made
annually on the 15th of the
month the initial payment was
made or such other date Aetna
may designate or allow.
(4) Elections and Revocation: SWO
may be elected by the Contract
Holder by submitting a completed
and signed election form to
Aetna's Home Office. The
Contract Holder must certify in
writing that the distribution is
in accordance with the terms of
the Plan.
Once elected, this option may be
revoked by the Contract Holder
by submitting a written request
to Aetna at its Home Office. Any
revocation will apply only to
amounts not yet paid. SWO may be
elected only once.
(5) Reservation of Rights: Aetna
reserves the right to change the
terms of SWO for future
elections and discontinue the
availability of this option
after proper notification. Aetna
also reserves the right to allow
payments to be made more
frequently than annually.
3.15 Sum Payable at Death Aetna will pay any portion of the
(Before Annuity Individual Account(s) Current Value to the
Payments Start): beneficiary and in the manner directed in
writing by the Contract Holder when:
(a) You die before Annuity payments
start; and
(b) The notice of death is received in
good order by Aetna.
For each Individual Account, the death
benefit is guaranteed to be the greater of:
(a) The Current Value of the Individual
Account plus aggregate positive MVA,
as applicable, on the date the notice
of death and the request for payment
are received in good order at Aetna's
Home Office; or
(b) The total of Net Purchase Payment(s)
made to each Individual Account minus
the total of all partial surrenders
or annuitizations made from each
Account.
This guaranteed death benefit is available
only to beneficiaries who request either a
lump sum payment or an Annuity Option
within the first six months after the date
of your death.
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<PAGE>
3.15 Sum Payable at Death If the payee of the death proceeds is your
(Before Annuity surviving spouse (as your designated
Payments Start) beneficiary), the first Annuity payment or
(Cont'd): the lump sum payment may be deferred to a
date not later than when you would have
attained age 70 1/2 or such later date as
may be allowed under federal law or
regulations. If the beneficiary is not your
surviving spouse, all of the Current Value
must either be applied to an Annuity Option
within one year of your death or be paid to
the payee within 5 years of your death (see
Part IV).
In no event may any payments to the
beneficiary under an Annuity Option extend
beyond:
(a) The life of the payee determined as
of the date payments are to commence;
or
(b) Any certain period greater than the
payee's life expectancy as determined
by regulations under Code Section 401
(a)(9) as of the date payments are to
begin.
3.16 Surrender Value: The amount payable by Aetna upon the
surrender of any portion on an Individual
Account will be the value of the Individual
Account at the end of the Valuation Period
in which the surrender request is received
at its Home Office. Partial surrenders of
an Individual Account's Fixed Account value
may not exceed 20% of the Fixed Account
Value during any calendar year. Any portion
of a full surrender of an Individual
Account which is in the Fixed Account will
be paid in five annual installments in
accordance with Section 3.19.
For a partial or full surrender from any
Individual Account, Aetna must receive
written direction from the Contract Holder
on a form acceptable to Aetna. Aetna may
defer payment of the surrender value until
appropriate Contract Holder direction is
received.
3.17 Surrender Restrictions: Limitations apply to full and partial
surrenders of any Restricted Amount under
this Contract, as required by Code Section
403(b)(11). The Restricted Amount is the
sum of:
(a) Net Purchase Payments attributable to
your salary reduction contributions
made on and after January 1, 1989, if
any; plus
(b) The net increase, if any, in the
Current Value of the Employee Account
after December 31, 1988 attributable
to investment gains and losses and
credited interest.
The Restricted Amount may be fully or
partially surrendered only if one or more
of the following conditions are met:
(a) You have reached age 59 1/2;
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<PAGE>
3.17 Surrender Restrictions (b) You have separated from service;
(Cont'd): (c) You have died;
(d) You have become disabled, within the
meaning of Code Section 72(m)(7); or
(e) The withdrawal is otherwise allowed
by federal law, regulations or
rulings.
A full or partial surrender is also allowed
if you incur a "hardship" as that term is
defined in the Code or regulations under
Code Section 403(b).
However, the amount available for hardship
is limited to the lesser of the amount
necessary to satisfy the need, or the Net
Purchase Payments attributable to your
salary reduction contributions made on and
after January 1, 1989.
The Contract Holder must certify that one
of these conditions has been met before a
surrender request will be considered to be
in good order. The Contract Holder must
notify Aetna in writing when a lump sum
payment is to be made or Annuity payments
are to commence.
If, pursuant to Revenue Ruling 90-24,
amounts are transferred to this Contract
from a Code Section 403(b)(7) custodial
account, the December 31, 1988 value from
such transferred amount may be distributed
upon the Contract Holder's request. The
Contract Holder must certify that one of
the conditions mentioned above has been met
or that you have incurred a hardship. The
remaining transferred value from the
Employee Account will be considered a
Restricted Amount subject to the Surrender
Restrictions of this subsection.
3.18 Timing of The distribution of benefits accrued after
Distributions: December 31, 1986, must be made in a lump
sum or must begin not later than the April
1 of the calendar year following the
calendar year in which you attain age 70
1/2 or retire, whichever occurs later.
The required distribution described in
either of the above rules must be made over
your life (or the joint lives of you and
the beneficiary) or over a period not
exceeding the life expectancy of you (or
the joint life expectancies of you and the
beneficiary). If the Contract Holder does
not request commencement of benefits as
described above, Aetna will not be
responsible for compliance with the Code
Section 401(a)(9) minimum distribution
requirements and for any adverse tax
consequences that may result.
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<PAGE>
3.19 Payment of Surrender Under certain emergency conditions, Aetna
Value: may defer payments:
(a) For a period of up to 6 months
(unless not allowed by state law);
and
(b) As provided by federal law.
Any surrenders requested from an Individual
Account's Fixed Account value may not
exceed 20% of the Individual Account's
Fixed Account Current Value as of the date
the withdrawal request is received in good
order at Aetna's Home Office during any
calendar year. The surrender value will be
reduced by any Fixed Account surrender(s),
transfer(s) or annuitizations previously
made during the calendar year.
In the event of Individual Account
termination, Aetna will pay any Fixed
Account surrender value from the Individual
Account with interest, in five annual
payments of:
o One-fifth of the Fixed Account
surrender value minus any Fixed
Account surrender(s), transfer(s) or
annuitizations made during the
calendar year;
o One-fourth of the Fixed Account
surrender value;
o One-third of the Fixed Account
surrender value;
o One-half of the Fixed Account
surrender value; and
o The remaining balance of the Fixed
Account surrender value as the fifth
and final payment.
Once Aetna receives notification of an
Individual Account termination, no further
surrender(s) or transfer(s) will be
permitted from the Fixed Account.
Interest, as used above, will not be more
than two percentage points below any rate
determined prospectively by the Board of
Directors for this class of Contract. In no
event will the interest rate be less than
3%.
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<PAGE>
3.20 Reinstatement: All or a portion of the proceeds of a full
surrender of this Contract may be
reinvested within 30 days after the
surrender if allowed by law. Any Market
Value Adjustment deducted from GA Account
surrenders will not be included in the
reinstatement. Amounts will be reinstated
among the Fixed Account, GA Account, and
the Fund(s) in the same proportion as they
were at the time of surrender. Any amount
reinstated to the GA Account will be
credited to the current Deposit Period. The
number of Record Units reinstated will be
based on the Record Unit Value(s) next
computed after receipt at Aetna's Home
Office of the reinstatement request and the
amount to be reinvested.
Reinstatement is permitted only once.
IV. ANNUITY PROVISIONS
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4.01 Choices to be Made: The Contract Holder may elect an Annuity
Option on your behalf by telling Aetna to
pay all or any portion of the Current Value
(minus any premium tax) as a premium for an
Annuity under Option 2, 3, or 4 (see 4.07).
The present value of the expected payments
to the Annuitant when payments start shall
be determined in accordance with the tables
under Code Section 401(a)(9) regulations in
order to comply with the incidental death
benefit test. This restriction does not
apply if Option 4(e) is chosen and the
second Annuitant is the spouse of the
Annuitant.
Generally, the first Annuity payment must
be made no later than the April 1 of the
calendar year following the year in which
you turn age 70 1/2 or retire, whichever
occurs later, or such later date as may be
allowed under federal law or regulations
(see 3.18). For distributions taken in a
lump sum, see Surrender Value (3.16 and
3.19).
For any election of an Annuity Option, the
Contract Holder must provide certification
that the Code Section 403(b)(11) withdrawal
restrictions have been satisfied.
When an Annuity Option is chosen, Aetna
must also be told if payments are to be
made other than monthly and to pay:
(a) A Fixed Annuity using the General
Account;
(b) A Variable Annual using any of the
Fund(s) made available by Aetna for
Annuity purposes; or
(c) A combination of (a) and (b).
If a Fixed Annuity is chosen, Aetna will
add interest daily at an annual rate no
less than 3.0%. Aetna may add interest
daily at any higher rate.
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<PAGE>
4.01 Choices to be Made If a Variable Annuity is chosen, an Assumed
(Cont'd): Annual Net Return Rate of 5% may be chosen.
If not chosen, Aetna will use an Assumed
Annual Net Return Rate of 3.5%.
With the exception of Option 2 on a
variable basis, once elected, an Annuity
Option may not be revoked.
4.02 Annuity Payments to In no event may any payments to the
Annuitant: Annuitant under any Annuity Option extend
beyond:
(a) The life of the Annuitant;
(b) The lives of the Annuitant and the
beneficiary;
(c) A period certain greater than the
Annuitant's life expectancy according
to regulations under Code Section
401(a)(9), determined as of the date
payments are to commence; or
(d) A period certain greater than the
life expectancies of the Annuitant
and the beneficiary according to
regulations under Code Section
401(a)(9) determined as of the date
payments are to begin.
4.03 Death of Annuitant: When an Annuitant dies under Options 2 and
3, the present value of any remaining
guaranteed payments will be paid in one sum
to the beneficiary as directed in writing
by the Contract Holder; or upon election by
the Annuitant's beneficiary, any remaining
payments will continue to the beneficiary.
If no beneficiary exists, the present value
of any remaining guaranteed payments will
be paid in one lump sum to the Contract
Holder.
However, if a beneficiary dies while under
Option 1 or while receiving Annuity
payments, the present value of any
remaining payments will be paid in one lump
sum to the estate of the beneficiary. The
interest rate used to determine the first
payment will be used to calculate the
present value.
4.04 Fund(s) Annuity Units The number of Fund(s) Annuity Units is
-- Separate Account: based on the amount of the first Variable
Annuity payment which is equal to:
(a) The portion of the Current Value
(minus any premium tax) applied to
pay a Variable Annuity; divided by
(b) 1,000; multiplied by
(c) The payment rate for the Option
chosen.
26
<PAGE>
4.04 Fund(s) Annuity Units Such amount, or portion, of the variable
-- Separate Account payment will be divided by the appropriate
(Cont'd): Fund(s) Annuity Unit Value (see 4.05) on
the tenth Valuation Period before the due
date of the first payment to determine the
number of each Fund Annuity Units. The
number of each Fund Annuity Units remains
fixed. Each future payment is equal to the
sum of the products of each Fund Annuity
Unit Value multiplied by the appropriate
number of Units. The Fund Annuity Unit
Value on the tenth Valuation Period prior
to the due date of the payment is used.
4.05 Fund(s) Annuity Unit For any Valuation Period, a Fund(s) Annuity
Value -- Separate Unit Value is equal to:
Account:
(a) The Value for the previous Period;
multiplied by
(b) The Annuity Net Return Factor(s) for
the Period; multiplied by
(c) A factor to reflect the Assumed
Annual Net Return Rate.
The factor for 3.5% per year is .9999058;
for 5% per year it is .9998663.
The dollar value of a Fund(s) Annuity Unit
Values and payments may go up or down due
to investment gain or loss.
If Variable Annuity payments are not to
decrease, Aetna must earn a gross return on
the assets of the Separate Account of:
o 4.75% on an annual basis plus an
annual return of up to 0.25% needed
to offset the administrative charge
set at the time Annuity payments
commence if an Assumed Annual Net
Return Rate of 3.5% is chosen; or
o 6.25% on an annual basis plus an
annual return of up to 0.25% needed
to offset the administrative charge
set at the time Annuity payments
commence if an Assumed Annual Net
Return Rate of 5% is chosen.
Payments shall not be changed due to
changes in the mortality or expense results
or administrative charges.
4.06 Annuity Net Return The Annuity Net Return Factor(s) are used
Factor(s) -- Separate to compute all Separate Account Annuity and
Account: payments for any Fund.
The Annuity Net Return Factor(s) for each
Fund is equal to 1.0000000 plus the Net
Return Rate.
27
<PAGE>
4.06 Annuity Net Return The Net Return Rate is equal to:
Factor(s) -- Separate
Account (Cont'd): (1) The value of the shares of the Fund
held by the Separate Account at the
end of a Valuation Period; minus
(2) The value of the shares of the Fund
held by the Separate Account at the
start of the Valuation Period; plus
or minus
(3) Taxes (or reserves for taxes) on the
Separate Account (if any); divided by
(4) The total value of the Fund(s) Record
Units and Fund(s) Annuity Units of
the Separate Account at the start of
the Valuation Period; minus
(5) A daily actuarial charge at an annual
rate of 1.25% for Annuity mortality
and expense risks and profit and a
daily administrative charge which
will not exceed 0.25% on an annual
basis.
A Net Return Rate may be more or less than
0.
The value of a share of the Fund is equal
to the net assets of the Fund divided by
the number of shares outstanding.
4.07 Annuity Options: Option 1 -- Payments of Interest on Sum
Left with Aetna -- This Option may be used
only by the beneficiary when you die before
Aetna has started paying an Annuity. A
portion or all of the sum paid upon death
may be held under this Option and will be
held in the General Account of Aetna at
interest (see 4.01). The Contract Holder,
on behalf of your beneficiary, may later
tell Aetna to:
(a) Pay a portion or all of the sum held
by Aetna; or
(b) Apply a portion or all of the sum
held by Aetna to any Annuity Option
below.
If the beneficiary is your surviving
spouse, payment may be deferred to a date
not later than when you would have attained
age 70 1/2.
If the beneficiary is not your spouse, the
Contract Holder must tell Aetna to pay the
full sum within 5 years after your death.
Option 2 -- Payments for a Stated Period of
Time -- An Annuity will be paid for the
number of years chosen. The number of years
must be at least 3 and not more than 30.
If payments for this Option are made under
a Variable Annuity, the present value of
any remaining payments may be withdrawn at
any time.
Option 3 -- Life Income -- An Annuity will
be paid for the life of the Annuitant. If
also chosen, Aetna will guarantee payments
for 60, 120, 180, or 240 months.
28
<PAGE>
4.07 Annuity Options Option 4 -- Life Income for Two Payees --
(Cont'd): An Annuity will be paid during the lives of
the Annuitant and a second Annuitant. At
the death of either, payments will continue
to the survivor. When this Option is
chosen, a choice must be made of:
(a) 100% of the payment to continue to
the survivor;
(b) 66 2/3% of the payment to continue to
the survivor;
(c) 50% of the payment to continue to the
survivor;
(d) Payments for a minimum of 120 months,
with 100% of the payment to continue
to the survivor; or
(e) 100% of the payment to continue to
the survivor if the survivor is the
Annuitant and 50% of the payment to
continue to the survivor if the
survivor is the second Annuitant.
Other Options -- Aetna may make other
options available as allowed by the laws of
the state in which the Contract and this
Certificate is delivered.
29
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 3.00% $ 28.99 $ 86.76 $ 172.88 $ 343.23
4 3.00% 22.06 66.02 131.56 261.19
5 3.00% 17.91 53.59 106.78 211.99
6 3.00% 15.14 45.30 90.27 179.22
7 3.00% 13.16 39.39 78.49 155.83
8 3.00% 11.68 34.96 69.66 138.31
9 3.00% 10.53 31.52 62.81 124.69
10 3.00% 9.61 28.77 57.33 113.82
11 3.00% 8.86 26.52 52.85 104.93
12 3.00% 8.24 24.65 49.13 97.54
13 3.00% 7.71 23.08 45.98 91.29
14 3.00% 7.26 21.73 43.29 85.95
15 3.00% 6.87 20.56 40.96 81.33
16 3.00% 6.53 19.54 38.93 77.29
17 3.00% 6.23 18.64 37.14 73.74
18 3.00% 5.96 17.84 35.56 70.59
19 3.00% 5.73 17.13 34.14 67.78
20 3.00% 5.51 16.50 32.87 65.26
21 3.00% 5.32 15.92 31.72 62.98
22 3.00% 5.15 15.40 30.68 60.92
23 3.00% 4.99 14.92 29.74 59.04
24 3.00% 4.84 14.49 28.88 57.33
25 3.00% 4.71 14.09 28.08 55.76
26 3.00% 4.59 13.73 27.36 54.31
27 3.00% 4.47 13.39 26.68 52.97
28 3.00% 4.37 13.08 26.06 51.74
29 3.00% 4.27 12.79 25.49 50.60
30 3.00% 4.18 12.52 24.95 49.53
- -------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Age of
Annuitant None 60 120 180 240
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93
51 4.12 4.11 4.09 4.05 3.99
52 4.19 4.19 4.16 4.11 4.04
53 4.27 4.26 4.23 4.18 4.10
54 4.35 4.34 4.31 4.25 4.16
55 4.44 4.42 4.39 4.32 4.22
56 4.53 4.51 4.47 4.40 4.29
57 4.62 4.61 4.56 4.48 4.35
58 4.72 4.71 4.65 4.56 4.42
59 4.83 4.81 4.75 4.64 4.49
60 4.95 4.93 4.86 4.73 4.55
61 5.07 5.05 4.97 4.83 4.62
62 5.20 5.17 5.08 4.92 4.69
63 5.34 5.31 5.20 5.02 4.76
64 5.49 5.45 5.33 5.12 4.83
65 5.65 5.61 5.47 5.22 4.89
66 5.82 5.77 5.61 5.33 4.96
67 6.01 5.94 5.75 5.44 5.02
68 6.20 6.13 5.91 5.54 5.08
69 6.41 6.33 6.07 5.65 5.14
70 6.64 6.54 6.23 5.76 5.19
71 6.88 6.76 6.41 5.86 5.24
72 7.14 7.00 6.59 5.97 5.28
73 7.43 7.26 6.77 6.06 5.32
74 7.73 7.53 6.96 6.16 5.35
75 8.06 7.82 7.14 6.25 5.38
- -------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
31
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Ages of
- -----------------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03
55 55 3.88 4.25 4.47 3.87 4.14
55 60 4.06 4.47 4.71 4.06 4.20
60 55 3.99 4.44 4.71 3.98 4.42
60 60 4.24 4.71 4.99 4.23 4.57
60 65 4.49 5.01 5.32 4.48 4.64
65 60 4.38 4.97 5.32 4.38 4.93
65 65 4.72 5.33 5.70 4.71 5.14
65 70 5.07 5.75 6.17 5.05 5.26
70 65 4.93 5.68 6.15 4.91 5.66
70 70 5.40 6.21 6.70 5.36 5.96
70 75 5.89 6.82 7.40 5.81 6.12
75 70 5.69 6.68 7.32 5.62 6.67
75 75 6.37 7.45 8.15 6.23 7.12
75 80 7.07 8.34 9.16 6.78 7.36
- -------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
32
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 3.50% $ 29.19 $ 87.33 $ 173.91 $ 344.86
4 3.50% 22.27 66.61 132.65 263.04
5 3.50% 18.12 54.19 107.92 213.99
6 3.50% 15.35 45.92 91.44 181.32
7 3.50% 13.38 40.01 79.69 158.01
8 3.50% 11.90 35.59 70.88 140.56
9 3.50% 10.75 32.16 64.05 127.00
10 3.50% 9.83 29.42 58.59 116.18
11 3.50% 9.09 27.18 54.13 107.34
12 3.50% 8.46 25.32 50.42 99.98
13 3.50% 7.94 23.75 47.29 93.78
14 3.50% 7.49 22.40 44.62 88.47
15 3.50% 7.10 21.24 42.31 83.89
16 3.50% 6.76 20.23 40.29 79.89
17 3.50% 6.47 19.34 38.51 76.37
18 3.50% 6.20 18.55 36.94 73.25
19 3.50% 5.97 17.85 35.54 70.47
20 3.50% 5.75 17.22 34.28 67.98
21 3.50% 5.56 16.65 33.15 65.74
22 3.50% 5.39 16.13 32.13 63.70
23 3.50% 5.24 15.66 31.19 61.85
24 3.50% 5.09 15.24 30.34 60.17
25 3.50% 4.96 14.85 29.56 58.62
26 3.50% 4.84 14.49 28.85 57.20
27 3.50% 4.73 14.15 28.19 55.90
28 3.50% 4.63 13.85 27.58 54.69
29 3.50% 4.53 13.57 27.02 53.57
30 3.50% 4.45 13.30 26.49 52.53
- -------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 5.00% $ 29.80 $ 89.04 $176.99 $ 349.72
4 5.00% 22.89 68.38 135.93 268.58
5 5.00% 18.74 56.00 111.33 219.98
6 5.00% 15.99 47.77 94.96 187.64
7 5.00% 14.02 41.90 83.30 164.59
8 5.00% 12.56 37.52 74.58 147.35
9 5.00% 11.42 34.11 67.81 133.99
10 5.00% 10.51 31.40 62.42 123.34
11 5.00% 9.77 29.19 58.03 114.66
12 5.00% 9.16 27.36 54.38 107.45
13 5.00% 8.64 25.81 51.31 101.39
14 5.00% 8.20 24.50 48.69 96.21
15 5.00% 7.82 23.36 46.44 91.75
16 5.00% 7.49 22.37 44.47 87.88
17 5.00% 7.20 21.51 42.75 84.48
18 5.00% 6.94 20.74 41.23 81.47
19 5.00% 6.71 20.06 39.88 78.80
20 5.00% 6.51 19.46 38.68 76.42
21 5.00% 6.33 18.91 37.59 74.28
22 5.00% 6.17 18.42 36.62 72.35
23 5.00% 6.02 17.98 35.73 70.61
24 5.00% 5.88 17.57 34.93 69.02
25 5.00% 5.76 17.20 34.20 67.57
26 5.00% 5.65 16.87 33.53 66.25
27 5.00% 5.54 16.56 32.92 65.04
28 5.00% 5.45 16.28 32.35 63.93
29 5.00% 5.36 16.01 31.83 62.90
30 5.00% 5.28 15.77 31.35 61.95
- -------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Months
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Age of
Annuitant None 60 120 180 240
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- -------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
35
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Months
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Age of
Annuitant None 60 120 180 240
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 6.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- -------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
36
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Ages of
- ---------------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- -------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
37
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $l,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Ages of
- ---------------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- -------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
38
<PAGE>
- --------------------------------------------------------------------------------
Aetna[LOGO]
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
Certificate of Group Annuity Coverage
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CERTIFICATE CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN
INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA
DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
GTCC-IB(ATORP) 39
Exhibit 99-B.4.39
---------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
Aetna Life Insurance and Annuity Company, herein called
Aetna, agrees to pay the benefits stated in the Contract.
- --------------------------------------------------------------------------------
Certificate of Group To the Employee:
Annuity Coverage
Aetna certifies that coverage is in force for you under
the stated Group Annuity Contract and Certificate
numbers. All data shown here is taken from Aetna records
and is based upon information furnished by you.
This Certificate is a summary of the Group Annuity
Contract provisions. It replaces any and all prior
certificates, riders, or amendments issued to you under
the stated Contract and Certificate numbers. This
Certificate is for information only and is not a part of
the Contract.
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE
DESCRIBED IN PARTS III AND IV.
- --------------------------------------------------------------------------------
Right to Cancel You may cancel this Certificate within 10 days of
receiving it by returning this Certificate along with a
written notice to Aetna at the above address or to the
agent from whom it was purchased. Within 7 days after it
receives the notice of cancellation and this Certificate
at its Home Office, Aetna will return the entire
consideration paid plus any increase or minus any
decrease in the current value of any funds allocated to
the Separate Account.
/s/ Thomas L. West /s/ George N. Gingold
Thomas L. West George N. Gingold
Senior Vice President, Annuity Secretary
- --------------------------------------------------------------------------------
Contract Holder Group Annuity Contract No.
STATE UNIVERSITY SYSTEM SPECIMEN
- --------------------------------------------------------------------------------
Your Name Certificate No.
JOHN DOE SPECIMEN
- --------------------------------------------------------------------------------
Type of Plan
ORP subject to IRC Section 401(a)
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CERTIFICATE CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA, APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN
INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA
DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
GTCC-IB(AORP)
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed There are guaranteed interest rates for amounts held in
Interest Rate the Fixed Account (See 3.04) and the GA Account (See
3.03(d)).
- --------------------------------------------------------------------------------
Deductions from There will be deductions for mortality and expense risks
the Separate and administrative fees. (See 3.07 and 4.06.)
Account
- --------------------------------------------------------------------------------
Deduction from Purchase Payment(s) are subject to a deduction for
Purchase premium taxes, if any. (See 3.01.)
Payment(s)
2
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TABLE OF CONTENTS
I. GENERAL DEFINITIONS
- --------------------------------------------------------------------------------
Page
1.01 Annuitant........................................................ 5
1.02 Annuity.......................................................... 5
1.03 Fixed Account.................................................... 5
1.04 Fixed Annuity.................................................... 5
1.05 Fund(s).......................................................... 5
1.06 General Account.................................................. 5
1.07 Guaranteed Accumulation Account (GA Account)..................... 5
1.08 Matured Term Value............................................... 5
1.09 Maturity Date.................................................... 5
1.10 Nonunitized Separate Account..................................... 5
1.11 Participant (You)................................................ 5
1.12 Plan............................................................. 5
1.13 Purchase Payment(s).............................................. 5
1.14 Separate Account................................................. 5
1.15 Valuation Period (Period)........................................ 6
1.16 Variable Annuity................................................. 6
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract............................................... 6
2.02 Change of Fund(s)................................................ 6
2.03 Nonparticipating Contract........................................ 7
2.04 Payments......................................................... 7
2.05 State Laws....................................................... 7
2.06 Control of Contract.............................................. 7
2.07 Designation of Beneficiary....................................... 8
2.08 Misstatements and Adjustments.................................... 8
2.09 Incontestability................................................. 8
2.10 Grace Period..................................................... 8
3
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III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- --------------------------------------------------------------------------------
Page
3.01 Net Purchase Payment............................................. 8
3.02 Individual Account(s)............................................ 8
3.03 Guaranteed Accumulation Account (GA Account)..................... 9
3.04 Guaranteed Interest Rate - Fixed Account......................... 9
3.05 Experience Credits............................................... 13
3.06 Fund Record Units - Separate Account............................. 13
3.07 Net Return Factor(s) - Separate Account.......................... 13
3.08 Fund Record Unit Value - Separate Account........................ 14
3.09 Current Value.................................................... 14
3.10 Transfer of Current Value from the Funds or GA Account........... 14
3.11 Transfer of Current Value from the Fixed Account................. 15
3.12 Notice to the Contract Holder.................................... 15
3.13 Distribution Options............................................. 15
3.14 Sum Payable at Death (Before Annuity Payments Start)............. 18
3.15 Surrender Value.................................................. 19
3.16 Timing of Distributions.......................................... 19
3.17 Payment of Surrender Value....................................... 20
3.18 Reinstatement.................................................... 20
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
4.01 Choices to be Made............................................... 21
4.02 Annuity Payments to Annuitant.................................... 21
4.03 Death of Annuitant............................................... 22
4.04 Fund(s) Annuity Units - Separate Account......................... 22
4.05 Fund(s) Annuity Unit Value - Separate Account.................... 22
4.06 Annuity Net Return Factor(s) - Separate Account.................. 23
4.07 Annuity Options.................................................. 23
4
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I. GENERAL DEFINITIONS
- --------------------------------------------------------------------------------
1.01 Annuitant: A person on whose life an Annuity has been
effected under this Certificate.
1.02 Annuity Payment of an income:
(a) For the life of one or two persons;
(b) For a stated period; or
(c) For some combination of (a) and (b)
1.03 Fixed Account: An accumulation option with a guaranteed
minimum interest rate. Aetna may credit a
higher rate which is not guaranteed
1.04 Fixed Annuity: An Annuity with payments which do not vary
in amount.
1.05 Fund(s): The open-end registered management
investment companies (mutual funds) made
available by Aetna under the Contract.
1.06 General Account: The Account holding the assets of Aetna,
other than those assets held in the Separate
Account or the Nonunitized Separate Account.
1.07 Guaranteed Accumulation An accumulation option which guarantees a
Account (GA Account): stipulated rate of interest for a specified
period of time.
1.08 Matured Term Value: The amount payable on a GA Account Term's
Maturity Date
1.09 Maturity Date: The last day of a GA Account Term,
1.10 Nonunitized Separate An Account set up by Aetna under Title 38a,
Account: Section 38a-433, of the Connecticut General
Statutes which is used to hold assets for GA
Account Terms greater than three years. The
Contract Holder does not participate in the
investment gain or loss from the assets held
in this Account.
1.11 Participant (You): A person who participates in the Plan named
on the cover of this Certificate.
1.12 Plan: The Plan named on the Certificate cover. The
Plan is not a part of the Contract. Aetna is
not bound by the terms of the Plan.
1.13 Purchase Payment(s): Payments made to Aetna.
1.14 Separate Account: An account which buys and holds shares of
the Fund(s). Income, gains or losses,
realized or unrealized are credited or
charged to this account without regard to
other income, gains or losses of Aetna.
Aetna owns the assets held in a separate
account and is not a trustee as to such
amounts. These accounts generally are not
guaranteed and are held at market value. The
assets of such accounts, to the extent of
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reserves and other contract liabilities of
the account, shall not be charged with other
Aetna liabilities.
1.15 Valuation Period (Period): The period as of 4:00 p.m. Eastern time on
each day the New York Stock Exchange is open
for business to 4:00 p.m. Eastern time of
the next such business day, or such other
day that one or more of the Funds determines
its net asset value.
1.16 Variable Annuity: An Annuity with payments which vary with the
net investment results of a Separate
Account.
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract: Except as provided below, only an authorized
officer of Aetna may change the terms of the
Contract by notifying the Contract Holder,
in writing, at least 30 days before the
effective date of the change. Any change
will not affect the amount or terms of any
Annuity which begins before the change.
Aetna may make a change that affects the GA
Account Market Value Adjustment (see 3.03
(g)) with at least 30 days advance written
notice to the Contract Holder. Any such
change shall become effective for any
present or future Participant.
Any change that affects the following
provisions of the Contract will not apply to
existing Individual Accounts:
(a) Net Purchase Payment(s)
(b) Guaranteed GA Account Interest Rate
(c) Guaranteed Interest Rate -- Fixed
Account
(d) Net Return Factor(s) -- Separate
Account
(e) Current Value
(f) Surrender Value
(g) Fund(s) Annuity Unit Value --
Separate Account.
Any change that affects the Annuity Options
and the tables for the Options cannot be
made:
(1) Until at least 12 months after the
Effective Date of the Contract; and
(2) Until at least 12 months after the
effective date of any such prior
change.
New Participants covered under the Contract
on or after the effective date of any change
will be subject to the change. If the
Contract Holder does not agree to any change
under this provision, no new Participants
will be covered under the Contract. Aetna
will continue to accept Purchase Payments
for the Participants covered under the
Contract before the change. The Contract may
also be changed as required by federal or
state law.
2.02 Change of Fund(s): Aetna or the Separate Account may:
6
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(a) Change the Fund(s) which may be
invested in by the Separate Account;
and
(b) Replace the shares of any Fund(s)
held in the Separate Account with
2.02 Change of Fund(s): shares of any other Fund(s).
(Cont'd):
Changes must be:
(a) Approved by a majority vote of persons
having an interest in the Separate
Account and the Fund(s):
(b) Deemed necessary by Aetna under the
Investment Company Act of 1940; or
(c) Deemed necessary by Aetna to
accomplish the purpose of the Separate
Account.
Aetna will notify the Contract Holder of any
change,
2.03 Nonparticipating You, your beneficiary or the Contract Holder
Contract: will not have a right to share in the
earnings of Aetna.
2.04 Payments: Aetna will make Annuity payments as and when
due. Aetna will make other payments within 7
days of receipt at its Home Office of a
written claim for payment which is in good
order.
2.05 State Laws: The Contract and this Certificate complies
with the laws of the state in which the
Contract is delivered. Any cash, death or
Annuity payments are equal to or greater
than the minimum required by such laws.
Annuity tables for legal reserve valuation
shall be as required by state law. Such
tables may be different from Annuity tables
used to determine Annuity payments.
2.06 Control of Contract: The Contract Holder may make any choices
allowed by the Contract for the Employer
Account and the Employee Account. Choices
made under the Contract must be in writing
or in a form satisfactory to Aetna. Until
receipt of such choices in its Home Office,
Aetna may rely on any previous choices made.
The Plan, however, may allow you to select
the investment options of the Employer
Account and/or the Employee Account. No
distributions will be made from the Employer
Account or the Employee Account without the
Contract Holder's written direction to
Aetna.
(a) Nontransferable and Nonassignable: The
Contract, this Certificate and any
Individual Accounts are nontransferable
and nonassignable, except to Aetna
pursuant of a "qualified domestic
relations order" as set forth under the
Internal Revenue Code.
(b) Distributions: With respect to any
distribution made from an Employee or
Employer Account, the Contract Holder
must certify in writing that the
distribution is in accordance with the
terms of the Plan.
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(c) Participant Rights/Employee Account:
You have a nonforfeitable right to the
value of your Employee Account pursuant
to the terms of the Plan as interpreted
by the Contract Holder (see 1.12).
(d) Participant Rights/Employer Account:
You have a nonforfeitable right to the
value of your Employer Account pursuant
to the terms of, and to the extent of
your vested percentage under, the Plan
as interpreted by the Contract Holder.
It is the Contract Holder's
responsibility to maintain records of
your vesting percentages. Aetna will
not maintain nor keep such records
2.07 Designation of Beneficiary: You shall name the beneficiary of the
Employer and Employee Account. Aetna will
pay any portion of the Individual Account(s)
Current Value to the beneficiary as directed
by the Contract Holder.
2.08 Misstatements and If Aetna finds the age of any payee to be
Adjustments: misstated, the correct facts will be used to
adjust payments.
2.09 Incontestability: Aetna cannot cancel the Contract because of
any error of fact on the application. Aetna
cannot cancel this Certificate because of
any error of fact on the enrollment form.
2.10 Grace Period: This Certificate will remain in effect even
if Purchase Payments are not continued.
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- --------------------------------------------------------------------------------
3.01 Net Purchase Payment(s): The actual Purchase Payment less any premium
tax. Generally, Aetna will deduct the
premium tax when Annuity benefits are
purchased (see Part IV). If Aetna determines
that a premium tax is due when Purchase
Payments are received or at any other time,
it will deduct the tax at that time.
The Net Purchase Payment(s) may be credited
among:
(a) The Fixed Account; and
(b) The Guaranteed Accumulation Account;
and
(c) The Fund(s) in which the Separate
Account invests.
Aetna must be told the percentage of the Net
Purchase Payment(s) to be applied to each
investment above.
During any calendar year, the Contract
Holder or, if allowed by the Plan, you may
tell Aetna to change the investment mix
twelve times. Should Aetna allow additional
changes, each may be subject to a fee of up
to $10.
3.02 Individual Account(s): The Contract is issued to the Contract
Holder on your behalf. However,
Participant's Individual Accounts are
explained below
Aetna may maintain two Individual Accounts
for each Participant. These will be:
8
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(a) Employer Account: This Individual
Account will be credited with
employer Net Purchase Payment(s);
and
(b) Employee Account: This Individual
Account will be credited with
employee Net Purchase Payment(s),
specifically employee salary
reduction contributions.
3.02 Individual Account(s) In addition to any Purchase Payment(s)
(Cont'd) stated to be made to the Contract, a
(Cont'd) lump-sum Purchase Payment(s), of
not less than a minimum amount stated by
Aetna, may be made on your behalf. Aetna may
maintain an Individual Account for each lump
sum payment. Such Individual Account(s) will
be designated as an Employer Account(s) or
an Employee Account(s) as instructed by the
Contract Holder.
3.03 Guaranteed Accumulation: The GA Account guarantees stipulated rates
Account (GA Account): of interest for stated periods of time (see
(a), (b) and (d) below). Amounts withdrawn
before the end of a Guaranteed Term may be
subject to a Market Value Adjustment
(MVA)(see(g) below).
(a) Deposit Period -- A calendar month,
a calendar quarter, or any other
period of time specified by Aetna
during which Net Purchase Payment(s)
and transfers are accepted into the
GA Account for one or more
Guaranteed Terms.
(b) Guaranteed Term (Term) -- The period
of time for which interest rates are
guaranteed on Net Purchase
Payment(s) and on transfers made
into the Deposit Period of the GA
Account. Terms are offered at
Aetna's discretion for various
lengths of time ranging up to and
including ten years.
(c) Guaranteed Term Classifications --
The grouping of Terms according to
their time to maturity. The
following are the Classifications:
(1) Short-Term: Terms of up to and
including 3 years: or
(2) Long-Term: Terms of greater
than 3 years and up to and
including 10 years.
During a Deposit Period, Aetna may
make available one or more Terms
within a Classification. The
Contract Holder or, if allowed by
the Plan, you have the option to
allocate Net Purchase Payment(s) and
transfers into any or all of the
available Deposit Period Terms. If
no specific direction is given, Net
Purchase Payment(s) and transfers
will go into available Terms on a
pro rata basis within the
Classification(s) previously chosen
by the Contract Holder. At least one
Term in the Short-Term
Classification will be available
each Deposit Period.
(d) Guaranteed GA Account Interest Rates
(Guaranteed Rates) - Aetna will
declare all interest rate(s)
applicable to a specific Term at the
start of the Deposit Period for that
Term. These rate(s) are guaranteed
by
9
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Aetna for that Deposit Period and
the ensuing Term and are not based
on the actual investment experience
of the underlying assets in the GA
Account. The Guaranteed Rates are
annual effective yields. The
interest is credited daily at a rate
that will produce the guaranteed
annual effective yield over the
period of a year. No annual rate
will ever be less than 3%.
3.03 Guaranteed Accumulation For Terms of one year or less, one
Account (GA Account) Guaranteed Interest Rate is set and
(Cont'd): announced for that full Term. For
other Terms, there may be two or
more rates.
The rate(s) will be set and
announced prior to the Deposit
Period for that Term and will not be
subject to change.
(e) Withdrawals from GA Account -- Full
or partial surrenders may be
requested at any time from the GA
Account. However, amounts withdrawn
prior to the Maturity Date of a Term
to satisfy a surrender request may
be subject to an MVA (see (g)
below).
Full and partial surrenders are
satisfied by withdrawing amounts
from each of the investment options
in which the Individual Account is
invested (the Fund(s), the Fixed
Account, the GA Account Short-Term
Classification and the GA Account
Long-Term Classification) on a pro
rata basis. However, the Contract
Holder may specify a particular
order in which investment options
will be liquidated in order to
satisfy a partial surrender request.
For purposes of withdrawals, Terms
within the GA Account Short-Term and
Long-Term Classifications are
considered as two separate
investment options. Amounts will be
removed within a GA Account
Classification starting with the
Term still in effect with the oldest
Deposit Period.
Amounts may be transferred at any
time subject to Contract
specifications (see 3.10 or 3.11
below). Amounts transferred prior to
the Maturity Date of a Term are
subject to an MVA (see (g) below).
Fund(s) will be removed within the
elected Classification starting with
the Term still in effect with the
oldest Deposit Period.
During the Deposit Period and the 90
days following the close of the
Deposit Period, any amounts applied
to the GA Account during that
Deposit Period may not be withdrawn
unless due to:
(1) A full or partial surrender;
(2) A payment of a premium for an
Annuity Option; or
(3) The Sum Payable at Death
provision.
(f) Maturity Date/Reinvestment -- The
Contract Holder or you, as
applicable, will be mailed a notice
at least 18 calendar days before a
Term's Maturity Date. This notice
will contain the current Deposit
Period's Guaranteed Rate(s), Term(s)
and projected Matured Term Value.
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The Matured Term Value may be
surrendered or transferred on the
Term's Maturity Date without an MVA.
If no specific direction is given by
the Contract Holder or you, as
applicable, prior to the Maturity
Date, each Matured Term Value will be
reinvested in a Term of the same
duration. In the event that a Term of
the same duration is unavailable, each
Matured
3.03 Guaranteed Accumulation Term Value will automatically be
Account (Cont'd) reinvested in the next shortest Term
available in the same Classification
during the then current Deposit
Period. If however, only one Term is
available within the Classification,
then the Matured Term Value will
automatically be reinvested in that
Term. Within two business days after
the Maturity, the Contract Holder or
you, as applicable, will be mailed a
confirmation statement. This statement
will state the Term and Guaranteed
Rate(s) which will apply to the
reinvested Matured Term Value.
During the calendar month following
the Term's Maturity Date, one
exception is allowed to the 90 day
transfer restriction and MVA under (e)
and (g). This exception is applicable
to each Matured Term Value plus any
interest accrued thereon, provided no
part of the Matured Term Value was
transferred on the Maturity Date.
During this calendar month period, the
Contract Holder or you, as applicable,
may notify Aetna's Home Office to
transfer or surrender all or part of
the Matured Term Value plus any
interest accrued thereon from the GA
Account without an MVA. This provision
only applies to the first such request
received from the Contract Holder
during this period for any Matured
Term Value. The Matured Term Value
plus any interest accrued thereon may
be transferred upon such request
without an MVA:
(1) To any other Terms of the GA
Account available in the current
Deposit Period; or
(2) To any other allowable Fund(s).
If no such notification is given, the
Matured Term Value will remain subject
to the terms and conditions of the new
Term. All surrender and transfer
requests will be processed as of the
date they are received in good order
at Aetna's Home Office.
(g) Market Value Adjustment (MVA) -- There
will be an MVA for a withdrawal from
the GA Account before the end of a
Term when the withdrawal is due to:
(1) A transfer;
(2) A full or partial surrender; or
(3) A payment of a premium for
Annuity Option 2.
The amount of the withdrawal will be
adjusted to a market value amount as
described below.
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The market value adjusted amount will
be equal to the amount withdrawn
multiplied by the following ratio:
_x
365
(1 + i)
---------------
_x
365
(1 + j)
3.03 Guaranteed Accumulation Where:
Account (GA Account) i is the Deposit Yield
(Cont'd) j is the Current Yield
x is the number of days
remaining, (computed from
Wednesday of the week of
withdrawal) in the
Guaranteed Term.
The Deposit Period Yield will be
determined as follows
o At the close of the last
business day of each Week of the
Deposit Period, a yield will be
computed as the average of the
yields on that day of U.S.
Treasury Notes which mature in
the last three months of the
Guaranteed Term.
o The Deposit Period Yield is the
average of those yields for the
Deposit Period. If withdrawal is
made prior to the close of the
Deposit Period, it is the
average of those yields on each
week preceding withdrawal.
The Current Yield is the average of
the yields on the last business day of
the week preceding withdrawal on the
same U.S. Treasury Notes included in
the Deposit Period Yield.
In the event that no U.S. Treasury
Notes which mature in the last three
months of the Guaranteed Term exist,
Aetna reserves the right to use the
U.S. Treasury Notes that mature in a
following quarter.
Full and partial surrenders as well as
transfers made within six months of
the Participant's date of death under
the Sum Payable at Death provision
will be the greater of:
o The aggregate MVA amount which
is the sum of all market value
adjusted amounts calculated due
to a withdrawal of amounts (for
surrender or transfer) from
Terms prior to the end of those
Terms. The aggregate MVA may be
either positive or negative; or
o The applicable portion of the
Current Value in the GA Account.
After the six month period, the
surrender or transfer will be the
aggregate MVA amount (i.e., including
all MVAs).
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The greater of the aggregate MVA
amount or the applicable portion of
the Current Value in the GA Account is
applied to amounts withdrawn from the
GA Account for payment of a premium
under Annuity Options 3 or 4.
Aetna may make any change to the MVA
with 30 days advance written notice to
the Contract Holder. Any such change
shall become effective for Purchase
Payment(s), transfers or reinvestments
made to any new Term by any present or
future Participant.
3.03 Guaranteed Accumulation (h) Deposits to the GA Account -- All
Account (GA Account) amounts in the GA Account under the
(Cont'd) Short-Term Classification are made to
the General Account.
All amounts in the GA Account under
the Long-Term Classifications are made
to a Nonunitized Separate Account.
There are no discrete units for this
Nonunitized Separate Account. The
Contract Holder or you, as applicable,
does not participate in the gain or
loss from the assets held in the
Nonunitized Separate Account. Such
gain or loss is borne entirely by
Aetna. These assets may be chargeable
with liabilities arising out of any
other business of Aetna.
For Terms under both the Short-Term
and Long-Term Classifications, Aetna
guarantees stipulated interest rates
to be credited to the GA Account. All
assets of Aetna including amounts made
to the GA Account are available to
meet the guarantees under the GA
Account.
3.04 Guaranteed Interest On any Purchase Payment(s) made to the Fixed
Rate - Fixed Account Account, Aetna will add interest daily at
any annual rate no less than 3%. Aetna may
add interest daily at any higher rate
determined by its Board of Directors.
3.05 Experience Credits: Aetna may apply Experience Credits under
this Contract. Any such Credits will be
computed as decided by Aetna.
3.06 Fund Record Units The portion of the Net Purchase Payment(s)
Separate Account applied to the Separate Account will
determine the number of each Fund's Record
Units. This number is equal to the Net
Purchase Payment applied to the Fund divided
by the Fund Record Unit Value (see 3.08) for
the Valuation Period in which the Purchase
Payment is received in good order.
3.07 Net Return Factor(s) The Net Return Factors are used to compute
Separate Account: all Separate Account Values and payments for
any Fund.
The Net Return Factor for each Fund is equal
to 1.0000000 plus the Net Return Rate.
The Net Return Rate is equal to:
(a) The value of the shares of the Fund
held by the Separate Account at the
end of a Valuation Period; minus
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(b) The value of the shares of the Fund
held by the Separate Account at the
start of the Valuation Period; plus or
minus
(c) Taxes (or reserves for taxes) on the
Separate Account (if any) divided by
(d) The total value of the Fund Record
Units and Fund Annuity Units of the
Separate Account at the start of the
Valuation Period; minus
3.07 Net Return Factor(s) -- (e) A daily actuarial charge at an annual
Separate Account: effective rate of 1.40% for Annuity
(Cont'd) mortality and expense risks and asset
based sales charge and profit and a
daily administrative charge which will
not exceed 0.25% on an annual
effective basis. The administrative
charge may be changed annually except
for amounts which have been used to
purchase an Annuity.
A Net Return Rate may be more or less than 0
The value of a share of the Fund is equal to
the net assets of the Fund divided by the
number of shares outstanding.
3.08 Fund Record Unit Value -- Each Fund's Record Unit Value is computed by
Separate Account: multiplying the Net Return Factor for the
current Valuation Period by the Fund's
Record Unit Value for the previous Period.
The dollar value of a Fund's Record Unit,
Separate Account assets, and Variable
Annuity payments may go up or down due to
investment gain or loss.
3.09 Current Value: The Current Value is equal to:
(a) Any amounts in the Fixed Account,
including Fixed Account interest added
by Aetna: plus
(b) Any amounts in the GA Account,
including GA Account interest added by
Aetna; plus
(c) The sum of any Separate Account Record
Unit Value(s); plus
(d) Any amount due to Experience Credits;
Current Value does not include amounts used
to elect an Annuity.
3.10 Transfer of Current Value Before an Annuity Option is elected, all or
from the Funds or GA any portion of the Current Value may be
Account: transferred from any Fund or the GA Account
to:
(a) Any other Fund;
(b) The Fixed Account; or
(c) The GA Account's current Deposit
Period.
Amounts in a specific GA Account Term cannot
be transferred to the Deposit Period of
another Term within the same Classification
except at the Term's Maturity.
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Amounts applied to Classifications of the GA
Account may not be transferred to the
Fund(s) or the Fixed Account during the
Deposit Period or for 90 days after the
close of the Deposit Period.
Transfers from the GA Account are subject to
the Withdrawal and Market Value Adjustment
provisions. (See 3.03 (e) and (g).)
3.10 Transfer of Current Value For each Individual Account, twelve
from the Funds or GA transfers of Current Value (excluding
Account (Cont'd): transfers from the GA Account at the end of
a Guaranteed Term) can be made during a
calendar year period. Should Aetna allow
additional transfers, each may be subject to
a fee of up to $10.
3.11 Transfer of Current Value Before an Annuity Option is elected, up to
from the Fixed Account: 20% of the Current Value held in the Fixed
Account may be transferred to any Fund(s) or
the GA Account's current Deposit Period(s).
Such transfer will be:
(a) Without charge; and
(b) Allowed once per calendar year.
The Current Value of the Fixed Account, as
used above, is the value when the request is
received in good order at the Home Office of
Aetna.
3.12 Notice to the Contract Aetna will notify the Contract Holder or
Holder: you, as applicable, each year of:
(a) The value of any amounts held in
(1) The Fixed Account;
(2) The GA Account;
(3) The Fund(s) for the Separate
Account;
(b) The number of any Fund(s) Record
Units; and
(c) The Fund(s) Record Unit Value(s), and
(d) The Surrender Values of these amounts.
Such number or values will be as of a date
no more than 60 days before the date of the
notice.
3.13 Distribution Options: The following distribution options may be
elected by the Contract Holder on your
behalf:
(a) Estate Conservation Option (ECO): A
distribution option under which a
portion of the Individual Account(s)
Current Value will automatically be
surrendered and distributed to you
each year.
(1) An ECO payment will be
determined in the following
manner:
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Payments will commence no
earlier than the year in which
you attain age 70 1/2 and will
be calculated on the full
Current Value of the Individual
Account(s).
(2) Amount of Distribution: Each
year that ECO is in effect,
Aetna will calculate and
distribute an amount equal to
the minimum required
distribution under the Internal
Revenue Code of 1986, (Code), as
it may be amended from time to
time. The annual distribution
will be determined by dividing
3.13 Distribution Options the determined by dividing the
(Cont'd): Individual Account(s) Current
Value, as of December 31 of the
year prior to the year for which
the payment is to be made, by a
life expectancy factor.
As elected by the Contract
Holder, the factor is either the
single life or joint life
expectancy based on tables in
Section 401(a)(9) of the Code or
related regulations. If joint
life expectancy is elected and
you or your spouse dies,
payments will be calculated
based on the survivor's life
expectancy.
These calculations may be
changed as necessary to comply
with the Code minimum
distribution rules. The joint
life expectancy factor can only
be elected based on the joint
life expectancy of you and your
spouse, and your spouse must be
named as the beneficiary of any
death benefits under the
Contract while ECO is in effect.
(3) Minimum Current Value: At its
discretion, Aetna may require a
minimum initial Current Value
for election of this option. If
after election of this option
the Current Value is
insufficient to make a scheduled
ECO payment, Aetna will
distribute the entire balance of
the Individual Account(s).
(4) Date of Distribution: The
Contract Holder shall specify
the initial distribution date.
The earliest date is the first
day of the calendar year in
which you attain age 70 1/2.
Subsequent distributions will be
made annually on the 15th of the
month the initial payment was
made or such other date Aetna
may designate or allow.
(5) Elections and Revocation: ECO
may be elected by the Contract
Holder, on your behalf, by
submitting a completed and
signed election form to Aetna's
Home Office. The Contract Holder
must also certify in writing
that the distribution is in
accordance with the terms of the
Plan.
Once elected, this option may be
revoked by the Contract Holder
by submitting a written request
to Aetna at its Home Office. Any
revocation will apply only to
amounts not yet paid. ECO may be
elected only once on your
behalf.
(6) Reservation of Rights: Aetna
reserves the right to change the
terms of ECO for future
elections and discontinue the
availability of this option
after proper
16
<PAGE>
notification. Aetna also
reserves the right to allow
payments to be made more
frequently than annually.
(b) Systematic Withdrawal Option (SWO): A
distribution option under which a
portion of your Individual Account(s)
Current Value will automatically be
surrendered and distributed to you
each year.
3.13 Distribution Options (1) Amount of Distribution: The
(Cont'd) Contract Holder may elect one of
the two payment methods
described below.
(a) Specified Amount: Payments
of a designated dollar
amount which must be no
greater than 10% of the
initial Current Value and
shall remain constant
unless a higher amount is
required under Code
minimum distribution
rules. Each year that the
Specified Amount is in
effect, Aetna will
calculate the minimum
required distribution
under the Code and
distribute this amount if
it is larger than the
amount elected by the
Contract Holder. The life
expectancy factor for this
purpose will be your life
expectancy at the time of
the election of this
option, and with each
subsequent calendar year
the factor will be reduced
by one. The minimum
required distribution will
be determined by dividing
the Individual Account(s)
Current Value as of
December 31 of the year
prior to the year for
which the payment is to be
made, by a life expectancy
factor. At its discretion,
Aetna may require a
minimum initial payment
amount; or
(b) Specified Period: Payments
which are made over a
period of time which must
be at least 10 years,
unless otherwise required
by Code minimum
distribution rules. The
maximum specified period
will be limited by the
Code minimum distribution
rules. The annual amount
paid each year is
calculated by dividing the
Individual Account(s)
Current Value as of
December 31 of the prior
year, by the number of
payment years remaining.
The life expectancy factor
is either the single life
or joint life expectancy,
as elected by the Contract
Holder, based on tables in
Section 401(a)(9) of the
Code or related
regulations. If the joint
life expectancy is
elected, upon your or your
spouse's death, the
minimum required
distribution for the
Specified Amount payment
method will continue to be
calculated in the same
manner as described in
(b)(1). Payments upon your
death will continue to be
calculated in the same
manner described above,
unless the Contract Holder
on behalf of your spouse
elects an alternate
17
<PAGE>
payment mode. Any mode
elected must provide
payments to be made at
least as rapidly as those
made prior to your death.
These calculations may be
changed as necessary to
comply with the Code
minimum distribution
rules. The joint life
expectancy factor can only
be elected based on the
joint life expectancy of
you and your spouse, and
your spouse must be named
as the Plan beneficiary of
any death benefits under
the Contract while SWO is
in effect.
3.13 Distribution Options (2) Minimum Initial Current Value:
(Cont'd) At its discretion, Aetna may
require a minimum initial
Current Value for election of
this option. If after election
of this option the Current Value
is insufficient to make a
scheduled SWO payment, Aetna
will distribute the entire
balance of the Individual
Account.
(3) Date of Distribution: The
Contract Holder shall specify
the initial date. The earliest
date is the first day of the
calendar year in which you
attain age 70 1/2. Subsequent
distributions will be made
annually on the 15th of the
month the initial payment was
made or such other date Aetna
may designate or allow.
(4) Elections and Revocation: SWO
may be elected by the Contract
Holder by submitting a completed
and signed election form to
Aetna's Home Office. The
Contract Holder must certify in
writing that the distribution is
in accordance with the terms of
the Plan.
Once elected, this option may be
revoked by the Contract Holder
by submitting a written request
to Aetna at its Home Office. Any
revocation will apply only to
amounts not yet paid. SWO may be
elected only once on your
behalf.
(5) Reservation of Rights: Aetna
reserves the right to change the
terms of SWO for future
elections and discontinue the
availability of this option
after proper notification. Aetna
also reserves the right to allow
payments to be made more
frequently than annually.
3.14 Sum Payable at Death Aetna will pay any portion of the Individual
(Before Annuity Payments Account(s) Current Value to the beneficiary
Start): and in the manner directed in writing by the
Contract Holder when:
(a) You die before Annuity payments start:
and
18
<PAGE>
(b) The notice of death is received in
good order by Aetna.
For each Individual Account, the death
benefit is guaranteed to be the greater of:
(a) The Current Value of the Individual
Account plus aggregate positive MVA,
as applicable, on the date the notice
of death and the request for payment
are received in good order at Aetna's
Home Office; or
(b) The total of Net Purchase Payment(s)
made to each Individual Account minus
the total of all partial surrenders or
annuitizations made from each Account.
This guaranteed death benefit is available
only to beneficiaries who request either a
lump sum payment or an Annuity Option within
the first six months after the date of your
death.
3.14 Sum Payable at Death If the payee of the death proceeds is your
(Before Annuity Payments surviving spouse (as your designated
Start) (Cont'd): beneficiary), the first Annuity payment or
the lump sum payment may be deferred to a
date not later than when you would have
attained age 70 1/2 or such later date as
may be allowed under federal law or
regulations. If the beneficiary is not the
surviving spouse, all of the Current Value
must either be applied to an Annuity Option
within one year of your death or be paid to
the payee within 5 years of your death (see
Part IV).
In no event may any payments to the
beneficiary under an Annuity Option extend
beyond:
(a) The life of the payee determined as of
the date payments are to commence; or
(b) Any certain period greater than the
payee's life expectancy as determined
by regulations under Code Section 401
(a)(9) as of the date payments are to
begin.
3.15 Surrender Value: The amount payable by Aetna upon the
surrender of any portion on an Individual
Account will be the value of the Individual
Account at the end of the Valuation Period
in which the surrender request is received
at its Home Office. Partial surrenders of an
Individual Account's Fixed Account value may
not exceed 20% of the Fixed Account Value
during any calendar year. Any portion of a
full surrender of an Individual Account
which is in the Fixed Account will be paid
in five annual installments in accordance
with Section 3.17.
For a partial or full surrender from any
Individual Account, Aetna must receive
written direction from the Contract Holder
on a form acceptable to Aetna. Aetna may
defer payment of the surrender value until
appropriate Contract Holder direction is
received.
19
<PAGE>
3.16 Timing of Distributions: The distribution of benefits accrued after
December 31, 1986, must be made in a lump
sum or must begin not later than the April 1
of the calendar year following the calendar
year in which you attain age 70 1/2 or
retire, whichever occurs later.
The required distribution described in
either of the above rules must be made over
your life (or the joint lives of you and the
beneficiary) or over a period not exceeding
your life expectancy (or the joint life
expectancies of you and the beneficiary).
3.16 Timing of Distributions: If the Contract Holder does not request
(Cont'd) commencement of benefits as described above,
Aetna will not be responsible for compliance
with the Code Section 401(a)(9) minimum
distribution requirements and for any
adverse tax consequences that may result.
3.17 Payment of Surrender Under certain emergency conditions, Aetna
Value: may defer payments:
(a) For a period of up to 6 months (unless
not allowed by state law); and
(b) As provided by federal law.
Any surrenders requested from an Individual
Account's Fixed Account value may not exceed
20% of the Individual Account's Fixed
Account Current Value as of the date the
withdrawal request is received in good order
at Aetna's Home Office during any calendar
year. The surrender value will be reduced by
any Fixed Account surrender(s), transfer(s)
or annuitizations previously made during the
calendar year.
In the event of Individual Account
termination, Aetna will pay any Fixed
Account surrender value from the Individual
Account with interest, in five annual
payments of:
o One-fifth of the Fixed Account
surrender value minus any Fixed
Account surrender(s), transfer(s) or
annuitizations made during the
calendar year;
o One-fourth of the Fixed Account
surrender value;
o One-third of the Fixed Account
surrender value; and
o One-half of the Fixed Account
surrender value; and
20
<PAGE>
o The remaining balance of the Fixed
Account surrender value as the fifth
and final payment.
Once Aetna receives notification of an
Individual Account termination, no further
surrender(s) or transfer(s) will be
permitted from the Fixed Account.
Interest, as used above, will not be more
than two percentage points below any rate
determined prospectively by the Board of
Directors for this class of Contract. In no
event will the interest rate be less than
3%.
3.18 Reinstatement: All or a portion of the proceeds of a full
surrender of this Contract may be reinvested
within 30 days after the surrender if
allowed by law. Any Market Value Adjustment
deducted from GA Account surrenders will not
be included in the reinstatement. Amounts
will be reinstated among the Fixed Account,
GA Account, and the Fund(s) in the same
proportion as they were at the time of
surrender. Any amount reinstated to the GA
Account will be credited to the current
Deposit Period. The number of Record Units
reinstated with be based on the Record
3.18 Reinstatement: Unit Value(s) next computed after receipt at
(Cont'd) Aetna's Home Office of the reinstatement
request and the amount to be reinvested.
Reinstatement is permitted only once.
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
4.01 Choices to be Made: The Contract Holder may elect an Annuity
Option on your behalf by telling Aetna to
pay all or any portion of the Current Value
(minus any premium tax) as a premium for an
Annuity under Option 2, 3, or 4 (see 4.07).
The present value of the expected payments
to the Annuitant when payments start shall
be determined in accordance with the tables
under Code Section 401(a)(9) regulations in
order to comply with the incidental death
benefit test. This restriction does not
apply if Option 4 (e) is chosen and the
second Annuitant is the spouse of the
Annuitant.
Generally, the first Annuity payment must be
made no later than the April 1 of the
calendar year following the year in which
you turn age 70 1/2 or retire, whichever
occurs later, or such later date as may be
allowed under federal law or regulations
(see 3.16). For distributions taken in a
lump sum, see Surrender Value (3.15 and
3.17).
When an Annuity Option is chosen, Aetna must
also be told if payments are to be made
other than monthly and to pay:
(a) A Fixed Annuity using the General
Account;
(b) A Variable Annuity using any of the
Fund(s) made available by Aetna for
Annuity purposes; or
21
<PAGE>
(c) A combination of (a) and (b).
If a Fixed Annuity is chosen, Aetna will add
interest daily at an annual rate no less
than 3.0%. Aetna may add interest daily at
any higher rate.
If a Variable Annuity is chosen, an Assumed
Annual Net Return Rate of 5% may be chosen.
If not chosen. Aetna will use an Assumed
Annual Net Return Rate of 3.5%.
With the exception of Option 2 on a variable
basis, once elected, an Annuity Option may
not be revoked.
4.02 Annuity Payments to In no event may any payments to the
Annuitant: Annuitant under any Annuity Option extend
beyond:
(a) The life of the Annuitant;
(b) The lives of the Annuitant and the
beneficiary;
4.02 Annuity Payments to (c) A period certain greater than the
Annuitant: Annuitant's life expectancy according
(Cont'd) to regulations under Code Section
401(a)(9), determined as of the date
payments are to commence: or
(d) A period certain greater than the life
expectancies of the Annuitant and the
beneficiary according to regulations
under Code Section 401(a)(9),
determined as of the date payments are
to begin.
4.03 Death of Annuitant: When an Annuitant dies under Options 2 and
3, the present value of any remaining
guaranteed payments will be paid in one sum
to the beneficiary as directed in writing by
the Contract Holder; or upon election by the
Annuitant's beneficiary, any remaining
payments will continue to the beneficiary.
If no beneficiary exists, the present value
of any remaining guaranteed payments will be
paid in one lump sum to the Contract Holder.
However, if a beneficiary dies while under
Option 1 or while receiving Annuity
payments, the present value of any remaining
payments will be paid in one lump sum to the
estate of the beneficiary. The interest rate
used to determine the first payment will be
used to calculate the present value.
4.04 Fund(s) Annuity Units - The number of Fund(s) Annuity Units is based
on the amount of the first Variable Annuity
payment which is equal to:
(a) The portion of the Current Value
(minus any premium tax) applied to pay
a Variable Annuity; divided by
(b) 1,000; multiplied by
(c) The payment rate for the Option
chosen.
22
<PAGE>
Such amount, or portion, of the variable
payment will be divided by the appropriate
Fund(s) Annuity Unit Value (see 4.05) on the
tenth Valuation Period before the due date
of the first payment to determine the number
of each Fund Annuity Units. The number of
each Fund Annuity Units remains fixed. Each
future payment is equal to the sum of the
products of each Fund Annuity Unit Value
multiplied by the appropriate number of
Units. The Fund Annuity Unit Value on the
tenth Valuation Period prior to the due date
of the payment is used.
4.05 Fund(s) Annuity Unit For any Valuation Period, a Fund(s) Annuity
Value - Separate Account: Unit Value is equal to:
(a) The Value for the previous Period:
multiplied by
(b) The Annuity Net Return Factor(s) for
the Period; multiplied by
(c) A factor to reflect the Assumed Annual
Net Return Rate.
The factor for 3.5% per year is .9999058;
for 5% per year it is .9998663.
4.05 Fund(s) Annuity Unit The dollar value of a Fund(s) Annuity Unit
Value --Separate Account: Values and payments may go up or down due to
(Cont'd) investment gain or loss.
If Variable Annuity payments are not to
decrease, Aetna must earn a gross return on
the assets of the Separate Account of:
o 4.75% on an annual basis plus an
annual return of up to 0.25% needed to
offset the administrative charge set
at the time Annuity payments commence
if an Assumed Annual Net Return Rate
of 3.5% is chosen: or
o 6.25% on an annual basis plus an
annual return of up to 0.25% needed to
offset the administrative charge set
at the time Annuity payments commence
if an Assumed Annual Net Return Rate
of 5% is chosen.
Payments shall not be changed due to changes
in the mortality or expense results or
administrative charges.
4.06 Annuity Net Return The Annuity Net Return Factor(s) are used to
compute all Separate Account Annuity and
payments for any Fund.
The Annuity Net Return Factor(s) for each
Fund is equal to 1.0000000 plus the Net
Return Rate.
The Net Return Rate is equal to:
23
<PAGE>
(1) The value of the shares of the Fund
held by the Separate Account at the
end of a Valuation Period; minus
(2) The value of the shares of the Fund
held by the Separate Account at the
start of the Valuation Period; plus or
minus
(3) Taxes (or reserves for taxes) on the
Separate Account (if any); divided by
(4) The total value of the Fund(s) Record
Units and Fund(s) Annuity Units of the
Separate Account at the start of the
Valuation Period; minus
(5) A daily actuarial charge at an annual
rate of 1.25% for Annuity mortality
and expense risks and profit and a
daily administrative charge which will
not exceed 0.25% on an annual basis.
A Net Return Rate may be more or less than
0.
The value of a share of the Fund is equal to
the net assets of the Fund divided by the
number of shares outstanding.
4.07 Annuity Options: Option 1 -- Payments of Interest on Sum Left
with Aetna -- This Option may be used only
by the beneficiary when you die before Aetna
has started paying an Annuity. A portion or
all of the sum paid upon death may be held
under this Option and will be held in the
General Account of Aetna at interest (see
4.01). The Contract Holder, on behalf of
your beneficiary, may later tell Aetna to:
4.07 Annuity Options: (a) Pay a portion or all of the sum held
(Cont'd) by Aetna; or
(b) Apply a portion or all of the sum held
by Aetna to any Annuity Option below.
If the beneficiary is your surviving spouse,
payment may be deferred to a date not later
than when you would have attained age 70
1/2.
If the beneficiary is not your spouse, the
Contract Holder must tell Aetna to pay the
full sum within 5 years after your death.
Option 2 -- Payments for a Stated Period of
Time -- An Annuity will be paid for the
number of years chosen. The number of years
must be at least 3 and not more than 30.
If payments for this Option are made under a
Variable Annuity, the present value of any
remaining payments may be withdrawn at any
time.
Option 3 -- Life Income -- An Annuity will
be paid for the life of the Annuitant. If
also chosen, Aetna will guarantee payments
for 60, 120, 180, or 240 months.
Option 4 -- Life Income for Two Payees -- An
Annuity will be paid during the lives of the
Annuitant and a second Annuitant. At the
death of either, payments will continue to
the survivor. When this Option is chosen, a
choice must be made of:
24
<PAGE>
(a) 100% of the payment to continue to the
survivor;
(b) 66 2/3% of the payment to continue to
the survivor;
(c) 50% of the payment to continue to the
survivor; or
(d) Payments for a minimum of 120 months,
with 100% of the payment to continue
to the survivor.
(e) 100% of the payment to continue to the
survivor if the survivor is the
Annuitant and 50% of the payment to
continue to the survivor if the
survivor is the second Annuitant.
Other Options -- Aetna may make other
options available as allowed by the laws of
the state in which the Contract and this
Certificate is delivered.
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- --------------------------------------------------------------------------------
3 3.00% $ 28.99 $ 86.76 $ 172.88 $ 343.23
4 3.00% 22.06 66.02 131.56 261.19
5 3.00% 17.91 53.59 106.78 211.99
6 3.00% 15.14 45.30 90.27 179.22
7 3.00% 13.16 39.39 78.49 155.83
8 3.00% 11.68 34.96 69.66 138.31
9 3.00% 10.53 31.52 62.81 124.69
10 3.00% 9.61 28.77 57.33 113.82
11 3.00% 8.86 26.52 52.85 104.93
12 3.00% 8.24 24.65 49.13 97.54
13 3.00% 7.71 23.08 45.98 91.29
14 3.00% 7.26 21.73 43.29 85.95
15 3.00% 6.87 20.56 40.96 81.33
16 3.00% 6.53 19.54 38.93 77.29
25
<PAGE>
17 3.00% 6.23 18.64 37.14 73.74
18 3.00% 5.96 17.84 35.56 70.59
19 3.00% 5.73 17.13 34.14 67.78
20 3.00% 5.51 16.50 32.87 65.26
21 3.00% 5.32 15.92 31.72 62.98
22 3.00% 5.15 15.40 30.68 60.92
23 3.00% 4.99 14.92 29.74 59.04
24 3.00% 4.84 14.49 28.88 57.33
25 3.00% 4.71 14.09 28.08 55.76
26 3.00% 4.59 13.73 27.36 54.31
27 3.00% 4.47 13.39 26.68 52.97
28 3.00% 4.37 13.08 26.06 51.74
29 3.00% 4.27 12.79 25.49 50.60
30 3.00% 4.18 12.52 24.95 49.53
- --------------------------------------------------------------------------------
26
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months
- --------------------------------------------------------------------------------
Age of
Annuitant None 60 120 180 240
- --------------------------------------------------------------------------------
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93
51 4.12 4.11 4.09 4.05 3.99
52 4.19 4.19 4.16 4.11 4.04
53 4.27 4.26 4.23 4.18 4.10
54 4.35 4.34 4.31 4.25 4.16
55 4.44 4.42 4.39 4.32 4.22
56 4.53 4.51 4.47 4.40 4.29
57 4.62 4.61 4.56 4.48 4.35
58 4.72 4.71 4.65 4.56 4.42
59 4.83 4.81 4.75 4.64 4.49
60 4.95 4.93 4.86 4.73 4.55
61 5.07 5.05 4.97 4.83 4.62
62 5.20 5.17 5.08 4.92 4.69
63 5.34 5.31 5.20 5.02 4.76
64 5.49 5.45 5.33 5.12 4.83
65 5.65 5.61 5.47 5.22 4.89
66 5.82 5.77 5.61 5.33 4.96
67 6.01 5.94 5.75 5.44 5.02
68 6.20 6.13 5.91 5.54 5.08
69 6.41 6.33 6.07 5.65 5.14
70 6.64 6.54 6.23 5.76 5.19
71 6.88 6.76 6.41 5.86 5.24
72 7.14 7.00 6.59 5.97 5.28
73 7.43 7.26 6.77 6.06 5.32
74 7.73 7.53 6.96 6.16 5.35
75 8.06 7.82 7.14 6.25 5.38
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
27
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------
Ages of
- ------------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03
55 55 3.88 4.25 4.47 3.87 4.14
55 60 4.06 4.47 4.71 4.06 4.20
60 55 3.99 4.44 4.71 3.98 4.42
60 60 4.24 4.71 4.99 4.23 4.57
60 65 4.49 5.01 5.32 4.48 4.64
65 60 4.38 4.97 5.32 4.38 4.93
65 65 4.72 5.33 5.70 4.71 5.14
65 70 5.07 5.75 6.17 5.05 5.26
70 65 4.93 5.68 6.15 4.91 5.66
70 70 5.40 6.21 6.70 5.36 5.96
70 75 5.89 6.82 7.40 5.81 6.12
75 70 5.69 6.68 7.32 5.62 6.67
75 75 6.37 7.45 8.15 6.23 7.12
75 80 7.07 8.34 9.16 6.78 7.36
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
28
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- --------------------------------------------------------------------------------
3 3.50% $ 29.19 $ 87.33 $ 173.91 $ 344.86
4 3.50% 22.27 66.61 132.65 263.04
5 3.50% 18.12 54.19 107.92 213.99
6 3.50% 15.35 45.92 91.44 181.32
7 3.50% 13.38 40.01 79.69 158.01
8 3.50% 11.90 35.59 70.88 140.56
9 3.50% 10.75 32.16 64.05 127.00
10 3.50% 9.83 29.42 58.59 116.18
11 3.50% 9.09 27.18 54.13 107.34
12 3.50% 8.46 25.32 50.42 99.98
13 3.50% 7.94 23.75 47.29 93.78
14 3.50% 7.49 22.40 44.62 88.47
15 3.50% 7.10 21.24 42.31 83.89
16 3.50% 6.76 20.23 40.29 79.89
17 3.50% 6.47 19.34 38.51 76.37
18 3.50% 6.20 18.55 36.94 73.25
19 3.50% 5.97 17.85 35.54 70.47
20 3.50% 5.75 17.22 34.28 67.98
21 3.50% 5.56 16.65 33.15 65.74
22 3.50% 5.39 16.13 32.13 63.70
23 3.50% 5.24 15.66 31.19 61.85
24 3.50% 5.09 15.24 30.34 60.17
25 3.50% 4.96 14.85 29.56 58.62
26 3.50% 4.84 14.49 28.85 57.20
27 3.50% 4.73 14.15 28.19 55.90
28 3.50% 4.63 13.85 27.58 54.69
29 3.50% 4.53 13.57 27.02 53.57
30 3.50% 4.45 13.30 26.49 52.53
- --------------------------------------------------------------------------------
29
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- --------------------------------------------------------------------------------
3 5.00% $ 29.80 $ 89.04 $176.99 $ 349.72
4 5.00% 22.89 68.38 135.93 268.58
5 5.00% 18.74 56.00 111.33 219.98
6 5.00% 15.99 47.77 94.96 187.64
7 5.00% 14.02 41.90 83.30 164.59
8 5.00% 12.56 37.52 74.58 147.35
9 5.00% 11.42 34.11 67.81 133.99
10 5.00% 10.51 31.40 62.42 123.34
11 5.00% 9.77 29.19 58.03 114.66
12 5.00% 9.16 27.36 54.38 107.45
13 5.00% 8.64 25.81 51.31 101.39
14 5.00% 8.20 24.50 48.69 96.21
15 5.00% 7.82 23.36 46.44 91.75
16 5.00% 7.49 22.37 44.47 87.88
17 5.00% 7.20 21.51 42.75 84.48
18 5.00% 6.94 20.74 41.23 81.47
19 5.00% 6.71 20.06 39.88 78.80
20 5.00% 6.51 19.46 38.68 76.42
21 5.00% 6.33 18.91 37.59 74.28
22 5.00% 6.17 18.42 36.62 72.35
23 5.00% 6.02 17.98 35.73 70.61
24 5.00% 5.88 17.57 34.93 69.02
25 5.00% 5.76 17.20 34.20 67.57
26 5.00% 5.65 16.87 33.53 66.25
27 5.00% 5.54 16.56 32.92 65.04
28 5.00% 5.45 16.28 32.35 63.93
29 5.00% 5.36 16.01 31.83 62.90
30 5.00% 5.28 15.77 31.35 61.95
- --------------------------------------------------------------------------------
30
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Months
- --------------------------------------------------------------------------------
Age of
Annuitant None 60 120 180 240
- --------------------------------------------------------------------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
31
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Months
- --------------------------------------------------------------------------------
Age of
Annuitant None 60 120 180 240
- --------------------------------------------------------------------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 6.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
32
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Ages of
- -----------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
33
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $l,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Ages of
- -----------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
34
<PAGE>
- --------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 525-4225
Certificate of Group Annuity Coverage
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CERTIFICATE CONTAINS A MARKET VALUE ADJUSTMENT
FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN
INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA
DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
GTCC-IB(AORP)
35
Exhibit 99-B.4.87
Aetna Life Insurance and Annuity Company
ENDORSEMENT
The Contract, and the Certificate if applicable, are endorsed as follows.
Subject to the provisions below, loans are available under the Contract.
During the Accumulation Phase, loans are available (1) as permitted under
applicable law, and (2) subject to the terms and conditions of the loan
agreement.
[The Loan Account
For each loan, an amount equal to the loan amount is transferred from the
Investment Options in which the Individual Account is invested and is credited
to the loan account. The loan account is then credited with interest at a rate
which is not less than the loan interest rate (which is the rate we charge on a
loan as defined below), less [3.0%], on an annual basis.]
Loan Effective Date
The loan effective date is the date we receive a loan request in Good Order at
our Home Office. For loan requests received in Good Order on the 29th, 30th, or
31st day of the month, however, the loan effective date is the first business
day of the following month.
Amount Available For Loan
The amount available for loan is limited to the Individual Account value
attributable to employee contributions, plus any additional amounts allowed by
the Plan as determined by the Contract Holder (the vested Individual Account
value).
For plans subject to ERISA, the minimum loan amount is $1,000; for plans not
subject to ERISA, the minimum loan amount is defined in the loan agreement.
The maximum loan amount is the lesser of:
(1) Fifty percent of the vested Individual Account value, including the
amount, if any, in the loan account, reduced by the amount of any
outstanding loan balance on the date we receive a loan agreement in Good
Order at Our Home Office; or
(2) Fifty thousand dollars reduced by the highest outstanding loan balance
for the preceding 12 months.
The total amount of all outstanding loans cannot exceed $50,000.
Amounts available from some Investment Options may be subject to limitations
specified in the loan agreement. To obtain the loan amount requested, these
limitations may require transfer of funds among Investment Options. A market
value adjustment may apply to amounts transferred from the Guaranteed
Accumulation Account. The amount, if any, from the Fixed Plus Account may be
subject to a default charge if the Participant defaults on the loan.
Loan Interest Rate
For plans subject to ERISA: We set a loan interest rate on the first calendar
day of each month. The rate will be equal to the Monthly Average Corporates
(which is Moody's Corporate Bond Yield Average-Monthly Average Corporates
published by Moody's Investor Service or its successor, or a substantially
similar average that may be allowed by law or regulation) for the calendar month
beginning two months before the loan interest rate is effective. The initial
rate for each loan is the rate for the calendar month in which the Loan
Effective Date occurs. The initial interest rate is effective for not less than
three months and not more than one year. For each subsequent period, the
interest rate is adjusted if the new rate is at least 0.5% higher or lower than
the current rate. We provide reasonable notification in writing of any change to
the loan interest rate.
For plans not subject to ERISA: The loan interest rate will be not greater than
8% on an annual basis.
Loan repayment
A loan may be repaid as described in the loan agreement, or repaid in full at
any time.
Partial Withdrawal(s) While A Loan Is Outstanding
While a loan is outstanding, the amount available for partial withdrawal is
equal to the vested Individual Account value, including the loan account, minus
125% of the outstanding loan balance.
<PAGE>
Full Withdrawal While A Loan Is Outstanding
When a full withdrawal is requested while a loan is outstanding, one of the
following occurs:
(1) If the amount of the vested Individual Account value available for
distribution is sufficient to repay (a) the outstanding loan balance,
plus (b) any applicable Fixed Plus Account default charge, and (c) any
applicable withdrawal charge due on the outstanding loan balance, that
amount (the total of a, b, and c,), minus the loan account balance, is
deducted from the vested Individual Account value and the loan is
canceled. The outstanding loan balance, if not previously reported, will
be reported to the Internal Revenue Service as a distribution.
(2) If the amount of the vested Individual Account value available for
distribution is not sufficient to repay (a) the outstanding loan
balance, plus (b) any applicable Fixed Plus Account default charge, and
(c) any applicable withdrawal charge due on the outstanding loan
balance, the withdrawal cannot be made until the loan is repaid in full.
Electing An Annuity Option While A Loan Is Outstanding
Before all or any portion of the vested Individual Account value is used to
purchase Annuity payments, the Participant may repay any outstanding loan
balance, or the vested Individual Account value is adjusted to cancel the loan
as described in "Full Withdrawal While a Loan Is Outstanding" above.
Death Of The Participant While A Loan Is Outstanding
If a death benefit claim is submitted for an Individual Account with an
outstanding loan, the vested Individual Account value, including the amount of
the loan account, is reduced by the amount of the outstanding loan balance
before the death benefit amount is determined.
[Loan Default: If we do not receive a loan payment when it is due, the defaulted
payment is treated as follows:
(1) If the amount of the vested Individual Account value available for
distribution is sufficient to repay (a) the defaulted payment, plus (b)
any applicable Fixed Plus Account default charge, and (c) any withdrawal
charge due on the defaulted payment, then that amount (the total of a,
b, and c,) is deducted from the vested Individual Account value. The
amount of the defaulted payment is reported to the Internal Revenue
Service as a distribution.
(2) If the amount of the vested Individual Account value available for
distribution is not sufficient to repay (a) the defaulted payment, plus
(b) any applicable Fixed Plus Account default charge, and (c) any
withdrawal charge due on the defaulted payment, until such time that the
amount due (the total of a, b and c) can be distributed, the loan
account continues to earn interest, and interest is charged on the
defaulted payment. The amount of the defaulted payment is reported to
the Internal Revenue Service as a deemed distribution. At the time the
amount due can be distributed, it is withdrawn from the vested
Individual Account value.]
This endorsement is effective and made part of the Contract, and the Certificate
if applicable, on the Effective Date of the Contract.
/s/ Thomas J. McInerney
----------------------------------------
President
Aetna Life Insurance and Annuity Company
EX-99.B.8.5
Second Amendment
to
Fund Participation Agreement
WITNESSETH:
WHEREAS, Aetna Life Insurance and Annuity Company ("ALIAC"), Aeltus
Investment Management, Inc. ("Aeltus") and Aetna Variable Fund, Aetna Variable
Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund, on
behalf of each of its series, Aetna Generation Portfolios, Inc., on behalf of
each of its series, and Aetna Variable Portfolios, Inc., on behalf of each of
its series ("Funds") have entered into a Fund Participation Agreement dated May
1, 1998 and amended on November 9, 1998; and
WHEREAS, ALIAC, Aeltus and the Funds desire to add ALIAC's Variable Life
Separate Account C to Schedule A;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises contained herein, the parties agree:
1. That Schedule A is hereby amended to include ALIAC's
Variable Life Separate Account C.
2. The Agreement, as modified by this Amendment, is ratified
and confirmed.
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment
by their duly authorized officers as of the 31st day of December, 1999.
AETNA LIFE INSURANCE AND AETNA VARIABLE FUND
ANNUITY COMPANY AETNA VARIABLE ENCORE FUND
AETNA INCOME SHARES
AETNA BALANCED VP, INC.
AETNA GET FUND
AETNA GENERATION PORTFOLIOS, INC.
AETNA VARIABLE PORTFOLIOS, INC.
By /s/ Laurie M. LeBlanc By /s/ Frank Litwin
---------------------- -----------------
Name Laurie M. LeBlanc Name Frank Litwin
Title Vice President Title Vice President
AELTUS INVESTMENT MANAGEMENT, INC.
By /s/ J. Scott Fox
----------------------
Name J. Scott Fox
Title Managing Director, COO
<PAGE>
SCHEDULE A
(Amended as of December 31, 1999)
Aetna Life Insurance and Annuity Company Variable Life Separate Account C
Ex-99.B.8.6
Form of Third Amendment
to
Fund Participation Agreement
WITNESSETH:
WHEREAS, Aetna Life Insurance and Annuity Company ("ALIAC"), Aeltus
Investment Management, Inc. ("Aeltus") and Aetna Variable Fund, Aetna Variable
Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund, on
behalf of each of its series, Aetna Generation Portfolios, Inc., on behalf of
each of its series, and Aetna Variable Portfolios, Inc., on behalf of each of
its series ("Funds") have entered into a Fund Participation Agreement dated May
1, 1998 and amended on November 9, 1998 and December 31, 1999 (the "Agreement").
WHEREAS, ALIAC, Aeltus and the Funds now desire to amend and restate
Schedule B to the Agreement to include (i) Aetna GET Fund, series: E, G, H, and
I, and (ii) Aetna Variable Portfolios, Inc. series: Aetna Technology VP.
NOW THEREFORE, in consideration of the mutual covenants and promises
contained in the Agreement, ALIAC, Aeltus and the Funds hereby agree:
1. to amend and restate Schedule B to include (i) Aetna GET Fund,
series: E, G, H and I, effective as of: June 1, 1999 with
respect to series E, September 1, 1999 with respect to series
G, December 1, 1999 with respect to series H, and March 1,
2000 with respect to series I; and (ii) Aetna Variable
Portfolios, Inc., series: Aetna Technology VP, effective as of
March 14, 2000; and
2. that the Agreement, as modified by this Amendment, is ratified
and confirmed.
IN WITNESS WHEREOF, the undersigned duly authorized officers of ALIAC,
Aeltus and the Funds have executed this Third Amendment as of the ____ day of
_______, 2000.
AETNA LIFE INSURANCE AND AETNA VARIABLE FUND
ANNUITY COMPANY AETNA VARIABLE ENCORE FUND
AETNA INCOME SHARES
AETNA BALANCED VP, INC.
AETNA GET FUND
AETNA GENERATION PORTFOLIOS, INC.
AETNA VARIABLE PORTFOLIOS, INC.
By By
------------------------ --------------------------
Name Laurie M. LeBlanc Name Frank Litwin
Title Vice President Title Vice President
AELTUS INVESTMENT MANAGEMENT, INC.
By
------------------------
Name J. Scott Fox
Title Managing Director, Chief
Operating Officer
<PAGE>
SCHEDULE B
(Amended and restated as of January ___, 2000)
Aetna Variable Fund
-------------------
Aetna Variable Encore Fund
--------------------------
Aetna Income Shares
-------------------
Aetna Balanced VP Inc.
----------------------
Aetna GET Fund
--------------
Series C
Series D
Series E
Series G
Series H
Series I
Aetna Generation Portfolios, Inc.
--------------------------------
Aetna Ascent VP
Aetna Crossroads VP
Aetna Legacy VP
Aetna Variable Portfolios, Inc.
-------------------------------
Aetna Value Opportunity VP
Aetna Growth VP
Aetna Small Company VP
Aetna Index Plus Large Cap VP
Aetna High Yield VP
Aetna Real Estate Securities VP
Aetna Mid Cap VP
Aetna Index Plus Mid Cap VP
Aetna Index Plus Small Cap VP
Aetna Index Plus Bond VP
Aetna International VP
Aetna Technology VP
Ex-99.B.8.9
Form of Second Amendment
to
Service Agreement with Investment Advisor
WHEREAS Aeltus Investment Management, Inc. (the "Adviser") and Aetna Life
Insurance and Annuity Company (the "Company"), have entered into a Service
Agreement effective May 1, 1998, as amended on November 4, 1998 (the
"Agreement") for the provision of administrative services by the Company in
connection with the sale of shares of, among others (i) Aetna GET Fund on behalf
of each of its series, and (ii) Aetna Variable Portfolios, Inc. on behalf of
each of its series.
WHEREAS, the Adviser and the Company now desire to amend and restate
Schedule A to the Agreement to include (i) Aetna GET Fund, series: E, G, H and
I; and (ii) Aetna Variable Portfolios, Inc., series: Aetna Technology VP.
NOW THEREFORE, the Adviser and the Company hereby agree
1. to amend and restate Schedule A to include (i) Aetna GET Fund,
series: E, G, H and I, effective as of: June 1, 1999 with
respect to series E, September 1, 1999 with respect to series
G, December 1, 1999 with respect to series H, and March 1,
2000 with respect to series I of Aetna GET Fund; and (ii)
Aetna Variable Portfolios, Inc., series: Aetna Technology VP,
effective as of March 14, 2000; and
2. that the Agreement, as modified by this Amendment, is ratified
and confirmed.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their authorized officers as the ___ day of _______,
2000.
AELTUS INVESTMENT MANAGEMENT, INC.
By:
---------------------------------
J. Scott Fox
Title: Managing Director, Chief Operating Officer
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:
---------------------------------
Laurie M. LeBlanc
Title: Vice President
<PAGE>
Schedule A
(Amended and restated as of _______ ___, 2000)
Servicing Fee
<TABLE>
<CAPTION>
Aetna Money Aetna Aetna Balanced Aetna Growth Aetna Ascent Aetna Aetna
Market VP Bond VP VP, Inc. & Income VP VP Crossroads VP Legacy VP
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12.5 20 25 25 30 30 30
</TABLE>
<TABLE>
<CAPTION>
12/15/1999 3/15/2000 3/15/2000 6/15/2000
3/14/2000 3/14/2005 6/14/2000 6/14/2000
Aetna Aetna Aetna Aetna Aetna Aetna Aetna Aetna
GET GET GET GET GET GET GET GET
Fund Fund Fund Fund Fund Fund Fund Fund
Series C Series D Series E Series G Series H Series H Series I Series I
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
30 30 30 30 12.5 30 12.5 30
</TABLE>
<TABLE>
<CAPTION>
Plus Large Aetna Aetna Value Aetna Small
Cap VP Growth VP Opportunity Company VP
- ------------------------------------------------------------------
<S> <C> <C> <C>
17.5 30 30 37.5
</TABLE>
<TABLE>
<CAPTION>
Aetna Real
Aetna Index Plus Aetna Index Aetna Mid Estate Aetna Aetna Index Aetna High Aetna
Small Cap VP Plus Mid Cap VP Cap VP Securities VP International VP Plus Bond VP Yield VP Technology VP
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
20 20 37.5 37.5 42.5 15 32.5 47.5
</TABLE>
2
EX-99.B.8.12
Form of
FUND PARTICIPATION AGREEMENT
between
THE CHAPMAN FUND and ALIAC
Aetna Life Insurance and Annuity Company (the "Company"), The Chapman
Fund on behalf of its Series DEM Equity Fund (the "Fund") and _________________
(the "Distributor") hereby agree to an arrangement whereby the Fund shall be
made available to serve as underlying investment media for Variable Annuity
Contracts ("Contracts") to be issued by the Company.
1. Establishment of Accounts; Availability of Fund.
------------------------------------------------
The Company represents that it has established Variable Annuity Accounts
B, C and D and may establish such other accounts as may be set forth in
Schedule A attached hereto and as may be amended from time to time with
the mutual consent of the parties hereto (the "Accounts"), each of which
is a separate account under Connecticut Insurance law, and has registered
or will register each of the Accounts (except for such Accounts for which
no such registration is required) as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"), to serve as an
investment vehicle for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account for
investment in the shares of one of more specified open-end management
investment companies available through that Account as underlying
investment media. Selection of a particular investment management company
and changes therein from time to time are made by the participant or
Contract owner, as applicable under a particular Contract.
2. Pricing Information; Orders; Settlement.
----------------------------------------
(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on
behalf of each Account at the net asset value applicable to each
order on those days on which the Fund calculates its net asset
value (a "Business Day"). Fund shares shall be purchased and
redeemed in such quantity and at such time determined by the
Company to be necessary to meet the requirements of those Contracts
for which the Fund(s) serve as underlying investment media,
provided, however, that the Board of Trustees of the Fund
(hereinafter the "Trustees") may upon reasonable notice to the
Company, refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Trustees, acting
in good faith and in the best interests of the shareholders of any
Portfolio and is acting in compliance with their fiduciary
obligations under federal and/or any applicable state laws.
<PAGE>
(b) The Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each
day that the New York Stock Exchange (the "Exchange") is open (each
such day a "Business Day"), and in no event later than 6:30 p.m.
Eastern Standard time on such Business Day. The Company will send
via facsimile or electronic transmission to the Fund or its
specified agent orders to purchase and/or redeem Fund shares by
10:00 a.m. Eastern Standard Time the following business day.
Payment for net purchases will be wired by the Company to an
account designated by the Fund to coincide with the order for
shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants.
Orders from Contract owners or participants received from any
distributor of the Contracts (including affiliates of the Company)
by the Company, acting as agent for the Fund, prior to the close of
the Exchange on any given business day will be executed by the Fund
at the net asset value determined as of the close of the Exchange
on such Business Day, provided that the Fund receives written (or
facsimile) notice of such order by 10 a.m. Eastern Standard Time on
the next following Business Day. Any orders received by the Company
acting as agent on such day but after the close of the Exchange
will be executed by the Fund at the net asset value determined as
of the close of the Exchange on the next business day following the
day of receipt of such order, provided that the Fund receives
written (or facsimile) notice of such order by 10 a.m. Eastern
Standard Time within two days following the day of receipt of such
order.
(d) Payments for net redemptions of shares of the Fund will be wired by
the Fund to an account designated by the Company on the same
Business Day the Company places an order to redeem Fund Shares.
Payments for net purchases of the Fund will be wired by the Company
to an account designated by the Fund on the same Business Day the
Company places an order to purchase Fund shares. Payments shall be
in federal funds transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a)
through 2(d) above, the parties may agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions through National Securities Clearing Corporation's
Fund/SERV system in which case such activities will be governed by
the provisions set forth in an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party
(g) The Fund and Distributor shall indemnify and hold the Company
harmless, from the effective date of this Agreement, against any
amount the Company is required to pay to Contract owners or
participants due to: (i) an incorrect calculation of a Fund's daily
net asset value, dividend rate, or capital gains distribution rate
or (ii) incorrect or late
2
<PAGE>
reporting of the daily net asset value, dividend rate, or capital
gain distribution rate of a Fund, upon written notification by the
Company, with supporting data, to Distributor. In addition, the
Fund or the Distributor shall be liable to the Company for systems
and out of pocket costs incurred by the Company in making a
Contract owners's or a participant's account whole, if such costs
or expenses are a result of the Fund's or the Distributor's failure
to provide timely or correct net asset values, dividend and capital
gains or financial information and if such information is not
corrected by 4:00 p.m. East Coast time of the next business day
after releasing such incorrect information provided the incorrect
NAV as well as the correct NAV for each day that the error occurred
is provided. If a mistake is caused in supplying such information
or confirmations, which results in a reconciliation with incorrect
information, the amount required to make a Contract owner's or a
participant's account whole shall be borne by the party providing
the incorrect information, regardless of when the error is
corrected.
(h) The Company agrees to purchase and redeem the shares of the Funds
named in Schedule B offered by the then current prospectus and
statement of additional information of the Fund in accordance with
the provisions of such prospectus and statement of additional
information.
3. Fees.
-----
In consideration of services provided by the Company under this
Agreement, the Fund or Distributor shall pay fees to the Company as set
forth in Schedule C.
4. Expenses.
---------
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement shall
be paid by the Fund, including the cost of registration of Fund
shares with the Securities and Exchange Commission (the "SEC") and
in states where required. The Fund and Distributor shall pay no fee
or other compensation to the Company under this Agreement, and the
Company shall pay no fee or other compensation to the Fund or
Distributor, except as provided herein and in Schedule C attached
hereto and made a part of this Agreement as may be amended from
time to time with the mutual consent of the parties hereto. All
expenses incident to performance by each party of its respective
duties under this Agreement shall be paid by that party, unless
otherwise specified in this Agreement.
(b) The Fund or the Distributor shall provide to the Company, at the
location designated by the Company, periodic fund reports to
shareholders and other materials that are required by law to be
sent to Contract owners or participants. In addition, the Fund or
the Distributor shall provide the Company with a sufficient
quantity of its prospectuses, statements of additional information
and any supplements to any of these materials, to be used in
connection with the offerings and transactions contemplated by this
Agreement
3
<PAGE>
(c) The Fund or Distributor shall provide the company with a sufficient
quantity of its proxy material that is required to be sent to
Contract owners or participants. The cost associated with proxy
preparation, group authorization letters, programming for
tabulation and necessary materials (including postage) will be paid
by the Fund or Distributor.
5. Representations.
----------------
(a) The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Distributor, make
representations concerning the Fund, or its shares except those
contained in the then current prospectuses and in current printed
sales literature approved by or deemed approved by the Fund or the
Distributor.
(b) The Fund and Distributor represent and warrant that (i) they have
examined and tested their systems and made reasonable inquiry of
their business partners and other entities with whom they conduct
business with respect to Year 2000 problems and (ii) their ability
to perform their obligations under this Agreement will not be
interrupted or disrupted as a result of any business interruptions
or other business problems relating to specific dates or days
before, during and after the Year 2000.
6. Termination.
------------
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Distributor or the Fund,
upon sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice
to the Distributor and the Fund, if Fund shares are not available
for any reason to meet the requirement of Contracts as determined
by the Company. Reasonable advance notice of election to terminate
shall be furnished by Company;
(c) at the option of either the Company, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Distributor by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or
any other regulatory body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with
the terms of the applicable Contracts. The Company will give 60
days written notice to the Fund and the Distributor of any decision
to replace the Fund's' shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
4
<PAGE>
(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued
by the Company. Prompt notice shall be given by the appropriate
party should such situation occur.
7. Continuation of Agreement.
--------------------------
Termination as the result of any cause listed in Section 6 shall not
affect the Fund's obligation to furnish its shares to Contracts then in
force for which its shares serve or may serve as the underlying medium
unless such further sale of Fund shares is prohibited by law or the SEC
or other regulatory body.
8. Advertising Materials; Filed Documents.
---------------------------------------
(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts
will be submitted to the Fund or its designee for review before
such material is submitted to any regulatory body for review. No
such material shall be used if the Fund or its designee reasonably
object to such use in writing, transmitted by facsimile within two
business days after receipt of such material.
(b) The Fund will provide additional copies of its financials as soon
as available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to
the Fund promptly after the filing of such document with the SEC or
other regulatory authorities. At the Distributor's request, the
Company will provide to the Distributor at least one complete copy
of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy
statements, and all amendments or supplements to any of the above
that relate to the Account promptly after the filing of such
document with the SEC or other regulatory authority.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at
least quarterly portfolio information necessary to update Fund
profiles with seven business days following the end of each
quarter.
9. Proxy Voting.
-------------
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners
and participants to the extent the SEC continues to interpret the
1940 Act as requiring such privileges. The Company shall provide
pass-through voting privileges on Fund shares held by unregistered
separate accounts to all Contract owners.
5
<PAGE>
(b) The Company will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, the Company, with respect to each group Contract and in each
Account, shall vote Fund shares for which no instructions have been
received in the same proportion as shares for which such
instructions have been received. The Company and its agents shall
not oppose or interfere with the solicitation of proxies for Fund
shares held for such Contract owners and participants.
10. Indemnification.
----------------
(a) The Company agrees to indemnify and hold harmless the Fund and the
Distributor, and its directors, officers, employees, agents and
each person, if any, who controls the Fund or its Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act")
against any losses, claims, damages or liabilities to which the
Fund or any such director, officer, employee, agent, or controlling
person may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectus or sales
literature of the Company or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or as a result of conduct,
statements or representations (other than statements or
representations contained in the prospectuses or sales literature
of the Fund) of the Company or its agents, with respect to the sale
and distribution of Contracts for which Fund shares are the
underlying investment. The Company will reimburse any legal or
other expenses reasonably incurred by the Fund or any such
director, officer, employee, agent, investment Distributor, or
controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon (i) an untrue statement or omission or
alleged omission made in such Registration Statement or prospectus
in conformity with written materials furnished to the Company by
the Fund specifically for use therein or (ii) the willful
misfeasance, bad faith, or gross negligence by the Fund or
Distributor in the performance of its duties or the Fund's or
Distributor's reckless disregard of obligations or duties under
this Agreement or to the Company, whichever is applicable. This
indemnity agreement will be in addition to any liability which
Company may otherwise have.
(b) The Fund and the Distributor agree to indemnify and hold harmless
the Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to
which the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
6
<PAGE>
contained in the Registration Statement, prospectuses or sales
literature of the Fund or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Fund will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer,
employee, agent, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Fund will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
omission or alleged omission made in such Registration Statement or
prospectuses which are in conformity with written materials
furnished to the Fund by the Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 10. In case any
such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 10 for
any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
11. Miscellaneous.
--------------
(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent
by telex, telecopier or registered or certified mail, postage
prepaid, return receipt requested, or recognized overnight courier
service to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
7
<PAGE>
Attention: Julie E. Rockmore, Counsel
To the Fund:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
Attn:
--------------------------------
To the Distributor:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
Attn:
--------------------------------
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) Severability. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) Non Exclusivity. It is understood by the parties that this
Agreement is not an exclusive arrangement in any respect.
8
<PAGE>
(i) Confidentiality. The terms of this Agreement and the Schedules
thereto will be held confidential by each party except to the
extent that either party or its counsel may deem it necessary to
disclose such terms.
12. Limitation on Liability of Trustees, etc.
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and
property of the Fund only and shall not be binding on any Trustee,
officer or shareholder of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the ____ day of _________, _____.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:
Name:________________________________
Title:_______________________________
THE CHAPMAN FUND
By: ________________________________
Name:________________________________
Title:_______________________________
DISTRIBUTOR
By:
Name:__________________________
Title:_________________________
9
<PAGE>
Schedule A
(For any future separate accounts - See Section 1(a)
10
<PAGE>
Schedule B
(List of funds available--See Section 1(b))
11
<PAGE>
Schedule C
Fees to the Company
1. Servicing Fees.
---------------
Administrative services to Contract owners and participants shall be
the responsibility of the Company and shall not be the responsibility of the
Fund or the Distributor. The Distributor recognizes the Company as the sole
shareholder of Fund shares issued under the Fund Participation Agreement, and
that substantial savings will be derived in administrative expenses, such as
significant reductions in postage expense and shareholder communications, by
virtue of having a sole shareholder for each of the Accounts rather than
multiple shareholders. In consideration of the administrative savings resulting
from such arrangement, Distributor agrees to pay to the Company a servicing fee
based on the annual rate of ____% (_____% quarterly) of the average net assets
invested in the Funds through the Contracts in each calendar quarter.
Distributor will make such payments to the Company within thirty (30) days after
the end of each calendar quarter. Each payment will be accompanied by a
statement showing the calculation of the fee payable to the Company for the
quarter and such other supporting data as may be reasonably requested by the
Company.
2. 12b-1 Fees.
-----------
In accordance with the Fund's plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Distributor will make payments to the
Company at an annual rate of ____% (______% quarterly) of the average net assets
invested in the Funds through the Contracts in each calendar quarter.
Distributor will make such payments to the Company within thirty (30) days after
the end of each calendar quarter. Each payment will be accompanied by a
statement showing the calculation of the fee payable to the Company for the
quarter and such other supporting data as may be reasonably requested by the
Company.
12
EX-99.B.8.17
Eighth Amendment
to
Fund Participation Agreement
WITNESSETH:
WHEREAS, Aetna Life Insurance and Annuity Company ("ALIAC"), Fidelity
Distributors Corporation (the "Underwriter") and Variable Insurance Products
Fund (the "Fund") have entered into a Fund Participation Agreement dated
February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996, March 1, 1996, May 1, 1997, November 6, 1997 and May 1,
1998; and
WHEREAS, ALIAC, the Underwriter and the Fund desire to include ALIAC's
Variable Life Separate Account C to Schedule A;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises contained herein, the parties agree:
1. That Schedule A is hereby amended to include ALIAC's Variable
Life Separate Account C.
2. The Agreement, as modified by this Amendment, is ratified and
confirmed.
IN WITNESS WHEREOF, the undersigned have executed this Eighth Amendment
by their duly authorized officers as of the 1st day of December, 1999.
AETNA LIFE INSURANCE AND VARIABLE INSURANCE PRODUCTS
ANNUITY COMPANY FUND
By /s/ Laurie M. LeBlanc By /s/ Robert C. Pozen
---------------------- --------------------
Name Laurie M. LeBlanc Name Robert C. Pozen
Title Vice President Title Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By /s/ Kevin Kelly
----------------
Name Kevin Kelly
Title Vice President
<PAGE>
SCHEDULE A
(Amended as of December 1, 1999)
Aetna Life Insurance and Annuity Company Variable Life Separate Account C
EX-99.B.8.22
Eighth Amendment
to
Fund Participation Agreement
WITNESSETH:
WHEREAS, Aetna Life Insurance and Annuity Company ("ALIAC"), Fidelity
Distributors Corporation (the "Underwriter") and Variable Insurance Products
Fund II (the "Fund") have entered into a Fund Participation Agreement dated
February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996, March 1, 1996, May 1, 1997, January 20, 1998 and May 1,
1998; and
WHEREAS, ALIAC, the Underwriter and the Fund desire to include ALIAC's
Variable Life Separate Account C to Schedule A;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises contained herein, the parties agree:
1. That Schedule A is hereby amended to include ALIAC's Variable
Life Separate Account C.
2. The Agreement, as modified by this Amendment, is ratified and
confirmed.
IN WITNESS WHEREOF, the undersigned have executed this Eighth Amendment
by their duly authorized officers as of the 1st day of December, 1999.
AETNA LIFE INSURANCE AND VARIABLE INSURANCE PRODUCTS
ANNUITY COMPANY FUND II
By /s/ Laurie M. LeBlanc By /s/ Robert C. Pozen
---------------------- ---------------------
Name Laurie M. LeBlanc Name Robert C. Pozen
Title Vice President Title Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By /s/ Kevin Kelly
----------------
Name Kevin Kelly
Title Vice President
<PAGE>
SCHEDULE A
(Amended as of December 1, 1999)
Aetna Life Insurance and Annuity Company Variable Life Separate Account C
EX-99.B.8.28
Second Amendment
to
Fund Participation Agreement
WITNESSETH:
WHEREAS, Aetna Life Insurance and Annuity Company ("ALIAC"), Janus
Capital Corporation (the "Adviser") and Janus Aspen Series (the "Fund") have
entered into a Fund Participation Agreement dated December 8, 1997 and amended
on October 12, 1998; and
WHEREAS, ALIAC, the Adviser and the Fund desire to include ALIAC's
Variable Life Separate Account C to Schedule A;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises contained herein, the parties agree:
1. That Schedule A is hereby amended to include ALIAC's
Variable Life Separate Account C.
2. The Agreement, as modified by this Amendment, is ratified
and confirmed.
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment
by their duly authorized officers as of the 1st day of December, 1999.
AETNA LIFE INSURANCE AND ANNUITY COMPANY JANUS ASPEN SERIES
By /s/ Laurie M. LeBlanc By /s/ Bonnie M. Howe
---------------------- ------------------------
Name Laurie M. LeBlanc Name Bonnie M. Howe
Title Vice President Title Assistant Vice President
JANUS CAPITAL CORPORATION
By /s/ Bonnie M. Howe
------------------------
Name Bonnie M. Howe
Title Assistant Vice President
<PAGE>
SCHEDULE A
(Amended as of December 1, 1999)
Aetna Life Insurance and Annuity Company Variable Life Separate Account C
Exhibit 99-B.8.30
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made as of the 11th day of May, 1994, between Janus
Capital Corporation, a Colorado corporation ("Janus"), and Aetna Life Insurance
and Annuity Company, a life insurance company organized under the laws of the
State of Connecticut (the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A, as may be
amended from time to time (the "Accounts").
W I T N E S S E T H:
-------------------
WHEREAS, the Company has established the Accounts to serve as
investment vehicles for certain variable annuity contracts and funding
agreements offered by the Company set forth on Schedule A ("Contracts"); and
WHEREAS, each Janus Fund set forth on Schedule B hereto (which may be
amended from time to time by mutual written consent) ("Fund or Funds") engages
in business as an investment company registered under the Investment Company Act
of 1940, as amended ("1940 Act"); and
WHEREAS, to the extent permitted by applicable securities and insurance
laws and regulations, the Company intends to purchase shares in the Funds on
behalf of each Account.
NOW, THEREFORE, in consideration of their mutual promises, the Company
and Janus agree as follows:
ARTICLE I.
Sale of Fund Shares
1.1. Janus shall make shares of the Funds available for purchase by the
Company at the net asset value next computed after receipt of such purchase
order by Janus, as established in accordance with the provisions of the then
current prospectus of the applicable Fund. The Company will transmit orders from
time to time to Janus for the purchase of shares of the Funds. Janus may refuse
to sell shares of any Fund to any person, or suspend or terminate the offering
of shares of any Fund if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of Janus,
necessary or in the best interests of the shareholders of such Fund.
1.2. The Company shall submit payment for shares of the Funds no later
than 12:00 noon New York time on the next Business Day after Janus receives the
order pursuant to section 1.1. Payments shall be made in federal funds
transmitted by wire to Janus. Upon receipt by Janus of the federal funds so
wired, such funds shall cease to be the responsibility of the Company and shall
become the responsibility of Janus for this purpose. "Business Day" shall mean
any day on which the New York Stock Exchange is open for trading and on which
the Funds calculate their net asset values pursuant to the rules of the
Securities and Exchange Commission.
1.3. Janus will redeem any full or fractional shares of any Fund when
requested by the Company at the net asset value next computed after receipt by
Janus of the request for redemption, as established in accordance with the
provisions of the then current prospectus of such Fund.
1.4. Issuance and transfer of a Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
1.5. Janus shall furnish prompt notice to the Company of any income
dividends or capital gain distributions payable on Fund shares. The Company
hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Fund's shares in additional shares of that
Fund. Janus shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.6. Janus shall calculate Fund net asset values on each Business Day,
as defined in section 1.2. Janus shall make the net asset value per share for
each Fund available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6 p. m. New
York time.
ARTICLE II.
Obligations of the Parties
2.1. Janus shall prepare and be responsible for filing with the
Securities and Exchange Commission and any state regulators requiring such
filing all shareholder reports, notices, proxy materials (or similar materials
such as voting instruction solicitation materials), prospectuses and statements
of additional information of the Funds. Janus shall bear the costs of
registration and qualification of its shares, preparation and filing of the
documents listed in this section 2.1. and all taxes to which an issuer is
subject on the issuance and transfer of its shares.
2.2. Recordkeeping and other administrative services to Contract owners
shall be the responsibility of the Company and shall not be the responsibility
of Janus, Janus Service Corporation, or the Funds' transfer agent, Investors
Fiduciary Trust Company. Janus and the Funds will recognize one omnibus account
for the Company in the Funds. Upon the request of Janus, the Company shall
provide copies of all records relating to the Funds as may reasonably be
requested to enable the Funds or their representatives to comply with any
request of a governmental body or self-regulatory organization.
2.3. The Company agrees and acknowledges that Janus Capital Corporation
("Janus Capital") is the sole owner of the name and mark "Janus" and that any
and all use of any designation comprised in whole or in part of Janus (a "Janus
Mark") under this Agreement shall inure to the benefit of Janus. The use by the
Company of any Janus Mark in any advertisement or sales literature of other
materials promoting the Funds shall be with the prior written consent of Janus.
Except to the extent required by law, the Company shall not, without prior
written consent of Janus, make written representations regarding the Funds,
Janus or their affiliates, except those contained in the then current prospectus
and the then current printed sales literature for the Funds. Upon termination of
this Agreement for any reason, the Company shall cease all use of any Janus
Mark(s) as soon as reasonably practicable. The Company shall not hold itself out
to the public or engage in any activity as an agent or distributor for the
Funds. The Company will comply with all applicable state and federal laws with
respect to the use of shares of the Funds.
ARTICLE III.
Representations and Warranties
3.1. The Company represents and warrants that it is an insurance
company duly organized and in good standing under the laws of the State of
Connecticut and that it has legally and validly established each Account as a
segregated asset account under such law on the date set forth in Schedule A.
3.2. The Company represents that the Contracts are currently treated as
annuity contracts under applicable provisions of the Code and that it will make
every effort to maintain such treatment and that it will notify Janus
immediately upon having a reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so treated in the future.
3.3. The Company represents and warrants that the Contracts will be
issued and sold in compliance in all material respects with all applicable
federal and state laws; and the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements.
3.4. Janus represents and warrants that it is duly organized and
validly existing under the laws of the State of Colorado.
3.5. Janus represents and warrants that Fund shares offered and sold
pursuant to this Agreement will be registered under the 1933 Act and the Funds
shall be registered under the 1940 Act prior to any issuance or sale of such
shares.
3.6. Janus makes no representation as to whether any aspect of any
Fund's operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states.
ARTICLE IV.
Indemnification
4.1. Indemnification By the Company. The Company agrees to indemnify
and hold harmless Janus, Janus Service Corporation, the Funds, and each of their
trustees, officers, employees and agents and each person, if any, who controls
Janus within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Article IV) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or expenses (including the reasonable costs
of investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as such
Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in any
disclosure document for the Contracts or in the Contracts themselves or
in sales literature generated or approved by the Company on behalf of
the Contracts or Accounts (or any amendment or supplement to any of the
foregoing) (collectively, "Company Documents" for the purposes of this
Article IV), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this indemnity shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from
written information furnished to the Company by or on behalf of Janus
for use in Company Documents or otherwise for use in connection with
the sale of the Contracts or Fund shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately
derived from Janus Documents as defined in Section 4.2(a)) or wrongful
conduct of the Company or persons under its control, with respect to
the sale or acquisition of the Contracts or Fund shares; or
(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Fund Documents
as defined in Section 4.2(a) or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such
statement or omission was made in reliance upon and accurately derived
from written information furnished to Janus by or on behalf of the
Company; or
(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms
of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company.
4.2. Indemnification By Janus. Janus agrees to indemnify and hold
harmless the Company and each of its directors, officers, employees and agents
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Article IV) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of Janus) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus for the Fund (or any amendment or
supplement thereto), (collectively, "Fund Documents" for the purposes
of this Article IV), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and was accurately
derived from written information furnished to Janus by or on behalf of
the Company for use in Janus Documents or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(b) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Company
Documents or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was
made in reliance upon and accurately derived from written information
furnished to the Company by or on behalf of Janus; or
(c) arise out of or result from any failure by Janus to
provide the services or furnish the materials required under the terms
of this Agreement; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by Janus in this Agreement or arise
out of or result from any other material breach of this Agreement by
Janus.
4.3. Neither the Company nor Janus shall be liable under the
indemnification provisions of sections 4.1 or 4.2, as applicable, with respect
to any Losses incurred or assessed against an Indemnified Party that arise from
such Indemnified Party's willful misfeasance, bad faith or gross negligence in
the performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations or duties under this
Agreement.
4.4. Neither the Company nor Janus shall be liable under the
indemnification provisions of sections 4.1 or 4.2, as applicable, with respect
to any claim made against an Indemnified Party unless such Indemnified Party
shall have notified the other party in writing within a reasonable time after
the summons, or other first written notification, giving information of the
nature of the claim shall have been served upon or otherwise received by such
Indemnified Party (or after such Indemnified Party shall have received notice of
service upon or other notification to any designated agent), but failure to
notify the party against whom indemnification is sought of any such claim or
shall not relieve that party from any liability which it may have to the
Indemnified Party in the absence of sections 4.1 and 4.2.
4.5. In case any such action is brought against the Indemnified
Parties, the indemnifying party shall be entitled to participate, at its own
expense, in the defense of such action. The indemnifying party also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from the indemnifying party to the
Indemnified Party of an election to assume such defense, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the indemnifying party will not be liable to the Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
ARTICLE V.
Fees and Expenses
5.1 Janus recognizes the Company as the sole shareholder of each
Fund's shares purchased under this Agreement. Janus further recognizes that
substantial savings in administrative expense such as significant reductions in
postage expense and shareholder communications and recordkeeping by virtue of
each Fund's having a sole shareholder rather than multiple shareholders will be
derived. In consideration of the administrative savings resulting from such
arrangement, Janus agrees to pay the Company a fee equivalent to 15 basis points
per annum of the average amount invested in each Fund through the Accounts in
accordance with this Agreement ("Fee").
5.2 Janus will calculate the amount of the Fee to be paid to the
Company at the end of each calendar quarter and will make such payment to the
Company within thirty (30) days thereafter. Each check for such payment will be
accompanied by a statement showing the calculation of the Fee for the relevant
calendar quarter and such other supporting data as may be reasonably requested
by the Company.
ARTICLE VI.
Termination
6.1. This Agreement shall continue in full force and effect until the
first to occur of;
(a) termination by any party for any reason on sixty (60)
days' advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to Janus with
respect to any Fund based upon the Company's determination that shares
of such Fund are not reasonably available to meet the requirements of
the Contracts; or
(c) termination by the Company by written notice to Janus with
respect to any Fund in the event any of the Fund's shares are not
registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be issued by
the Company; and
(d) termination by the Company by written notice to Janus with
respect to any Fund in the event that such Fund ceases to qualify as a
regulated investment company under Subchapter M of the Code or under
any successor or similar provision, or if the Company reasonably
believes that such Fund may fail to do so qualify.
(e) termination by Janus if it is determined by any federal or
state regulatory authority that compensation to be paid hereunder is in
violation of or inconsistent with any federal or state law. If Janus
terminates for such reason, the Company may maintain investments in the
Funds without further payment from Janus.
ARTICLE VII.
Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to Janus:
100 Fillmore Street, Suite 300
Denver, Colorado 80206
Attention: Stephen L. Stieneker, Esq.
If to the Company:
151 Farmington Avenue
Hartford, Connecticut 06156
Attention: Barrett N. Sidel, Esq., RE4C
ARTICLE VIII.
Miscellaneous
8.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction of effect.
8.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
8.3. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
8.4. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Colorado.
8.5. Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
8.6. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
8.7. The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.8. Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the prior written approval of the other
party.
8.9. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Participation Agreement as of the date and year first
above written.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Laura R. Estes
--------------------------------
Name: Laura R. Estes
Title Senior Vice President
JANUS CAPITAL CORPORATION
By: /s/ Stephen L. Stieneker
---------------------------------
Name: Stephen L. Stieneker
Title: Assistant Vice President
<PAGE>
Schedule A
----------
Separate Accounts and Associated Contracts
------------------------------------------
Name of Separate Account and Contracts Funded
Date Established by Board of Directors By Separate Account
- -------------------------------------- -------------------
Separate Account F EGF-PVU-IC
EGFA-PVU-IC
<PAGE>
Schedule B
----------
Janus Funds
-----------
Janus Fund
Janus Balanced Fund
Janus Flexible Income Fund
Exhibit 99-B.8.31
AMENDMENT TO FUND PARTICIPATION AGREEMENT
This Amendment is made as of January 2, 1995, between Janus Capital
Corporation, a Colorado corporation ("Janus"), and Aetna Life Insurance and
Annuity Company, a Connecticut life insurance company (the "Company").
BACKGROUND
A. Janus and the Company are parties to a Fund Participation Agreement
dated May 11, 1994 (the "Agreement").
B. The parties wish to amend the Agreement as set forth below.
AMENDMENT
For good and valuable consideration, the receipt of which is
acknowledged, the parties agree as follows:
1. Exhibit B of the Agreement shall be deleted and replaced with the
attached.
2. The Agreement, as supplemented by this Amendment, is ratified and
confirmed.
3. This Amendment may be executed in two or more counterparts which
together shall constitute one instrument.
JANUS SERVICE CORPORATION AETNA LIFE INSURANCE AND
ANNUITY COMPANY
By: /s/ Stephen L. Stieneker By: /s/ Laura R. Estes
----------------------------- ------------------------
Name: Stephen L. Stieneker Name: Laura R. Estes
----------------------------- ------------------------
Title: Assistant Vice President Title: Senior Vice President
----------------------------- ------------------------
<PAGE>
Date: January 2, 1995
AMENDED EXHIBIT B TO THE
FUND PARTICIPATION AGREEMENT
Janus Funds:
- ------------
Janus Fund
Janus Balanced Fund
Janus Flexible Income Fund
Janus Worldwide Fund
Exhibit 99-B.8.32
AMENDMENT TO FUND PARTICIPATION AGREEMENT
This Amendment to the Fund Participation Agreement ("Agreement") entered
into as of May 11, 1994, between Janus Capital Corporation, a Colorado
corporation ("Janus"), and Aetna Life Insurance and Annuity Company, a
Connecticut life insurance company (the "Company") is effective as of February
24, 1995.
AMENDMENT
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:
1. Schedule A of this Agreement shall be deleted and replaced with the
attached Schedule A.
All other terms of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Amendment as of the date and year first above written.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Laura R. Estes
------------------------------------------
Name: Laura R. Estes
Title: Senior Vice President
JANUS CAPITAL CORPORATION
By: /s/ Stephen L. Stieneker
------------------------------------------
Name: Stephen L. Stieneker
Title: Assistant Vice President
<PAGE>
Schedule A
----------
Separate Accounts and Associated Contracts
------------------------------------------
Name of Separate Account and Contracts Funded
Date Established by Board of Directors By Separate Account
-------------------------------------- -------------------
Separate Account F EGF-PVU-IC
EGFA-PVU-IC
GF-PBA-IC
GFA-PBA-IC
Exhibit 99-B.8.33
THIRD AMENDMENT TO
PARTICIPATION AGREEMENT
THIS THIRD AMENDMENT TO THE PARTICIPATION AGREEMENT (the "Third
Amendment") is made and entered into as of the 1st day of May, 1995, by and
among AETNA LIFE INSURANCE AND ANNUITY COMAPNY, a Connecticut life insurance
company (the "Company") on its own behalf and on behalf of each segregated asset
account of the Company (each an "Account") set forth on Schedule A of the
Original Agreement (defined below), and JANUS CAPITAL CORPORATION, a Colorado
corporation ("Janus").
WHEREAS, the Company and Janus are parties to a Participation Agreement,
dated May 11, 1994, as supplemented by Amendments to the Fund Participation
Agreement dated as of January 2, 1995 and February 24, 1995 (the "Original
Agreement"), and
WHEREAS, the Company and Janus now desire to modify the Original
Agreement to add additional Contracts funded by each Account.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and promises expressed herein, the parties agree as follows:
1. Schedule A of the Original Agreement is hereby deleted and replaced with
Schedule A attached hereto; effective as of May 1, 1995;
2. the Original Agreement, as supplemented by this Third Amendment, is
ratified and confirmed; and
3. this Third Amendment may be executed in two or more counterparts, which
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Third Amendment as of
the date first above written.
AETNA LIFE INSURANCE AND JANUS CAPITAL
ANNUITY COMPANY CORPORATION
By: /s/ Scott Striegel By: /s/ Stephen L. Stieneker
-------------------------- ---------------------------
Name: Scott Striegel Name: Stephen L. Stieneker
Title: Senior Vice President Title: Assistant Vice President
<PAGE>
Schedule A
----------
- -------------------------------------------------------------------------------
Name of Separate Account Policy Form Numbers of Contracts Issued
Through Separate Account
- -------------------------------------------------------------------------------
GF-PVA-IC
Separate Account F GFA-PVA-IC
EGF-PVU-IC
EGFA-PVU-IC
G-CDA-ID(DCF)
- -------------------------------------------------------------------------------
Any state variation of the above-referenced contracts are considered included on
this Schedule A.
Date of Amendment: May 1, 1995.
[Janus Letterhead] Exhibit 99-B.8.34
January 1, 1996
VIA FACSIMILE
Aetna Life Insurance and Annuity
Company
151 Farmington Avenue
Hartford, CT 06156
Dear Ladies and Gentlemen:
In consideration for increasing the amount of your reimbursement under
the May 11, 1994 Fund Participation Agreement (the "Agreement") between you and
Janus Capital Corporation ("Janus"), you have agreed to amend the Agreement to
include the following provisions:
1. Effective as of the first of the month following receipt by Janus of
your signed acknowledgement of, and agreement to, this letter, the
fee paid pursuant to the Agreement shall be .25% on an annual basis
of the average aggregate amount, rather than .15%.
2. You agree to send all marketing materials to Janus for review prior
to release.
3. You represent, warrant, and covenant that:
a. You will not be a "fiduciary" of the plans (the "Plans") which
purchase your annuity contracts or funding agreements, as such
term is defined in Section 3(21) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and Section
4975 of the Internal Revenue Code of 1986, as amended (the
"Code");
b. To the best of your knowledge, your receipt of the fees
described in the Agreement will not constitute a non-exempt
"prohibited transaction" as such term is defined in section 406
of ERISA and Section 4975 of the Code, and, you are not required
to be registered as a broker and dealer or as a transfer agent
pursuant to the Securities Exchange Act of 1934 or any
applicable state securities laws, in order to enter into and
perform the services set forth in the Agreement;
c. To the best of your knowledge, your receipt of the fees
described in the Agreement does not constitute fees paid for
investment advice, as that term is defined by ERISA, nor does it
constitute payment for solicitation as defined under Rule
206(4)-3 of the Investment Advisors Act of 1940;
<PAGE>
Aetna Life Insurance and Annuity
Company
January 1, 1996
Page 2
d. You will disclose the existence of fee arrangements like that
under the Agreement and this letter agreement to Plan
fiduciaries unrelated to you, prior to such Plan's allocation to
the Janus Funds;
e. You do not make investment recommendations with respect to any
of the Janus Funds to any of the Plans or Plan participants;
however, registered representatives of your broker-dealer
affiliates will provide recommendations to customers in
compliance with suitability requirements of the National
Association of Securities Dealers, Inc. and other appropriate
regulators.
Very truly yours,
JANUS CAPITAL CORPORATION
By /s/ Stephen L. Stieneker
--------------------------------------
Stephen L. Stieneker
Vice President of Compliance
ACKNOWLEDGEMENT AND AGREEMENT
We acknowledge and agree to the above amendments to the Agreement and
further acknowledge that the Agreement, as supplemented by the above, is
ratified and confirmed.
AETNA LIFE INSURANCE AND
ANNUITY COMPANY
By /s/ Laura Estes Date: May 30, 1996
------------------------------- -----------------------
Name: Laura Estes
Title: Senior Vice Presidnet
Janus Letterhead] Exhibit 99-B.8.35
February 18, 1999
Julie Rockmore, Esq.
Aetna Life Insurance and Annuity Co.
151 Farmington Avenue
Hartford, CT 06156
Re: Fund Participation Agreement Dated May 11, 1994, as amended,
between Janus Service Corporation and Aetna Life Insurance and
Annuity Company ("Agreement")
Dear Ms. Rockmore:
The Securities and Exchange Commission recently made certain revisions to
Form N-1A, the registration statement form filed by mutual funds. One new
provision requires that a fund, or a financial intermediary through which fund
shares may be purchased, send a fund's annual report, semi-annual report and a
statement of additional information by first-class mail or other means designed
to ensure equally prompt delivery within three business days of receipt of the
request for any such document. In. addition, if the Janus Funds begin using
profiles, such delivery requirements shall apply to full statutory prospectuses.
As a financial intermediary through which shares of the Janus Funds are sold,
you are subject to these provisions.
This letter is intended to serve as notice of this new requirement and to
clarify your existing duties under the Agreement. If you need additional
materials for the Janus Funds to facilitate compliance with this requirement,
please do not hesitate to call Janus Institutional at 1-800-525-1068.
To acknowledge your understanding and agreement to deliver requested
documents in accordance with and within the time applicable to the Janus Funds
under current law, please sign the enclosed additional copy of this letter. You
may return the signed copy to my attention in the enclosed postage paid reply
envelope. If we do not receive either a signed copy of the letter of your
written objection by March 19, 1999, we will assume that you have no objection.
Very truly yours,
JANUS SERVICE CORPORATION
/s/ Bonnie M. Howe
-------------------------------------------
Bonnie M. Howe
Assistant Vice President
Acknowledged and Agreed to by: AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Laurie M. LeBlanc
--------------------------------------
Name: Laurie M. LeBlanc
Title: Vice President
EX-99-B.8.36
FORM OF
AMENDMENT TO
PARTICIPATION AGREEMENT
THIS AMENDMENT TO THE PARTICIPATION AGREEMENT (the "Amendment") is made
and entered into as of the ___ day of _______, 2000, by and among AETNA LIFE
INSURANCE AND ANNUITY COMPANY, a Connecticut life insurance company (the
"Company") on its own behalf and on behalf of each segregated asset account of
the Company (each an "Account") set forth on Schedule A of the Original
Agreement (defined below), and JANUS CAPITAL CORPORATION, a Colorado corporation
("Janus").
WHEREAS, the Company and Janus are parties to a Participation Agreement,
dated May 11, 1994, as supplemented by Amendments to the Fund Participation
Agreement dated as of January 2, 1995 and February 24, 1995, May 1, 1995,
January 1, 1996 and February 18, 1999 (the "Original Agreement"), and
WHEREAS, the Company and Janus now desire to modify the Original
Agreement to (i) include additional segregated asset accounts of the Company,
(ii) include additional Contracts funded by each Account; and (ii) make an
additional funding option available.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and promises expressed herein, the parties agree as follows:
1. Schedule A of the Original Agreement is hereby deleted and replaced
with Schedule A attached hereto; effective as of _________, 2000;
2. Schedule B of the Original Agreement is hereby deleted and replaced
with Schedule B attached hereto, effective as of _________, 2000.
3. the Original Agreement, as supplemented by this Amendment, is ratified
and confirmed; and
4. this Amendment may be executed in two or more counterparts, which
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
<TABLE>
<CAPTION>
AETNA LIFE INSURANCE AND JANUS CAPITAL CORPORATION
ANNUITY COMPANY
<S> <C>
By: ------------------------------------ By: -----------------------------------
Name: Laurie M. LeBlanc Name: ---------------------------------
Title: Vice President Title: Assistant Vice President
--------------------------------
</TABLE>
<PAGE>
Schedule A
Separate Accounts and Associated Contracts
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Name of Separate Account Contracts Funded by Separate Account
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
GF-PVA-IC
Separate Account F GFA-PVA-IC
EGF-PVU-IC
EGFA-PVU-IC
G-CDA-ID(DCF); and
associated 401/457 Contracts
- ---------------------------------------------------------------------------------------------------------------------
Separate Account B 457 Contracts sold in Healthcare or
Education Markets
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Separate Account C 403(b)/401/457 Contracts sold in
Healthcare, Education or
Government Markets
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Separate Account D 401/457 Contracts sold in Corporate
or Government Markets
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
Any state variation of the above-referenced contracts are considered included in
this Schedule A.
Date of Amendment: ______________, 2000.
2
<PAGE>
AMENDED EXHIBIT B TO THE
FUND PARTICIPATION AGREEMENT
Janus Funds:
Janus 20 Fund
Janus Fund
Janus Balanced Fund
Janus Flexible Income Fund
Janus Worldwide Fund
Date of Amendment _______________, 2000.
3
EX-99.B.8.39
First Amendment
to
Fund Participation Agreement
WITNESSETH:
WHEREAS, Aetna Life Insurance and Annuity Company ("ALIAC"), Oppenheimer
Funds, Inc. (the "Adviser") and Oppenheimer Variable Account Funds (the "Fund")
have entered into a Fund Participation Agreement dated March 11, 1997; and
WHEREAS, ALIAC, the Adviser and the Fund desire to include ALIAC's
Variable Life Separate Account C to Schedule A;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises contained herein, the parties agree:
1. That Schedule A is hereby amended to include ALIAC's
Variable Life Separate Account C.
2. The Agreement, as modified by this Amendment, is ratified
and confirmed.
IN WITNESS WHEREOF, the undersigned have executed this First Amendment by
their duly authorized officers as of the 1st day of December, 1999.
AETNA LIFE INSURANCE AND OPPENHEIMER VARIABLE ACCOUNT
ANNUITY COMPANY FUNDS
By: /s/ Laurie M. LeBlanc By: /s/ Andrew J. Donohue
--------------------- ----------------------------
Name: Laurie M. LeBlanc Name: Andrew J. Donohue
Title: Vice President Title: Vice President and Secretary
OPPENHEIMER FUNDS, INC.
By: /s/ Andrew J. Donohue
------------------------
Name: Andrew J. Donohue
Title: Executive Vice President
<PAGE>
SCHEDULE A
(Amended as of December 1, 1999)
Aetna Life Insurance and Annuity Company Variable Life Separate Account C
