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EXHIBIT 4.(q)
[LOGO OF PACIFIC LIFE]
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
SIMPLE INDIVIDUAL RETIREMENT ANNUITY RIDER
This rider is a part of the Contract to which it is attached by Pacific Life
Insurance Company ("PL").
The Contract under which it has been issued is hereby modified as specified
below in order to qualify as a SIMPLE Individual Retirement Annuity ("SIMPLE
IRA") under Code Section 408(p).
The provisions of this rider will control if they are in conflict with those of
the Contract.
A. Definitions
Add-In Amount - Any amount added by PL to the Contract Value on the Notice Date
to set the Contract Value equal to the death benefit proceeds that would have
been payable to the Owner's surviving spouse, when such spouse is the deemed
sole Designated Beneficiary of the death benefit under part D below.
Annuitant - is the individual named as a measuring life for periodic annuity
payments under this Contract.
Annuity Start Date - The date shown in the Contract Specifications, or the date
you have most recently elected under the Contract, if any, for the start of
annuity payments if the Annuitant is still living and the Contract is in force;
or if earlier, the date that annuity payments actually begin.
Code - is the Internal Revenue Code of 1986, as amended.
Designated Beneficiary - is an individual designated as a beneficiary by the
Owner.
IRA - is an individual retirement account or annuity under Code Section 408.
Notice Date - The day on which PL receives, in a form satisfactory to PL, proof
of death and instructions satisfactory to PL regarding payment of death benefit
proceeds.
Owner or You - is the Owner of the Contract.
Regulation - is a regulation issued or proposed pursuant to the Code.
Required Beginning Date - is April 1 of the calendar year following the year in
which the Annuitant reaches age 70 1/2.
SIMPLE IRA - is a SIMPLE IRA under Code Section 408(p).
Surviving Spouse - is the surviving spouse of a deceased Owner.
B. SIMPLE IRA Provisions
1. The Annuitant shall at all times be the Owner of the Contract (or its
beneficial Owner where a fiduciary is its legal Owner). Such individual
Owner's rights under the Contract shall be nonforfeitable, and this Contract
shall be for the exclusive benefit of such Owner and his or her
beneficiaries.
2. No benefits under the Contract may be transferred, sold, assigned, or pledged
as collateral for a loan, or as security for the performance of an
obligation, or for any other purpose, to any person; except that the Contract
may be transferred to a former or separated spouse of the Owner under a
divorce or
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separation instrument described in Code Section 408(d)(6). In the event of
such a transfer, the transferee shall for all purposes be treated as the
Owner under this Contract.
3. No contribution shall be allowed into this Contract unless it is (a) a cash
contribution made on the Owner's behalf under a SIMPLE IRA plan described in
Code Section 408(p) or (b) a rollover contribution or transfer of assets from
another SIMPLE IRA of the Owner.
4. Prior to the expiration of the 2-year period beginning on the date that the
Owner first participated in any SIMPLE IRA plan maintained by the Owner's
employer, any rollover, transfer or distribution from this SIMPLE IRA that is
not made timely to another SIMPLE IRA of the Owner may be subject to a 25%
penalty tax, as well as to ordinary income tax. Any rollover or transfer
made after such 2-year period to any IRA of the Owner under Code Section
408(a) or (b) can be tax-free if made in a timely and appropriate manner.
5. Additional Purchase Payments (or premium payments) under the Contract must
be at least the minimum as stated in the Purchase Payment (or Premiums)
provision of the Contract.
6. Where this Contract has been set up under a SIMPLE IRA plan of an employer
who made all contributions to the IRAs of a designated trustee or issuer
within the meaning of Code Section 408(p)(7), the Owner's balance under this
Contract may be transferred tax free to another IRA in accordance with Code
Section 408(p)(7) and the SIMPLE IRA rollover rules in Code Section
408(d)(3)(G).
7. Any Purchase Payment (or premium) refund declared by PL other than a refund
attributable to an excess contribution will be applied toward the purchase of
additional benefits before the close of the calendar year following the
refund.
8. This Contract and all distributions made under it are subject to the minimum
distribution and incidental death benefit rules of Code Section 401(a)(9) and
the Regulations thereunder, and shall comply with such rules. Accordingly:
(a) The entire interest under the Contract shall be distributed to the Owner:
(i) Not later than the April 1st next following the close of the calendar
year in which the Owner attains age 70-1/2, or
(ii) Commencing not later than the Required Beginning Date, over the
Owner's life or the lives of the Owner and his or her Designated
Beneficiary (or over a period not extending beyond the Owner's life
expectancy or the joint and last survivor life expectancy of the Owner
and his or her Designated Beneficiary).
(b) For purposes of this Section 8, life expectancy is computed by use of the
expected return multiples in Tables V and VI of Regulation Section 1.72-9.
Unless otherwise elected by the Owner by the Required Beginning Date, life
expectancy for the Owner shall be recalculated annually, but shall not be
recalculated annually for any spouse Designated Beneficiary. Any election
by the Owner to recalculate (or not) the life expectancy of the Owner or
of a spouse Designated Beneficiary shall be irrevocable and shall apply to
all subsequent years. The life expectancy of a non-spouse Designated
Beneficiary may not be recalculated. Instead where the life expectancy of
a Designated Beneficiary (or Owner) is not recalculated annually, such a
life expectancy shall be calculated using the attained age of such
Beneficiary (or Owner) during the calendar year in which the Owner attains
age 70 1/2, and payments for subsequent years shall be calculated based
on such life expectancy reduced by one year for each calendar year which
has elapsed since the calendar year life expectancy was first calculated.
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(c) The method of distribution selected also shall comply with the "minimum
distribution incidental benefit" or "MDIB" rule of Code Section 401(a)(9),
and proposed Regulation Section 1.401(a)(9)-2. This MDIB rule includes the
following requirements:
(i) if the Owner's only Designated Beneficiary is the spouse, the minimum
amount that must be distributed in a distribution calendar year is
the amount determined under the regular minimum distribution
requirements in this Section 8.
(ii) if the distributions are not made as substantially equal annuity
payments under an annuity contract that has been purchased on or
before the Owner's Required Beginning Date and where the Owner's
spouse is not the only Designated Beneficiary, the minimum amount
that must be distributed in a distribution calendar year is the
quotient obtained by dividing the Owner's entire interest by the
applicable divisor specified in proposed Regulation Section
1.401(a)(9)-2, Q & A - 4.
(iii) if distribution is being made under an annuity contract with
substantially equal payments that has been purchased on or before the
Owner's Required Beginning Date and the Owner's spouse is not the
only Designated Beneficiary, the minimum amount that must be
distributed is determined as follows:
- Period certain annuity without a life contingency: The period certain
may not exceed the maximum period specified in proposed Regulation
Section 1.401(a)(9)-2, Q & A - 5.
- Life annuity or a joint and survivor annuity: A life annuity on the
Owner's life which satisfies the regular minimum distribution
requirements satisfies the MDIB rule. The periodic annuity payment to
the survivor under a joint and survivor annuity may not exceed the
applicable percentage of the annuity payment to the Owner, as
provided in proposed Regulation Section 1.401(a)(9)-2, Q & A -6(b).
- Life annuity with period certain: The distribution must satisfy the
requirements for a single life (or joint and survivor) annuity and
the period certain may not exceed the period determined for non-
annuity distributions, as provided in proposed Regulation Section
1.401(a)(9) -2, Q & A - 6(c).
(d) Required annuity payments must be made at intervals of no longer than one
year and may not be in increasing amounts except as allowed by proposed
Regulation Section 1.401(a)(9) - 1, Q&A, F-3.
(e) Only a method of distribution offered by PL that satisfies these
conditions can be selected. You must make this selection before the end of
the calendar year in which you attain age 70-1/2.
9. On the death of the Owner, distribution shall be made in accordance with the
annuity options described in the Contract. However, selection of an annuity
option which does not satisfy the conditions of this Section 9 shall not be
permitted.
(a) If the Owner dies before distribution of his or her interest in the
Contract has begun in accordance with paragraph 8(b) above, the entire
interest shall be distributed by December 31st of the fifth calendar year
which follows the year of the Owner's death except to the extent that
paragraph 9(b) below applies or: (i) such interest is paid over a period
not exceeding the lifetime, or the life expectancy, of the Designated
Beneficiary; and (ii) payments begin by December 31st of the calendar year
which follows the year of the Owner's death.
(b) To the extent that the Designated Beneficiary of the Owner's interest is
the Surviving Spouse, such spouse may elect to receive payments over the
life or life expectancy of such spouse commencing at any date prior to the
later of: (i) December 31 of the calendar year immediately following the
calendar year in which the Owner died; and (ii) December 31 of the
calendar year
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in which the Owner would have attained age 70 1/2. Such election must be
made no later than the earlier of December 31 of the calendar year
containing the fifth anniversary of the Owner's death or the date
distributions are required to begin pursuant to the preceding sentence.
Such Surviving Spouse may accelerate these payments at any time, i.e.,
increase the frequency or amount of such payments.
(c) If the Surviving Spouse is the Designated Beneficiary, such spouse may
elect to convert this IRA to such spouse's own IRA by requesting such a
conversion in writing to PL. If such spouse so elects, such spouse shall
be Owner and Annuitant for purposes of applying the restrictions contained
in this rider. Such an election shall be deemed to have been made (i) if
such spouse fails to make an election in accordance with paragraph 9(b)
above, makes a regular IRA contribution to this contract, makes a rollover
distribution or direct transfer from this Contract, or makes a rollover
distribution or direct transfer to this Contract from another SIMPLE IRA
of such spouse, or (ii) if the employer of such spouse makes a
contribution to this Contract under a SIMPLE IRA plan maintained by such
an employer.
(d) For purposes of this Section 9, life expectancy is computed by use of the
expected return multiples in Tables V and VI of Regulation Section 1.72-9.
For purposes of distributions beginning after the Owner's death, unless
otherwise elected by the Surviving Spouse by the time distributions are
required to begin, such spouse's life expectancy shall not be recalculated
annually. Such election shall be irrevocable as to such spouse and shall
apply to all subsequent years. In such a case of non-recalculation for the
Surviving Spouse and in the case of any other Designated Beneficiary, life
expectancies shall be calculated using the attained age of such
Beneficiary during the calendar year in which distributions are required
to begin pursuant to this Section, and payments for any subsequent
calendar year shall be calculated based on such life expectancy reduced by
one year for each calendar year which has elapsed since the calendar year
life expectancy was first calculated.
(e) Any amount paid to a minor child of the Owner shall be treated as if it
had been paid to the Surviving Spouse if the remainder of the interest
becomes payable to such spouse when the child reaches the age of majority.
(f) If the Owner dies after distribution of his or her interest in the
Contract has begun in accordance with paragraph 8(b) above but before his
or her entire interest has been distributed, the remaining interest shall
be distributed at least as rapidly as under the method of distribution
being used immediately prior to the Owner's death.
(g) Distributions under this Section 9 are considered to have begun if
distributions are made on account of the Owner reaching the Required
Beginning Date or if prior to the Required Beginning Date distributions
irrevocably commence to an individual over a period permitted, and in an
annuity form acceptable, under proposed Regulation Section 1.401(a)(9)-2.
(h) If the Owner dies before his or her entire interest has been distributed
to him or her, no additional cash contributions or "rollover
contributions" shall be allowed into this Contract unless the Surviving
Spouse elects to convert this Contract to be his or her own IRA, as
specified above in this Section 9.
10. PL shall furnish annual calendar year reports concerning the status of the
Contract.
C. Tax Qualification Provisions
The Contract as amended by this rider is intended to qualify as part of a
tax-qualified individual retirement arrangement, plan or contract that meets
the requirements of Code Section 408(p) and any applicable regulations
relating thereto. To that end, the provisions of this rider and the Contract
(including any other rider or endorsement) are to be interpreted to ensure
or maintain such tax qualification, notwithstanding any other provision to
the contrary. PL reserves the right to amend this
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rider to comply with any future changes in the Code or any regulations,
rulings or other published guidance under the Code, or to reflect any
clarifications that may be needed or are appropriate to maintain such tax
qualification, without consent (except for the states of Michigan,
Pennsylvania, South Carolina and Washington, where affirmative consent is
required). PL shall provide the Owner with a copy of any such amendment.
D. Spousal Continuation Provisions
If the Owner dies before the Annuity Start Date and the Surviving Spouse is
deemed the sole Designated Beneficiary of the death benefit, the Surviving
Spouse shall become the Owner and Annuitant effective on the date of death
of the deceased Owner, unless such treatment is inconsistent with the death
benefit payment option that has been elected as of the Notice Date.
1. On the Notice Date, if the Surviving Spouse is deemed to have continued
(or rolled over) this Contract by becoming the Owner and Annuitant
thereof, PL shall set the Contract Value equal to the death benefit
proceeds that would have been payable to the Surviving Spouse as the
deemed sole Designated Beneficiary of the death benefit, and no such
proceeds shall be paid to the Surviving Spouse. The amount by which the
death benefit proceeds payable exceeds the Contract Value shall be added
to the Contract Value in the form of an Add-In Amount on the Notice
Date. There will be no adjustment to the Contract Value if the Contract
Value is equal to the death benefit proceeds payable as of the Notice
Date.
2. The Add-In Amount shall be treated as earnings under the Contract, and
shall be allocated among any Investment Options under the Contract in
accordance with the current allocation instructions for the Contract.
Pacific Life Insurance Company
/s/ THOMAS C. SUTTON /s/ AUDREY L. MILFS
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Thomas C. Sutton Audrey L. Milfs
Chairman and Chief Executive Officer Secretary
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