Ex.4(d)
ALEXANDER HAMILTON LIFE
INSURANCE COMPANY OF AMERICA
[32291 Hamilton Court, Farmington Hills, Michigan 48334]
Tax Sheltered Annuity Endorsement
under Section 403(b) of the Internal Revenue Code of 1986
At the Owner's request, this Endorsement is a part of the Contract to which it
is attached by Alexander Hamilton Life Insurance Company of America. The
provisions of this Endorsement shall override any other conflicting provisions
contained in, or forming part of, the Contract. The attachment of this
Endorsement to the contract is intended to meet the form requirements,
limitations, and in all other respects, qualify under the provisions of section
403(b) of the Internal Revenue Code of 1986, as amended from time to time by
Regulation or Ruling.
The Contract, for as long as this Endorsement remains in effect, is hereby
modified as follows:
1. The Annuitant will at all times be the Owner of this Contract.
2. The Owner's rights under this Contract shall be nonforfeitable and for the
exclusive benefit of the Owner and his or her Beneficiaries.
3. Premiums under this Contract must be paid by an employer described in
section 501(c)(3) which is exempt from tax under section 501(a), or an
employer who is an educational organization described in Section
170(b)(1)(A)(ii), or an employer which is a State, political subdivision
of a State, or an agency or instrumentality of any or more of the
foregoing. Premiums paid by the employer may include contributions made
pursuant to salary reduction agreements. Premiums may also be paid by the
Owner from the proceeds of a transfer from another tax sheltered annuity,
policy, contract or custodial agreement qualified under Section 403(b) of
the Code.
4. This Contract is not transferable by the Owner, except that this Contract
may be transferred to a former spouse of the Owner under a Qualified
Domestic Relations Order. In the event of a transfer pursuant to a
Qualified Domestic Relations Order, the transferee shall for all purposes
be treated as the Owner under this Contract.
No benefits under this Contract may be sold, assigned, or pledged as
collateral for a loan, or as security for the performance of an
obligation, or for any other purpose.
5. Premium payments may not exceed the applicable limits of section 403(b),
section 415(c) and section 402(g) of the Code, a determined under the
employer's Plan.
6. Should this Policy be issued to the Owner as part of an employer's 403(b)
Plan or Program which is subject to the requirements of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
then any distributions from this Policy shall be subject to the applicable
requirements of ERISA and the employer's Plan. The Plan Administrator
shall certify compliance with those requirements in a form satisfactory to
us.
19861
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7. Distributions attributable to contributions made pursuant to a salary
reduction agreement (within the meaning of section 402(g)(3)(C) of the
Code) and earnings (credited after December 31, 1988) may not be
distributed unless the Owner has satisfied one of the following:
a. attained age 59-1/2;
b. separated from service;
c. died;
d. become disabled (within the meaning of Code section 72(m)(7));
e. incurred a financial hardship; or
f. such other conditions have occurred as may be satisfactory under the
Regulations. To the extent required by Regulations issued under
section 403(b) or other sections of the Code, the Company may
require written proof of the events in items (a) through (c) and
such proof must be satisfactory under the Regulations.
The restrictions of this Part of the Endorsement shall only apply with
respect to:
(i) Contributions made after the close of the last year beginning before
January 1, 1989 and earnings on those contributions.
(ii) Earnings on amounts held as of the close of the last year beginning
January 1, 1989.
8. Distributions from this Contract shall be made in accordance with the
minimum distribution incidental benefit requirement of section 403(b)(10),
including Section 1.403(b)-2 of the Proposed Income Tax Regulations, as
amended.
Any method of payment selected on behalf of the Owner must be primarily to
distribute benefits to the Owner and not to designated Beneficiaries or
others. Accordingly, any method of payment selected for an Owner must be
such that: (a) the present value of payments to be made to the Owner under
the optional method of payment selected is more than fifty percent (50%)
of the present value of the total payments to be made to the Owner and his
Beneficiaries; or (b) the payments to the Owner begin as of his or her
retirement with a like, or lesser amount, payable to the Owner's spouse if
the spouse survives the Owner or with a like, or lesser amount, payable to
another for the lifetime of the spouse if the spouse survives the Owner.
9. Distributions from this Contract shall be made in accordance with the
minimum distribution requirement of section 403(b)(10) of the Code.
In accordance with regulations prescribed by the Secretary of the Treasury
or his delegate, the entire interest under this Contract will begin to be
distributed to the Owner no later than the first day of April following
the calendar year in which the Owner attains Age 70-1/2 (required
beginning date).
Payments will be distributed in equal or substantially equal amounts and
in annual or more frequent installments over:
a. The Owner's life or the lives of the Owner and his or her named
Beneficiary; or
b. A period not exceeding the Owner's life expectancy or the joint and
last survivor life expectancy of the Owner and his or her named
Beneficiary.
In addition, distributions in the form of annuity payments must be either
non-increasing or they may increase only as provided in Q&A F-3 of section
1.401(a)(9)-1 of the Proposed Income Tax Regulations.
Any method of settlement described in the Settlement Options section of
the Contract, except for the Interest Only Election, that satisfies these
conditions can be selected. Distributions subsequent to the initial
distribution must be made prior to December 31 of the calendar year.
19861
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The amount to be distributed each year, beginning with the first calendar
year for which distributions are required and then for each succeeding
calendar year, shall not be less than the quotient obtained by dividing
the Owner's benefit be the lesser of:
a) the applicable life expectancy; or
b) if the Owner's spouse is not the named Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of section
1.401(a)(9)-2 of the Proposed Income Tax Regulations. Distributions
after the death of the Owner shall be calculated using the
applicable life expectancy as the relevant divisor without regard to
Proposed Income Tax Regulations section 1.401(a)(9)-2.
Life expectancy is computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the Income Tax Regulations. Unless
otherwise elected by the Owner by the time distributions are required to
begin, life expectancies shall be recalculated annually. Such election
shall be irrevocable by the Owner and shall apply to all subsequent years.
The life expectancy of a non-spouse Beneficiary may not be recalculated.
Instead, life expectancy will be calculated using the attained age of such
Beneficiary 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 for each calendar year which has
elapsed since the calendar year life expectancy was first calculated.
If the amount distributed is less than that required by Internal Revenue
Code sections 403(b)(10), an excise tax is imposed on the Owner. The
excise tax will be an amount equal to 50% of the excess of the minimum
amount required to be distributed during the year, over the amount
actually distributed.
The provisions of this Part of the endorsement shall only apply to
benefits accruing after December 31, 1986.
10. Distributions following the Owner's death shall be made in accordance with
section 403(b)(10) of the Code.
The Death Benefit in all cases will be paid according to the terms of this
provision, provided due proof of the Owner's death is received at the Home
Office of Alexander Hamilton Life Insurance Company of America. If the
Owner dies after distribution of his interest under this Contract has
begun, the remaining portion of such interest under this Contract will
continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Owner's death.
If the Owner dies before distribution of his or her interest under this
Contract begins, distribution of the Owner's entire interest under this
Contract shall be completed by December 31, of the calendar year
containing the fifth anniversary of the Owner's death except to the extent
that an election is made to receive distributions in accordance with (a)
or (b) below:
a) If a primary Beneficiary is named by the Owner, then the interest
under this Contract will begin to be paid in substantially equal
installments over the life or over a period certain not greater than
the life expectancy of the primary Beneficiary commencing on or
before December 31 of the calendar year immediately following the
calendar year in which the Owner died.
19861
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b) If the primary Beneficiary is the Owner's surviving spouse, the date
distributions are required to begin in accordance with (a) above
shall not be earlier that the later of A) December 31 of the
calendar year immediately following the calendar year in which the
Owner died or B) December 31 of the calendar year in which the Owner
would have attained Age 70-1/2. The surviving spouse may accelerate
these payments at any time, such as increasing the frequency or
amount of such payments.
Life expectancy is computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the Income Tax Regulations. 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, life expectancies shall be recalculated annually. Such
election shall be irrevocable by the surviving spouse and shall apply to
all subsequent years. In the case of any other designated Beneficiary,
life expectancy will be calculated using the attained age of such
Beneficiary during the calendar year in which distributions are required
to begin pursuant to this part, and payments for subsequent years shall be
calculated based on such life expectancy reduced by one for each calendar
year which has elapsed since the calendar year life expectancy was first
calculated.
Distributions under this part are considered to have begun if
distributions are made on account of the Owner reaching his required
beginning date or if prior to the required beginning date distributions
irrevocably begin to the Owner over a period permitted and in an annuity
form acceptable under section 403(b)(10), including section 1.403(b)-2 of
the Proposed Income Tax Regulations. If the Owner receives distributions
in the form of installment payments prior to the required beginning date
and the Owner dies, distributions will not be considered to have begun.
11. Notwithstanding any provisions of this Contract to the contrary, with
respect to distributions made after December 31, 1992, the Owner shall be
permitted to elect to have any "eligible rollover distribution"
transferred directly to an "eligible retirement plan" that the Owner
specifies. Policy provisions otherwise applicable to distributions
continue to apply to the direct transfer option. The Owner shall, in the
time and manner prescribed by the Company, specify the amount to be
directly transferred and the "eligible retirement plan" to receive the
transfer. Any portion of a distribution which is not transferred shall be
distributed to the Owner.
The term "eligible rollover distribution" means any distribution other
than a distribution of substantially equal periodic payments over the life
or life expectancy of the Owner (or joint life or joint life expectancies
of the Owner and the Owner's designated Beneficiary) or a distribution
over a period certain of ten years or more. Amounts required to be
distributed under Code section 401(a)(9) are not eligible rollover
distributions. The direct transfer option applies only to eligible
rollover distributions which would otherwise be includible in gross income
if not transferred.
The term "eligible retirement plan" means an Individual Retirement Account
as described in Code section 408(a), an Individual Retirement Annuity as
described in Code section 408(a), or a Tax Sheltered Annuity plan or
program described under Code section 403(b) which accepts rollovers.
The direct rollover or transfer option applies to the Owner's surviving
spouse after the Owner's death; however, distributions to the surviving
spouse may only be transferred to an Individual Retirement Account or
Individual Retirement Annuity. For purposes of the direct rollover or
transfer option, a spouse or former spouse who is the alternate payee
under a Qualified Domestic Relations Order as defined in Code section
414(p) will be treated as the Owner.
With regard to an eligible rollover distribution, the Company shall
provide the Owner within the applicable period a written explanation of
the direct rollover option.
19861
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12. Alexander Hamilton Life Insurance Company of America may, if it becomes
necessary under the Internal Revenue Code of 1986, as amended from time to
time and including the Regulations thereunder, discontinue acceptance of
premiums as of the date specified by Alexander Hamilton Life Insurance
Company of America in a written notice to the Owner if the Owner ceases to
be employed by an organization exempt from taxation under section
501(c)(3) of the Code or a public school system. However, the contract
shall continue in force, subject to such elections as the Owner or
Alexander Hamilton Life Insurance Company of America may make to terminate
it under its provisions.
13. As a condition to the issuance of this Endorsement to the Contract, the
Owner agrees to be solely responsible for complying, in operation, with
the provisions and limitations of this Endorsement and the Regulations
under section 403(b) of the Code and other appreciable law. The Owner
further agrees to provide Alexander Hamilton Life Insurance Company of
America with any documentation necessary in order to maintain this
Contract's compliance under section 403(b) of the Code.
14. The Owner may terminate this agreement by surrendering this Contract.
15. This Contract is restricted as required by the Internal Revenue Code of
1986, as amended, including any Regulations or Rulings thereto. the
Contract will be considered amended automatically to comply with any
changes required to maintain compliance with the Internal Revenue Code or
other applicable law. The Owner agrees that he or she will surrender this
Contract upon request so that it may be appropriately endorsed or written
to conform with the above conditions or any amendments to section 403(b)
of the Internal Revenue Code of 1986, as amended. Alexander Hamilton Life
Insurance Company of America reserves the right to amend this Endorsement
to comply with future changes in the Code and any Regulations or Rulings
issued under the provisions of the Code. Alexander Hamilton Life Insurance
Company of America shall provide the Owner with a copy of any such
amendment.
IN WITNESS WHEREOF, Alexander Hamilton Life Insurance Company of America has
caused this Tax Sheltered Annuity Endorsement to be executed as of the Effective
Date of the Contract to which it is attached and of which it becomes a part.
President Secretary
19861
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