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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IDS Life Insurance Company
...............................................................................
(Exact name of registrant as specified in its charter)
Minnesota
...............................................................................
(State or other jurisdiction of incorporation or organization)
63
...............................................................................
(Primary Standard Industrial Classification Code Number)
41-0823832
...............................................................................
(I.R.S. Employer Identification No.)
IDS Tower 10, Minneapolis, MN 55440-0010, (612) 671-3131
..............................................................................
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
Bruce Kohn, Counsel, IDS Life Insurance Company, IDS Tower 10, Minneapolis,
Minnesota 55440-0010, (612) 671-2221
..............................................................................
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after effectiveness of the Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine.
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Calculation of Registration Fee
<TABLE>
<CAPTION>
- ---------------------- -------------------- --------------------- --------------------- --------------------
Title of each class Amount to be Proposed maximum Proposed maximum Amount of
of securities to be registered offering price per aggregate offering registration fee
registered unit price
- ---------------------- -------------------- --------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Portfolio Guaranteed * * $338,983 $100
Term Annuity
</TABLE>
*The maximum aggregate offering price is estimated solely for the purpose of
determining the registration fee. The amount being registered and the proposed
maximum offering price per unit are not applicable in that these securities are
not issued in predetermined amounts or units.
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IDS LIFE ACCOUNT MGA
GROUP AND INDIVIDUAL MARKET VALUE ANNUITY CONTRACTS ISSUED BY
IDS LIFE INSURANCE COMPANY
Cross-Reference Sheet
Pursuant to Regulation S-K
Item 501(b)
<TABLE>
<CAPTION>
Form S-1 Item Number and Caption Location in Prospectus
<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus.......................Outside Front
Cover
2. Inside Front and Outside Back Cover Pages of
Prospectus...................................................Table of Contents
(inside front cover)
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges...........................The Portfolio Guaranteed Term Annuity
in brief, Not Applicable
4. Use of Proceeds..............................................Investments by IDS Life
5. Determination of Offering Price..............................Not Applicable
6. Dilution.....................................................Not Applicable
7. Selling Security Holders.....................................Not Applicable
8. Plan of Distribution.........................................Distribution of contracts
9. Description of Securities to Be Registered...................Description of contracts
10. Interests of Named Experts and Counsel.......................Not Applicable
11. Information with Respect to the
Registrant...................................................The Company; Directors and executive
officers; Executive compensation;
Security ownership of management;
Legal proceedings and opinion; and
Financial statements
12. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities...............................See Item 14 in Part II
</TABLE>
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PART I.
INFORMATION REQUIRED IN PROSPECTUS
Attached hereto and made a part hereof is the Prospectus.
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Portfolio Guaranteed Term Annuity
Prospectus, __________________, 1998
This prospectus describes interests in a group market value annuity contract and
individual market value annuity contracts offered by IDS Life Insurance Company
(IDS Life) to members of a wrap-fee program sponsored by American Express
Financial Advisors Inc. (AEFA) under which this contract is made available for
non-tax qualified and tax qualified purchases. Participation in a group contract
will be accounted for separately by the issuance of a certificate showing your
interest under the group contract. Participation in an individual contract is
shown by the issuance of an individual annuity contract. The certificate and the
individual contract are both referred to as the "contract."
Further details about the wrap-fee program are outlined in the client service
agreement for the program and in AEFA's Part II to Form ADV, including the
Schedule H that is filed with the Part II materials. You may obtain these
materials by calling 612-671-3131. Please remember: (1) you cannot purchase this
product unless you pay an annual wrap fee; (2) if your participation in the
wrap-fee program is terminated, you will no longer qualify for this contract and
your contract will be terminated and subject to a market value adjustment; and
(3) if your contract is terminated, you will be given the option of exchanging
into another annuity product, which may contain higher fees, a lower guaranteed
interest rate and a surrender charge.
A similar product is available outside of the wrap-fee program under which this
contract is made available. Depending on your individual circumstances, it may
be to your benefit to purchase the similar product that is available outside of
the wrap-fee program. Please consult your financial advisor or call the
telephone number below for more information.
IDS Life may offer this contract in the following tax qualified programs: (1)
plans qualified under Section 401(a), 401(k) or 403(a) of the Internal Revenue
Code of 1986, as amended (the Code); (2) annuity purchase plans adopted by
public school systems and certain tax-exempt organizations pursuant to Section
403(b) of the Code; (3) individual retirement annuities (IRAs), SIMPLE IRAs and
Simplified Employee pension (SEP) Plans eligible under Section 408 of the Code;
and (4) deferred compensation plans under Section 457 of the Code.
A minimum purchase payment of at least $5,000 must accompany the application for
a contract. No additional payment is permitted under a contract. The
accumulation value will be guaranteed by the general assets of IDS Life. IDS
Life generally intends to invest funds received in relation to contracts in a
variety of debt instruments having price durations which tend to match the
applicable contract.
IDS Life Account MGA
Group and Individual Market
Value Annuity Contracts
Sold by:
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
Telephone: 800-437-0602
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These securities may be subject to a substantial market value adjustment if not
held to the renewal date which could result in your receipt of less than your
original purchase payment.
For renewal guarantee periods, the renewal interest rate will be declared by IDS
Life based on various factors. It may be higher or lower than the previous
guaranteed interest rate.
The minimum guaranteed renewal interest rate is 3%.
These securities have not been approved or disapproved by the Securities and
Exchange Commission nor has the Commission passed upon the accuracy or adequacy
of this prospectus. Any representation to the contrary is a criminal offense.
IDS Life is not a bank or financial institution, and the securities it offers
are not deposits or obligations of, backed or guaranteed or endorsed by any bank
or financial institution nor are they insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. Investments in this
annuity involve investment risk including the possible loss of principal.
<PAGE>
Table of contents Page
The Portfolio Guaranteed Term Annuity in brief..................................
Key terms.......................................................................
Description of contracts........................................................
General.........................................................................
Application and purchase payment................................................
Right to cancel.................................................................
Guarantee periods...............................................................
Surrenders......................................................................
Market value adjustment.........................................................
Premium taxes...................................................................
Death benefit prior to settlement...............................................
Statement.......................................................................
Electing the settlement date and form of annuity................................
Amendment, distribution, assignment and termination of contracts................
Amendment of contracts..........................................................
Distribution of contracts.......................................................
Assignment of contracts.........................................................
Termination of contracts........................................................
Federal tax considerations......................................................
The Company.....................................................................
Business........................................................................
Investments by IDS Life.........................................................
Selected financial data.........................................................
Management's discussion and analysis of consolidated
financial condition and results of operations...................................
Directors and executive officers................................................
Executive compensation..........................................................
Security ownership of management................................................
Legal proceedings and opinion...................................................
Experts.........................................................................
Appendix A - Partial surrender illustration.....................................
Appendix B - Market value adjustment illustration...............................
IDS Life financial information..................................................
<PAGE>
The Portfolio Guaranteed Term Annuity in brief
Contracts: IDS Life is offering group and individual market value annuities to
members of a wrap-fee program sponsored by AEFA under which this contract is
made available for non-tax qualified and tax qualified purchases. IDS Life is a
wholly owned subsidiary of American Express Financial Corporation, which itself
is a wholly owned subsidiary of American Express Company. As described in this
prospectus, market value annuity contracts have a guaranteed interest rate that
is credited to the purchase payment when it is held to the end of the guarantee
period (the renewal date). Surrenders before the renewal date are subject to a
market value adjustment.
Guarantee periods: When a payment is made under an application, the applicant
selects a guarantee period from among those then offered by IDS Life. During
this guarantee period, the purchase payment earns interest at the applicable
guaranteed interest rate as established by IDS Life. Interest is credited on a
daily basis and the interest credited earns interest at the applicable
guaranteed interest rate as established by IDS Life. (p. )
Renewal guarantee periods: At the end of each guarantee period, a renewal
guarantee period of one year will begin, unless the owner elects a different
duration. The owner must elect the length of a renewal guarantee period during
the 30 days before the end of the previous guarantee period. Failure to make an
election will result in an automatic renewal for a period of one year. As of the
first day of each renewal guarantee period the renewal value will earn interest
at the then applicable renewal guaranteed interest rate and the interest
credited will earn interest at the then applicable renewal guaranteed interest
rate. (p. )
Surrenders: Subject to certain restrictions, partial or total surrenders are
permitted without a surrender charge. We may defer payment of any surrender for
a period up to 6 months from the date we receive notice of surrender or the
period permitted by state law, if less. A deferral of payment will not be for a
period greater than 7 days except under extraordinary circumstances. We will pay
annual interest of at least 3% of any amounts deferred for more than 30 days
during such period if we choose to exercise this deferral right. (p. )
Market value adjustment: Surrenders may be subject to a market value adjustment.
A market value adjustment will be applied when the surrender occurs before the
renewal date. No market value adjustment will be applied to any surrender
effective as of the end of a guarantee period. The market adjusted value will
reflect the relationship, at the time of surrender, between the rate we then are
crediting on purchase payments to new contracts with the same durations as the
time remaining in the guarantee period, and the guaranteed interest rate
applicable to that contract. Generally, significant factors affecting the amount
of the market value adjustment are the level of interest rates on investments
that are similar to those supporting current contract purchase payments and the
time remaining to the end of the guarantee period. The market adjusted value is
sensitive, therefore, to changes in current interest rates. The level of the
market value adjustment is dependent on the current interest rate at the time of
surrender. The market value adjustment may increase or decrease the value of
this investment before the renewal date. It is possible that the amount you
receive on surrender would be less than your original purchase payment if
interest rates increase. Also, if interest rates decrease, the amount you
receive on surrender may be more than your original purchase payment and accrued
interest. The market adjusted value also affects settlements under an annuity
payment plan. (p. )
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Premium taxes: We reserve the right to deduct applicable premium taxes from the
accumulation value of the contract. State premium taxes range from 0 to 3.5% of
the gross purchase payments. (p. )
Death benefit prior to settlement: The contract provides for a guaranteed death
benefit. In the event of the death of the annuitant or owner prior to the
settlement date, IDS Life will pay to the owner or beneficiary the death benefit
in lieu of any other payment under the contract. The amount of the death benefit
will equal the accumulation value. (p. )
Electing the settlement date and form of annuity: On the settlement date
specified by the owner, IDS Life will pay the owner a lump sum payment or start
to pay a series of payments. A series of payments may be elected under certain
annuity plans. (p. )
Key terms
In this prospectus, "we", "us" and "IDS Life" refer to IDS Life Insurance
Company and "you" and "yours" refer to an owner who has been issued a contract
and is a member of a wrap-fee program sponsored by AEFA under which this
contract is made available.
These terms can help you understand details about your annuity:
Accumulation value - The value of the purchase payment plus interest credited,
adjusted for any surrenders.
Annuitant - The person on whose life monthly annuity payments depend.
Annuity - A contract purchased from an insurance company that offers
tax-deferred growth of the purchase payment until earnings are withdrawn.
Cash surrender value - The market adjusted value is the cash surrender value. On
the last day of a guarantee period, the cash surrender value is the accumulation
value.
Contract anniversary - The same day and month as the contract date each year
that the contract remains in force.
Contract date - The effective date of the contract as designated in the
contract.
Current interest rate - The applicable interest rate contained in a schedule of
rates established by us from time to time for various guarantee periods.
Initial guarantee period - The period during which the initial guarantee rate
will be credited.
Initial guarantee rate - The rate of interest credited to the purchase payment
during the initial guarantee period.
Market adjusted value - The accumulation value adjusted by the market adjusted
value formula, on any date before the end of the guarantee period.
Market value adjustment - The market adjusted value minus the accumulation
value.
Owner - The person or entity to whom the annuity contract is issued.
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Purchase payment - Payment made to IDS Life for an annuity.
Renewal date - The first day of a renewal guarantee period. It will always be on
a contract anniversary.
Renewal guarantee period - A renewal guarantee period will begin at the end of
each guarantee period.
Renewal guarantee rate - The rate of interest credited to the renewal value
during the renewal guarantee period.
Renewal value - The accumulation value at the end of the current guarantee
period.
Settlement - The application of contract value to provide annuity payments. If
the settlement date is not the last day of a guarantee period, we apply the
market adjusted value of the contract. On the last day of a guarantee period, we
apply the accumulation value of the contract.
Settlement date - The date on which annuity payments are to begin.
Written request - A request in writing signed by you and delivered to us at our
corporate office.
Description of contracts
General
This prospectus describes interests in market value annuities offered by IDS
Life to members of a wrap-fee program sponsored by AEFA under which this
contract is made available for non-tax qualified and tax qualified purchases.
The contracts may be offered in the following tax qualified programs: (1)
Section 401(a), 401(k) and 403(a) plans; (2) Section 403(b) plans; (3) IRAs,
SIMPLE IRAs and SEPs; and (4) deferred compensation plans.
As described in this prospectus, the contracts have a guaranteed interest rate
that is credited to a purchase payment in the contract when the purchase payment
is held to its renewal date. Surrenders prior to the renewal date are subject to
a market value adjustment.
Application and purchase payment
To apply for a contract, you must complete an application and make a minimum
purchase payment of $5,000. For individuals age 90 and younger, the maximum
purchase payment is $1,000,000 without prior approval. This limit applies in
total to all IDS Life annuities you own. If you purchase the contract to fund a
tax qualified plan, that plan's limit on contributions also will apply.
We will return an improperly completed application, along with the corresponding
purchase payment, five business days after we receive it if the application has
not, by that time, been properly completed.
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A payment is credited to a contract on the date we receive a properly completed
application at our Minneapolis office along with the purchase payment. Interest
is earned the next day. IDS Life then issues a contract and confirms the
purchase payment in writing.
Right to cancel
State or federal law may give you the right to cancel the contract within a
specific period of time after receipt of the contract and receive a refund of
the entire purchase payment. For revocation to be effective, mailing or delivery
of notice of cancellation must be made in writing to our corporate office at the
following address: IDS Life Insurance Company, Attn: Transactions, P.O. Box 534,
Minneapolis, MN 55440-0534.
Guarantee periods
The owner selects the duration of the guarantee period from among those
durations we offer. As of the date of this prospectus, we are offering guarantee
periods with annual durations from one to 10 years; however, the guarantee
periods we offer in the future could be different. The duration selected will
determine the guaranteed interest rate and the purchase payment (less surrenders
made and less applicable premium taxes, if any) will earn interest at this
guaranteed interest rate during the entire guarantee period. All interest earned
will be credited daily; this compounding effect is reflected in the guaranteed
interest rate.
Below is an illustration of how we will credit interest during the guarantee
period. For the purpose of this example, we have made the assumptions as
indicated.
Example of guaranteed rate of accumulation
Beginning account value: $50,000
Guaranteed period: 10 years
Guaranteed rate: 6% annual effective rate
Interest credited to the Cumulative interest
Year account during year credited to the account
1 $3,000.00 $ 3,000.00
2 3,180.00 6,180.00
3 3,370.80 9,550.80
4 3,573.05 13,123.85
5 3,787.43 16,911.28
6 4,014.68 20,925.96
7 4,255.56 25,181.51
8 4,510.89 29,692.40
9 4,781.54 34,473.95
10 5,068.44 39,542.38
Guaranteed accumulation value at the end of 10 years is:
$50,000 + $39,542.38 = $89,542.38
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Note: This example assumes no surrenders of any amount during the entire
ten-year period. A market value adjustment applies to any interim surrender.
(See Surrenders). The hypothetical interest rates are illustrative only and are
not intended to predict future interest rates to be declared under the contract.
Actual interest rates declared for any given time may be more or less than those
shown.
Renewal guarantee periods: At the end of any guarantee period, a renewal
guarantee period will begin. We will notify you in writing about the renewal
guarantee periods available before the renewal date. This written notification
will not specify the interest rate for the renewal value. You may elect in
writing, during the 30-day period before the end of the guarantee period, a
renewal guarantee period of a different duration from among those we offer at
that time. If no election is made, we will automatically apply the renewal value
to a guarantee period of one year. In no event may renewal guarantee periods
extend beyond the settlement date then in effect for the contract. For example,
if the annuitant is age 62 at the end of a guarantee period and the settlement
date for the annuitant is age 65, a three-year guarantee period is the maximum
guarantee period that may be selected under the contract. The renewal value will
then earn interest at a guaranteed interest rate that we have declared for such
duration. We may declare new schedules of guaranteed interest rates as
frequently as daily.
At the beginning of any renewal guarantee period, the renewal value will be the
accumulation value at the end of the guarantee period just ending. The renewal
value is guaranteed by our general assets. This amount will earn interest for
the renewal guarantee period at the then applicable guaranteed interest rate for
the period selected, that may be higher or lower than the previous guaranteed
interest rate.
At your written request, we will notify you of the renewal guarantee rates for
the periods then available. You also may call us to inquire about renewal
guarantee rates.
Establishment of guaranteed interest rates: The guaranteed interest rate for a
chosen guarantee period will be known at the time a purchase payment is received
or an accumulation value is renewed. We will send a confirmation that will show
the amount and the applicable guaranteed interest rate. The minimum guaranteed
interest rate for renewal values is 3% per year. The rate on renewal values will
be equal to or greater than the rate credited on new comparable purchase
payments at that time.
IDS Life has no specific formula for determining the rate of interest that it
will declare as guaranteed interest rates in the future. We will declare the
guaranteed interest rates from time to time based on our analysis of current
market conditions. (See Investments by IDS Life). In addition, IDS Life also may
consider various other factors in determining guaranteed interest rates for a
given period, including regulatory and tax requirements; sales commission and
administrative expenses we bear; general economic trends; and competitive
factors. IDS Life management will make the final determination as to the
guaranteed interest rates to be declared. We cannot predict nor can we guarantee
future guaranteed interest rates above the 3% rate.
Surrenders
General: Subject to certain tax law and retirement plan restrictions noted
below, total and partial surrenders may be made under a contract at any time.
<PAGE>
In the case of all surrenders, the accumulation value will be reduced by the
amount surrendered on the surrender date and that amount will be payable to the
owner. The accumulation value also will be either reduced or increased by any
market value adjustment applicable to the surrender. IDS Life will, on request,
inform you of the amount payable in a total or partial surrender. Any total or
partial surrender may be subject to tax and tax penalties. Surrenders from
certain tax qualified contracts also may be subject to 20% income tax
withholding. (See Federal tax considerations.)
Tax-sheltered annuities: The Code imposes certain restrictions on an owner's
right to receive early distributions attributable to salary reduction
contributions from a contract purchased for a retirement plan qualified under
Section 403(b) of the Code as a tax-sheltered annuity (TSA).
Distributions attributable to salary reduction contributions made after Dec. 31,
1988, plus the earnings on them, or to transfers or rollovers of such amounts
from other contracts may be made from the TSA contract only if the owner has
attained age 59-1/2, has become disabled as defined in the Code, has separated
from the service of the employer that purchased the contract or has died.
Additionally, if the owner should encounter a financial hardship (within the
meaning of the Code), he or she may receive a distribution of all contract
values attributable to salary reduction contributions made after Dec. 31, 1988,
but not of the earnings on them.
Even though a distribution may be permitted under these rules (e.g., for
hardship or after separation from service), it may nonetheless be subject to a
10% IRS penalty tax (in addition to income tax) as a premature distribution and
to 20% income tax withholding. (See Federal tax considerations.)
These restrictions do not apply to transfers of contract value to another TSA
investment vehicle available through the employer.
Partial surrenders: Unless we agree otherwise, the minimum amount you may
surrender is $250. You cannot make a partial surrender if it would reduce the
accumulation value of your annuity to less than $2,000.
You may request the net check amount you wish to receive. We will determine how
much accumulation value needs to be surrendered to yield the net check amount
after any applicable market value adjustment.
A partial surrender request not exceeding $50,000 may be made by telephone. We
have the authority to honor any telephone partial surrender request believed to
be authentic and will use reasonable procedures to confirm that they are. This
includes asking identifying questions and tape recording calls. As long as
reasonable procedures are followed, neither IDS Life nor its affiliates will be
liable for any loss resulting from fraudulent requests. At times when the volume
of telephone requests is unusually high, we will take special measures to ensure
that your call is answered as promptly as possible. A telephone surrender
request will not be allowed within 30 days of a phoned-in address change.
Total surrenders: We will compute the value of your contract at the close of
business after we receive your request for a complete surrender. We may ask you
to return the contract.
<PAGE>
Payment on surrender: We may defer payment of any partial or total surrender for
a period not exceeding 6 months from the date we receive your notice of
surrender or the period permitted by state insurance law, if less. Only under
extraordinary circumstances will we defer a surrender payment more than 7 days,
and if we defer payment for more than 30 days, we will pay annual interest of at
least 3% on the amount deferred. While all circumstances under which we could
defer payment upon surrender may not be foreseeable at this time, such
circumstances could include, for example, our inability to liquidate assets due
to a general financial crisis. If we intend to withhold payment more than 30
days, we will notify you in writing.
NOTE: You will be charged a fee if you request express mail delivery.
Market value adjustment
The accumulation value, including the interest credited, is guaranteed if the
contract is held until the end of the guarantee period. However, a market value
adjustment will be applied if a surrender occurs prior to the end of the
guarantee period. The market adjusted value also affects settlements under an
annuity payment plan occurring at any time other than the last day of a
guarantee period.
The market adjusted value is your accumulation value (purchase payment plus
interest credited minus surrenders) adjusted by a formula. The market adjusted
value reflects the relationship between the guaranteed interest rate on your
contract and the interest rate we are crediting on new Portfolio Guaranteed Term
Annuity contracts with guarantee periods that are the same as the time remaining
in your guarantee period.
The market adjusted value is sensitive to changes in current interest rates. The
difference between your accumulation value and market adjusted value on any day
will depend on our current schedule of guaranteed interest rates on that day,
the time remaining in your guarantee period and your guaranteed interest rate.
Upon surrender your market adjusted value may be greater than your contract's
accumulation value, equal to it or less than it depending on how the guaranteed
interest rate on your contract compares to the interest rate of a new Portfolio
Guaranteed Term Annuity for the same number of years as the guarantee period
remaining on your contract.
Relationship between your contract's guaranteed rate and new contract for the
same number of years as the guaranteed period remaining on your contract:
If your annuity rate is: Your market adjusted value will be:
greater than the new annuity rate + .25% greater than your accumulation value
equal to the new annuity rate + .25% equal to your accumulation value
less than the new annuity rate + .25% less than your accumulation value
For example, assume you bought a contract with a guarantee period of 10 years
and a guaranteed interest rate of 4.5% annually. Assume that after 3 years you
decide to surrender your contract (you have 7 years left in your guarantee
period). If the current interest rate we are offering on new Portfolio
Guaranteed Term Annuity contracts with 7-year guarantee periods is 5%, your
market adjusted value will be lower than your accumulation value. On the other
hand, if the current interest rate we are then offering on new Portfolio
Guaranteed Term Annuity contracts with 7-year guarantee periods is 4%, your
market adjusted value will be higher than your accumulation value.
<PAGE>
Market adjusted value formula:
Market adjusted value = (Renewal value)
_______________________
(1 + ic + .0025)(N + t)
Renewal value -- The accumulation value at the end of the current guarantee
period
ic -- The current interest rate offered for new Portfolio
Guaranteed Term Annuity contract sales and renewals for
the number of years remaining in the guarantee period
N -- The number of complete contract years to the end of the
current guarantee period
t -- The fraction of the contract year remaining to the end
of the contract year (for example, if 180 days remain in a
365 day contract year, t would be .493)
The current guaranteed interest rate (ic) is declared by us periodically. It is
the rate we are then paying on purchase payments and renewals paid under this
class of contracts for guarantee period durations equaling the remaining
guarantee period duration of the contract to which the formula is being applied.
If the remaining guarantee period is a number of complete years, the specific
complete year guarantee rate will be used. If the remaining guarantee period is
less than 1 year, the one year guarantee rate will be used. If the remaining
guarantee period is a number of complete years plus fractional years, the rate
will be determined by straight line interpolation between the two years' rates.
For example, if the remaining guarantee period duration is 8.5 years, and the
current guaranteed interest rate for 8 years is 4% and for 9 years is 5%, IDS
Life will use a guaranteed interest rate of 4.5%.
Market value adjustment formula:
Market value adjustment = Market adjusted value less accumulation value
For an illustration showing an upward and downward adjustment, see Appendix B.
Premium taxes
We reserve the right to deduct an amount from the accumulation value of the
contract at the time that any applicable premium taxes not previously deducted
are payable. If a tax is payable at the time of the purchase payment and we
choose to not deduct it at that time, we further reserve the right to deduct it
at a later date. Current premium taxes range in an amount up to 3.5% depending
on jurisdiction.
Death benefit prior to settlement
If the annuitant or owner dies before the settlement date, the death benefit
payable to the beneficiary will equal the accumulation value.
If your spouse is sole beneficiary or joint owner: Unless you have given us
other written instructions, if you, as owner or joint owner, die before the
settlement date and
<PAGE>
your spouse is the only beneficiary or joint owner with a right of survivorship,
your spouse may keep the annuity as owner. To do this, your spouse must, within
60 days after we receive proof of death, give us written instructions to keep
the contract in force.
Section 401(k) plans, Section 403(b) plans (TSAs), Section 457 plans, custodial
and trusteed plans, and IRAs, SIMPLE IRAs and SEPs: If the contract is purchased
under a Section 401(k) plan, Section 403(b) plan, Section 457 plan, custodial or
trusteed plan or for an IRA, SIMPLE IRA or SEP and we receive proof of the
annuitant's death before the settlement date, we will pay the beneficiary the
death benefit described above. If the annuitant dies before reaching the
settlement date and the spouse is the only beneficiary, the spouse may keep the
contract in force until the date on which the annuitant would have reached
70-1/2 or any other date permitted by the Code. To do this, the spouse must,
within 60 days after we receive proof of death, give us written instructions to
keep the contract in force.
Paying the beneficiary: Unless you have given us other written instructions, we
will pay the beneficiary in a single payment. The beneficiary may elect to
receive this payment at any time within 5 years after the date of death. Payment
from a tax qualified contract (except an IRA, SIMPLE IRA, SEP or Section 457
plan) made to a surviving spouse instead of being directly rolled over to an IRA
may be subject to 20% income tax withholding. We may make payments under any
payment plan available under this contract if:
o the beneficiary asks us in writing within 60 days after we receive proof
of death;
o payments begin no later than one year after death or any other date
permitted by the Code; and
o the payment period does not extend beyond the beneficiary's life or life
expectancy.
We will determine the accumulation value at the next close of business after our
death claim requirements are fulfilled. We will mail payment to the beneficiary
within seven days after our death claim requirements are fulfilled.
Statement
Prior to the settlement date, at least annually, we will send a statement
showing a summary of the contract.
Electing the settlement date and form of annuity
Upon processing your application we will establish the settlement date to the
maximum age or date as specified below. You can also select a date within the
maximum limits. This date can be aligned with your actual retirement from a job,
or it can be a different future date, depending on your needs and goals and on
certain restrictions. You can also change the date, provided you send us written
instructions at least 30 days before annuity payouts begin.
<PAGE>
For non-tax qualified contracts, the settlement date cannot be later than the
latest of:
o the contract anniversary nearest the annuitant's 85th birthday; or
o the 10th contract anniversary.
For tax qualified contracts, to avoid IRS penalty taxes, the settlement date
generally must be:
o on or after the date the annuitant reaches age 59-1/2;
o for IRAs, SIMPLE IRAs and SEPs, by April 1 of the year following the
calendar year when the annuitant reaches age 70-1/2; or
o for all other tax qualified contracts, by April 1 of the year following
the calendar year when the annuitant reaches age 70-1/2 or, if later,
retires; except that 5% business owners may not select a settlement date
that is later than April 1 of the year following the calendar year when
they reach age 70-1/2.
If you are taking the minimum IRA or TSA distributions as required by the Code
from another tax qualified investment, or in the form of partial surrenders from
this contract, annuity payouts can start as late as the annuitant's 85th
birthday or the 10th contract anniversary.
Annuity payments: The first payment will be made as of the settlement date. Once
annuity payments have started for an annuitant, no surrender of the annuity
benefit can be made for the purpose of receiving a lump sum in lieu of payments.
Death after settlement date: If you or the annuitant dies after the settlement
date, the amount payable to the beneficiary, if any, will continue as provided
in the annuity payment plan then in effect.
Annuity plans: There are different ways to receive annuity payments. We call
these plans. You may select one of these plans, or another payment arrangement
to which we agree, by giving us written notice at least 30 days before the
settlement date.
The market adjusted value (less applicable premium taxes, if any) may be applied
on the settlement date under any of the annuity plans described below, but in
the absence of an election, the market adjusted value will be applied on the
settlement date under Plan B to provide a life annuity with 120 monthly payments
certain.
If the amount to be applied to an annuity plan is not at least $2,000 or if
payments are to be made to other than a natural person, we have the right to
make a lump sum payment of the cash surrender value. If a lump sum payment is
made from a tax qualified contract (except an IRA, SIMPLE IRA, SEP or Section
457 plan), 20% income tax withholding may apply.
o Plan A - This provides monthly annuity payments for the lifetime of the
annuitant. No payments will be made after the annuitant dies.
<PAGE>
o Plan B - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of
at least 5, 10 or 15 years. You must select the period.
o Plan C - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain
number of months. We determine the number of months by dividing the market
adjusted value applied under this plan by the amount of the monthly annuity
payment.
o Plan D - We call this a joint and survivor life annuity. Monthly payments
will be paid for the lifetime of the annuitant and a joint annuitant. When
either the annuitant or joint annuitant dies, we will continue to make
monthly payments for the lifetime of the survivor. No payments will be paid
after the death of both the annuitant and joint annuitant.
o Plan E - This provides monthly fixed dollar annuity payments for a period
of years. The period of years may be no less than 10 nor more than 30.
The contract provides for annuity payment plans on a fixed basis only. The
amount of each annuity payment will not change during the annuity payment
period. The amount of the annuity payment will depend on:
- - the market adjusted value (less any applicable premium tax not previously
deducted) on the date;
- - the annuity table we are then using for annuity settlements (never less
than the table guaranteed in the contract);
- - the annuitant's age; and
- - the annuity payment plan selected.
The tables for Plans A, B, C and D are based on the "1983 Individual Annuitant
Mortality Table A" and an assumed rate of 3% per year. The table for Plan E is
based on an interest rate of 3%. IDS Life may, at our discretion, if mortality
appears more favorable and interest rates justify, apply other tables that will
result in higher monthly payments.
Restrictions for some tax qualified plans: If you purchased a tax qualified
annuity, you must select a payment plan that provides for payments:
o during the life of the annuitant;
o during the joint lives of the annuitant and beneficiary;
o for a period not exceeding the life expectancy of the annuitant; or
o for a period not exceeding the joint life expectancies of the annuitant
and beneficiary.
Reference also must be made to the terms of the tax qualified plan and
applicable law for any limitations or restrictions on the settlement date or
annuity payment plan that may be selected.
<PAGE>
Amendment, distribution and assignment of contracts
Amendment of contracts
We reserve the right to amend the contracts to meet the requirements of
applicable federal or state laws or regulations. We will notify you in writing
of any such amendments.
Distribution of contracts
IDS Life is the principal underwriter for the contracts. IDS Life is registered
with the Securities and Exchange Commission under the Securities Exchange Act of
1934 (1934 Act) as a broker-dealer and is a member of the National Association
of Securities Dealers, Inc. IDS Life may enter into selling agent agreements
with certain broker-dealers registered under the 1934 Act. IDS Life will pay a
maximum commission of 5% for the sale of a contract. In the future, we may pay a
commission on an election of a subsequent guarantee period by an owner. American
Express Financial Advisors Inc., an affiliate of IDS Life, is the sponsor of the
wrap-fee program under which this contract is made available.
Assignment of contracts
You may change ownership of your annuity at any time by filing a change of
ownership with us at our corporate office. No change of ownership will be
binding upon us until we receive and record it. We take no responsibility for
the validity of the change. If you have a tax qualified plan, the contract may
not be sold, assigned, transferred, discounted or pledged as collateral for a
loan or as security for the performance of an obligation or for any other
purpose to any person other than IDS Life; provided, however, that if the owner
is a trust or custodian, or an employer acting in a similar capacity, ownership
of a contract may be transferred to the annuitant.
The value of any part of a non-tax qualified annuity contract assigned or
pledged is taxed like a cash withdrawal to the extent allocable to investment in
annuity contracts after Aug. 13, 1982.
Transfer of a non-tax qualified annuity contract to another person without
adequate consideration is considered a gift and the transfer will be considered
a surrender of the contract for federal income tax purposes. The income in the
contract will be taxed to the transferor who may be subject to the 10% IRS
penalty tax for early withdrawal. The transferee's investment in the annuity
will be the value of the annuity at the time of the transfer. Consult with your
tax advisor before taking any action.
Termination of contracts
If your participation in the wrap-fee program is terminated, you will no longer
qualify for this contract and your contract will be terminated. Your contract
will be subject to a market value adjustment unless the termination occurs at
the end of a guarantee period. Upon termination, you will be given the option of
exchanging into another annuity product, which may contain higher fees, a lower
guaranteed interest rate and a surrender charge.
<PAGE>
Federal tax considerations
Under current law, there is no liability for federal income tax on any increase
in the annuity's value until payments are made (except for change of ownership
discussed above in "Assignment of contracts"). However, since federal tax
consequences cannot always be anticipated, you should consult a tax advisor if
you have any questions about the taxation of your annuity contract.
You are not taxed on your purchase payment. Your purchase payment generally
includes purchase payments made with after-tax dollars. If the purchase payment
was made by you or on your behalf with pre-tax dollars as part of a tax
qualified retirement plan, such amounts are not considered to be part of your
investment in the contract and will be taxed when paid to you.
If you surrender part or all of your contract before the date on which you have
decided to begin to receive annuity payments, you will be taxed on the payments
which you receive, to the extent that the value of your contract exceeds your
investment in the contract, and you may have to pay an IRS penalty tax for early
withdrawal.
If you begin receiving annuity payments under a non-tax qualified annuity
contract, a portion of each payment will be subject to tax and a portion of each
payment will be considered to be part of your investment in the contract and
will not be taxed. All amounts received after your investment in the contract is
recovered will be subject to tax. If you begin receiving payments from a tax
qualified annuity, all of the payments generally will be subject to taxation
except to the extent that the contributions were made with after-tax dollars.
Unlike life insurance proceeds, the death benefit under an annuity contract is
not tax exempt. The gain, if any, is taxable as ordinary income to the
beneficiary in the year(s) he or she receives the payments. The gain is subject
to income tax, not estate or inheritance tax.
Tax law requires that all non-qualified deferred annuity contracts issued by the
same company to the same contract owner during a calendar year are to be treated
as a single, unified contract. The amount of income included and taxed in a
distribution (or a transaction deemed a distribution under tax law) taken from
any one of such contracts is determined by summing all such contracts.
The income earned on a non-tax qualified contract held by such entities as
corporations, partnerships or trusts generally will be treated as ordinary
income received during that year. However, if the trust was set up for the
benefit of a natural person only, the income will continue to be tax-deferred.
If you receive amounts from your contract before reaching age 59-1/2, you may
have to pay a 10% IRS penalty on the amount includible in your ordinary income.
If you receive amounts from your SIMPLE IRA before reaching age 59-1/2,
generally the IRS 10% penalty provisions apply. However, if you receive these
amounts before age 59-1/2 and within the first two years of your participation
in the SIMPLE IRA plan, the IRS penalty will be assessed at the rate of 25%
instead of 10%. However, this penalty will not apply to any amount received:
o after you reach age 59-1/2;
<PAGE>
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal periodic
payments over your life or life expectancy (or joint lives or life
expectancies of you and your designated beneficiary); or
o if it is allocable to a purchase payment before Aug. 14, 1982 (except for
contracts in tax qualified plans).
These are the major exceptions to the 10% IRS penalty tax. Additional exceptions
may apply depending upon whether or not the annuity is tax qualified.
For tax qualified contracts, other penalties apply if you surrender an annuity
bought under your plan before the plan specifies that payments can be made under
the plan.
In general, if you receive all or part of the contract value from an annuity,
withholding may be imposed against the taxable income portion of the payment.
Any withholding that is done represents a prepayment of your tax due for the
year. You take credit for such amounts on the annual tax return that you file.
If the payment is part of an annuity payment plan, the amount of withholding
generally is computed using payroll tables. You can provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial or full
surrender), withholding is computed using 10% of the taxable portion. Similar to
above, as long as you've provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.
If a distribution is taken from a contract offered under a Section 457 plan
(deferred compensation plan of state and local governments and tax-exempt
organizations), withholding is computed using payroll methods depending upon the
type of payment.
Some states also impose withholding requirements similar to the federal
withholding described above. If this should be the case, any payment from which
federal withholding is deducted may also have state withholding deducted.
The withholding requirements may differ if payment is being made to a non-U.S.
citizen or if the payment is being delivered outside the United States.
If you receive all or part of the contract value from a tax qualified annuity
(except an IRA, SIMPLE IRA, SEP or Section 457 plan), mandatory 20% income tax
withholding generally will be imposed at the time the payment is made. In
addition, federal income tax and the 10% IRS penalty tax for early withdrawals
may apply to amounts properly includible in income. This mandatory 20% income
tax withholding will not be imposed if:
<PAGE>
o instead of receiving the payment, you elect to have the payment rolled over
directly to an IRA or another eligible plan;
o the payment is one of a series of substantially equal periodic payments,
made at least annually, over your life or life expectancy (or joint lives
or life expectancies of you and your designated beneficiary) or made over a
period of 10 years or more; or
o the payment is a minimum distribution required under the Code.
These are the major exceptions to the mandatory 20% income tax withholding.
Payments made to a surviving spouse instead of being directly rolled over to an
IRA may be subject to 20% income tax withholding. For taxable distributions that
are not subject to the mandatory 20% withholding, federal income tax will be
withheld from the taxable part of your distribution unless you elect otherwise.
State withholding also may be imposed on taxable distributions.
You will receive a tax statement for any year that you receive a taxable
distribution from your annuity contract according to our records.
The contract is intended to qualify as an annuity for federal income tax
purposes. To that end, the provisions of the contract are to be interpreted to
ensure or maintain such tax qualification, notwithstanding any other provisions
of the contract. We reserve the right to amend the contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
Our discussion of federal tax laws is based upon our understanding of these laws
as they are currently interpreted. Either federal tax laws or current
interpretations of them may change. You are urged to consult your tax advisor
concerning your specific circumstances.
The Company
Business
IDS Life is a stock insurance company organized in 1957 under the laws of the
State of Minnesota. IDS Life is a wholly owned subsidiary of American Express
Financial Corporation, which is a wholly owned subsidiary of American Express
Company. IDS Life acts as a direct writer of insurance policies and annuities
and as the investment manager of various investment companies. IDS Life is
licensed to write life insurance and annuity contracts in 49 states and the
District of Columbia. The headquarters of IDS Life is IDS Tower 10, Minneapolis,
MN 55440-0010.
Investments by IDS Life
Assets of IDS Life must be invested in accordance with requirements established
by applicable state laws regarding the nature and quality of investments that
may be made by life insurance companies and the percentage of their assets that
may be committed to any particular type of investment. In general, these laws
permit investments, within specified limits and subject to certain
qualifications, in federal, state, and municipal obligations,
<PAGE>
corporate bonds, preferred and common stocks, real estate mortgages, real estate
and certain other investments. All claims by purchasers of the contracts, and
other general account products, will be funded by the general account.
IDS Life intends to construct and manage the investment portfolio using a
strategy known as "immunization". Immunization seeks to lock in a defined return
on the pool of assets versus the pool of liabilities over a specified time
horizon. Since the return on the assets versus the liabilities is locked in, it
is "immune" to any potential fluctuations in interest rates during the given
time. Immunization is achieved by constructing a portfolio of assets with a
price sensitivity to interest rate changes (i.e., price duration) that is
essentially equal to the price duration of the corresponding portfolio of
liabilities. Portfolio immunization provides flexibility and efficiency to IDS
Life in creating and managing the asset portfolio, while still assuring safety
and soundness for funding liability obligations.
IDS Life's investment strategy will incorporate the use of a variety of debt
instruments having price durations tending to match the applicable guaranteed
interest periods. These instruments include, but are not necessarily limited to,
the following:
o Securities issued by the U.S. government or its agencies or
instrumentalities, which issues may or may not be guaranteed by the U.S.
government;
o Debt securities that have an investment grade, at the time of purchase,
within the four highest grades assigned by the nationally recognized rating
agencies;
o Debt instruments that are unrated, but which are deemed by IDS Life to
have an investment quality within the four highest grades;
o Other debt instruments, which are rated below investment grade, limited to
15% of assets at the time of purchase; and
o Real estate mortgages, limited to 30% of portfolio assets at the time of
acquisition.
In addition, options and futures contracts on fixed income securities will be
used from time to time to achieve and maintain appropriate investment and
liquidity characteristics on the overall asset portfolio.
While this information generally describes our investment strategy, we are not
obligated to follow any particular strategy except as may be required by federal
law and Minnesota and other state insurance laws.
Selected financial data
The following selected financial data for IDS Life and its subsidiaries should
be read in conjunction with the consolidated financial statements and notes
included in the prospectus beginning on page __.
<PAGE>
<TABLE>
<CAPTION>
Years ended Dec. 31, (thousands)
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Premiums $ 182,921 $ 161,530 $ 144,640 $ 127,245 $ 114,379
Net investment income 1,965,362 1,907,309 1,781,873 1,783,219 1,616,821
Net realized (loss) on (159) (4,898) (4,282) (6,737) (3,710)
investments
Other 574,341 472,035 384,105 304,344 240,959
Total revenues $ 2,722,465 $ 2,535,976 $ 2,306,336 $ 2,208,071 $ 1,968,449
Income before income taxes $ 621,714 $ 560,782 $ 512,512 $ 412,726 $ 315,821
Net income $ 414,576 $ 364,940 $ 336,169 $ 270,079 $ 211,170
Total assets $47,305,981 $42,900,078 $35,747,543 $33,057,753 $27,295,773
</TABLE>
Management's discussion and analysis of consolidated financial condition and
results of operations
Results of operations
1996 compared to 1995:
Consolidated net income increased 14% to $415 million in 1996, compared to $365
million in 1995. Earnings growth resulted primarily from increases in management
fees and policyholder and contractholder charges partially offset by a slight
decrease in investment margins. These increases reflect higher average insurance
and annuities in force during 1996. Investment margins were below prior year
levels primarily due to increasing interest credited rates throughout 1996.
Consolidated income before income taxes totaled $622 million in 1996, compared
with $561 million in 1995. In 1996, $161 million was from the life, disability
income and long-term care insurance segment, compared with $125 million in 1995.
In 1996, $461 million was from the annuity segment, compared with $440 million
in 1995.
Total premiums received increased to $6.1 billion in 1996, compared with $5.0
billion in 1995. This increase is primarily due to an increase in sales of
variable annuities in 1996.
Total revenues increased to $2.7 billion in 1996, compared with $2.5 billion in
1995. The increase is primarily due to increases in net investment income,
policyholder and contractholder charges, and management fees. Net investment
income, the largest component of revenues, increased from the prior year,
reflecting a slight increase in investments owned.
Policyholder and contractholder charges, which consist primarily of cost of
insurance charges on universal life-type policies, increased 18% to $303 million
in 1996, compared with $256 million in 1995. This increase reflects higher total
life insurance in force which grew 13% to $67 billion at December 31, 1996.
Management and other fees increased 26% to $271 million in 1996, compared with
$216 million in 1995. This is primarily due to an increase in separate account
assets, which grew 24% to $19 billion at December 31, 1996, due to market
appreciation and sales. The Company provides investment management services for
the mutual funds used as investment options for variable annuities and variable
life insurance. The Company also receives a mortality and expense risk fee from
the separate accounts.
<PAGE>
Total benefits and expenses increased slightly to $2.1 billion in 1996. The
largest component of expenses, interest credited to policyholder accounts for
universal life-type insurance and investment contracts, increased to $1.4
billion. This was due to higher aggregate amounts in force and an increase in
average interest credited rates.
1995 compared to 1994:
Consolidated net income increased 8.6% to $365 million in 1995, compared to $336
million in 1994. Earnings growth resulted primarily from increases in management
fees and policyholder and contractholder charges partially offset by a slight
decrease in investment margins. These increases reflect higher average insurance
and annuities in force during 1995. Investment margins were below prior year
levels primarily due to higher interest credited rates during the first two
quarters of 1995.
Consolidated income before income taxes totaled $561 million in 1995, compared
with $513 million in 1994. In 1995, $125 million was from the life, disability
income, health and long-term care insurance segment, compared with $123 million
in 1994. In 1995, $440 million was from the annuity segment, compared with $394
million in 1994. There was a $4.9 million net realized loss on investments in
1995, compared with a net realized loss on investments of $4.3 million in 1994.
Total premiums received decreased to $5.0 billion in 1995, compared with $5.7
billion in 1994. This decrease is primarily due to a decrease in sales of
variable annuities, reflecting very strong sales of variable products during
1994.
Total revenues increased to $2.5 billion in 1995, compared with $2.3 billion in
1994. The increase is primarily due to increases in net investment income,
policyholder and contractholder charges, and management fees. Net investment
income, the largest component of revenues, increased from the prior year,
reflecting an increase in investments owned.
Policyholder and contractholder charges, which consist primarily of cost of
insurance charges on universal life-type policies, increased 16% to $256 million
in 1995, compared with $220 million in 1994. This increase reflects higher total
life insurance in force which grew 13% to $59.4 billion at December 31, 1995.
Management and other fees increased 32% to $216 million in 1995, compared with
$164 million in 1994. This is primarily due to an increase in separate account
assets, which grew 38% to $15 billion at December 31, 1995, due to market
appreciation and sales. The Company provides investment management services for
the mutual funds used as investment options for variable annuities and variable
life insurance. The Company also receives a mortality and expense risk fee from
the separate accounts.
Total benefits and expenses increased to $2.0 billion in 1995. The largest
component of expenses, interest credited to policyholder accounts for universal
life-type insurance and investment contracts, increased to $1.3 billion. This
was due to higher aggregate amounts in force and an increase in average interest
credited rates.
<PAGE>
Risk management
The Company primarily invests in fixed income securities over a broad range of
maturities for the purpose of providing fixed annuity clients with a competitive
rate of return on their investments while minimizing risk, and to provide a
dependable and targeted spread between the interest rate earned on investments
and the interest rate credited to clients' accounts. The Company does not invest
in securities to generate trading profits.
The Company has an investment committee that holds regularly scheduled meetings
and, when necessary, special meetings. At these meetings, the committee reviews
models projecting different interest rate scenarios and their impact on
profitability. The objective of the committee is to structure the investment
security portfolio based upon the type and behavior of products in the liability
portfolio so as to achieve targeted levels of profitability.
Rates credited to clients' accounts are generally reset at shorter intervals
than the maturity of underlying investments. Therefore, margins may be
negatively impacted by increases in the general level of interest rates. Part of
the committee's strategy includes the purchase of some types of derivatives,
such as interest rate caps and swaps, for hedging purposes. These derivatives
protect margins by increasing investment returns if there is a sudden and severe
rise in interest rates, thereby mitigating the impact of an increase in rates
credited to clients' accounts.
Liquidity and capital resources
The liquidity requirements of the Company are met by funds provided from
operations and investment activity. The primary components of the funds provided
are premiums, investment income, proceeds from sales of investments as well as
maturities and periodic repayments of investment principal.
The primary uses of funds are policy benefits, commissions and operating
expenses, policy loans, dividends and investment purchases.
The Company has available lines of credit with two banks and its parent
aggregating $175 million, of which $100 million is with its parent. The $25,000
line of credit with one bank expired on Dec. 31, 1996 and the Company did not
seek renewal. The $50,000 line of credit with the other bank expires on June 30,
1997 and the Company expects to seek renewal. The lines of credit are used
strictly as short-term sources of funds. Borrowings outstanding under the
agreements were $nil at Dec. 31, 1996. At Dec. 31, 1996, outstanding reverse
repurchase agreements totaled $17 million.
At Dec. 31, 1996, investments in fixed maturities comprised 86% of the Company's
total invested assets. Of the fixed maturity portfolio, approximately 42% is
invested in GNMA, FNMA and FHLMC mortgage-backed securities which are considered
AAA/Aaa quality.
At Dec. 31, 1996, approximately 9.6% of the Company's investments in fixed
maturities were below investment grade bonds. These investments may be subject
to a higher degree of risk than the high-rated issues because of the borrower's
generally greater sensitivity to adverse economic conditions, such as recession
or increasing interest rates, and in certain instances, the lack of an active
secondary market. Expected returns on below investment
<PAGE>
grade bonds reflect consideration of such factors. The Company has identified
those fixed maturities for which a decline in fair value is determined to be
other than temporary, and has written them down to fair value with a charge to
earnings.
At Dec. 31, 1996, net unrealized appreciation on fixed maturities held to
maturity included $380 million of gross unrealized appreciation and $94 million
of gross unrealized depreciation. Net unrealized appreciation on fixed
maturities available for sale included $231 million of gross unrealized
appreciation and $93 million of gross unrealized depreciation.
At Dec. 31, 1996, the Company had an allowance for losses for mortgage loans
totaling $37 million and for real estate investments totaling $4 million.
The economy and other factors have caused an increase in the number of insurance
companies that are under regulatory supervision. This circumstance has resulted
in an increase in assessments by state guaranty associations to cover losses to
policyholders of insolvent or rehabilitated companies. Some assessments can be
partially recovered through a reduction in future premium taxes in certain
states. The Company established an asset for guaranty association assessments
paid to those states allowing a reduction in future premium taxes over a
reasonable period of time. The asset is being amortized as premium taxes are
reduced. The Company has also estimated the potential effect of future
assessments on the Company's financial position and results of operations and
has established a reserve for such potential assessments.
In the first quarter of 1997, the Company paid a $45 million dividend to its
parent. In 1996, dividends paid to its parent were $165 million.
The National Association of Insurance Commissioners has established risk-based
capital standards to determine the capital requirements of a life insurance
company based upon the risks inherent in its operations. These standards require
the computation of a risk-based capital amount which is then compared to a
company's actual total adjusted capital. The computation involves applying
factors to various statutory financial data to address four primary risks: asset
default, adverse insurance experience, interest rate risk and external events.
These standards provide for regulatory attention when the percentage of total
adjusted capital to authorized control level risk-based capital is below certain
levels. As of Dec. 31, 1996, the Company's total adjusted capital was well in
excess of the levels requiring regulatory attention.
Segment information
The Company's operations consist of two business segments: Individual and group
life, disability income and long-term care insurance; and fixed and variable
annuity products designed for individuals, pension plans, small businesses and
employer-sponsored groups. The Company is not dependent upon any single customer
and no single customer accounted for more than 10% of revenue in 1996, 1995 or
1994. Additionally, no single distributor accounted for more than 10% of
premiums received in 1996, 1995 or 1994. (See Note 10, Segment information, in
the "Notes to Consolidated Financial Statements".)
<PAGE>
Reinsurance
Reinsurance arrangements are used to reduce exposure to large losses. The
maximum amount of risk retained by the Company on any one life is $750,000 of
life and waiver of premium benefits plus $50,000 of accidental death benefits.
The excesses are reinsured with other life insurance companies. At December 31,
1996, traditional life and universal life-type insurance in force aggregated
$67.2 billion, of which $3.9 billion was reinsured.
Reserves
In accordance with the insurance laws and regulations under which IDS Life
operates, it is obligated to carry on its books, as liabilities, actuarially
determined reserves to meet its obligations on its outstanding life and health
insurance policies and annuity contracts. Reserves for policies and contracts
are based on mortality and morbidity tables in general use in the United States.
These reserves are computed amounts that, with additions from premiums to be
received, and with interest on such reserves compounded annually at assumed
rates, will be sufficient to meet IDS Life's policy obligations at their
maturities or in the event of an insured's death. In the accompanying financial
statements these reserves are determined in accordance with generally accepted
accounting principles. (See Note 1, Liabilities for future policy benefits, in
the "Notes to Consolidated Financial Statements.")
Investments
Of IDS Life's consolidated total investments of $25.6 billion at Dec. 31, 1996,
36% was invested in mortgage-backed securities, 47% in corporate and other
bonds, 14% in primary mortgage loans on real estate, 2% in policy loans and the
remaining 1% in other investments.
Competition
IDS Life is engaged in a business that is highly competitive due to the large
number of stock and mutual life insurance companies and other entities marketing
insurance products. There are over 2,600 stock, mutual and other types of
insurers in the life insurance business. Best's Insurance Reports, Life-Health
edition, 1996, assigned IDS Life one of its highest classifications, A+
(Superior).
Employees
As of Dec. 31, 1996, IDS Life and its subsidiaries had 266 employees; including
209 employed at the corporate office in Minneapolis, MN, 8 employed at American
Centurion Life Assurance Company located in Albany, NY and 49 employed at IDS
Life Insurance Company of New York located in Albany, NY.
Properties
IDS Life occupies office space in Minneapolis, MN, which is rented by its
parent, American Express Financial Corporation. IDS Life reimburses American
Express Financial Corporation for rent based on direct and indirect allocation
methods. Facilities occupied by IDS Life and its subsidiaries are believed to be
adequate for the purposes for which they are used and are well maintained.
<PAGE>
State regulation
IDS Life is subject to the laws of the State of Minnesota governing insurance
companies and to the regulations of the Minnesota Department of Commerce. An
annual statement in the prescribed form is filed with the Minnesota Department
of Commerce each year covering IDS Life's operation for the preceding year and
its financial condition at the end of such year. Regulation by the Minnesota
Department of Commerce includes periodic examination to determine IDS Life's
contract liabilities and reserves so that the Minnesota Department of Commerce
may certify that these items are correct. IDS Life's books and accounts are
subject to review by the Minnesota Department of Commerce at all times. Such
regulation does not, however, involve any supervision of the account's
management or IDS Life's investment practices or policies. In addition, IDS Life
is subject to regulation under the insurance laws of other jurisdictions in
which it operates. A full examination of IDS Life's operations is conducted
periodically by the National Association of Insurance Commissioners.
Under insurance guaranty fund laws, in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses incurred
by insolvent companies. Most of these laws do provide, however, that an
assessment may be excused or deferred if it would threaten an insurer's own
financial strength.
Directors and executive officers
The members of the Board of Directors and the principal executive officers of
IDS Life, together with the principal occupation of each during the last five
years, are as follows:
Directors*
David R. Hubers
Born in 1943
Director since September 1989; president and chief executive officer, AEFC,
since August 1993, and director since January 1984. Senior vice president,
Finance and chief financial officer, AEFC, from January 1984 to August 1993.
Richard W. Kling
Born in 1940
Director since February 1984; president since March 1994. Executive vice
president, Marketing and Products from January 1988 to March 1994. Senior vice
president, AEFC, since May 1994. Director of IDS Life Series Fund, Inc. and
member of the board of managers and president of IDS Life Variable Annuity Funds
A and B.
Paul F. Kolkman
Born in 1946
Director since May 1984; executive vice president since March 1994; vice
president, Finance from May 1984 to March 1994; vice president, AEFC, since
January 1987. Vice president and chief actuary of IDS Life Series Fund, Inc.
<PAGE>
James A. Mitchell
Born in 1941
Chairman of the board since March 1994; director since July 1984; chief
executive officer since November 1986; president from July 1984 to March 1994;
executive vice president, AEFC, since March 1994; director, AEFC, since July
1984; senior vice president, AEFC, from July 1984 to March 1994.
Barry J. Murphy
Born in 1951
Director and executive vice president, Client Service, since March 1994; senior
vice president, AEFC, since May 1994; senior vice president, Travel Related
Services (TRS), a subsidiary of American Express Company, from July 1992 to
April 1994; vice president, TRS, from November 1989 to July 1992.
Stuart A. Sedlacek
Born in 1957
Director and executive vice president, Assured Assets since March 1994; vice
president, AEFC, since September 1988.
Officers other than directors*
Jeffrey S. Horton
Born in 1961
Vice president and treasurer since December 1997; vice president and corporate
treasurer, AEFC, since December 1997; controller, American Express Technologies
- - Financial Services, AEFC, from July 1997 to December 1997; controller, Risk
Management Products, AEFC, from May 1994 to July 1997; director of finance and
analysis, Corporate Treasury, AEFC, from June 1990 to May 1994.
William A. Stoltzmann
Born in 1948
Vice president, general counsel and secretary since 1989; vice president and
assistant general counsel, AEFC, since November 1985.
*The address for all of the directors and principal officers is: IDS Tower 10,
Minneapolis, MN 55440-0010.
Executive compensation
Executive officers of IDS Life also may serve one or more affiliated companies.
The following table reflects cash compensation paid to the five most highly
compensated executive officers as a group for services rendered in 1996 to IDS
Life and its affiliates. The table also shows the total cash compensation paid
to all executive officers of IDS Life, as a group, who were executive officers
at any time during 1996.
<PAGE>
<TABLE>
<CAPTION>
Name of individual or number in
group Position held Cash compensation
- ------------------------------------ ----------------------------------- -----------------------------------
<S> <C> <C>
Five most highly compensated $3,448,681
executive officers as a group:
James A. Mitchell Chairman of the Board and Chief
Executive Officer
Richard W. Kling President
Barry J. Murphy Exec. Vice President, Client
Service
Stuart A. Sedlacek Exec. Vice President, Assured
Assets
Lorraine R. Hart Vice President, Investments
All executive officers as a group $4,923,385
(10)
</TABLE>
Security ownership of management
IDS Life's directors and officers do not beneficially own any outstanding shares
of stock of IDS Life. All of the outstanding shares of stock of IDS Life are
beneficially owned by its parent, American Express Financial Corporation. The
percentage of shares of American Express Financial Corporation owned by any
director, and by all directors and officers of IDS Life as a group, does not
exceed 1% of the class outstanding.
Legal proceedings and opinion
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which IDS Life does business involving insurers' sales
practices, alleged agent misconduct, failure to properly supervise agents, and
other matters. IDS Life, like other life and health insurers, from time to time
is involved in such litigation. On December 13, 1996, an action of this nature
was commenced in Minnesota state court. The plaintiffs purport to represent a
class consisting of all persons who replaced existing IDS Life policies with new
IDS Life policies from and after January 1, 1985. Plaintiffs seek damages in an
unspecified amount and also seek to establish a claims resolution facility for
the determination of individual issues. IDS Life filed an answer to the
Complaint on February 18, 1997. A similar action involving the replacement of
existing IDS Life insurance policies and annuity contracts was filed in the same
court on March 21, 1997.
IDS Life believes it has meritorious defenses to these and other actions arising
in connection with the conduct of its business activities and intends to defend
them vigorously. IDS Life believes that it is not a party to, nor are any of its
properties the subject of, any pending legal proceedings which would have a
material adverse effect on its consolidated financial condition.
<PAGE>
Legal matters in connection with federal laws and regulations affecting the
issue and sale of the contracts described in this prospectus and the
organization of IDS Life, its authority to issue contracts under Minnesota law
and the validity of the forms of the contracts under Minnesota law have been
passed on by the general counsel of IDS Life.
Experts
The consolidated financial statements of IDS Life Insurance Company at December
31, 1996, and 1995, and for each of the three years in the period ended December
31, 1996, appearing in this prospectus and registration statement have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and in the registration statement, and is
included in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
<PAGE>
Appendix A
Partial surrender illustration
Involving a market value adjustment
Annuity assumptions:
Single payment $10,000
Guarantee period 10 years
Guarantee rate (ig) 6% effective annual yield
End of contract year accumulation
values
Contract year if no surrenders
- ------------------------------------ -----------------------------------
1 $ 10,600.00
2 11,236.00
3 11,910.16
4 12,624.77
5 13,382.26
6 14,185.19
7 15,036.30
8 15,938.48
9 16,894.79
10 17,908.48
Partial surrender assumptions:
On the first day of your 4th contract year you request a partial surrender of:
Example I -- $2,000 of your accumulation value
Example II -- A $2,000 net surrender check
The accumulation value surrendered is subject to a market value adjustment.
The current rate (ic) for applicable new sales and renewals = 5.5%
The number of full years left in your guarantee period (N) = 7
The number of fractional years left in your guarantee period (t) = 0
Example I - $2,000 of accumulation value surrendered
What will be your market value adjustment amount?
The market adjusted value of your $2,000 partial surrender will be:
Renewal value of accumulation value surrendered
-----------------------------------------------
(1 + ic + .0025)(N + t)
<PAGE>
= $2,000 (1 + ig)7
----------------
(1 + ic + .0025)7
= $2,000 (1.06)7
--------------
(1.0575)7
= $2,033.33
The market value adjustment = the market adjusted value surrendered less the
accumulation value surrendered
$2,033.33 - $2,000 = $33.33
(NOTE: This market value adjustment is positive. In other cases the market value
adjustment may be negative.)
What net amount will you receive?
Your contract's accumulation value will decrease by $2,000 and we will send you
a check for:
Accumulation value surrendered $2,000.00
Market value adjustment 33.33
Net surrender amount $2,033.33
Example II - $2,000 net surrender check requested
What will be the accumulation value surrendered?
Tell us if you want a specific net surrender check amount. We will work
backwards using an involved formula to determine how much accumulation value
must be surrendered to result in a net check to you for a specific amount. For a
$2,000 net check to you, the formula results in $1,967.21 of accumulation value
to be surrendered.
What will be your market value adjustment amount?
The market adjusted value is:
Renewal value of accumulation value surrendered
-----------------------------------------------
(1 + ic + .0025)(N + t)
= $1,967.21 (1 + ig)7
-------------------
(1 + ic + .0025)7
= $1,967.21 (1.06)7
-----------------
(1.0575)7
= $2,000.00
<PAGE>
The market value adjustment = the market adjusted value surrendered less the
accumulation value surrendered
$2,000.00 - $1,967.21 = $32.79
(NOTE: This market value adjustment is positive. In other cases the market value
adjustment may be negative.)
What net amount will you receive?
Your contract's accumulation value will decrease by $1,967.21 and we will send
you a check for:
Accumulation value surrendered $1,967.21
Market value adjustment 32.79
- ----------------------------------------------------------
Net surrender amount $2,000.00
<PAGE>
Appendix B
Market value adjustment illustration
Annuity assumptions:
Single payment $50,000
Guarantee period 10 years
Guarantee rate 6% effective annual yield
Market adjustment assumptions: These examples show how the market value
adjustment may affect your contract values. The surrenders in these examples
occur one year after the contract date. There are no previous surrenders.
The accumulation value at the end of one year is $53,000. If there aren't any
surrenders, the renewal value at the end of the 10 year guarantee period will be
$89,542.38.
The market value adjustment is based on the rate we are crediting (at the time
of your surrender) on new contracts with the same length guarantee period as the
time remaining in your guarantee period. After one year, you have 9 years left
of your 10 year guarantee period.
Example I shows a downward market value adjustment. Example II shows an upward
market value adjustment.
Market adjusted value formula:
Market adjusted value = (Renewal value)
--------------------
(1 + ic + .0025)(N + t)
Renewal value -- The accumulation value at the end of the current
guarantee period
ic -- The current interest rate offered for new contract
sales and renewals for the number of years remaining
in the guarantee period
N -- The number of complete contract years to the end of
the current guarantee period
t -- The fraction of the contract year remaining to the
end of the contract year
Example I - Downward market value adjustment
A surrender results in a downward market value adjustment when interest rates
have increased. Assume after 1 year, we are now crediting 6.5% for a new
contract with a 9 year guarantee period. If you fully surrender, the market
adjusted value would be:
Renewal value
--------------------
(1 + ic + .0025)(N + t)
<PAGE>
= $89,542.38
------------------
(1 + .065 + .0025)9
= $49,741.36
The market value adjustment is a $3,258.64 reduction of the accumulation value:
($3,258.64) = $49,741.36 - $53,000
If you surrendered half of your contract instead of all, the market adjusted
value of the surrendered portion would be one-half that of the full surrender:
$24,870.68 = $44,771.19
------------------
(1 + .065 + .0025)9
Example II - Upward market value adjustment
A surrender results in an upward market value adjustment when interest rates
have decreased more than .25%. Assume after 1 year, we are now crediting 5.5%
for a new contract with a 9 year guarantee period. If you fully surrender, the
market adjusted value would be:
Renewal value
---------------------
(1 + ic + .0025)(N + t)
= $89,542.38
------------------
(1 + .055 + .0025)9
= $54,138.38
The market value adjustment is a $1,138.38 increase of the accumulation value:
$1,138.38 = $54,138.38 - $53,000
If you surrendered half of your contract instead of all, the market adjusted
value of the surrendered portion would be one-half that of the full surrender:
$27,069.19 = $44,771.19
------------------
(1 + .055 + .0025)9
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The expenses of the issuance and distribution of the interests in the
IDS Life Account MGA of IDS Life Insurance Company to be registered, other than
commissions on sales of the Contracts, are to be borne by the Registrant.
Item 14. Indemnification of Directors and Officers
Section 300.083 of Minnesota Law provides in part that a corporation
organized under such law shall have power to indemnify anyone made, or
threatened to be made, a party to a threatened, pending or completed proceeding,
whether civil or criminal, administrative or investigative, because he is or was
a director or officer of the corporation, or served as a director or officer of
another corporation at the request of the corporation. Indemnification in such a
proceeding may extend to judgments, penalties, fines and amounts paid in
settlement, as well as to reasonable expenses, including attorneys' fees and
disbursements. In a civil proceeding, there can be no indemnification under the
statute, unless it appears that the person seeking indemnification has acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation and its shareholders and unless such
person has received no improper personal benefit; in a criminal proceeding, the
person seeking indemnification must also have no reasonable cause to believe his
conduct was unlawful.
Article IX of the By-laws of IDS Life Insurance Company requires IDS
Life Insurance Company to indemnify directors and officers to the extent
indemnification is permitted as stated by the preceding paragraph, and contains
substantially the same language as the above-mentioned Section 300.083.
Article IX, paragraph (2), of the By-laws of IDS Life Insurance Company
provides as follows:
"Section 2. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party, by reason of the fact that he is or
was a director, officer, employee or agent of this Corporation, or is or was
serving at the direction of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, to any threatened, pending or completed action, suit or proceeding,
wherever brought, to the fullest extent permitted by the laws of the State of
Minnesota, as now existing or hereafter amended, provided that this Article
shall not indemnify or protect any such director, officer, employee or agent
against any liability to the Corporation or its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of his duties or by reason of his reckless
disregard of his obligations and duties."
The parent company of IDS Life Insurance Company maintains an insurance
policy which affords liability coverage to directors and officers of IDS Life
Insurance Company while acting in that capacity. IDS Life Insurance Company pays
its proportionate share of the premiums for the policy.
<PAGE>
Insofar as indemnification for liabilities 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 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.
Item 15. Recent Sales of Unregistered Securities
None
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
1. - 2. Not Applicable.
3.1 Copy of Certificate of Incorporation of IDS Life Insurance Company filed
electronically as Exhibit 3.1 to Post-Effective Amendment No. 5 to
Registration Statement No. 33-28976 is incorporated herein by reference.
3.2 Copy of the Amended By-laws of IDS Life Insurance Company filed
electronically as Exhibit 3.2 to Post-Effective Amendment No. 5 to
Registration Statement No. 33-28976 is incorporated herein by reference.
3.3 Copy of Resolution of the Board of Directors of IDS Life Insurance Company,
dated May 5, 1989, establishing IDS Life Account MGA filed electronically
as Exhibit 3.3 to Post-Effective Amendment No. 5 to Registration Statement
No. 33-28976 is incorporated herein by reference.
4.1 Copy of Non-tax qualified Group Annuity Contract, Form 33111, is filed
electronically herewith.
4.2 Copy of Non-tax qualified Group Annuity Certificate, Form 33114, is filed
electronically herewith.
4.3 Copy of Tax qualified Group Annuity Contract, Form 33112, is filed
electronically herewith.
4.4 Copy of Tax qualified Group Annuity Certificate, Form 33115, is filed
electronically herewith.
<PAGE>
4.5 Copy of Group IRA Annuity Contract, Form 33113, is filed electronically
herewith.
4.6 Copy of Group IRA Annuity Certificate, Form 33116, is filed electronically
herewith.
5. Opinion of Counsel regarding legality of Contracts to be filed by
amendment.
6. - 21. Not Applicable.
22. Copy of List of Subsidiaries filed electronically as Exhibit 22 to
Post-Effective Amendment No. 8 to Registration Statement No. 33-28976 is
incorporated herein by reference.
23. Not Applicable.
24. Consent of Independent Auditors to be filed by amendment.
25. Power of Attorney, dated August 19, 1997, is filed electronically
herewith.
(b) Financial Statement Schedules
27.1 Financial Statement Schedules to be filed by amendment.
27.2 Financial Data Schedule to be filed by amendment.
Item 17. Undertakings
A. The Registrant undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section 10(a)
(3) of the Securities Act of 1933,
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement,
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement,
<PAGE>
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such
securities at that time may be deemed to be the initial bona
fide offering thereof, and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The Registrant represents that it is relying upon the no-action assurance
given to the American Council of Life Insurance (pub. avail. Nov. 28,
1988). Further, the Registrant represents that it has complied with the
provisions of paragraphs (1) - (4) of the no-action letter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in this City of Minneapolis, and State of
Minnesota on the 19th day of December, 1997.
IDS Life Insurance Company
(Registrant)
By /s/James A. Mitchell*
James A. Mitchell, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated on the 19th day of December, 1997.
Signature Title
/s/ James A. Mitchell* Chairman of the Board
James A. Mitchell and Chief Executive Officer
/s/ Richard W. Kling* Director and President
Richard W. Kling
/s/ Jeffrey S. Horton Vice President and Treasurer
Jeffrey S. Horton
/s/ David R. Hubers* Director
David R. Hubers
/s/ Paul F. Kolkman* Director and Executive Vice President
Paul F. Kolkman
/s/ Barry J. Murphy* Director and Executive Vice
Barry J. Murphy President, Client Service
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
*Signed pursuant to Power of Attorney dated August 19, 1997, filed
electronically herewith for IDS Life Insurance Company (IDS Life Account MGA).
By:
____________________________________
Bruce A. Kohn
<PAGE>
IDS Life Insurance Company
IDS Life Account MGA
Portfolio Guaranteed Term Annuity
EXHIBIT INDEX
Exhibit 4.1: Copy of Non-tax qualified Group Annuity Contract, Form 33111.
Exhibit 4.2: Copy of Non-tax qualified Group Annuity Certificate, Form 33114.
Exhibit 4.3: Copy of Tax qualified Group Annuity Contract, Form 33112.
Exhibit 4.4: Copy of Tax qualified Group Annuity Certificate, Form 33115.
Exhibit 4.5: Copy of Group IRA Annuity Contract, Form 33113.
Exhibit 4.6: Copy of Group IRA Annuity Certificate, Form 33116.
Exhibit 25: Power of Attorney, dated August 19, 1997.
<PAGE>
- --------------------------------------------------------------------------------
=====================================================================
GROUP ANNUITY CONTRACT
=====================================================================
- --------------------------------------------------------------------------------
o Purchase payments are payable in a single sum.
o Annuity payments begin on the settlement date.
o This contract is nonparticipating. Dividends are not payable.
Contract Holder: ABC Corporation, Trustee
Contract Number: 33111-GP1
Contract Date: July 1, 1997
IDS Life Insurance Company, herein called the Company, will pay the benefits
provided by this contract in accordance with and subject to all provisions of
this contract.
We issue this contract in consideration of the application of the
contractholder.
THE GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA WHICH MAY
RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN CASH SURRENDER BENEFITS.
Surrenders are available without market value adjustment on the last day of each
certificate guarantee period.
Signed for and issued by IDS Life Insurance Company, Minneapolis, Minnesota, as
of the contract date shown above.
President:
[GRAPHIC OMITTED]
Richard W. Kling
Secretary:
[GRAPHIC OMITTED]
William A. Stoltzmann
[GRAPHIC OMITTED]
AMERICAN EXPRESS
Financial Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
33111
<PAGE>
CONTRACT DATA
GROUP CONTRACTHOLDER: ABC Corporation, Trustee
GROUP CONTRACT NUMBER: 33111-GP1
SURRENDER CHARGE: There are no surrender charges.
MARKET VALUE ADJUSTMENT: Applied at any time other than the
last day of a Guaranteed Period or
for death benefits.
GUARANTEE PERIODS: 1-10 Years
<PAGE>
==========================================================
Guide to Contract Provisions
==========================================================
Definitions Important words and meanings/Pages 4-5
The Annuity Contract Entire contract; Modification; Incontestability;
Benefits based on incorrect data/Page 6
Contractholder and Contractholder; Owner's rights; Change
Owner of ownership; Assignment/Page 7
Beneficiary and Payments to Who is the beneficiary; Change of
Beneficiary beneficiary; Payments to beneficiary;
Pre-election of beneficiary plans/Pages 8-9
Purchase Payment Payment of the purchase payment/Page 9
Accumulation Value, How the accumulation value is
Cash Surrender Value, determined; Surrender of the certificate for
and Market Adjusted Value the cash surrender value; How the market
adjusted value is determined; Annual
statement of value/Pages 10-11
Annuity Payment Plans When annuity payments begin; Different ways to
receive annuity payments/Page 12
Table of Settlement Rates Table showing monthly annuity payment amounts
for the various plans/Page 13
<PAGE>
==========================================================
Definitions
==========================================================
The following words are used often in this contract. When we use these words,
this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
you, your, owner
The owner of the certificate. The owner may be someone other than the annuitant.
The owner may be changed as provided in this contract.
we, our, us
IDS Life Insurance Company
certificate date
It is the date from which certificate anniversaries, certificate years, and
certificate months are determined. The certificate date is shown under
Certificate Data, in the certificate.
certificate anniversary
The same day and month as the certificate date each year that the certificate
remains in force.
initial guarantee period
The period during which the initial guarantee rate will be credited. It is shown
under certificate data, in the certificate.
initial guarantee rate
The rate of interest credited to the purchase payment as described in the
accumulation value section. It is shown under certificate data, in the
certificate.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee period. It is
determined in accordance with the terms of the contract.
renewal guarantee rate
The rate of interest credited to the renewal value as described in the
accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on a certificate
anniversary.
current rate
The applicable interest rate contained in a schedule of rates established by us
from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted for any
surrenders.
market adjusted value
The accumulation value adjusted by the market adjusted value formula.
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value is the cash surrender value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
<PAGE>
written request
A request in writing signed by the owner and delivered to us at our corporate
office.
settlement
If the settlement date is not the last day of a guarantee period, settlement is
the application of the market adjusted value of a certificate to provide annuity
payments. On the last day of a guarantee period, settlement is the application
of the accumulation value of a certificate to provide annuity payments.
settlement date
The date on which annuity payments are to begin under a certificate. This date
may be changed as provided in the contract.
<PAGE>
==========================================================
The Annuity Contract
==========================================================
What is the entire contract?
This Group Contract, including any endorsements or riders, and the master
application of the Group Contractholder is the entire contract between the
Contractholder and us.
No one except one of our corporate officers (President, Vice President,
Secretary, or Assistant Secretary) can change or waive any of our rights or
requirements under the contract. That person must do so in writing. None of our
agents or other persons has the authority to change or waive any of our rights
or requirements under the contract.
Can this contract be modified?
This contract may be modified at any time by written agreement between the
contractholder and us. The modification must be signed by one of our corporate
officers (President, Vice President, Secretary or Assistant Secretary). No
modification will affect the amount or term of any certificates issued before
the effective date of the modification unless it is required to conform the
contract to, or give the contractholder the benefit of, any Federal or State
statutes.
When will the certificate become incontestable?
The certificate is incontestable from its date of issue.
What if benefits are based on incorrect data?
If the amount of benefits is determined by data as to a person's age or sex that
is incorrect, benefits will be recalculated on the basis of the correct data.
Any underpayments made by us will be made up immediately. Any overpayments made
by us will be subtracted from the future payments under this contract and/or as
otherwise legally permissible.
What federal and state laws govern the contract?
This contract is intended to qualify as an annuity contract for Federal income
tax purposes. To that end, the provisions of this contract are to be interpreted
to ensure or maintain such tax qualification, despite any other provisions to
the contrary. We reserve the right to amend this contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
The contract is governed by the law of the state in which it is delivered. The
values and benefits of the certificates are at least equal to those required by
such state.
<PAGE>
==========================================================
Contractholder and Owner
==========================================================
Who is the Group Contractholder?
The group contractholder is listed on the cover page of this contract. The
contract provides for a successor contractholder. In the event the
contractholder should merge with another corporation, the new corporation would
be the group contractholder.
What are the rights of the owners of the certificates?
As long as the annuitant is living and unless otherwise provided in this
contract, the owner may exercise all rights and privileges in this contract or
allowed by us.
How can the ownership be changed on the certificate?
The owner can change the ownership of the certificate by written request on a
form approved by us. The change must be made while the annuitant is living. Once
the change is recorded by us, it will take effect as of the date of the request,
subject to any action taken or payment made by us before the recording.
Can the owner assign the certificate as collateral?
Yes. While the annuitant is living, the owner can assign the certificate or any
interest in it. The owner's interest and the interest of any beneficiary is
subject to the interest of the assignee. An assignment is not a change of
ownership and an assignee is not an owner as these terms are used in the
contract. Any amounts payable to the assignee will be paid in a single sum.
A copy of any assignment must be submitted to us at our corporate office. Any
assignment is subject to any action taken or payment made by us before the
assignment was recorded at our corporate office. We are not responsible for the
validity or effect - tax or otherwise - of any assignment.
<PAGE>
==============================================
Beneficiary and Payments
to Beneficiary
==============================================
What death benefits are paid if the annuitant or certificate owner dies before
settlement?
If the annuitant or owner dies before settlement while the certificate is in
force, we will pay the beneficiary the accumulation value.
The above described payment will also be made upon the first to die if ownership
is in a joint tenancy except where spouses are joint owners with rights of
survivorship and the surviving spousal joint owner elects to continue the
certificate. For joint spousal ownership with rights of survivorship, the
surviving spouse is deemed the sole beneficiary superseding any other
beneficiary designation. The beneficiary may elect to receive payment any time
within 5 years after the date of death of the annuitant.
Unless the owner has provided otherwise during the lifetime of the annuitant,
the beneficiary may elect by written request to have the amount payable applied
under the terms of the annuity payment plans section of the contract provided:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. payments begin no later than one year after the date of death; and
3. the plan provides equal or substantially equal payments over a period which
does not exceed the life of the beneficiary or the life expectancy of the
beneficiary.
In this event, the references to "annuitant" in the annuity payment plans
section of the contract will apply to the beneficiary.
Can you pre-elect an annuity payment plan for a beneficiary?
During their lifetime the owner may elect how the death benefit described herein
is to be paid under the certificate in the event of death before the settlement
date. Any such election must be made on a form satisfactory to us. We must
receive the form in our corporate office prior to the first to die of the owner
or annuitant. In this event the death benefit shall be payable as so elected by
the owner, rather than the beneficiary. If for any reason such election does not
satisfy Internal Revenue Code section 72 distribution requirements, the election
will be void and the beneficiary will then be permitted to elect payment
pursuant to the provisions of the contract.
To whom are the death benefits payable?
Benefits will be paid equally to all primary beneficiaries surviving the
annuitant. If none survive, proceeds will be paid equally to all contingent
beneficiaries surviving the annuitant. If no beneficiary survives the annuitant,
we will pay the benefits to the owner, if living, otherwise to the owner's
estate.
Who is the beneficiary?
Beneficiaries are those you name, in a form satisfactory to us, to receive the
benefits of this contract if the owner or annuitant dies while this contract is
in force. The owner may change the beneficiary as provided below. If the
beneficiary has been changed, we will pay any benefits in accordance with the
owner's last change of beneficiary request.
How does the owner change the beneficiary?
The owner may change the beneficiary any time while the annuitant is living by
satisfactory written request to us. Once the change is recorded by us, it will
take effect as of the date of the owner's request, subject to any action taken
or payment made by us before the recording.
What are the rights of the beneficiary?
If the death benefit under this contract becomes payable to a beneficiary
(payee) under an Annuity Payment Plan, that payee shall have the right to name a
beneficiary. Any such request from the payee must be made on a form satisfactory
to us.
<PAGE>
What is the spouse's option to continue the certificate?
If the owner's death occurs prior to the settlement date, the owner's spouse, if
designated as sole beneficiary, may elect in writing to forego receipt of the
death benefit and instead continue the certificate in force as its owner. The
election by the spouse must be made within 60 days after we receive due proof of
death.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any, will be as
provided in the annuity payment plan then in effect.
- --------------------------------------------------------------------------------
==============================================
Purchase Payment
==============================================
What is the purchase payment for a certificate?
The purchase payment for a certificate is shown under certificate data on the
certificate. It is payable to us on or before we deliver the certificate. It
must be paid or mailed to us at our corporate office or to an authorized agent.
<PAGE>
- --------------------------------------------------------------------------------
==============================================
Accumulation Value,
Cash Surrender Value,
Market Adjusted Value
==============================================
How is the accumulation value determined?
On the certificate date the accumulation value of the certificate is the
purchase payment. Thereafter interest accrues from day to day for the guarantee
periods initially at the rate shown under certificate data in the certificate
and later at the renewal rate(s). These rates represent an effective annual
yield. At no time while the certificate is in force shall interest accrue at a
rate less than 3% compounded annually. The accumulation value will be adjusted
for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation value of the
certificate at the time that any applicable premium taxes not previously
deducted are payable.
If a tax is payable at the time of the purchase payment and we choose to not
deduct it at that time, we further reserve the right to deduct it at a later
date.
How are renewal guarantee periods determined?
At the end of any guarantee period a renewal guarantee period will begin. We
will notify the owner in writing 45 days before the renewal guarantee period.
Each renewal guarantee period will be one year unless the owner elects a
different length from those offered at the time. We must receive the owner's
written request at least 15 days before the renewal date. The renewal guarantee
period may never extend beyond the settlement date.
The accumulation value on the renewal date will be equal to the accumulation
value at the end of the guarantee period just ending. This value will earn
interest at the renewal guarantee rate. Upon written request within 45 days of
the renewal guarantee period, we will notify the owner of the renewal guarantee
rate then in effect for certificates renewing at that time. The actual renewal
guarantee rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date before the end
of the current guarantee period adjusted by a formula. The formula adjustment
reflects the relationship between:
1. the interest rate we are then crediting for new certificate sales and
renewals (Form 33114) for the time remaining in the certificate's current
guarantee period; and
2. the guaranteed interest rate applicable to the certificate's current
guarantee period.
The market adjusted value may be more or less than the accumulation value.
The market adjusted value formula is as follows:
market adjusted value = renewal value
-----------------------
(N + t)
(1 + ic + .0025)
where: renewal value = the accumulation value at the end of the owner's
current guarantee period.
N = the number of complete certificate years to
the end of the owner's guarantee period.
t = the fraction of the certificate year remaining
to the end of the owner's certificate year (for
example, if 180 days remain in a 365 day
certificate year, t would be .493)
ic = the current rate offered for new certificate
sales and renewals (Form 33114) for the number
of years left in the owner's guarantee period
(straight line interpolation between whole year
rates). If N is zero, ic is the rate for one
year guarantee periods.
The market value adjustment is as follows:
market value adjustment =
market adjusted value - accumulation value
There will be no market value adjustment made on the last day of a guarantee
period.
Can the owner request surrender of any amounts under the certificate before
settlement?
Yes. By written request to us and subject to the rules below the owner may:
1. surrender the certificate for the total cash surrender value;
2. partially surrender the certificate for a part of the cash surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment will be
deducted from the accumulation value of the certificate on the date of
surrender. The owner may surrender all or a portion of the cash surrender value.
However, the accumulation value that remains after a partial surrender must be
at least $2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to the owner within seven days of
the receipt of the owner's written request.
Upon surrender of the certificate for the total cash surrender value, the
certificate will terminate. We may require that the owner return the certificate
to our corporate office before we pay the total cash surrender value.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period not to exceed
6 months from the date we receive the owner's surrender request or the period
permitted by state insurance law, if less. If we defer payment more than 30
days, we will pay annual interest of at least 3% on the amount deferred.
Will the owner receive information about the certificate values?
Yes. At least once a year we will send the owner a statement showing both the
accumulation value and the cash surrender value of the certificate. The
statement will specify the market value adjustment used to determine the cash
surrender value. This statement will be based on any laws or regulations that
apply.
We will also notify the owner 45 days before the end of a guarantee period
concerning renewal periods available and the owner's right to surrender without
a market value adjustment on the last day of the guarantee period.
<PAGE>
==============================================
Annuity Payment Plans
==============================================
When will annuity payments begin?
The first payment will be made as of the settlement date. Before payments begin
we will require satisfactory proof that the annuitant is alive. We may also
require that the owner exchange the certificate for a supplemental contract
which provides the annuity payments.
Can the owner change the settlement date?
Yes. The owner must tell us the new date by written request. However, the
settlement date cannot be later than the later of:
1. the certificate anniversary nearest the annuitant's 85th birthday; or
2. the 10th certificate anniversary.
Also, if the owner selects a new date, it must be at least 30 days after we
receive the owner's written request at our corporate office.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call these plans.
Plan A - This provides monthly annuity payments for the lifetime of the
annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of at
least five, ten or fifteen years. The owner must select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain number
of months. We determine the number of months by dividing the market adjusted
value applied under this plan by the amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly payments will
be paid for the lifetime of the annuitant and a joint annuitant. When either the
annuitant or joint annuitant dies we will continue to make monthly payments for
the lifetime of the survivor. No payments will be paid after the death of both
the annuitant and joint annuitant.
Plan E - This provides monthly fixed dollar annuity payments for a period of
years. The period of years may be no less than 10 nor more than 30.
What are the requirements for selecting a plan?
By written request to us at least 30 days before the settlement date, the owner
may select the plan or change to another plan. If at least 30 days before the
settlement date we have not received at our corporate office the owner's written
request to select a plan, we will make payments according to Plan B with
payments guaranteed for ten years.
If the amount to be applied to a plan is not at least $2,000, or if payments are
to be made to other than a natural person, we have the right to make a lump sum
payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally endorsed by
the payee or payees as well as the annuitant (or joint annuitant under plan D).
If the annuitant or joint annuitant does not endorse the check, other evidence
must be furnished to show that the annuitant or joint annuitant is still alive.
<PAGE>
==============================================
Table of Settlement Rates
==============================================
What will be the amount of the monthly annuity payments?
If the settlement date is the last day of a guarantee period, the amount applied
to provide a payment will be the accumulation value on that date. The market
adjusted value is applied if the settlement date is not the last day of a
guarantee period. The amount applied to provide a payment will be the
accumulation value on the settlement date. The amount of each monthly annuity
payment for each $1,000 applied under any payment plan will be based on our
Table of Settlement Rates in effect at the time of the first payment. The
amounts will not be less than those shown in the table below.
The amount of such payments under plans A, B, and C will depend on the sex and
the adjusted age of the annuitant on the settlement date. The amount of such
payments under plan D will depend on the sex and the adjusted age of the
annuitant and the joint annuitant on the settlement date.
Adjusted age means the age on the annuitant's nearest birthday minus an
"adjustment" based on the calendar year of the birth of the annuitant as
follows:
Calendar Calendar
Year of Year of
Annuitant's Adjust- Annuitant's Adjust-
Birth ment Birth ment
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Amount of Each Monthly Annuity Payment Per $1,000 Applied
- --------------------------------------------------------------------------------------------------------------
Plan A Plan B Plan C Plan D - Joint and Survivor
Adjusted Age of Female Joint Annuitant
- --------------------------------------------------------------------------------------------------------------
Life 5 Years 10 Years 15 Years With Adj.
Adj. Income Certain Certain Certain Refund Male 10 Years 5 Years Same 5 Years 10 Years
Age* M F M F M F M F M F Age* Younger Younger Age Older Older
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.42 4.10 55 3.51 3.69 3.88 4.06 4.23
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.86 4.48 60 3.76 3.99 4.24 4.49 4.72
65 6.10 5.35 6.03 5.32 5.81 5.22 5.46 5.05 5.43 4.97 65 4.07 4.38 4.72 5.07 5.39
66 6.29 5.51 6.21 5.47 5.96 5.36 5.56 5.16 5.56 5.08 66 4.15 4.48 4.84 5.21 5.55
67 6.50 5.67 6.41 5.63 6.11 5.50 5.66 5.26 5.70 5.20 67 4.23 4.58 4.97 5.36 5.73
68 6.73 5.85 6.62 5.80 6.28 5.65 5.76 5.37 5.85 5.33 68 4.31 4.69 5.10 5.53 5.92
69 6.97 6.04 6.84 5.98 6.44 5.80 5.86 5.49 6.00 5.47 69 4.40 4.80 5.25 5.70 6.12
70 7.23 6.25 7.07 6.18 6.61 5.96 5.96 5.60 6.16 5.61 70 4.50 4.93 5.40 5.89 6.34
71 7.51 6.47 7.32 6.39 6.78 6.14 6.05 5.71 6.33 5.76 71 4.60 5.06 5.57 6.10 6.57
72 7.80 6.71 7.58 6.62 6.96 6.31 6.14 5.83 6.51 5.93 72 4.71 5.20 5.75 6.31 6.82
73 8.12 6.97 7.85 6.86 7.14 6.50 6.23 5.94 6.70 6.10 73 4.83 5.35 5.94 6.55 7.09
74 8.45 7.26 8.14 7.12 7.32 6.69 6.31 6.04 6.90 6.28 74 4.95 5.51 6.15 6.80 7.37
75 8.82 7.56 8.44 7.39 7.49 6.89 6.38 6.14 7.11 6.48 75 5.08 5.68 6.37 7.07 7.68
76 9.21 7.90 8.76 7.69 7.67 7.09 6.48 6.24 7.33 6.68 76 5.22 5.87 6.61 7.36 8.01
77 9.62 8.26 9.09 8.01 7.84 7.29 6.51 6.33 7.56 6.90 77 5.37 6.07 6.87 7.67 8.36
78 10.07 8.65 9.44 8.34 8.01 7.49 6.57 6.41 7.80 7.13 78 5.54 6.29 7.15 8.01 8.74
79 10.55 9.07 9.80 8.69 8.17 7.69 6.62 6.48 8.05 7.38 79 5.71 6.52 7.45 8.37 9.14
80 11.06 9.53 10.17 9.07 8.33 7.89 6.66 6.55 8.32 7.64 80 5.90 6.78 7.77 8.76 9.57
81 11.61 10.03 10.55 9.46 8.48 8.08 6.70 6.61 8.60 7.91 81 6.10 7.05 8.12 9.17 10.02
82 12.19 10.57 10.94 9.87 8.61 8.26 6.73 6.66 8.89 8.21 82 6.32 7.34 8.49 9.61 10.51
83 12.81 11.16 11.33 10.30 8.74 8.43 6.76 6.70 9.20 8.51 83 6.55 7.65 8.90 10.08 11.02
84 13.46 11.79 11.72 10.74 8.86 8.59 6.79 6.74 9.52 8.83 84 6.80 7.99 9.33 10.58 11.56
85 14.16 12.48 12.12 11.19 8.97 8.74 6.81 6.77 9.85 9.18 85 7.07 8.36 9.78 11.11 12.13
90 18.25 16.68 14.04 13.42 9.36 9.26 6.86 6.85 11.81 11.11 90 8.79 10.65 12.57 14.22 15.63
- --------------------------------------------------------------------------------------------------------------
*Adjusted age of annuitant. M = Male F = Female
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The table above is based on the "1983 Individual Annuitant Mortality Table A"
assuming an interest rate of 3% per year compounded annually. Settlement rates
for any age, or any combination of age and sex not shown above, will be
calculated on the same basis as those rates shown in the table above. Such rates
will be furnished by us upon request. Amounts shown in the Table below are based
on an assumed interest rate of 3% per year compounded annually.
- --------------------------------------------------------------------------------
Plan E Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000
Applied
- --------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------------------------------------------------------------------
<PAGE>
==========================================================
Group Annuity
Contract
==========================================================
o Purchase payment is payable in a single sum.
o Annuity payments to begin on the settlement date.
o The certificate is nonparticipating. Dividends are not payable.
- --------------------------------------------------------------------------------
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
==========================================================
Group Annuity
Certificate
==========================================================
- - Purchase payment is payable in a single sum.
- - Annuity payments to begin on the settlement date.
- - This contract is nonparticipating. Dividends are not payable.
This annuity certificate summarizes the provisions of the Group Annuity Contract
specified on the enrollment application. It does not amend or modify any of the
provisions of the Group Contract. All rights, privileges and benefits are
governed by the provisions of the Group Contract. The Group Contract may be
inspected by the certificate owner or annuitant at the Contractholder's office
during office hours.
If the annuitant is living on the Settlement Date, we will begin to pay you
monthly annuity payments. Any payments made by us are subject to the Terms of
the Group contract.
We issue this certificate in consideration of your enrollment application, and
payment of the single purchase payment.
THE GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA WHICH MAY
RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN CASH SURRENDER BENEFITS.
Surrenders are available without market value adjustment on the last day of each
certificate period.
Signed for and issued by IDS Life Insurance Company, Minneapolis, Minnesota, as
of the certificate date shown below.
President:
[GRAPHIC OMITTED]
Richard W. Kling
Secretary:
[GRAPHIC OMITTED]
William A. Stoltzmann
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
ANNUITANT: John Doe
CERTIFICATE NUMBER: XXX-XXXXXX
CERTIFICATE DATE: March 18, 1991
CERTIFICATE SETTLEMENT DATE: March 18, 2021
33114
<PAGE>
==========================================================
Guide to Certificate Provisions
==========================================================
Definitions Important words and meanings/Page 3
The Annuity Contract Entire contract; Modification; Incontestability;
Benefits based on incorrect data/Page 4
Owner Owner's rights; Change of ownership;
Assignment/Page 4
Purchase Payment Payment of the purchase payment/Page 5
Beneficiary and Payments to Who is the beneficiary; Change of
Beneficiary beneficiary; Payments to beneficiary;
Pre-election of beneficiary plans/Page 6
Accumulation Value, How the accumulation value is
Cash Surrender Value, and determined; Surrender of the certificate for
Market Adjusted Value the cash surrender value; How the market
adjusted value is determined; Annual
statement of value/Pages 7-8
Annuity Payment Plans When annuity payments begin; Different
ways to receive annuity payments/Page 9
Table of Settlement Rates Table showing monthly annuity payment
amounts for the various plans/Page 10
<PAGE>
CERTIFICATE DATA
GROUP CONTRACTHOLDER: ABC Corporation GROUP
as Trustee of the CONTRACT
Market Value Annuity Group Trust NUMBER: 33111-GP1
GROUP ANNUITY CERTIFICATE OWNER: John Doe
PURCHASE PAYMENT: $100,000.00
INITIAL GUARANTEE RATE: 8.00%
INITIAL GUARANTEE PERIOD: 5 Years
SURRENDER CHARGE: There are no surrender charges.
MARKET VALUE ADJUSTMENT: Applied at any time other than the last
day of a Guarantee Period or
for death benefits.
ACCUMULATION VALUE AT END OF INITIAL GUARANTEE PERIOD: $146,932.81
ANNUITANT: John Doe
CERTIFICATE NUMBER: XXX-XXXXXX
CERTIFICATE DATE: March 18, 1991
CERTIFICATE SETTLEMENT DATE: March 18, 2021
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
==========================================================
Definitions
==========================================================
The following words are used often in this certificate. When we use these words,
this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
you, your, owner
The owner of this certificate. The owner may be someone other than the
annuitant. The owner may be changed as provided in this certificate.
we, our, us
IDS Life Insurance Company.
certificate date
It is the date from which certificate anniversaries, certificate years, and
certificate months are determined. Your certificate date is shown under
Certificate Data.
certificate anniversary
The same day and month as the certificate date each year that the certificate
remains in force.
initial guarantee period
The period during which the initial guarantee rate will be credited. It is shown
under Certificate Data.
initial guarantee rate
The rate of interest credited to the purchase payment as described in the
accumulation value section. It is shown under Certificate Data.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee period. It is
determined in accordance with the terms of the certificate.
renewal guarantee rate
The rate of interest credited to the renewal value as described in the
accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on a certificate
anniversary.
current rate
The applicable interest rate contained in a schedule of rates established by us
from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted for any
surrenders.
market adjusted value
The accumulation value adjusted by the market adjusted value formula.
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value is the cash surrender value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
written request
A request in writing signed by you and delivered to us at our corporate office.
settlement
If the settlement date is not the last day of a guarantee period, settlement is
the application of the market adjusted value of a certificate to provide annuity
payments. On the last day of a guarantee period, settlement is the application
of the accumulation value of a certificate to provide annuity payments.
settlement date
The date on which annuity payments are to begin. This date may be changed as
provided in this certificate.
<PAGE>
==================================================
The Annuity Contract
==================================================
What is the entire contract?
The Group Contract, including any endorsements or riders, and the application of
the Group Contractholder is the entire contract between the Contractholder and
us.
No one except one of our corporate officers (President, Vice President,
Secretary, or Assistant Secretary) can change or waive any of our rights or
requirements under the contract. That person must do so in writing. None of our
agents or other persons has the authority to change or waive any of our rights
or requirements under the contract.
Can this contract be modified?
This contract may be modified at any time by written agreement between the
contractholder and us. The modification must be signed by one of our corporate
officers (President, Vice President, Secretary or Assistant Secretary). No
modification will affect the amount or term of any certificates issued before
the effective date of the modification unless it is required to conform the
contract to, or give the contractholder the benefit of, any Federal or State
statutes.
When will the certificate become incontestable?
This certificate is incontestable from its date of issue.
What if benefits are based on incorrect data?
If the amount of benefits is determined by data as to a person's age or sex that
is incorrect, benefits will be recalculated on the basis of the correct data.
Any underpayments made by us will be made up immediately. Any overpayments made
by us will be subtracted from the future payments under this contract and/or as
otherwise legally permissible.
What federal and state laws govern the contract?
This contract is intended to qualify as an annuity contract for Federal income
tax purposes. To that end, the provisions of this contract are to be interpreted
to ensure or maintain such tax qualification, despite any other provisions to
the contrary. We reserve the right to amend this contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
The contract is governed by the law of the state in which it is delivered. The
values and benefits of this certificate is at least equal to those required by
such state.
===========================================================
Owner
===========================================================
What are your rights as owner of this certificate?
As long as the annuitant is living and unless otherwise provided in the
contract, you may exercise all rights and privileges in the contract or allowed
by us.
How can you change ownership for this certificate?
You can change the ownership of this certificate by written request on a form
approved by us. The change must be made while the annuitant is living. Once the
change is recorded by us, it will take effect as of the date of your request,
subject to any action taken or payment made by us before the recording.
Can you assign this certificate as collateral?
Yes. While the annuitant is living, you can assign this certificate or any
interest in it. Your interest and the interest of any beneficiary is subject to
the interest of the assignee. An assignment is not a change of ownership and an
assignee is not an owner as these terms are used in the contract. Any amounts
payable to the assignee will be paid in a single sum.
A copy of any assignment must be submitted to us at our corporate office. Any
assignment is subject to any action taken or payment made by us before the
assignment was recorded at our corporate office. We are not responsible for the
validity or effect - tax or otherwise - of any assignment.
<PAGE>
==========================================================
Purchase Payment
==========================================================
What is the purchase payment for this certificate?
The purchase payment for this certificate is shown under certificate data. It is
payable to us on or before the date we deliver this certificate. It must be paid
or mailed to us at our corporate office or to an authorized agent.
<PAGE>
===========================================================
Beneficiary and Payments
to Beneficiary
===========================================================
What death benefits are paid if the annuitant or owner dies before settlement?
If the annuitant or owner dies before settlement while this certificate is in
force, we will pay the beneficiary the accumulation value.
The above described payment will also be made upon the first to die if ownership
is in a joint tenancy except where spouses are joint owners with right of
survivorship and the surviving spousal joint owner elects to continue the
certificate. For joint spousal ownership with rights of survivorship, the
surviving spouse is deemed the sole beneficiary superseding any other
beneficiary designation. The beneficiary may elect to receive payment any time
within 5 years after the date of death of the annuitant.
Unless you have provided otherwise during the lifetime of the annuitant, the
beneficiary may elect by written request to have the amount payable applied
under the terms of the annuity payment plans section of this certificate
provided:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. payments begin no later than one year after the date of death; and
3. the plan provides equal or substantially equal payments over a period which
does not exceed the life of the beneficiary or the life expectancy of the
beneficiary.
In this event, the references to "annuitant" in the annuity payment plans
section of the certificate will apply to the beneficiary.
Can you pre-elect an annuity payment plan for a beneficiary?
During their lifetime you may elect how the death benefit described herein is to
be paid under the certificate in the event of death before the settlement date.
Any such election must be made on a form satisfactory to us. We must receive the
form in our corporate office prior to the first to die of the owner or
annuitant. In this event the death benefit shall be payable as so elected by
you, rather than the beneficiary. If for any reason such election does not
satisfy Internal Revenue Code section 72 distribution requirements, the election
will be void and the beneficiary will then be permitted to elect payment
pursuant to the provisions of the contract.
To whom are the death benefits payable?
Benefits will be paid equally to all primary beneficiaries surviving the
annuitant. If none survive, proceeds will be paid equally to all contingent
beneficiaries surviving the annuitant. If no beneficiary survives the annuitant,
we will pay the benefits to you, if living, otherwise to your estate.
Who is the beneficiary?
Beneficiaries are those you name, in a form satisfactory to us, to receive the
benefits of this contract if the owner or annuitant dies while this contract is
in force. The owner may change the beneficiary as provided below. If the
beneficiary has been changed, we will pay any benefits in accordance with your
last change of beneficiary request.
How do you change the beneficiary?
The owner may change the beneficiary any time while the annuitant is living by
satisfactory written request to us. Once the change is recorded by us, it will
take effect as of the date of the owner's request, subject to any action taken
or payment made by us before the recording.
What are the rights of the beneficiary?
If the death benefit under this certificate becomes payable to a beneficiary
(payee) under an Annuity Payment Plan, that payee shall have the right to name a
beneficiary. Any such request from the payee must be made on a form satisfactory
to us.
What is the spouse's option to continue the certificate?
If the owner's death occurs prior to the settlement date, the owner's spouse, if
designated as sole beneficiary, may elect in writing to forego receipt of the
death benefit and instead continue this certificate in force as its owner. The
election by the spouse must be made within 60 days after we receive due proof of
death.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any, will be as
provided in the annuity payment plan then in effect.
<PAGE>
==========================================================
Accumulation Value,
Cash Surrender Value,
Market Adjusted Value
==========================================================
How is the accumulation value determined?
On the certificate date the accumulation value of this certificate is the
purchase payment. Thereafter interest accrues from day to day for the guarantee
period at the rate shown under certificate data. This rate represents an
effective annual yield. At no time while the certificate is in force shall
interest accrue at a rate less than 3% compounded annually. The accumulation
value will be adjusted for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation value of this
certificate at the time that any applicable premium taxes not previously
deducted are payable.
If a tax is payable at the time of your purchase payment and we choose to not
deduct it at that time, we further reserve the right to deduct it at a later
date.
How are renewal guarantee periods determined?
At the end of any guarantee period, a renewal guarantee period will begin. We
will notify you in writing 45 days before the renewal guarantee period. Each
renewal guarantee period will be one year unless you elect a different length
from those offered at the time. We must receive your written request at least 15
days before the renewal date. The renewal guarantee period may never extend
beyond the settlement date.
The accumulation value on the renewal date will be equal to the accumulation
value at the end of the guarantee period just ending. This value will earn
interest at the renewal guarantee rate. Upon written request, within 45 days of
the renewal guarantee period, we will notify you of the renewal guarantee rate
then in effect for certificates renewing at that time. The actual renewal
guarantee rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date before the end
of the current guarantee period adjusted by a formula. The formula adjustment
reflects the relationship between:
1. the interest rate we are then crediting for new certificate sales and
renewals (Form 33114) for the time remaining in your certificate's current
guarantee period; and
2. the guaranteed interest rate applicable to your certificate's current
guarantee period.
The market adjusted value may be more or less than the accumulation value.
The market adjusted value formula is as follows:
market adjusted value = renewal value
-----------------------
(N + t)
(1 + ic + .0025)
where: renewal value = the accumulation value at the end of your current
guarantee period.
N = the number of complete certificate years to the
end of your guarantee period.
t = the fraction of the certificate year remaining
to the end of your certificate year (for example,
if 180 days remain in a 365 day certificate year,
t would be .493)
ic = the current rate offered for new certificate
sales and renewals (Form 33114) for the number of
years left in your guarantee period (straight line
interpolation between whole year rates). If N is
zero, ic is the rate for one year guarantee
periods.
The market value adjustment is as follows:
market value adjustment =
market adjusted value - accumulation value
There will be no market value adjustment made on the last day of a guarantee
period.
Can you request surrender of any amounts under this certificate before
settlement?
Yes. By written request to us and subject to the rules below you may:
<PAGE>
1. surrender this certificate for the total cash surrender value;
2. partially surrender this certificate for a part of the cash surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment will be
deducted from the accumulation value of the certificate on the date of
surrender. You may surrender all or a portion of the cash surrender value.
However, the accumulation value that remains after a partial surrender must be
at least $2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to you within seven days of the
receipt of your written request.
Upon surrender of this certificate for the total cash surrender value, this
certificate will terminate. We may require that you return this certificate to
our corporate office before we pay the total cash surrender value.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period not to exceed
6 months from the date we receive your surrender request or the period permitted
by state insurance law, if less. If we defer payment more than 30 days, we will
pay annual interest of at least 3% on the amount deferred.
Will you receive information about your certificate values?
Yes. At least once a year we will send you a statement showing both the
accumulation value and the cash surrender value of this certificate. The
statement will specify the market value adjustment used to determine the cash
surrender value. This statement will be based on any laws or regulations that
apply.
We will also notify you 45 days before the end of a guarantee period concerning
renewal periods available and your right to surrender without a market value
adjustment on the last day of your guarantee period.
<PAGE>
==========================================================
Annuity Payment Plans
==========================================================
When will annuity payments begin?
The first payment will be made as of the settlement date. Before payments begin,
we will require satisfactory proof that the annuitant is alive. We may also
require that you exchange this certificate for a supplemental contract which
provides the annuity payments.
Can you change the settlement date?
Yes. Tell us the new date by written request. However, the settlement date
cannot be later than the later of:
1. the certificate anniversary nearest the annuitant's 85th birthday; or
2. the 10th certificate anniversary.
Also, if you select a new date, it must be at least 30 days after we receive
your written request at our corporate office.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call these plans.
Plan A - This provides monthly annuity payments for the lifetime of the
annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of at
least five, ten, or fifteen years. You must select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain number
of months. We determine the number of months by dividing the market adjusted
value applied under this plan by the amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly payments will
be paid for the lifetime of the annuitant and a joint annuitant. When either the
annuitant or joint annuitant dies, we will continue to make monthly payments for
the lifetime of the survivor. No payments will be paid after the death of both
the annuitant and joint annuitant.
Plan E - This provides monthly fixed dollar annuity payments for a period of
years. The period of years may be no less than 10 nor more than 30.
What are the requirements for selecting a plan?
By written request to us at least 30 days before the settlement date, you may
select the plan or change to another plan. If at least 30 days before the
settlement date we have not received at our corporate office your written
request to select a plan, we will make payments according to Plan B with
payments guaranteed for ten years.
If the amount to be applied to a plan is not at least $2,000, or if payments are
to be made to other than a natural person, we have the right to make a lump sum
payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally endorsed by
the payee or payees as well as the annuitant (or joint annuitant under Plan D).
If the annuitant or joint annuitant does not endorse the check, other evidence
must be furnished to show that the annuitant or joint annuitant is still alive.
<PAGE>
==========================================================
Table of Settlement Rates
==========================================================
What will be the amount of the monthly annuity payments?
If the settlement date is the last day of a guarantee period, the amount applied
to provide a payment will be the accumulation value on that date. The market
adjusted value is applied if the settlement date is not the last day of a
guarantee period. The amount applied to provide a payment will be the
accumulation value on the settlement date. The amount of each monthly annuity
payment for each $1,000 applied under any payment plan will be based on our
Table of Settlement Rates in effect at the time of the first payment. The
amounts will not be less than those shown in the table below.
The amount of such payments under plans A, B, and C will depend on the sex and
the adjusted age of the annuitant on the settlement date. The amount of such
payments under plan D will depend on the sex and the adjusted age of the
annuitant and the joint annuitant on the settlement date. Adjusted age means the
age on the annuitant's nearest birthday minus an "adjustment" based on the
calendar year of the birth of the annuitant as follows:
Calendar Calendar
Year of Year of
Annuitant's Adjust- Annuitant's Adjust-
Birth ment Birth ment
- ----- ---- ----- ----
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Amount of Each Monthly Annuity Payment Per $1,000 Applied
- --------------------------------------------------------------------------------------------------------------------------
Plan A Plan B Plan C Plan D - Joint and Survivor
Adjusted Age of Female Joint Annuitant
- --------------------------------------------------------------------------------------------------------------------------
Life 5 Years 10 Years 15 Years With Adj.
Adj. Income Certain Certain Certain Refund Male 10 Years 5 Years Same 5 Years 10 Years
Age* M F M F M F M F M F Age* Younger Younger Age Older Older
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.42 4.10 55 3.51 3.69 3.88 4.06 4.23
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.86 4.48 60 3.76 3.99 4.24 4.49 4.72
65 6.10 5.35 6.03 5.32 5.81 5.22 5.46 5.05 5.43 4.97 65 4.07 4.38 4.72 5.07 5.39
66 6.29 5.51 6.21 5.47 5.96 5.36 5.56 5.16 5.56 5.08 66 4.15 4.48 4.84 5.21 5.55
67 6.50 5.67 6.41 5.63 6.11 5.50 5.66 5.26 5.70 5.20 67 4.23 4.58 4.97 5.36 5.73
68 6.73 5.85 6.62 5.80 6.28 5.65 5.76 5.37 5.85 5.33 68 4.31 4.69 5.10 5.53 5.92
69 6.97 6.04 6.84 5.98 6.44 5.80 5.86 5.49 6.00 5.47 69 4.40 4.80 5.25 5.70 6.12
70 7.23 6.25 7.07 6.18 6.61 5.96 5.96 5.60 6.16 5.61 70 4.50 4.93 5.40 5.89 6.34
71 7.51 6.47 7.32 6.39 6.78 6.14 6.05 5.71 6.33 5.76 71 4.60 5.06 5.57 6.10 6.57
72 7.80 6.71 7.58 6.62 6.96 6.31 6.14 5.83 6.51 5.93 72 4.71 5.20 5.75 6.31 6.82
73 8.12 6.97 7.85 6.86 7.14 6.50 6.23 5.94 6.70 6.10 73 4.83 5.35 5.94 6.55 7.09
74 8.45 7.26 8.14 7.12 7.32 6.69 6.31 6.04 6.90 6.28 74 4.95 5.51 6.15 6.80 7.37
75 8.82 7.56 8.44 7.39 7.49 6.89 6.38 6.14 7.11 6.48 75 5.08 5.68 6.37 7.07 7.68
76 9.21 7.90 8.76 7.69 7.67 7.09 6.48 6.24 7.33 6.68 76 5.22 5.87 6.61 7.36 8.01
77 9.62 8.26 9.09 8.01 7.84 7.29 6.51 6.33 7.56 6.90 77 5.37 6.07 6.87 7.67 8.36
78 10.07 8.65 9.44 8.34 8.01 7.49 6.57 6.41 7.80 7.13 78 5.54 6.29 7.15 8.01 8.74
79 10.55 9.07 9.80 8.69 8.17 7.69 6.62 6.48 8.05 7.38 79 5.71 6.52 7.45 8.37 9.14
80 11.06 9.53 10.17 9.07 8.33 7.89 6.66 6.55 8.32 7.64 80 5.90 6.78 7.77 8.76 9.57
81 11.61 10.03 10.55 9.46 8.48 8.08 6.70 6.61 8.60 7.91 81 6.10 7.05 8.12 9.17 10.02
82 12.19 10.57 10.94 9.87 8.61 8.26 6.73 6.66 8.89 8.21 82 6.32 7.34 8.49 9.61 10.51
83 12.81 11.16 11.33 10.30 8.74 8.43 6.76 6.70 9.20 8.51 83 6.55 7.65 8.90 10.08 11.02
84 13.46 11.79 11.72 10.74 8.86 8.59 6.79 6.74 9.52 8.83 84 6.80 7.99 9.33 10.58 11.56
85 14.16 12.48 12.12 11.19 8.97 8.74 6.81 6.77 9.85 9.18 85 7.07 8.36 9.78 11.11 12.13
90 18.25 16.68 14.04 13.42 9.36 9.26 6.86 6.85 11.81 11.11 90 8.79 10.65 12.57 14.22 15.63
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
*Adjusted age of annuitant. M = Male F = Female
- --------------------------------------------------------------------------------
The table above is based on the "1983 Individual Annuitant Mortality Table A"
assuming an interest rate of 3% per year compounded annually. Settlement rates
for any age, or any combination of age and sex not shown above, will be
calculated on the same basis as those rates shown in the table above. Such rates
will be furnished by us upon request. Amounts shown in the Table below are based
on an assumed interest rate of 3% per year compounded annually.
- --------------------------------------------------------------------------------
Plan E Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000
Applied
- --------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
- ------- ------- ------- ------- ------- -------
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------------------------------------------------------------------
<PAGE>
==========================================================
Group Annuity
Certificate
==========================================================
- - Purchase payment is payable in a single sum.
- - Annuity payments to begin on the settlement date.
- - This contract is nonparticipating. Dividends are not payable.
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
==========================================================
GROUP ANNUITY CONTRACT
==========================================================
- --------------------------------------------------------------------------------
o Purchase payments are payable in a single sum.
o Annuity payments begin on the settlement date.
o This contract is nonparticipating. Dividends are not payable.
Contract Holder: ABC Corporation, Trustee
Contract Number: 33112-GP1
Contract Date: July 1, 1997
IDS Life Insurance Company, herein called the Company, will pay the benefits
provided by this contract in accordance with and subject to all provisions of
this contract. We issue this contract in consideration of the application of the
contractholder.
THE GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA WHICH MAY
RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN CASH SURRENDER BENEFITS.
Surrenders are available without market value adjustment on the last day of each
certificate guarantee period.
Signed for and issued by IDS Life Insurance Company, Minneapolis, Minnesota, as
of the contract date shown above.
President:
[GRAPHIC OMITTED]
Richard W. Kling
Secretary:
[GRAPHIC OMITTED]
William A. Stoltzmann
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
33112
<PAGE>
CONTRACT DATA
GROUP CONTRACTHOLDER: ABC Corporation, Trustee
GROUP CONTRACT NUMBER: 33112-GP1
SURRENDER CHARGE: There are no surrender charges.
MARKET VALUE ADJUSTMENT: Applied at any time other than the last day
of a Guaranteed Period or for death
benefits.
GUARANTEE PERIODS: 1-10 Years
<PAGE>
=================================================================
Guide to Contract Provisions
=================================================================
Definitions Important words and meanings/Pages 4-5
The Annuity Contract Entire contract; Modification; Incontestability;
Benefits based on incorrect data/Page 6
Contractholder and Contractholder; Owner's rights; Change
Owner of ownership restricted/Page 7
Purchase Payment Payment of the purchase payment; Limit on
elective deferrals/Page 7
Beneficiary and Payments to Who is the beneficiary; Change of
Beneficiary beneficiary; Payments to beneficiary/Page 8
Accumulation Value, How the accumulation value is determined; How the Cash
Surrender Value, market adjusted value is determined; Surrender of and Market
Adjusted Value the certificate for the cash surrender value; TSA
prohibited distributions; Annual statement of
value/Pages 9-11
Annuity Payment Plans When annuity payments begin; Different ways to
receive annuity payments/Pages 12-13
Table of Settlement Rates Table showing monthly annuity payment amounts for
the various plans/Page 14
<PAGE>
======================================================
Definitions
======================================================
The following words are used often in this contract. When we use these words,
this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
you, your, owner
The owner of the certificate. The owner may be someone other than the annuitant.
The owner may be changed as provided in this contract.
we, our, us
IDS Life Insurance Company
certificate date
It is the date from which certificate anniversaries, certificate years, and
certificate months are determined. The certificate date is shown under
certificate data, in the certificate.
certificate anniversary
The same day and month as the certificate date each year that the certificate
remains in force.
initial guarantee period
The period during which the initial guarantee rate will be credited. It is shown
under certificate data, in the certificate.
initial guarantee rate
The rate of interest credited to the purchase payment as described in the
accumulation value section. It is shown under certificate data, in the
certificate.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee period. It is
determined in accordance with the terms of the contract.
renewal guarantee rate
The rate of interest credited to the renewal value as described in the
accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on a certificate
anniversary.
current rate
The applicable interest rate contained in a schedule of rates established by us
from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted for any
surrenders.
market adjusted value
The accumulation value adjusted by the market adjusted value formula.
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value is the cash surrender value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
written request
A request in writing signed by the owner and delivered to us at our corporate
office.
<PAGE>
settlement
If the settlement date is not the last day of a guarantee period, settlement is
the application of the market adjusted value of a certificate to provide annuity
payments. On the last day of a guarantee period, settlement is the application
of the accumulation value of a certificate to provide annuity payments.
settlement date
The date on which annuity payments are to begin under a certificate. This date
may be changed as provided in the contract.
elective deferrals
Employer contributions to the annuity that are excludable from the taxpayer's
current income as provided in the Code.
Code
The Internal Revenue Code of 1986, as amended, and all related laws and
regulations which are in effect during the term of this contract.
TSA
A Tax Sheltered Annuity as described in Section 403(b) of the Code.
<PAGE>
======================================================
The Annuity Contract
======================================================
What is the entire contract?
This Group Contract, including any endorsements or riders, and the master
application of the Group Contractholder is the entire contract between the
Contractholder and us.
No one except one of our corporate officers (President, Vice President,
Secretary, or Assistant Secretary) can change or waive any of our rights or
requirements under the contract. That person must do so in writing. None of our
agents or other persons has the authority to change or waive any of our rights
or requirements under the contract.
Can this contract be modified?
We reserve the right to modify the contract to the extent necessary to qualify a
certificate issued under this contract, if purchased as part of a 401(a)
qualified plan or a TSA, to the extent necessary to comply with Section 401, 403
or any other applicable section of the Code, or to comply with the provisions of
your 401(a) qualified plan or TSA. We also reserve the right to modify the
contract to the extent necessary to qualify a certificate issued under this
contract, if purchased as part of a deferred compensation plan under Section 457
of the Code, to the extent necessary to comply with Section 457 or any other
applicable section of the Code, or to comply with the provisions of your
deferred compensation plan.
When will the certificate become incontestable?
The certificate is incontestable from its date of issue.
What if benefits are based on incorrect data?
If the amount of benefits is determined by data as to a person's age that is
incorrect, benefits will be recalculated on the basis of the correct data. Any
underpayments made by us will be made up immediately. Any overpayments made by
us will be subtracted from the future payments under this contract and/or as
otherwise legally permissible.
What federal and state laws govern the contract?
This contract is intended to qualify as an annuity contract for Federal income
tax purposes. To that end, the provisions of this contract are to be interpreted
to ensure or maintain such tax qualification, despite any other provisions to
the contrary. We reserve the right to amend this contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
The contract is governed by the law of the state in which it is delivered. The
values and benefits of the certificates are at least equal to those required by
such state.
<PAGE>
======================================================
Contractholder and Owner
======================================================
Who is the Group Contractholder?
The group contractholder is listed on the cover page of this contract. The
contract provides for a successor contractholder. In the event the
contractholder should merge with another entity, the new entity would be the
group contractholder.
What are the rights of the owners of the certificates?
As long as the annuitant is living and unless otherwise provided in this
contract, the owner may exercise all rights and privileges in this contract or
allowed by us.
What are the rights of the owner if the owner is a trust or custodial account?
If the owner is a tax qualified trust or tax qualified custodial account, then
the trustees or custodians (or their successors) properly named by the trust or
custodial agreement may exercise all rights and privileges provided in the
certificate or allowed by us.
Can the ownership of the certificate be changed?
The certificate may not be sold, assigned, transferred, discounted, or pledged
as collateral for a loan or as security for the performance of an obligation or
for any other purpose to any person other than as may be required or permitted
under Sections 401, 403, 457, or other applicable sections of the Code.
However, if the owner is the trustee of a tax-qualified trust or the custodian
of a tax-qualified custodial account, the owner may transfer ownership of the
certificate to the annuitant or to a qualified successor trustee or custodian if
permitted by the Code.
Or, if the owner is a trust or custodian or an employer as part of a qualified
plan under Section 401 or 403 or a deferred compensation plan under Section 457
of the Code, you may transfer ownership of the certificate to the annuitant if
permitted by the Code.
Any permitted transfer must be on a form approved by us. The change must be made
while the annuitant is living. Once the change is recorded by us, it will take
effect subject to any action taken or payment made by us before the recording.
- ------------------------------------------------------------------------------
======================================================
Purchase Payment
======================================================
What is the purchase payment for a certificate?
The purchase payment for a certificate is shown under certificate data on the
certificate. It is payable to us on or before the date we deliver the
certificate. It must be paid or mailed to us at our corporate office or to an
authorized agent.
Is there a limit on elective deferrals?
Elective deferrals made under the contract may not exceed the annual limit on
elective deferrals as provided in the Code.
<PAGE>
======================================================
Beneficiary and Payments
to Beneficiary
======================================================
What death benefits are paid if the annuitant or certificate owner dies before
settlement?
If the annuitant or owner dies before settlement while the certificate is in
force, we will pay the beneficiary the accumulation value.
The above amount will be payable in a lump sum upon receipt of due proof of
death of the annuitant. The beneficiary may elect to receive payment any time
within 5 years after the date of death of the annuitant.
Instead of a lump sum, payment may be made under an annuity payment plan
provided amounts are calculated in accordance with the Code, and:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. payments begin no later than:
a. one year after the date of death, in the case of a non-spouse
beneficiary; or
b. the date on which the annuitant would have attained age 70 1/2, in the
case of a spouse beenficiary; and
3. the plan provides equal or substantially equal payments over a period which
does not exceed the life of the beneficiary or the life expectancy of the
beneficiary, or in the case of a non-spouse beneficiary of a Section 457
plan, payments do not exceed a period of 15 years.
In this event, the reference to "annuitant" in the annuity payment plans section
will apply to the beneficiary.
To whom are the death benefits payable?
Benefits will be paid equally to all primary beneficiaries surviving the
annuitant. If none survive, proceeds will be paid equally to all contingent
beneficiaries surviving the annuitant. If no beneficiary survives the annuitant,
we will pay the benefits to the owner, if living, otherwise to the owner's
estate.
Who is the beneficiary?
Beneficiaries are those you name, in a form satisfactory to us, to receive the
benefits of this contract if the owner or annuitant dies while this contract is
in force. The owner may change the beneficiary as provided below. If the
beneficiary has been changed, we will pay any benefits in accordance with the
owner's last change of beneficiary request.
How does the owner change the beneficiary?
The owner may change the beneficiary any time while the annuitant is living by
satisfactory written request to us. Once the change is recorded by us, it will
take effect as of the date of the owner's request, subject to any action taken
or payment made by us before the recording.
What are the rights of the beneficiary?
If the death benefit under the certificate becomes payable to a beneficiary
(payee) under an Annuity Payment Plan, that payee shall have the right to name a
beneficiary. Any such request from the payee must be made on a form satisfactory
to us.
What is the spouse's option to continue the certificate?
If the annuitant's death occurs before the settlement date and before the
annuitant's age 70-1/2, the annuitant's spouse, if designated as sole
beneficiary, may elect in writing to postpone receipt of the death benefit and
instead continue the certificate in force. The election by the spouse must be
made within 60 days after we receive due proof of death. The certificate may be
continued in force only until the date on which the annuitant would have
attained age 70-1/2. Any annuity payment plan later elected by the spouse must
provide amounts calculated in accordance with the Code.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any, will be as
provided in the annuity payment plan then in effect.
<PAGE>
- --------------------------------------------------------------------------------
=========================================================
Accumulation Value,
Cash Surrender Value,
Market Adjusted Value
=========================================================
How is the accumulation value determined?
On the certificate date the accumulation value of the certificate is the
purchase payment. Thereafter interest accrues from day to day for the guarantee
periods initially at the rate shown under certificate data in the certificate
and later at the renewal rate(s). These rates represent an effective annual
yield. At no time while the certificate is in force shall interest accrue at a
rate less than 3% compounded annually. The accumulation value will be adjusted
for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation value of the
certificate at the time that any applicable premium taxes not previously
deducted are payable.
If a tax is payable at the time of the purchase payment and we choose to not
deduct it at that time, we further reserve the right to deduct it at a later
date.
How are renewal guarantee periods determined?
At the end of any guarantee period a renewal guarantee period will begin. We
will notify the owner in writing 45 days before the renewal guarantee period.
Each renewal guarantee period will be one year unless the owner elects a
different length from those offered at the time. We must receive the owner's
written request at least 15 days before the renewal date. The renewal guarantee
period may never extend beyond the settlement date.
The accumulation value on the renewal date will be equal to the accumulation
value at the end of the guarantee period just ending. This value will earn
interest at the renewal guarantee rate. Upon written request within 45 days of
the renewal guarantee period, we will notify the owner of the renewal guarantee
rate then in effect for certificates renewing at that time. The actual renewal
guarantee rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date before the end
of the current guarantee period adjusted by a formula. The formula adjustment
reflects the relationship between:
1. the interest rate we are then crediting for new certificate sales and
renewals (Form 33115) for the time remaining in the certificate's current
guarantee period; and
2. the guaranteed interest rate applicable to the certificate's current
guarantee period.
The market adjusted value may be more or less than the accumulation value.
<PAGE>
The market adjusted value formula is as follows:
market adjusted value = renewal value
-----------------------
(N + t)
(1 + ic + .0025)
where: renewal value = the accumulation value at the end of the owner's
current guarantee period.
N = the number of complete certificate years to
the end of the owner's guarantee period.
t = the fraction of the certificate year remaining
to the end of the owner's certificate year (for
example, if 180 days remain in a 365 day
certificate year, t would be .493)
ic = the current rate offered for new certificate
sales and renewals (Form 33115) for the number
of years left in the owner's guarantee period
(straight line interpolation between whole year
rates). If N is zero, ic is the rate for one
year guarantee periods.
The market value adjustment is as follows:
market value adjustment =
market adjusted value - accumulation value
There will be no market value adjustment made on the last day of a guarantee
period.
Can the owner request surrender of any amounts under the certificate before
settlement?
Yes. By written request to us and subject to the rules below the owner may:
1. surrender the certificate for the total cash surrender value;
2. partially surrender the certificate for a part of the cash surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment will be
deducted from the accumulation value of the certificate on the date of
surrender. The owner may surrender all or a portion of the cash surrender value.
However, the accumulation value that remains after a partial surrender must be
at least $2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to the owner within seven days of
the receipt of the owner's written request.
Upon surrender of the certificate for the total cash surrender value, the
certificate will terminate. We may require that the owner return the certificate
to our corporate office before we pay the total cash surrender value.
<PAGE>
What distributions are prohibited if the certificate is a TSA?
To meet the requirements of Section 403(b) of the Code, unless otherwise
provided in the Code, no amounts may be distributed unless the annuitant has:
1. attained age 59-1/2; or
2. separated from service; or
3. dies; or
4. become disabled (as defined in Section 72(m)(7) of the Code); or
5. encountered hardship (within the meaning of Section 401(k) of the Code);
and then only such amounts as the Code may provide.
We will require satisfactory written proof of the event(s) in items 1 through 5
above prior to any distribution from the certificate.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period not to exceed
6 months from the date we receive the owner's surrender request or the period
permitted by state insurance law, if less. If we defer payment more than 30
days, we will pay annual interest of at least 3% on the amount deferred.
Will the owner receive information about the certificate values?
Yes. At least once a year we will send the owner a statement showing both the
accumulation value and the cash surrender value of the certificate. The
statement will specify the market value adjustment used to determine the cash
surrender value. This statement will be based on any laws or regulations that
apply.
We will also notify the owner 45 days before the end of a guarantee period
concerning renewal periods available and the owner's right to surrender without
a market value adjustment on the last day of the guarantee period.
<PAGE>
- --------------------------------------------------------------------------------
=========================================================
Annuity Payment Plans
=========================================================
When will annuity payments begin?
The first payment will be made as of the settlement date. Before payments begin
we will require satisfactory proof that the annuitant is alive. We may also
require that the owner exchange the certificate for a supplemental contract
which provides the annuity payments.
Can the owner change the settlement date?
Yes. The owner must tell us the new date by written request. If the owner
selects a new date it must be at least 30 days after we receive the owner's
written request at our corporate office.
The settlement date cannot be later than the later of:
1. April 1 following the calendar year in which the annuitant attains age 70
1/2; or
2. except for 5% owners, if later, April 1 following the calendar year in
which the annuitant retires; or
3. such other date which satisfies the minimum distribution requirements under
the Code; or
4. such other date as agreed upon by us.
Notwithstanding the above, the settlement date cannot be later than the later
of:
1. the certificate anniversary nearest the annuitant's 85th birthday; or
2. the 10th certificate anniversary.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call these plans.
Plan A - This provides monthly annuity payments for the lifetime of the
annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of at
least five, ten or fifteen years. The owner must select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain number
of months. We determine the number of months by dividing the market adjusted
value applied under this plan by the amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly payments will
be paid for the lifetime of the annuitant and a joint annuitant. When either the
annuitant or joint annuitant dies we will continue to make monthly payments for
the lifetime of the survivor. No payments will be paid after the death of both
the annuitant and joint annuitant.
Plan E - This provides monthly fixed dollar annuity payments for a period of
years. The period of years may be no less than 10 nor more than 30.
What are the requirements for selecting a plan?
The owner may elect by written notice to us at anytime at least 30 days prior to
the settlement date to have the market adjusted value applied on the settlement
date to provide:
1. a lump sum payment as a result of a total surrender as provided under the
cash surrender value provision of the certificate; or
2. one of the annuity payment plans shown herein. Amounts payable under any
such annuity payment plan will be calculated in a accordance with the Code.
Any such annuity payment plan must be provided:
a. in equal or substantially equal payments over a period no longer than
the life of the annuitant or the lives of the annuitant and a joint
annuitant; or
b. in equal or substantially equal payments over a period which does not
exceed the life expectancy of the annuitant, or the life expectancy of
the annuitant and a joint annuitant; and
c. any annuity payment plan selected must also meet the incidental death
benefit requirements under the Code.
If at least 30 days before the settlement date we have not received at our
corporate office the owner's written request to select a plan, we will make
payments according to plan B with payments guaranteed for 10 years, unless
otherwise required by the Code.
If the amount to be applied to a plan is not at least $2,000, or if payments are
to be made to other than a natural person, we have the right to make a lump sum
payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally endorsed by
the payee or payees as well as the annuitant (or joint annuitant under Plan D).
If the annuitant or joint annuitant does not endorse the check, other evidence
must be furnished to show that the annuitant or joint annuitant is still alive.
Can distributions be delayed at settlement?
When the owner is eligible to receive a distribution from their certificate, the
owner may be able to have all or a portion of that distribution paid in a
"direct rollover." A direct rollover means that, instead of paying the owner, we
will make the payment directly to an individual retirement account or annuity
(IRA, as defined in Section 408 of the Code) or to another Code Section 403(b)
contract or custodial account that accepts direct rollovers. If the owner
chooses a direct rollover, the owner will not be taxed on the distribution until
it is later taken out of the IRA or 403(b) plan. However, the owner will be
subject to any applicable charges under the certificate at the time of the
distribution.
Do all distributions qualify for direct rollover?
Only "an eligible rollover distribution" (as defined in Code Section 402(c)) may
be paid as a direct rollover. In general, eligible rollover distributions DO NOT
include any payment that is part of a series of equal or almost equal payments
made at least once a year over:
- the owner's life or life expectancy;
- the life or life expectancies of the owner and beneficiary; or
- for a period of ten years or more.
Also, required minimum distributions made beginning in the year the owner
retires or reaches age 70-1/2, as applicable, are not "eligible rollover
distributions" available for direct rollover.
Are eligible rollover distributions available for alternate payees or
beneficiaries?
The rules outlined above apply to a former spouse who is an "alternate payee"
under a "qualified domestic relations order" (as defined in Code Section
414(p)). A qualified domestic relations order is issued by a court, usually in
connection with a divorce or legal separation.
A beneficiary who is a surviving spouse may elect to have an eligible rollover
distribution directly rolled over into an IRA, but not into another 403(b) plan.
A distribution to a non-spouse is not an eligible rollover distribution.
<PAGE>
- -------------------------------------------------------------------------------
==========================================================
Table of Settlement Rates
==========================================================
What will be the amount of the monthly annuity payments?
If the settlement date is the last day of a guarantee period, the amount applied
to provide a payment will be the accumulation value on that date. The market
adjusted value is applied if the settlement date is not the last day of a
guarantee period. The amount applied to provide a payment will be the
accumulation value on the settlement date. The amount of each monthly annuity
payment for each $1,000 applied under any payment plan will be based on our
Table of Settlement Rates in effect at the time of the first payment. The
amounts will not be less than those shown in the table below.
The amount of such payments under plans A, B, and C will depend on the adjusted
age of the annuitant on the settlement date. The amount of such payments under
plan D will depend on the adjusted age of the annuitant and the joint annuitant
on the settlement date.
Adjusted age means the age on the annuitant's nearest birthday minus an
"adjustment" based on the calendar year of the birth of the annuitant as
follows:
Calendar Calendar
Year of Year of
Annuitant's Adjust- Annuitant's Adjust-
Birth ment Birth ment
- ----- ---- ----- ----
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Amount of Each Monthly Annuity Payment Per $1,000 Applied
- --------------------------------------------------------------------------------------------------------------------------
Plan A Plan B Plan C Plan D - Joint and Survivor
Adjusted Age of Joint Annuitant
- --------------------------------------------------------------------------------------------------------------------------
Adj. Life 5 Years 10 Years 15 Years With Adj. 10 Years 5 Years Same 5 Years 10 Years
Age* Income Certain Certain Certain Refund Age* Younger Younger Age Older Older
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.25 4.25 4.22 4.18 4.10 55 3.47 3.62 3.77 3.90 4.01
60 4.72 4.70 4.66 4.57 4.48 60 3.71 3.90 4.10 4.28 4.42
65 5.35 5.32 5.22 5.05 4.97 65 4.01 4.28 4.54 4.79 4.99
66 5.51 5.47 5.36 5.16 5.08 66 4.08 4.36 4.65 4.91 5.13
67 5.67 5.63 5.50 5.26 5.20 67 4.16 4.46 4.76 5.04 5.28
68 5.85 5.80 5.65 5.37 5.33 68 4.24 4.56 4.89 5.19 5.43
69 6.04 5.98 5.80 5.49 5.47 69 4.33 4.67 5.02 5.34 5.61
70 6.25 6.18 5.96 5.60 5.61 70 4.42 4.79 5.16 5.51 5.79
71 6.47 6.39 6.14 5.71 5.76 71 4.52 4.91 5.31 5.69 5.99
72 6.71 6.62 6.31 5.83 5.93 72 4.63 5.04 5.48 5.88 6.20
73 6.97 6.86 6.50 5.94 6.10 73 4.74 5.19 5.66 6.09 6.43
74 7.26 7.12 6.69 6.04 6.28 74 4.86 5.34 5.85 6.32 6.68
75 7.56 7.39 6.89 6.14 6.48 75 4.99 5.51 6.06 6.56 6.96
76 7.90 7.69 7.09 6.24 6.68 76 5.13 5.69 6.28 6.82 7.25
77 8.26 8.01 7.29 6.33 6.90 77 5.28 5.88 6.52 7.11 7.56
78 8.65 8.34 7.49 6.41 7.13 78 5.43 6.09 6.78 7.42 7.90
79 9.07 8.69 7.69 6.48 7.38 79 5.61 6.32 7.07 7.75 8.27
80 9.53 9.07 7.89 6.55 7.64 80 5.79 6.56 7.38 8.11 8.67
81 10.03 9.46 8.08 6.61 7.91 81 5.99 6.82 7.71 8.50 9.09
82 10.57 9.87 8.26 6.66 8.21 82 6.20 7.11 8.07 8.92 9.55
83 11.16 10.30 8.43 6.70 8.51 83 6.43 7.42 8.45 9.37 10.04
84 11.79 10.74 8.59 6.74 8.83 84 6.68 7.75 8.87 9.86 10.57
85 12.48 11.19 8.74 6.77 9.18 85 6.96 8.11 9.32 10.38 11.14
90 16.68 13.42 9.26 6.85 11.11 90 8.67 10.38 12.09 13.50 14.67
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Adjusted age of annuitant.
- -------------------------------------------------------------------------------
The table above is based on the "1983 Individual Annuitant Mortality Table A"
assuming an interest rate of 3% per year compounded annually. Settlement rates
for any age not shown above, will be calculated on the same basis as those rates
shown in the table above. Such rates will be furnished by us upon request.
Amounts shown in the Table below are based on an assumed interest rate of 3% per
year compounded annually.
- --------------------------------------------------------------------------------
Plan E Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000
Applied
- -------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
- ------- ------- ------- ------- ------- -------
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
=============================================================
Group Annuity
Contract
=============================================================
o Purchase payment is payable in a single sum.
o Annuity payments to begin on the settlement date.
o The certificate is nonparticipating. Dividends are not payable.
- --------------------------------------------------------------------------------
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
==========================================================
Group Annuity
Certificate
==========================================================
- - Purchase payment is payable in a single sum.
- - Annuity payments to begin on the settlement date.
- - This contract is nonparticipating. Dividends are not payable.
This annuity certificate summarizes the provisions of the Group Annuity Contract
specified on the enrollment application. It does not amend or modify any of the
provisions of the Group Contract. All rights, privileges and benefits are
governed by the provisions of the Group Contract. The Group Contract may be
inspected by the certificate owner or annuitant at the Contractholder's office
during office hours.
If the annuitant is living on the Settlement Date, we will begin to pay you
monthly annuity payments. Any payments made by us are subject to the Terms of
the Group contract.
We issue this certificate in consideration of your enrollment application, and
payment of the single purchase payment.
THE GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA WHICH MAY
RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN CASH SURRENDER BENEFITS.
Surrenders are available without market value adjustment on the last day of each
certificate guarantee period.
Signed for and issued by IDS Life Insurance Company, Minneapolis, Minnesota, as
of the certificate date shown below.
President:
[GRAPHIC OMITTED]
Richard W. Kling
Secretary:
[GRAPHIC OMITTED]
William A. Stoltzmann
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
ANNUITANT: John Doe
CERTIFICATE NUMBER: XXX-XXXXXX
CERTIFICATE DATE: March 18, 1991
CERTIFICATE SETTLEMENT DATE: March 18, 2021
33115
<PAGE>
==========================================================
Guide to Certificate Provisions
==========================================================
Definitions Important words and meanings/Page 3
The Annuity Contract Entire contract; Modification;
Incontestability; Benefits based on incorrect
data/Page 4
Owner Owner's rights; Change of ownership;
Assignment/Page 5
Beneficiary and Payments to Who is the beneficiary; Change of
Beneficiary beneficiary; Payments to beneficiary/
Page 6
Purchase Payment Payment of the purchase payment; Limit on
elective deferrals/Page 6
Accumulation Value, How the accumulation value is
Cash Surrender Value, and determined; How the market adjusted
Market Adjusted Value value is determined; Surrender of the
certificate for the cash surrender value;
TSA prohibited distributions; Annual
statement of value/Pages 7-8
Annuity Payment Plans When annuity payments begin;
Different ways to receive annuity payments;
Direct rollover of distributions/Pages 9-10
Table of Settlement Rates Table showing monthly annuity payment
amounts for the various plans/Page 11
<PAGE>
CERTIFICATE DATA
GROUP CONTRACTHOLDER: ABC Corporation GROUP
as Trustee of the CONTRACT
Market Value Annuity Group Trust NUMBER: 33112-GP1
GROUP ANNUITY CERTIFICATE OWNER: John Doe
PURCHASE PAYMENT: $100,000.00
INITIAL GUARANTEE RATE: 8.00%
INITIAL GUARANTEE PERIOD: 5 Years
SURRENDER CHARGE: There are no surrender charges.
MARKET VALUE ADJUSTMENT: Applied at any time other than the last day
of a Guarantee Period or for death benefits.
ACCUMULATION VALUE AT END OF INITIAL GUARANTEE PERIOD: $146,932.81
ANNUITANT: John Doe
CERTIFICATE NUMBER: XXX-XXXXXX
CERTIFICATE DATE: March 18, 1991
CERTIFICATE SETTLEMENT DATE: March 18, 2021
<PAGE>
PAGE INTENTIONALLY LEFT BLANK
<PAGE>
==========================================================
Definitions
==========================================================
The following words are used often in this certificate. When we use these words,
this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
you, your, owner
The owner of this certificate. The owner may be someone other than the
annuitant. The owner may be changed as provided in this certificate.
we, our, us
IDS Life Insurance Company
certificate date
It is the date from which certificate anniversaries, certificate years, and
certificate months are determined. Your certificate date is shown under
certificate data, in the certificate.
certificate anniversary
The same day and month as the certificate date each year that the certificate
remains in force.
initial guarantee period
The period during which the initial guarantee rate will be credited. It is shown
under certificate data, in the certificate.
initial guarantee rate
The rate of interest credited to the purchase payment as described in the
accumulation value section. It is shown under certificate data, in the
certificate.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee period. It is
determined in accordance with the terms of the certificate.
renewal guarantee rate
The rate of interest credited to the renewal value as described in the
accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on a certificate
anniversary.
current rate
The applicable interest rate contained in a schedule of rates established by us
from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted for any
surrenders.
market adjusted value
The accumulation value adjusted by the market adjusted value formula.
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value is the cash surrender value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
written request
A request in writing signed by you and delivered to us at our corporate office.
settlement
If the settlement date is not the last day of a guarantee period, settlement is
the application of the market adjusted value of a certificate to provide annuity
payments. On the last day of a guarantee period, settlement is the application
of the accumulation value of a certificate to provide annuity payments.
settlement date
The date on which annuity payments are to begin under a certificate. This date
may be changed as provided in the certificate.
elective deferrals
Employer contributions to the annuity that are excludable from the taxpayer's
current income as provided in the Code.
Code
The Internal Revenue Code of 1986, as amended, and all related laws and
regulations which are in effect during the term of this certificate.
TSA
A Tax Sheltered Annuity as described in Section 403(b) of the Code.
<PAGE>
==========================================================
The Annuity Contract
==========================================================
What is the entire contract?
The Group Contract, including any endorsements or riders, and the application of
the Group Contractholder is the entire contract between the Contractholder and
us.
No one except one of our corporate officers (President, Vice President,
Secretary, or Assistant Secretary) can change or waive any of our rights or
requirements under the contract. That person must do so in writing. None of our
agents or other persons has the authority to change or waive any of our rights
or requirements under the contract.
Can this contract be modified?
We reserve the right to modify the contract to the extent necessary to qualify a
certificate issued under this contract, if purchased as part of a 401(a)
qualified plan or a TSA, to the extent necessary to comply with Section 401, 403
or any other applicable section of the Code, or to comply with the provisions of
your 401(a) qualified plan or TSA. We also reserve the right to modify the
contract to the extent necessary to qualify a certificate issued under this
contract, if purchased as part of a deferred compensation plan under Section 457
of the Code, to the extent necessary to comply with Section 457 or any other
applicable section of the Code, or to comply with the provisions of your
deferred compensation plan.
When will the certificate become incontestable?
This certificate is incontestable from its date of issue.
What if benefits are based on incorrect data?
If the amount of benefits is determined by data as to a person's age that is
incorrect, benefits will be recalculated on the basis of the correct data. Any
underpayments made by us will be made up immediately. Any overpayments made by
us will be subtracted from the future payments under this contract and/or as
otherwise legally permissible.
What federal and state laws govern the contract?
This contract is intended to qualify as an annuity contract for Federal income
tax purposes. To that end, the provisions of this contract are to be interpreted
to ensure or maintain such tax qualification, despite any other provisions to
the contrary. We reserve the right to amend this contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
The contract is governed by the law of the state in which it is delivered. The
values and benefits of the certificates are at least equal to those required by
such state.
<PAGE>
==========================================================
Owner
==========================================================
What are your rights as owner of this certificate?
As long as the annuitant is living and unless otherwise provided in the
contract, you may exercise all rights and privileges in the contract or allowed
by us.
What are your rights as owner if you are a trust or custodial account?
If you are a tax qualified trust or tax qualified custodial account, then your
trustees or custodians (or their successors) properly named by your trust or
custodial agreement may exercise all rights and privileges provided in this
certificate or allowed by us.
Can you change the ownership of this certificate?
This certificate may not be sold, assigned, transferred, discounted, or pledged
as collateral for a loan or as security for the performance of an obligation or
for any other purpose to any person other than as may be required or permitted
under Sections 401, 403, 457, or other applicable sections of the Code.
However, if you are the trustee of a tax-qualified trust or the custodian of a
tax-qualified custodial account, you may transfer ownership of this certificate
to the annuitant or to a qualified successor trustee or custodian if permitted
by the Code.
Or, if you are a trust or custodian or an employer as part of a qualified plan
under Section 401 or 403 or a deferred compensation plan under Section 457 of
the Code, you may transfer ownership of this certificate to the annuitant if
permitted by the Code.
Any permitted transfers must be on a form approved by us. The change must be
made while the annuitant is living. Once the change is recorded by us, it will
take effect subject to any action taken or payment made by us before the
recording.
<PAGE>
==========================================================
Beneficiary and Payments To
Beneficiary
==========================================================
What death benefits are paid if the annuitant or owner dies before settlement?
If the annuitant or owner dies before settlement while this certificate is in
force, we will pay the beneficiary the accumulation value.
The above amount will be payable in a lump sum upon receipt of due proof of
death of the annuitant. The beneficiary may elect to receive payment any time
within 5 years after the date of death of the annuitant.
Instead of a lump sum, payment may be made under an annuity payment plan
provided amounts are calculated in accordance with the Code, and:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. payments begin no later than:
a. one year after the date of death, in the case of a non-spouse
beneficiary; or
b. the date on which the annuitant would have attained age 70 1/2, in the
case of a spouse beneficiary; and
3. the plan provides equal or substantially equal payments over a period which
does not exceed the life of the beneficiary or the life expectancy of the
beneficiary, or in the case of a non-spouse beneficiary of a Section 457
plan, payments do not exceed a period of 15 years.
In this event, the reference to "annuitant" in the annuity payment plans section
will apply to the beneficiary.
To whom are the death benefits payable?
Benefits will be paid equally to all primary beneficiaries surviving the
annuitant. If none survive, proceeds will be paid equally to all contingent
beneficiaries surviving the annuitant. If no beneficiary survives the annuitant,
we will pay the benefits to you, if living, otherwise to your estate.
Who is the beneficiary?
Beneficiaries are those you name, in a form satisfactory to us, to receive the
benefits of this contract if the owner or annuitant die while this contract is
in force. The owner may change the beneficiary as provided below. If the
beneficiary has been changed, we will pay any benefits in accordance with your
last change of beneficiary request.
How do you change the beneficiary?
You may change the beneficiary any time while the annuitant is living by
satisfactory written request to us. Once the change is recorded by us, it will
take effect as of the date of your request, subject to any action taken or
payment made by us before the recording.
What are the rights of the beneficiary?
If the death benefit under this contract becomes payable to a beneficiary
(payee) under an Annuity Payment Plan, that payee shall have the right to name a
beneficiary. Any such request from the payee must be made on a form satisfactory
to us.
What is the spouse's option to continue this certificate?
If the annuitant's death occurs before the settlement date and before the
annuitant's age 70 1/2, the annuitant's spouse, if designated as sole
beneficiary, may elect in writing to postpone receipt of the death benefit and
instead continue this certificate in force. The election by the spouse must be
made within 60 days after we receive due proof of death. The certificate may be
continued in force only until the date on which the annuitant would have
attained age 70 1/2. Any annuity payment plan later elected by the spouse must
provide amounts calculated in accordance with the Code.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any, will be as
provided in the annuity payment plan then in effect.
==========================================================
Purchase Payment
==========================================================
What is the purchase payment for this certificate?
The purchase payment for this certificate is shown under certificate data. It is
payable to us on or before the date we deliver this certificate. It must be paid
or mailed to us at our corporate office or to an authorized agent.
Is there a limit on elective deferrals?
Elective deferrals made under the contract may not exceed the annual limit on
elective deferrals as provided in the Code.
<PAGE>
==========================================================
Accumulation Value,
Cash Surrender Value,
Market Adjusted Value
==========================================================
How is the accumulation value determined?
On the certificate date, the accumulation value of this certificate is the
purchase payment. Thereafter, interest accrues from day to day for the guarantee
period at the rate shown under certificate data. This rate represents an
effective annual yield. At no time while the certificate is in force shall
interest accrue at a rate less than 3% compounded annually. The accumulation
value will be adjusted for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation value of this
certificate at the time that any applicable premium taxes not previously
deducted are payable.
If a tax is payable at the time of your purchase payment and we choose to not
deduct it at that time, we further reserve the right to deduct it at a later
date.
How are renewal guarantee periods determined?
At the end of any guarantee period, a renewal guarantee period will begin. We
will notify you in writing 45 days before the renewal guarantee period. Each
renewal guarantee period will be one year unless you elect a different length
from those offered at the time. We must receive your written request at least 15
days before the renewal date. The renewal guarantee period may never extend
beyond the settlement date.
The accumulation value on the renewal date will be equal to the accumulation
value at the end of the guarantee period just ending. This value will earn
interest at the renewal guarantee rate. Upon written request, within 45 days of
the renewal guarantee period, we will notify you of the renewal guarantee rate
then in effect for certificates renewing at that time. The actual renewal
guarantee rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date before the end
of the current guarantee period adjusted by a formula. The formula adjustment
reflects the relationship between:
1. the interest rate we are then crediting for new certificate sales and
renewals (Form 33115) for the time remaining in your certificate's current
guarantee period; and
2. the guaranteed interest rate applicable to your certificate's current
guarantee period.
The market adjusted value may be more or less than the accumulation value.
The market adjusted value formula is as follows:
market adjusted value = renewal value
-----------------------
(N + t)
(1 + ic + .0025)
where: renewal value = the accumulation value at the end of your current
guarantee period.
N = the number of complete certificate years to the
end of your guarantee period.
t = the fraction of the certificate year remaining
to the end of your certificate year (for example,
if 180 days remain in a 365 day certificate year,
t would be .493)
ic = the current rate offered for new certificate
sales and renewals (Form 33115) for the number of
years left in your guarantee period (straight
line interpolation between whole year rates). If
N is zero, ic is the rate for one year guarantee
periods.
The market value adjustment is as follows:
market value adjustment =
market adjusted value - accumulation value
<PAGE>
There will be no market value adjustment made on the last day of a guarantee
period.
Can you request surrender of any amounts under this certificate before
settlement?
Yes. By written request to us and subject to the rules below you may:
1. surrender this certificate for the total cash surrender value;
2. partially surrender this certificate for a part of the cash surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment will be
deducted from the accumulation value of the certificate on the date of
surrender. You may surrender all or a portion of the cash surrender value.
However, the accumulation value that remains after a partial surrender must be
at least $2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to you within seven days of the
receipt of your written request.
Upon surrender of this certificate for the total cash surrender value, this
certificate will terminate. We may require that you return this certificate to
our corporate office before we pay the total cash surrender value.
What distributions are prohibited if your certificate is a TSA?
To meet the requirements of Section 403(b) of the Code, unless otherwise
provided in the Code, no amounts may be distributed unless you have:
1. attained age 59-1/2; or
2. separated from service; or
3. died; or
4. become disabled (as defined in Section 72(m)(7) of the Code); or
5. encountered hardship (within the meaning of Section 401(k) of the Code); and
then only such amounts as the Code may provide.
We will require satisfactory written proof of the event(s) in items 1 through 5
above prior to any distribution from the certificate.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period not to exceed
6 months from the date we receive your surrender request or the period permitted
by state insurance law, if less. If we defer payment more than 30 days, we will
pay annual interest of at least 3% on the amount deferred.
Will you receive information about your certificate values?
Yes. At least once a year we will send you a statement showing both the
accumulation value and the cash surrender value of this certificate. The
statement will specify the market value adjustment used to determine the cash
surrender value. This statement will be based on any laws or regulations that
apply.
We will also notify you 45 days before the end of a guarantee period concerning
renewal periods available and your right to surrender without a market value
adjustment on the last day of your guarantee period.
<PAGE>
==========================================================
Annuity Payment Plans
==========================================================
When will annuity payments begin?
The first payment will be made as of the settlement date. Before payments begin,
we will require satisfactory proof that the annuitant is alive. We may also
require that you exchange this certificate for a supplemental contract which
provides the annuity payments.
Can you change the settlement date?
Yes. Tell us the new date by written request. If you select a new date, it must
be at least 30 days after we receive your written request at our corporate
office.
The settlement date cannot be later than the later of:
1. April 1 following the calendar year in which the annuitant attains age 70
1/2; or
2. except for 5% owners, if later, April 1 following the calendar year in
which the annuitant retires; or
3. such other date which satisfies the minimum distribution requirements under
the Internal Revenue Code of 1986, as amended, its regulations and/or
promulgations by the Internal Revenue Service; or
4. such other date as agreed upon by us.
Notwithstanding either of the above, the settlement date cannot be later than
the later of:
1. the certificate anniversary nearest the annuitant's 85th birthday; or
2. the 10th certificate anniversary.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call these plans.
Plan A - This provides monthly annuity payments for the lifetime of the
annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of at
least five, ten, or fifteen years. You must select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain number
of months. We determine the number of months by dividing the market adjusted
value applied under this plan by the amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly payments will
be paid for the lifetime of the annuitant and a joint annuitant. When either the
annuitant or joint annuitant dies, we will continue to make monthly payments for
the lifetime of the survivor. No payments will be paid after the death of both
the annuitant and joint annuitant.
Plan E - This provides monthly fixed dollar annuity payments for a period of
years. The period of years may be no less than 10 nor more than 30.
What are the requirements for selecting a plan?
You may elect by written notice to us at any time at least 30 days prior to the
settlement date, to have the market adjusted value applied on the settlement
date to provide:
1. a lump-sum payment as a result of a total surrender as provided under cash
surrender value provision of this certificate; or
2. one of the annuity payment plans shown herein. Amounts payable under any
such annuity payment plan will be calculated in accordance with the Code.
Any such annuity payment plan must be provided:
a. in equal or substantially equal payments over a period no longer than
the life of the annuitant or the lives of the annuitant and a joint
annuitant; or
b. in equal or substantially equal payments over a period which does not
exceed the life expectancy of the annuitant, or the life expectancy of
the annuitant and a joint annuitant; and
c. any annuity payment plan selected must also meet the incidental death
benefit requirements under the Code.
If at least 30 days before the settlement date we have not received at our
corporate office your written request to select a plan, we will make payments
according to Plan B with payments guaranteed for 10 years, unless otherwise
required by the Code.
If the amount to be applied to a plan is not at least $2,000, or if payments are
to be made to other than a natural person, we have the right
<PAGE>
to make a lump-sum payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally endorsed by
the payee or payees as well as the annuitant (or joint annuitant under Plan D).
If the annuitant or joint annuitant does not endorse the check, other evidence
must be furnished to show that the annuitant or joint annuitant is still alive.
Can I delay distributions at settlement?
When you are eligible to receive a distribution from your contract, you may be
able to have all or a portion of that distribution paid in a "direct rollover."
A direct rollover means that, instead of paying you, we will make your payment
directly to an individual retirement account or annuity (IRA, as defined in
Section 408 of the Code) or to another Code Section 403(b) contract or custodial
account that accepts direct rollovers. If you choose a direct rollover, you will
not be taxed on your distribution until you later take it out of the IRA or
403(b) plan. However, you will be subject to any applicable charges under your
contract at the time of the distribution.
Do all distributions qualify for direct rollover?
Only an "eligible rollover distribution" (as defined in Code Section 402(c)) may
be paid as a direct rollover. In general, eligible rollover distributions DO NOT
include any payment that is part of a series of equal or almost equal payments
made at least once a year over:
- your life or life expectancy;
- the life or life expectancies of you and your beneficiary; or
- for a period of ten years or more.
Also, required minimum distributions made beginning in the year you retire or
reach age 70-1/2, as applicable, are not "eligible rollover distributions"
available for direct rollover.
Are eligible rollover distributions available for alternate payees or
beneficiaries?
The rules outlined above apply to your former spouse who is an "alternate payee"
under a "qualified domestic relations order" (as defined in Code Section
414(p)). A qualified domestic relations order is issued by a court, usually in
connection with a divorce or legal separation.
A beneficiary who is your surviving spouse may elect to have an eligible
rollover distribution directly rolled over into an IRA, but not into another
403(b) plan.
A distribution to a non-spouse is not an eligible rollover distribution.
<PAGE>
- ----------------------------------------------------------
Table of Settlement Rates
- ----------------------------------------------------------
What will be the amount of the monthly annuity payments?
If the settlement date is the last day of a guarantee period, the amount applied
to provide a payment will be the accumulation value on that date. The market
adjusted value is applied if the settlement date is not the last day of a
guarantee period. The amount applied to provide a payment will be the
accumulation value on the settlement date. The amount of each monthly annuity
payment for each $1,000 applied under any payment plan will be based on our
Table of Settlement Rates in effect at the time of the first payment. The
amounts will not be less than those shown in the table below.
The amount of such payments under plans A, B, and C will depend on the adjusted
age of the annuitant on the settlement date. The amount of such payments under
plan D will depend on the adjusted age of the annuitant and the joint annuitant
on the settlement date. Adjusted age means the age on the annuitant's nearest
birthday minus an "adjustment" based on the calendar year of the birth of the
annuitant as follows:
Calendar Calendar
Year of Year of
Annuitant's Adjust- Annuitant's Adjust-
Birth ment Birth ment
- ----- ---- ----- ----
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Amount of Each Monthly Annuity Payment Per $1,000 Applied
- --------------------------------------------------------------------------------------------------------------------------
Plan A Plan B Plan C Plan D - Joint and Survivor
Adjusted Age of Joint Annuitant
- --------------------------------------------------------------------------------------------------------------------------
Adj. Life 5 Years 10 Years 15 Years With Adj. 10 Years 5 Years Same 5 Years 10 Years
Age* Income Certain Certain Certain Refund Age* Younger Younger Age Older Older
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.25 4.25 4.22 4.18 4.10 55 3.47 3.62 3.77 3.90 4.01
60 4.72 4.70 4.66 4.57 4.48 60 3.71 3.90 4.10 4.28 4.42
65 5.35 5.32 5.22 5.05 4.97 65 4.01 4.28 4.54 4.79 4.99
66 5.51 5.47 5.36 5.16 5.08 66 4.08 4.36 4.65 4.91 5.13
67 5.67 5.63 5.50 5.26 5.20 67 4.16 4.46 4.76 5.04 5.28
68 5.85 5.80 5.65 5.37 5.33 68 4.24 4.56 4.89 5.19 5.43
69 6.04 5.98 5.80 5.49 5.47 69 4.33 4.67 5.02 5.34 5.61
70 6.25 6.18 5.96 5.60 5.61 70 4.42 4.79 5.16 5.51 5.79
71 6.47 6.39 6.14 5.71 5.76 71 4.52 4.91 5.31 5.69 5.99
72 6.71 6.62 6.31 5.83 5.93 72 4.63 5.04 5.48 5.88 6.20
73 6.97 6.86 6.50 5.94 6.10 73 4.74 5.19 5.66 6.09 6.43
74 7.26 7.12 6.69 6.04 6.28 74 4.86 5.34 5.85 6.32 6.68
75 7.56 7.39 6.89 6.14 6.48 75 4.99 5.51 6.06 6.56 6.96
76 7.90 7.69 7.09 6.24 6.68 76 5.13 5.69 6.28 6.82 7.25
77 8.26 8.01 7.29 6.33 6.90 77 5.28 5.88 6.52 7.11 7.56
78 8.65 8.34 7.49 6.41 7.13 78 5.43 6.09 6.78 7.42 7.90
79 9.07 8.69 7.69 6.48 7.38 79 5.61 6.32 7.07 7.75 8.27
80 9.53 9.07 7.89 6.55 7.64 80 5.79 6.56 7.38 8.11 8.67
81 10.03 9.46 8.08 6.61 7.91 81 5.99 6.82 7.71 8.50 9.09
82 10.57 9.87 8.26 6.66 8.21 82 6.20 7.11 8.07 8.92 9.55
83 11.16 10.30 8.43 6.70 8.51 83 6.43 7.42 8.45 9.37 10.04
84 11.79 10.74 8.59 6.74 8.83 84 6.68 7.75 8.87 9.86 10.57
85 12.48 11.19 8.74 6.77 9.18 85 6.96 8.11 9.32 10.38 11.14
90 16.68 13.42 9.26 6.85 11.11 90 8.67 10.38 12.09 13.50 14.67
- -------------------------------------------------------------------------------------------------------------------------
*Adjusted age of annuitant.
</TABLE>
- --------------------------------------------------------------------------------
The table above is based on the "1983 Individual Annuitant Mortality Table A"
assuming an interest rate of 3% per year compounded annually. Settlement rates
for any age not shown above, will be calculated on the same basis as those rates
shown in the table above. Such rates will be furnished by us upon request.
Amounts shown in the Table below are based on an assumed interest rate of 3% per
year compounded annually.
- --------------------------------------------------------------------------------
Plan E Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000
Applied
- --------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
- ------- ------- ------- ------- ------- -------
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------------------------------------------------------------------
<PAGE>
==========================================================
Group Annuity
Certificate
==========================================================
- - Purchase payment is payable in a single sum.
- - Annuity payments to begin on the settlement date.
- - This contract is nonparticipating. Dividends are not payable.
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
- --------------------------------------------------------------------------------
==========================================================
GROUP IRA
ANNUITY CONTRACT
==========================================================
- --------------------------------------------------------------------------------
o Purchase payments are payable in a single sum.
o Annuity payments begin on the settlement date.
o This contract is nonparticipating. Dividends are not payable.
Contract Holder: ABC Corporation, Trustee
Contract Number: 33113-GP1
Contract Date: July 1, 1997
IDS Life Insurance Company, herein called the Company, will pay the benefits
provided by this contract in accordance with and subject to all provisions of
this contract.
We issue this contract in consideration of the application of the
contractholder.
THE GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA WHICH MAY
RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN CASH SURRENDER BENEFITS.
Surrenders are available without market value adjustment on the last day of each
certificate guarantee period.
Signed for and issued by IDS Life Insurance Company, Minneapolis, Minnesota, as
of the contract date shown above.
President:
[GRAPHIC OMITTED]
Richard W. Kling
Secretary:
[GRAPHIC OMITTED]
William A. Stoltzmann
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
33113
<PAGE>
CONTRACT DATA
GROUP CONTRACTHOLDER: ABC Corporation, Trustee
GROUP CONTRACT NUMBER: 33113-GP1
SURRENDER CHARGE: There are no surrender charges.
MARKET VALUE ADJUSTMENT: Applied at any time other than the last day of a
Guaranteed Period or for death benefits.
GUARANTEE PERIODS: 1-10 Years
- --------------------------------------------------------------------------------
<PAGE>
==============================================================
Guide to Contract Provisions
==============================================================
Definitions Important words and meanings/Pages 4-5
The Annuity Contract Entire contract; Modification; Incontestability;
Benefits based on incorrect data/Page 6
Contractholder and Contractholder; Owner's rights; Change
Owner of ownership; Assignment/Page 7
Beneficiary and Payments to Who is the beneficiary; Change of
Beneficiary beneficiary; Payments to beneficiary/
Page 8
Purchase Payment Payment of the purchase payment/Page 9
Accumulation Value, How the accumulation value is
Cash Surrender Value, determined; Surrender of the certificate
and Market Adjusted Value for the cash surrender value; How market adjusted
value is determined; Annual statement of
value/Pages 10-12
Annuity Payment Plans When annuity payments begin; Different ways to
receive annuity payments/Pages 13-14
Table of Settlement Rates Table showing monthly annuity payment amounts for
the various plans/Page 15
<PAGE>
==============================================================
Definitions
==============================================================
The following words are used often in this contract. When we use these words,
this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
you, your, owner
The owner of the certificate. The owner is the same as the annuitant. The owner
is shown in the application unless the owner has been changed as provided in
this contract.
we, our, us
IDS Life Insurance Company
certificate date
It is the date from which certificate anniversaries, certificate years, and
certificate months are determined. The certificate date is shown under
certificate data, in the certificate.
certificate anniversary
The same day and month as the certificate date each year that the certificate
remains in force.
initial guarantee period
The period during which the initial guarantee rate will be credited. It is shown
under certificate data, in the certificate.
initial guarantee rate
The rate of interest credited to the purchase payment as described in the
accumulation value section. It is shown under certificate data, in the
certificate.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee period. It is
determined in accordance with the terms of the contract.
renewal guarantee rate
The rate of interest credited to the renewal value as described in the
accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on a certificate
anniversary.
current rate
The applicable interest rate contained in a schedule of rates established by us
from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted for any
surrenders.
market adjusted value
The accumulation value adjusted by the market adjusted value formula.
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value is the cash surrender value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
written request
A request in writing signed by the owner and delivered to us at our corporate
office.
<PAGE>
settlement
If the settlement date is not the last day of a guarantee period, settlement is
the application of the market adjusted value of a certificate to provide annuity
payments. On the last day of a guarantee period, settlement is the application
of the accumulation value of a certificate to provide annuity payments.
settlement date
The date on which annuity payments are to begin under a certificate. This date
may be changed as provided in the contract.
Code
The Internal Revenue Code of 1986, as amended, and all related laws and
regulations which are in effect during the term of this contract.
IRA
An Individual Retirement Annuity as described in Section 408(b) of the Code.
<PAGE>
===================================================
The Annuity Contract
===================================================
What is the entire contract?
This Group Contract, including any endorsements or riders, and the master
application of the Group Contractholder is the entire contract between the
Contractholder and us.
No one except one of our corporate officers (President, Vice President,
Secretary, or Assistant Secretary) can change or waive any of our rights or
requirements under the contract. That person must do so in writing. None of our
agents or other persons has the authority to change or waive any of our rights
or requirements under the contract.
Can this contract be modified?
We reserve the right to modify the contract to the extent necessary to qualify a
certificate issued under this contract as an IRA as described in Section 408(b)
of the Code or in any other applicable section of the Code.
When will the certificate become incontestable?
The certificate is incontestable from its date of issue.
What if benefits are based on incorrect data?
If the amount of benefits under the certificate is determined by data as to a
person's age or sex that is incorrect, benefits will be recalculated on the
basis of the correct data. Any underpayments made by us will be made up
immediately. Any overpayments made by us will be subtracted from the future
payments under this contract and/or as otherwise legally permissible.
What federal and state laws govern the contract?
This contract is intended to qualify as an annuity contract for Federal income
tax purposes. To that end, the provisions of this contract are to be interpreted
to ensure or maintain such tax qualification, despite any other provisions to
the contrary. We reserve the right to amend this contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
The contract is governed by the law of the state in which it is delivered. The
values and benefits of the certificates are at least equal to those required by
such state.
<PAGE>
===================================================
Contractholder and Owner
===================================================
Who is the Group Contractholder?
The group contractholder is listed on the cover page of this contract. The
contract provides for a successor contractholder. In the event the
contractholder should merge with another corporation, the new corporation would
be the group contractholder.
What are the rights of the owners of the certificates?
As long as the annuitant is living and unless otherwise provided in this
contract, the owner may exercise all rights and privileges in this contract or
allowed by us.
How can the ownership be changed on the certificate?
Your right to change ownership of the certificate is restricted. The certificate
may not be sold, assigned, transferred, discounted, or pledged as collateral for
a loan or as security for the performance of an obligation or for any other
purpose to any person other than as may be required or permitted under Section
408 of the Code or under any other applicable section of the Code. The owner's
interest in the certificate may be transferred to a former spouse, if any, under
a divorce decree or a written instrument incident to such divorce.
Any permitted transfers must be on a form approved by us. The change must be
made while the annuitant is living. Once the change is recorded by us, it will
take effect subject to any action taken or payment made by us before the
recording.
<PAGE>
==========================================================
Beneficiary and Payments
to Beneficiary
==========================================================
What death benefits are paid if the annuitant or certificate owner dies before
settlement?
If the annuitant or owner dies before settlement while certificate is in force,
we will pay the beneficiary the accumulation value.
The above amount will be payable in a lump sum upon receipt of due proof of
death of the annuitant. The beneficiary may elect to receive payment anytime
within 5 years after the date of death of the annuitant.
Instead of a lump sum, payment may be made under an annuity payment plan
provided amounts are calculated in accordance with the Code and:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. payments begin no later than:
a. one year after the date of death, in the case of a non-spouse
beneficiary; or
b. the date on which the annuitant would have attained age 70 1/2, in the
case of a spouse beneficiary; and
3. the plan provides equal or substantially equal payments over a period which
does not exceed the life of the beneficiary or the life expectancy of the
beneficiary.
In this event, the references to "annuitant" in the annuity payment plans
section will apply to the beneficiary.
To whom are the death benefits payable?
Benefits will be paid equally to all primary beneficiaries surviving the
annuitant. If none survive, proceeds will be paid equally to all contingent
beneficiaries surviving the annuitant. If no beneficiary survives the annuitant,
we will pay the benefits to the owner, if living, otherwise to the owner's
estate.
Who is the beneficiary?
Beneficiaries are those you name, in a form satisfactory to us, to receive the
benefits of this contract if the owner or annuitant dies while this contract is
in force. The owner may change the beneficiary as provided below. If the
beneficiary has been changed, we will pay any benefits in accordance with the
owner's last change of beneficiary request.
How does the owner change the beneficiary?
The owner may change the beneficiary any time while the annuitant is living by
satisfactory written request to us. Once the change is recorded by us, it will
take effect as of the date of the owner's request, subject to any action taken
or payment made by us before the recording.
What is the spouse's option to continue the certificate?
If the owner's death occurs prior to the settlement date, the owner's spouse, if
designated as sole beneficiary, may elect in writing to forego receipt of the
death benefit and instead continue the certificate in force as its owner. The
election by the spouse must be made within 60 days after we receive due proof of
death.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any, will be as
provided in the annuity payment plan then in effect.
==========================================================
Purchase Payment
==========================================================
What is the purchase payment for a certificate?
The purchase payment for a certificate is shown under certificate data on the
certificate. It is payable to us on or before we deliver the certificate. It
must be paid or mailed to us at our corporate office or to an authorized agent.
Except as otherwise provided in this paragraph, a purchase payment is that
amount which is a qualified transfer contribution from another individual
retirement account or individual retirement annuity, or a qualified rollover
contribution described in Sections 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of
the Code. If the certificate is maintained in connection with a Simplified
Employee Pension Plan or a SIMPLE Savings Plan, an employer's purchase payment
may not exceed the applicable contribution limits described in Section 408(k)
and 408(p) of the Code. In addition, if the certificate is maintained in
connection with a Simple Savings Plan, no purchase payment may be made to this
contract other than an employer contribution described in Sections
408(p)(2)(A)(i) and (ii) of the Code, or a rollover contribution described in
Section 408(d)(3)(G) of the Code.
All purchase payments must be made in cash.
<PAGE>
==========================================================
Accumulation Value,
Cash Surrender Value,
Market Adjusted Value
==========================================================
How is the accumulation value determined?
On the certificate date the accumulation value of the certificate is the
purchase payment. Thereafter interest accrues from day to day for the guarantee
periods initially at the rate shown under certificate data in the certificate
and later at the renewal rate(s). These rates represent an effective annual
yield. At no time while the certificate is in force shall interest accrue at a
rate less than 3% compounded annually. The accumulation value will be adjusted
for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation value of the
certificate at the time that any applicable premium taxes not previously
deducted are payable.
If a tax is payable at the time of the purchase payment and we choose to not
deduct it at that time, we further reserve the right to deduct it at a later
date.
How are renewal guarantee periods determined?
At the end of any guarantee period a renewal guarantee period will begin. We
will notify the owner in writing 45 days before the renewal guarantee period.
Each renewal guarantee period will be one year unless the owner elects a
different length from those offered at the time. We must receive the owner's
written request at least 15 days before the renewal date. The renewal guarantee
period may never extend beyond the settlement date.
The accumulation value on the renewal date will be equal to the accumulation
value at the end of the guarantee period just ending. This value will earn
interest at the renewal guarantee rate. Upon written request within 45 days of
the renewal guarantee period, we will notify the owner of the renewal guarantee
rate then in effect for certificates renewing at that time. The actual renewal
guarantee rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date before the end
of the current guarantee period adjusted by a formula. The formula adjustment
reflects the relationship between:
1. the interest rate we are then crediting for new certificate sales and
renewals (Form 33116) for the time remaining in the certificate's current
guarantee period; and
2. the guaranteed interest rate applicable to the certificate's current
guarantee period.
The market adjusted value may be more or less than the accumulation value.
The market adjusted value formula is as follows:
market adjusted value = renewal value
-----------------------
(N + t)
(1 + ic + .0025)
where: renewal value = the accumulation value at the end of the owner's
current guarantee period.
<PAGE>
N = the number of complete certificate years to
the end of the owner's guarantee period.
t = the fraction of the certificate year remaining
to the end of the owner's certificate year (for
example, if 180 days remain in a 365 day
certificate year, t would be .493)
ic = the current rate offered for new certificate
sales and renewals (Form 33116) for the number
of years left in the owner's guarantee period
(straight line interpolation between whole year
rates). If N is zero, ic is the rate for one
year guarantee periods.
The market value adjustment is as follows:
market value adjustment =
market adjusted value - accumulation value
There will be no market value adjustment made on the last day of a guarantee
period.
Can the owner request surrender of any amounts under the certificate before
settlement?
Yes. By written request to us and subject to the rules below the owner may:
1. surrender the certificate for the total cash surrender value;
2. partially surrender the certificate for a part of the cash surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment will be
deducted from the accumulation value of the certificate on the date of
surrender. The owner may surrender all or a portion of the cash surrender value.
However, the accumulation value that remains after a partial surrender must be
at least $2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to the owner within seven days of
the receipt of the owner's written request.
Upon surrender of the certificate for the total cash surrender value, the
certificate will terminate. We may require that the owner return the certificate
to our corporate office before we pay the total cash surrender value.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period not to exceed
6 months from the date we receive the owner's surrender request or the period
permitted by state insurance law, if less. If we defer payment more than 30
days, we will pay annual interest of at least 3% on the amount deferred.
<PAGE>
Will the owner receive information about the certificate values?
Yes. At least once a year we will send the owner a statement showing both the
accumulation value and the cash surrender value of the certificate. The
statement will specify the market value adjustment used to determine the cash
surrender value. This statement will be based on any laws or regulations that
apply.
We will also notify the owner 45 days before the end of a guarantee period
concerning renewal periods available and the owner's right to surrender without
a market value adjustment on the last day of the guarantee period.
<PAGE>
=========================================================
Annuity Payment Plans
=========================================================
When will annuity payments begin?
The first payment will be made as of the settlement date. Before payments begin
we will require satisfactory proof that the annuitant is alive. We may also
require that the owner exchange the certificate for a supplemental contract
which provides the annuity payments.
Can the owner change the settlement date?
Yes. The owner must tell us the new date by written request. However, it must be
at least 30 days after we receive your written request at our corporate office.
The settlement date cannot be later than the later of:
1. the April 1 following the calendar year in which the annuitant attains age
70 1/2; or
2. such other date, provided the Code allows the annuitant to satisfy the
minimum distribution requirements of Section 408(b)(3) of the Code with
respect to the certificate through a means other than settlement of this
contract, including the ability to satisfy such distribution requirements
from other individual retirement accounts and/or individual retirement
annuities that you may own.
Notwithstanding either of the above, the settlement date cannot be later than
the later of:
1. the certificate anniversary nearest the annuitant's 85th birthday; or
2. the 10th certificate anniversary.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call these plans.
Plan A - This provides monthly annuity payments for the lifetime of the
annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of at
least five, ten or fifteen years. The owner must select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain number
of months. We determine the number of months by dividing the market adjusted
value applied under this plan by the amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly payments will
be paid for the lifetime of the annuitant and a designated beneficiary. When
either the annuitant or designated beneficiary dies we will continue to make
monthly payments for the lifetime of the survivor. No payments will be paid
after the death of both the annuitant and designated beneficiary.
Plan E - This provides monthly fixed dollar annuity payments for a period of
years. The period of years may be no less than 10 nor more than 30.
What are the requirements for selecting a plan?
By written request to us at least 30 days before the settlement date, the owner
may elect to have the accumulation value applied on the settlement date to
provide:
1. a lump-sum payment as a result of a total surrender as provided under the
cash surrender value provision of the certificate; or
2. one of the annuity payment plans shown herein. Amounts payable under any
such annuity payment plan will be calculated
<PAGE>
in accordance with the Code. Any such annuity payment plan must be provided:
a. in equal or substantially equal payments over a period no longer than
the life of the annuitant or over the joint lives of the annuitant and
the designated beneficiary; or
b. in equal or substantially equal payments over a period which does not
exceed the life expectancy of the annuitant, or the joint life
expectancies of the annuitant and the designated beneficiary.
c. in the case of a non-spouse beneficiary, payments must be such that at
least 50% of the present value of the certificate is expected to be
distributed within the life expectancy of the annuitant.
If, at least 30 days before the settlement date, we have not received at our
corporate office the annuitant's written request to select a plan, we will make
payments according to Plan B with payments guaranteed for 10 years, unless
otherwise required by the Code.
If the amount to be applied to a plan is not at least $2,000, or if payments are
to be made to other than a natural person, we have the right to make a lump-sum
payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally endorsed by
the payee or payees as well as the annuitant (or designated beneficiary under
Plan D). If the annuitant or designated beneficiary does not endorse the check,
other evidence must be furnished to show that the annuitant or designated
beneficiary is still alive.
<PAGE>
==========================================================
Table of Settlement Rates
==========================================================
What will be the amount of the monthly annuity payments?
If the settlement date is the last day of a guarantee period, the amount applied
to provide a payment will be the accumulation value on that date. The market
adjusted value is applied if the settlement date is not the last day of a
guarantee period. The amount applied to provide a payment will be the
accumulation value on the settlement date. The amount of each monthly annuity
payment for each $1,000 applied under any payment plan will be based on our
Table of Settlement Rates in effect at the time of the first payment. The
amounts will not be less than those shown in the table below.
The amount of such payments under plans A, B, and C will depend on the sex and
the adjusted age of the annuitant on the settlement date. The amount of such
payments under plan D will depend on the sex and the adjusted age of the
annuitant and the designated beneficiary on the settlement date.
Adjusted age means the age on the annuitant's nearest birthday minus an
"adjustment" based on the calendar year of the birth of the annuitant as
follows:
Calendar Calendar
Year of Year of
Annuitant's Adjust- Annuitant's Adjust-
Birth ment Birth ment
- ----- ---- ----- ----
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Amount of Each Monthly Annuity Payment Per $1,000 Applied
- --------------------------------------------------------------------------------------------------------------------------
Plan A Plan B Plan C Plan D - Joint and Survivor
Adjusted Age of Female Designated Beneficiary
- --------------------------------------------------------------------------------------------------------------------------
Life 5 Years 10 Years 15 Years With Adj.
Adj. Income Certain Certain Certain Refund Male 10 Years 5 Years Same 5 Years 10 Years
Age* M F M F M F M F M F Age* Younger Younger Age Older Older
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.42 4.10 55 3.51 3.69 3.88 4.06 4.23
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.86 4.48 60 3.76 3.99 4.24 4.49 4.72
65 6.10 5.35 6.03 5.32 5.81 5.22 5.46 5.05 5.43 4.97 65 4.07 4.38 4.72 5.07 5.39
66 6.29 5.51 6.21 5.47 5.96 5.36 5.56 5.16 5.56 5.08 66 4.15 4.48 4.84 5.21 5.55
67 6.50 5.67 6.41 5.63 6.11 5.50 5.66 5.26 5.70 5.20 67 4.23 4.58 4.97 5.36 5.73
68 6.73 5.85 6.62 5.80 6.28 5.65 5.76 5.37 5.85 5.33 68 4.31 4.69 5.10 5.53 5.92
69 6.97 6.04 6.84 5.98 6.44 5.80 5.86 5.49 6.00 5.47 69 4.40 4.80 5.25 5.70 6.12
70 7.23 6.25 7.07 6.18 6.61 5.96 5.96 5.60 6.16 5.61 70 4.50 4.93 5.40 5.89 6.34
71 7.51 6.47 7.32 6.39 6.78 6.14 6.05 5.71 6.33 5.76 71 4.60 5.06 5.57 6.10 6.57
72 7.80 6.71 7.58 6.62 6.96 6.31 6.14 5.83 6.51 5.93 72 4.71 5.20 5.75 6.31 6.82
73 8.12 6.97 7.85 6.86 7.14 6.50 6.23 5.94 6.70 6.10 73 4.83 5.35 5.94 6.55 7.09
74 8.45 7.26 8.14 7.12 7.32 6.69 6.31 6.04 6.90 6.28 74 4.95 5.51 6.15 6.80 7.37
75 8.82 7.56 8.44 7.39 7.49 6.89 6.38 6.14 7.11 6.48 75 5.08 5.68 6.37 7.07 7.68
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
76 9.21 7.90 8.76 7.69 7.67 7.09 6.48 6.24 7.33 6.68 76 5.22 5.87 6.61 7.36 8.01
77 9.62 8.26 9.09 8.01 7.84 7.29 6.51 6.33 7.56 6.90 77 5.37 6.07 6.87 7.67 8.36
78 10.07 8.65 9.44 8.34 8.01 7.49 6.57 6.41 7.80 7.13 78 5.54 6.29 7.15 8.01 8.74
79 10.55 9.07 9.80 8.69 8.17 7.69 6.62 6.48 8.05 7.38 79 5.71 6.52 7.45 8.37 9.14
80 11.06 9.53 10.17 9.07 8.33 7.89 6.66 6.55 8.32 7.64 80 5.90 6.78 7.77 8.76 9.57
81 11.61 10.03 10.55 9.46 8.48 8.08 6.70 6.61 8.60 7.91 81 6.10 7.05 8.12 9.17 10.02
82 12.19 10.57 10.94 9.87 8.61 8.26 6.73 6.66 8.89 8.21 82 6.32 7.34 8.49 9.61 10.51
83 12.81 11.16 11.33 10.30 8.74 8.43 6.76 6.70 9.20 8.51 83 6.55 7.65 8.90 10.08 11.02
84 13.46 11.79 11.72 10.74 8.86 8.59 6.79 6.74 9.52 8.83 84 6.80 7.99 9.33 10.58 11.56
85 14.16 12.48 12.12 11.19 8.97 8.74 6.81 6.77 9.85 9.18 85 7.07 8.36 9.78 11.11 12.13
90 18.25 16.68 14.04 13.42 9.36 9.26 6.86 6.85 11.81 11.11 90 8.79 10.65 12.57 14.22 15.63
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Adjusted age of annuitant. M = Male F = Female
- --------------------------------------------------------------------------------
The table above is based on the "1983 Individual Annuitant Mortality Table A"
assuming an interest rate of 3% per year compounded annually. Settlement rates
for any age, or any combination of age and sex not shown above, will be
calculated on the same basis as those rates shown in the table above. Such rates
will be furnished by us upon request. Amounts shown in the Table below are based
on an assumed interest rate of 3% per year compounded annually.
- --------------------------------------------------------------------------------
Plan E Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000
Applied
- --------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
------- ------- ------- ------- ------- -------
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------------------------------------------------------------------
<PAGE>
=============================================================
Group IRA
Annuity Contract
=============================================================
o Purchase payment is payable in a single sum.
o Annuity payments to begin on the settlement date.
o The certificate is nonparticipating. Dividends are not payable.
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
==========================================================
Group IRA
Annuity Certificate
==========================================================
- - Purchase payment is payable in a single sum.
- - Annuity payments to begin on the settlement date.
- - This contract is nonparticipating. Dividends are not payable.
This annuity certificate summarizes the provisions of the Group Annuity Contract
specified on the enrollment application. It does not amend or modify any of the
provisions of the Group Contract. All rights, privileges and benefits are
governed by the provisions of the Group Contract. The Group Contract may be
inspected by the certificate owner or annuitant at the Contractholder's office
during office hours.
If the annuitant is living on the Settlement Date, we will begin to pay you
monthly annuity payments. Any payments made by us are subject to the Terms of
the Group contract.
We issue this certificate in consideration of your enrollment application, and
payment of the single purchase payment.
THIS GROUP ANNUITY CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA WHICH MAY
RESULT IN BOTH UPWARD AND DOWNWARD ADJUSTMENTS IN CASH SURRENDER BENEFITS.
Surrenders are available without market value adjustment on the last day of each
certificate guarantee period.
NOTICE OF YOUR RIGHT TO EXAMINE THIS CERTIFICATE FOR SEVEN DAYS. If for any
reason you are not satisfied with this certificate, return it to us or our agent
within seven days after you receive it. We will then cancel this certificate and
refund all purchase payments you have made. This certificate will then be
considered void from the start.
Signed for and issued by IDS Life Insurance Company, Minneapolis, Minnesota, as
of the certificate date shown below.
President:
[GRAPHIC OMITTED]
Richard W. Kling
Secretary:
[GRAPHIC OMITTED]
William A. Stoltzmann
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
ANNUITANT: John Doe
CERTIFICATE NUMBER: XXX-XXXXXX
CERTIFICATE DATE: March 18, 1991
CERTIFICATE SETTLEMENT DATE: March 18, 2021
33116
<PAGE>
==========================================================
Guide to Certificate Provisions
==========================================================
Definitions Important words and meanings/Page 3
The Annuity Contract Entire contract; Modification;
Incontestability; Benefits
based on incorrect data/Page 4
Owner Owner's rights; Change of ownership/Page 4
Beneficiary and Payments Who is the beneficiary; Change of
to Beneficiary beneficiary; Payments to
beneficiary/Page 5
Purchase Payment Payment of the purchase payment/Page 6
Accumulation Value, How the accumulation value is determined;
Cash Surrender Value, and Surrender of the certificate for the cash surrender
Market Adjusted Value value; How the market adjusted value is determined;
Annual statement of value/Pages 7-8
Annuity Payment Plans When annuity payments begin; Different ways to
receive annuity payments/Page 9
Table of Settlement Rates Table showing monthly annuity
payment amounts for the various plans/Page 10
<PAGE>
CERTIFICATE DATA
GROUP CONTRACTHOLDER: ABC Corporation GROUP
as Trustee of the CONTRACT
Market Value Annuity Group Trust NUMBER: 33113-GP1
GROUP ANNUITY CERTIFICATE OWNER: John Doe
PURCHASE PAYMENT: $100,000.00
INITIAL GUARANTEE RATE: 8.00%
INITIAL GUARANTEE PERIOD: 5 Years
SURRENDER CHARGE: There are no surrender charges.
MARKET VALUE ADJUSTMENT: Applied at any time other than the last day
of a Guarantee Period or for death benefits.
ACCUMULATION VALUE AT END OF INITIAL GUARANTEE PERIOD: $146,932.81
ANNUITANT: John Doe
CERTIFICATE NUMBER: XXX-XXXXXX
CERTIFICATE DATE: March 18, 1991
CERTIFICATE SETTLEMENT DATE: March 18, 2021
<PAGE>
This page intentionally left blank
<PAGE>
==========================================================
Definitions
==========================================================
The following words are used often in this certificate. When we use these words,
this is what we mean:
the annuitant
The person on whose life monthly annuity payments depend.
you, your, owner
The owner of this certificate. The owner is the same as the annuitant. The owner
is shown in the application unless the owner has been changed as provided in
this certificate.
we, our, us
IDS Life Insurance Company
certificate date
It is the date from which certificate anniversaries, certificate years, and
certificate months are determined. Your certificate date is shown under
certificate data, in the certificate.
certificate anniversary
The same day and month as the certificate date each year that the certificate
remains in force.
initial guarantee period
The period during which the initial guarantee rate will be credited. It is shown
under certificate data, in the certificate.
initial guarantee rate
The rate of interest credited to the purchase payment as described in the
accumulation value section. It is shown under certificate data, in the
certificate.
renewal guarantee period
A renewal guarantee period will begin at the end of each guarantee period. It is
determined in accordance with the terms of the certificate.
renewal guarantee rate
The rate of interest credited to the renewal value as described in the
accumulation value section.
renewal date
The first day of a renewal guarantee period. It will always be on a certificate
anniversary.
current rate
The applicable interest rate contained in a schedule of rates established by us
from time to time for various guarantee periods.
accumulation value
The value of the purchase payment plus interest credited, adjusted for any
surrenders.
market adjusted value
The accumulation value adjusted by the market adjusted value formula.
market value adjustment
The market adjusted value minus the accumulation value.
renewal value
The accumulation value at the end of the guarantee period.
cash surrender value
The market adjusted value is the cash surrender value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
written request
A request in writing signed by you and delivered to us at our corporate office.
settlement
If the settlement date is not the last day of a guarantee period, settlement is
the application of the market adjusted value of a certificate to provide annuity
payments. On the last day of a guarantee period, settlement is the application
of the accumulation value of a certificate to provide annuity payments.
settlement date
The date on which annuity payments are to begin under a certificate. This date
may be changed as provided in the certificate.
Code
The Internal Revenue Code of 1986, as amended, and all related laws and
regulations which are in effect during the term of this certificate.
IRA
An Individual Retirement Annuity as described in Section 408(b) of the Code.
<PAGE>
==========================================================
The Annuity Contract
==========================================================
What is the entire contract?
The Group Contract, including any endorsements or riders, and the application of
the Group Contractholder is the entire contract between the Contractholder and
us.
No one except one of our corporate officers (President, Vice President,
Secretary, or Assistant Secretary) can change or waive any of our rights or
requirements under the contract. That person must do so in writing. None of our
agents or other persons has the authority to change or waive any of our rights
or requirements under the contract.
Can the contract be modified?
We reserve the right to modify the contract to the extent necessary to qualify a
certificate issued under the contract as an IRA as described in Section 408(b)
of the Code or in any other applicable section of the Code.
When will the certificate become incontestable?
This certificate is incontestable from its date of issue.
What if benefits are based on incorrect data?
If the amount of benefits is determined by data as to a person's age or sex that
is incorrect, benefits will be recalculated on the basis of the correct data.
Any underpayments made by us will be made up immediately. Any overpayments made
by us will be subtracted from the future payments under this contract and/or as
otherwise legally permissible.
What federal and state laws govern the contract?
This contract is intended to qualify as an annuity contract for Federal income
tax purposes. To that end, the provisions of this contract are to be interpreted
to ensure or maintain such tax qualification, despite any other provisions to
the contrary. We reserve the right to amend this contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
The contract is governed by the law of the state in which it is delivered. The
values and benefits of this certificate is at least equal to those required by
such state.
==========================================================
Owner
==========================================================
What are your rights as owner of this certificate?
As long as the annuitant is living and unless otherwise provided in the
contract, you may exercise all rights and privileges in the contract or allowed
by us. Your entire interest as owner is non-forfeitable.
Can you change the ownership of this certificate?
Your right to change ownership of this certificate is restricted. This
certificate may not be sold, assigned, transferred, discounted, or pledged as
collateral for a loan or as security for the performance of an obligation or for
any other purpose to any person other than as may be required or permitted under
Section 408 of the Code or under any other applicable section of the Code. Your
interest in this contract may be transferred to your former spouse, if any,
under a divorce decree or a written instrument incident to such divorce.
Any permitted transfers must be on a form approved by us. The change must be
made while the annuitant is living. Once the change is recorded by us, it will
take effect subject to any action taken or payment made by us before the
recording
<PAGE>
==========================================================
Beneficiary and Payments
to Beneficiary
==========================================================
What death benefits are paid if the annuitant or owner dies before settlement?
If the annuitant or owner dies before settlement while this certificate is in
force, we will pay the beneficiary the accumulation value.
The above amount will be payable in a lump sum upon receipt of due proof of
death of the annuitant. The beneficiary may elect to receive payment any time
within 5 years after the date of death of the annuitant. Instead of a lump sum,
payment may be made under an annuity payment plan provided amounts are
calculated in accordance with the Code and:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. payments begin no later than:
a. one year after the date of death, in the case of a non-spouse
beneficiary; or
b. the date on which the annuitant would have attained age 70 1/2 if
later than one year after the date of death, in case of a spouse
beneficiary; and
3. the plan provides equal or substantially equal payments over a period which
does not exceed the life of the beneficiary or the life expectancy of the
beneficiary.
In this event, the reference to "annuitant" in the annuity payment plans section
will apply to the beneficiary.
To whom are the death benefits payable?
Benefits will be paid equally to all primary beneficiaries surviving the
annuitant. If none survive, proceeds will be paid equally to all contingent
beneficiaries surviving the annuitant. If no beneficiary survives the annuitant,
we will pay the benefits to you, if living, otherwise to your estate.
Who is the beneficiary?
Beneficiaries are those you name, in a form satisfactory to us, to receive the
benefits of this contract if the owner or annuitant dies while this contract is
in force. The owner may change the beneficiary as provided below. If the
beneficiary has been changed, we will pay any benefits in accordance with your
last change of beneficiary request.
How do you change the beneficiary?
You may change the beneficiary any time while the annuitant is living by
satisfactory written request to us. Once the change is recorded by us, it will
take effect as of the date of your request, subject to any action taken or
payment made by us before the recording.
What is the spouse's option to continue this certificate?
If the annuitant's death occurs before the settlement date, the annuitant's
spouse, if designated as sole beneficiary, may elect in writing to forego
receipt of the death benefit and instead continue this certificate in force as
its owner and annuitant. The election by the spouse must be made within 60 days
after we receive due proof of death. In this event, the settlement date may not
be later than the April 1 following the calendar year in which the spouse
attains age 70 1/2.
What if the annuitant dies after settlement?
If the annuitant dies after settlement, the amount payable, if any, will be as
provided in the annuity payment plan then in effect.
<PAGE>
==========================================================
Purchase Payment
==========================================================
What is the purchase payment for this certificate?
The purchase payment for this certificate is shown under certificate data. It is
payable to us on or before the date we deliver this certificate. It must be paid
or mailed to us at our corporate office or to an authorized agent.
Except as otherwise provided in this paragraph, a purchase payment is that
amount which is a qualified transfer contribution from another individual
retirement account or individual retirement annuity, or a qualified rollover
contribution described in Sections 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of
the Code. If this certificate is maintained in connection with a Simplified
Employee Pension Plan or a SIMPLE Savings Plan, an employer's purchase payment
may not exceed the applicable contribution limits described in Section 408(k)
and 408(p) of the Code. In addition, if this contract is maintained in
connection with a Simple Savings Plan, no purchase payment may be made to this
contract other than an employer contribution described in Sections
408(p)(2)(A)(i) and (ii) of the Code, or a rollover contribution described in
Section 408(d)(3)(G) of the Code.
All purchase payments must be made in cash.
<PAGE>
==========================================================
Accumulation Value,
Cash Surrender Value,
Market Adjusted Value
==========================================================
How is the accumulation value determined?
On the certificate date the accumulation value of this certificate is the
purchase payment. Thereafter interest accrues from day to day for the guarantee
period at the rate shown under certificate data. This rate represents an
effective annual yield. At no time while the certificate is in force shall
interest accrue at a rate less than 3% compounded annually. The accumulation
value will be adjusted for any amounts surrendered.
Are there premium tax charges?
We reserve the right to deduct an amount from the accumulation value of this
certificate at the time that any applicable premium taxes not previously
deducted are payable.
If a tax is payable at the time of your purchase payment and we choose to not
deduct it at that time, we further reserve the right to deduct it at a later
date.
How are renewal guarantee periods determined?
At the end of any guarantee period, a renewal guarantee period will begin. We
will notify you in writing 45 days before the renewal guarantee period. Each
renewal guarantee period will be one year unless you elect a different length
from those offered at the time. We must receive your written request at least 15
days before the renewal date. The renewal guarantee period may never extend
beyond the settlement date.
The accumulation value on the renewal date will be equal to the accumulation
value at the end of the guarantee period just ending. This value will earn
interest at the renewal guarantee rate. Upon written request, within 45 days of
the renewal guarantee period, we will notify you of the renewal guarantee rate
then in effect for certificates renewing at that time. The actual renewal
guarantee rate will be determined on the renewal date.
What is the market adjusted value and how is it determined?
The market adjusted value is the accumulation value on any date before the end
of the current guarantee period adjusted by a formula. The formula adjustment
reflects the relationship between:
1. the interest rate we are then crediting for new certificate sales and
renewals (Form 33116) for the time remaining in your certificate's current
guarantee period; and
2. the guaranteed interest rate applicable to your certificate's current
guarantee period.
The market adjusted value may be more or less than the accumulation value.
The market adjusted value formula is as follows:
market adjusted value = renewal value
-----------------------
(N + t)
(1 + ic + .0025)
where: renewal value = the accumulation value at the end of your current
guarantee period.
N = the number of complete certificate years to the
end of your guarantee period.
t = the fraction of the certificate year remaining
to the end of your certificate year (for example,
if 180 days remain in a 365 day certificate year,
t would be .493)
ic = the current rate offered for new certificate
sales and renewals (Form 33116) for the number of
years left in your guarantee period (straight line
interpolation between whole year rates). If N is
zero, ic is the rate for one year guarantee
periods.
<PAGE>
The market value adjustment is as follows:
market value adjustment =
market adjusted value - accumulation value
There will be no market value adjustment made on the last day of a guarantee
period.
Can you request surrender of any amounts under this certificate before
settlement?
Yes. By written request to us and subject to the rules below you may:
1. surrender this certificate for the total cash surrender value;
2. partially surrender this certificate for a part of the cash surrender value.
How is the cash surrender value determined?
The cash surrender value is the market adjusted value. On the last day of a
guarantee period, the cash surrender value is the accumulation value.
What are the rules for a surrender or partial surrender?
The amount surrendered and any applicable market value adjustment will be
deducted from the accumulation value of the certificate on the date of
surrender. You may surrender all or a portion of the cash surrender value.
However, the accumulation value that remains after a partial surrender must be
at least $2,000. Any partial surrender must be at least $250.
The surrender payment will normally be mailed to you within seven days of the
receipt of your written request.
Upon surrender of this certificate for the total cash surrender value, this
certificate will terminate. We may require that you return this certificate to
our corporate office before we pay the total cash surrender value.
Can we delay or suspend payment of a partial or full surrender?
We may defer payment of any partial or full surrender for a period not to exceed
6 months from the date we receive your surrender request or the period permitted
by state insurance law, if less. If we defer payment more than 30 days, we will
pay annual interest of at least 3% on the amount deferred.
Will you receive information about your certificate values?
Yes. Separate records are maintained for the interest of each IRA participant.
At least once a year we will send you a statement showing both the accumulation
value and the cash surrender value of this certificate. The statement will
specify the market value adjustment used to determine the cash surrender value.
This statement will be based on any laws or regulations that apply.
We will also notify you 45 days before the end of a guarantee period concerning
renewal periods available and your right to surrender without a market value
adjustment on the last day of your guarantee period.
<PAGE>
==========================================================
Annuity Payment Plans
==========================================================
When will annuity payments begin?
The first payment will be made as of the settlement date. Before payments begin,
we will require satisfactory proof that the annuitant is alive. We may also
require that you exchange this certificate for a supplemental contract which
provides the annuity payments.
Can you change the settlement date?
Yes. Tell us the new date by written request. If you select a new date, it must
be at least 30 days after we receive your written request at our corporate
office.The settlement date cannot be later than the later of:
1. the April 1 following the calendar year in which the annuitant attains age
70 1/2; or
2. such other date, provided the Code allows you to satisfy the minimum
distribution requirements of Section 408(b)(3) of the Code with respect to
this certificate through a means other than settlement of this certificate,
including the ability to satisfy such distribution requirements from other
individual retirement accounts and/or individual retirement annuities that
you may own.
Notwithstanding either of the above, the settlement date cannot be later than
the later of:
1. the certificate anniversary nearest the annuitant's 85th birthday; or
2. the 10th certificate anniversary.
What are the annuity payment plans?
There are different ways to receive annuity payments. We call these plans.
Plan A - This provides monthly annuity payments for the lifetime of the
annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of at
least five, ten, or fifteen years. You must select the guaranteed period.
Plan C - This provides monthly annuity payments for the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain number
of months. We determine the number of months by dividing the market adjusted
value applied under this plan by the amount of the monthly annuity payment.
Plan D - We call this a joint and survivor life annuity. Monthly payments will
be paid for the lifetime of the annuitant and a designated beneficiary. When
either the annuitant or designated beneficiary dies, we will continue to make
monthly payments for the lifetime of the survivor. No payments will be paid
after the death of both the annuitant and designated beneficiary.
Plan E - This provides monthly fixed dollar annuity payments for a period of
years. The period of years may be no less than 10 nor more than 30.
What are the requirements for selecting a plan?
You may elect by written notice to us at any time at least 30 days before the
settlement date to have the market adjusted value applied on the settlement date
to provide:
1. a lump sum payment as a result of a total surrender as provided under the
cash surrender value provision of this certificate; or
2. one of the annuity payment plans shown herein. Amounts payable under any
such annuity payment plan will be calculated in accordance with the Code.
Any such annuity payment plan must be provided:
a. in equal or substantially equal payments over a period no longer than
the life of the annuitant or over the life of the annuitant and the
designated beneficiary; or
b. in equal or substantially equal payments over a period which does not
exceed the life expectancy of the annuitant, or the life expectancy of
the annuitant and the designated beneficiary.
c. in the case of a non-spouse beneficiary, payments must be such that at
least 50% of the present value of the certificate is expected to be
distributed within the life expectancy of the annuitant.
If at least 30 days before the settlement date we have not received at our
corporate office your written request to select a plan, we will make payments
according to Plan B with payments guaranteed for 10 years, unless otherwise
required by the Code.
If the amount to be applied to a plan is not at least $2,000, or if payments are
to be made to other than a natural person, we have the right to make a lump sum
payment of the cash surrender value.
How will payments be made?
Payments will be made by us by check. The check must be personally endorsed by
the payee or payees as well as the annuitant (or designated beneficiary under
Plan D). If the annuitant or designated beneficiary does not endorse the check,
other evidence must be furnished to show that the annuitant or designated
beneficiary is still alive.
<PAGE>
- ----------------------------------------------------------
Table of Settlement Rates
- ----------------------------------------------------------
What will be the amount of the monthly annuity payments?
If the settlement date is the last day of a guarantee period, the amount applied
to provide a payment will be the accumulation value on that date. The market
adjusted value is applied if the settlement date is not the last day of a
guarantee period. The amount applied to provide a payment will be the
accumulation value on the settlement date. The amount of each monthly annuity
payment for each $1,000 applied under any payment plan will be based on our
Table of Settlement Rates in effect at the time of the first payment. The
amounts will not be less than those shown in the table below.
The amount of such payments under plans A, B, and C will depend on the sex and
the adjusted age of the annuitant on the settlement date. The amount of such
payments under plan D will depend on the sex and the adjusted age of the
annuitant and the designated beneficiary on the settlement date. Adjusted age
means the age on the annuitant's nearest birthday minus an "adjustment" based on
the calendar year of the birth of the annuitant as follows:
Calendar Calendar
Year of Year of
Annuitant's Adjust- Annuitant's Adjust-
Birth ment Birth ment
- ----- ---- ----- ----
Prior to 1920 0 1945 through 1949 6
1920 through 1924 1 1950 through 1959 7
1925 through 1929 2 1960 through 1969 8
1930 through 1934 3 1970 through 1979 9
1935 through 1939 4 1980 through 1989 10
1940 through 1944 5 After 1989 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Amount of Each Monthly Annuity Payment Per $1,000 Applied
- --------------------------------------------------------------------------------------------------------------------------
Plan A Plan B Plan C Plan D - Joint and Survivor
Adjusted Age of Female Designated Beneficiary
- --------------------------------------------------------------------------------------------------------------------------
Life 5 Years 10 Years 15 Years With Adj.
Adj. Income Certain Certain Certain Refund Male 10 Years 5 Years Same 5 Years 10 Years
Age* M F M F M F M F M F Age* Younger Younger Age Older Older
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.42 4.10 55 3.51 3.69 3.88 4.06 4.23
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.86 4.48 60 3.76 3.99 4.24 4.49 4.72
65 6.10 5.35 6.03 5.32 5.81 5.22 5.46 5.05 5.43 4.97 65 4.07 4.38 4.72 5.07 5.39
66 6.29 5.51 6.21 5.47 5.96 5.36 5.56 5.16 5.56 5.08 66 4.15 4.48 4.84 5.21 5.55
67 6.50 5.67 6.41 5.63 6.11 5.50 5.66 5.26 5.70 5.20 67 4.23 4.58 4.97 5.36 5.73
68 6.73 5.85 6.62 5.80 6.28 5.65 5.76 5.37 5.85 5.33 68 4.31 4.69 5.10 5.53 5.92
69 6.97 6.04 6.84 5.98 6.44 5.80 5.86 5.49 6.00 5.47 69 4.40 4.80 5.25 5.70 6.12
70 7.23 6.25 7.07 6.18 6.61 5.96 5.96 5.60 6.16 5.61 70 4.50 4.93 5.40 5.89 6.34
71 7.51 6.47 7.32 6.39 6.78 6.14 6.05 5.71 6.33 5.76 71 4.60 5.06 5.57 6.10 6.57
72 7.80 6.71 7.58 6.62 6.96 6.31 6.14 5.83 6.51 5.93 72 4.71 5.20 5.75 6.31 6.82
73 8.12 6.97 7.85 6.86 7.14 6.50 6.23 5.94 6.70 6.10 73 4.83 5.35 5.94 6.55 7.09
74 8.45 7.26 8.14 7.12 7.32 6.69 6.31 6.04 6.90 6.28 74 4.95 5.51 6.15 6.80 7.37
75 8.82 7.56 8.44 7.39 7.49 6.89 6.38 6.14 7.11 6.48 75 5.08 5.68 6.37 7.07 7.68
76 9.21 7.90 8.76 7.69 7.67 7.09 6.48 6.24 7.33 6.68 76 5.22 5.87 6.61 7.36 8.01
77 9.62 8.26 9.09 8.01 7.84 7.29 6.51 6.33 7.56 6.90 77 5.37 6.07 6.87 7.67 8.36
78 10.07 8.65 9.44 8.34 8.01 7.49 6.57 6.41 7.80 7.13 78 5.54 6.29 7.15 8.01 8.74
79 10.55 9.07 9.80 8.69 8.17 7.69 6.62 6.48 8.05 7.38 79 5.71 6.52 7.45 8.37 9.14
80 11.06 9.53 10.17 9.07 8.33 7.89 6.66 6.55 8.32 7.64 80 5.90 6.78 7.77 8.76 9.57
81 11.61 10.03 10.55 9.46 8.48 8.08 6.70 6.61 8.60 7.91 81 6.10 7.05 8.12 9.17 10.02
82 12.19 10.57 10.94 9.87 8.61 8.26 6.73 6.66 8.89 8.21 82 6.32 7.34 8.49 9.61 10.51
83 12.81 11.16 11.33 10.30 8.74 8.43 6.76 6.70 9.20 8.51 83 6.55 7.65 8.90 10.08 11.02
84 13.46 11.79 11.72 10.74 8.86 8.59 6.79 6.74 9.52 8.83 84 6.80 7.99 9.33 10.58 11.56
85 14.16 12.48 12.12 11.19 8.97 8.74 6.81 6.77 9.85 9.18 85 7.07 8.36 9.78 11.11 12.13
90 18.25 16.68 14.04 13.42 9.36 9.26 6.86 6.85 11.81 11.11 90 8.79 10.65 12.57 14.22 15.63
- -------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
*Adjusted age of annuitant. M = Male F = Female
</TABLE>
- --------------------------------------------------------------------------------
The table above is based on the "1983 Individual Annuitant Mortality Table A"
assuming an interest rate of 3% per year compounded annually. Settlement rates
for any age, or any combination of age and sex not shown above, will be
calculated on the same basis as those rates shown in the table above. Such rates
will be furnished by us upon request. Amounts shown in the Table below are based
on an assumed interest rate of 3% per year compounded annually.
- --------------------------------------------------------------------------------
Plan E Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000
Applied
- --------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment
- ------- ------- ------- ------- ------- -------
10 $9.61 17 $6.23 24 $4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------------------------------------------------------------------
<PAGE>
==========================================================
Group IRA
Annuity Certificate
==========================================================
- - Purchase payment is payable in a single sum.
- - Annuity payments to begin on the settlement date.
- - This contract is nonparticipating. Dividends are not payable.
[GRAPHIC OMITTED]
AMERICAN
EXPRESS
Financial
Advisors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
<PAGE>
IDS LIFE INSURANCE COMPANY
POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors of IDS Life Insurance Company on
behalf of the below listed registrants that previously have filed registration
statements and amendments thereto pursuant to the requirements of the Securities
Act of 1933 and the Investment Company Act of 1940 with the Securities and
Exchange Commission:
1933 Act 1940 Act
Reg. Number Reg. Number
IDS Life Variable Account 10
IDS Life Flexible Portfolio Annuity 33-62407 811-07355
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Flexible Annuity 33-4173 811-3217
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Variable Retirement and Combination
Retirement Annuities 2-73114 811-3217
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Employee Benefit Annuity 33-52518 811-3217
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Group Variable Annuity Contract 33-47302 811-3217
IDS Life Insurance Company
IDS Life Group Variable Annuity Contract
(Fixed Account) 33-48701 N/A
IDS Life Insurance Company
IDS Life Guaranteed Term Annuity 33-28976 N/A
IDS Life Insurance Company
IDS Life Flexible Payment Market Value Annuity 33-50968 N/A
IDS Life Variable Life Separate Account
Flexible Premium Variable Life Insurance Policy 33-11165 811-4298
IDS Life Variable Life Separate Account
Flexible Premium Survivorship Variable
Life Insurance Policy 33-62457 811-4298
IDS Life Variable Life Separate Account
Single Premium Variable Life
Insurance Policy 2-97637 811-4298
IDS Life Variable Account for Smith Barney
Single Premium Variable Life Insurance Policy 33-5210 811-4652
IDS Life Account SBS
Symphony Annuity 33-40779 812-7731
IDS Life Account RE
IDS Life Real Estate Variable Annuity 33-13375 N/A
IDS Life Variable Annuity Fund A 2-29081 811-1653
IDS Life Variable Annuity Fund B 2-47430 811-1674
<PAGE>
hereby constitutes and appoints William A. Stoltzmann, Mary Ellyn Minenko,
Eileen J. Newhouse, Sherilyn K. Beck, Colin Lancaster, Bruce Kohn and Timothy S.
Meehan or any one of them, as her or his attorney-in-fact and agent, to sign for
her or him in her or his name, place and stead any and all filings, applications
(including applications for exemptive relief), periodic reports, registration
statements for existing or future products of existing separate accounts (with
all exhibits and other documents required or desirable in connection therewith),
other documents, and amendments thereto and to file such filings, applications,
periodic reports, registration statements, other documents, and amendments
thereto with the Securities and Exchange Commission, and any necessary states,
and grants to any or all of them the full power and authority to do and perform
each and every act required or necessary in connection therewith.
Dated the 19th day of August, 1997.
/s/ David R. Hubers August 15, 1997
David R. Hubers
Director
/s/ Richard W. Kling August 18, 1997
Richard W. Kling
Director and President
/s/ Paul F. Kolkman August 19, 1997
Paul F. Kolkman
Director and Executive Vice
President
/s/ James A. Mitchell August 15, 1997
James A. Mitchell
Director, Chairman of the
Board and Chief Executive Officer
/s/ Barry J. Murphy August 14, 1997
Barry J. Murphy
Director and Executive Vice
President, Client Service
/s/ Stuart A. Sedlacek August 19, 1997
Stuart A. Sedlacek
Director and Executive Vice
President, Assured Assets
/s/ Melinda S. Urion August 14, 1997
Melinda S. Urion
Director, Executive Vice
President and Controller
