THE SECURITIES ACT OF 1933 |
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Pre-Effective Amendment No. |
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Post-Effective Amendment No. 1 |
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |
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Amendment No. 13 |
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☐ | immediately upon filing pursuant to paragraph (b) of Rule 485. |
☒ | on May 1, 2024 pursuant to paragraph (b) of Rule 485. |
☐ | 60 days after filing pursuant to paragraph (a) of Rule 485. |
☐ | on (date) pursuant to paragraph (a) of Rule 485. |
Deferred Variable Annuity |
• | is an individual annuity and is not available as a group contract; |
• | has multiple investment options available, including variable investment options which invest in underlying mutual fund portfolios and fixed investment options which will earn an interest rate which we will declare; |
• | is a deferred annuity, which means that the regular annuity payments do not start immediately; |
• | allows for flexible purchase payments, on or after the contract date, subject to certain restrictions; |
• | is tax-deferred, which means that you will not pay income taxes until we begin to make annuity payments to you, or you take withdrawals from the Contract, or until the death benefit is paid to your beneficiary(ies); |
• | allows you to choose among the fixed annuitization options that can guarantee income payments for a specified period or for the lifetime of the annuitant(s); |
• | includes a standard death benefit; and |
• | offers a selection of optional benefits at an additional charge including the Guaranteed Income Rider, Accumulation Income Rider, Enhanced Death Benefit Rider, and Guaranteed Minimum Accumulation Rider (although rider availability may vary by state and may change in the future). |
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A-1 |
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B-1 |
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C-1 |
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D-1 |
Fees and Expenses | ||||||||||||||
Charges for Early Withdrawals |
If you surrender your Contract or withdraw money from the Contract within following your last Purchase Payment, you will be assessed a Surrender Charge of up to For example, if you make a withdrawal in the first year, you could pay a Surrender Charge of up to $ For more detailed information, see “ Surrender Charge” under “ What Are the Fees and Charges Under the Contract?” in this Prospectus. | |||||||||||||
Transaction Charges |
In addition to Surrender Charges, you may also be charged for other transactions, such as transfers between Investment Options. For more detailed information, see “Table of Fees and Expenses;” “ What Are the Fees and Charges Under the Contract?” |
Ongoing Fees and Expenses |
The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your Contract Specifications Page for information about the specific fees you will pay each year based on the options you have elected. | |||||||||||||
Annual Fee |
Minimum |
Maximum |
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Base Contract 1 |
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Investment Options (Portfolio fees and expenses) 2 |
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Optional benefits available for an additional charge (for a single optional benefit, if elected) 3 |
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1 2 3 |
Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year, based on current charges. The estimate assumes that you do not take withdrawals from the Co ntr act, which could add Surrender Charges that substantially increase costs. | ||||||||||||||
Lowest Annual Cost: $ |
Highest Annual Cost: $ |
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Assumes: • Investment of $100,000 • 5.00% annual appreciation • Least expensive combination of the Contract and Portfolio fees and expenses • No optional benefits • No sales charges • No additional Purchase Payments, transfers, or withdrawals |
Assumes: • Investment of $100,000 • 5.00% annual appreciation • Most expensive combination of Contract, optional benefits and Portfolio fees and expenses • No sales charges • No additional Purchase Payments, transfers, or withdrawals |
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Risks |
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Risk of Loss |
You can lose money by investing in this Contract, including loss of your Purchase Payments (principal). | |||||||||
Not a Short- Term Investment |
The Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The Contract is designed to provide for the accumulation of retirement savings and income on a long-term basis. As such, you should not use the Contract as a short-term investment or savings vehicle. A Surrender Charge may apply in certain circumstances, and potentially result in a significant reduction in the Standard Death Benefit, potentially significant reduction in or loss of optional benefits, and/or federal and state income taxes and tax penalties. | |||||||||
Risks Associated with Investment Options |
• An investment in the Contract is subject to the risk of loss/ p oor investment performance of the Portfolios you choose, and the value of an investment can vary depending on the performance of the Portfolios. | |||||||||
• Each Investment Option (the Variable Investment Options and the Fixed Account Options) has its own unique risks. You should review these Investment Options before making an investment decision. The performance of the Portfolios will vary among each other, may underperform similar mutual funds not available through the Variable Investment Options, and some are riskier than others. | ||||||||||
• A discussion of the risk of allocating your Purchase Payments to one or more Portfolios can be found in the prospectuses for the Portfolios. You should review the prospectuses for the Portfolios before making an investment decision. For more detailed information, see “ Summary of Principal Risks of Investing in the Contract;” “ Appendix A — Portfolio Companies Available Under the Contract;” “ Appendix B — Fixed Account Options.” |
Insurance Company Risks |
An investment in the Contract is subject to the risks related to the Company, including: • Any obligations, guarantees, and benefits of the Contract (including the Fixed Account Options, the Standard Death Benefit, and the optional Rider benefits) are subject to the claims-paying ability and financial strength of the Company. • There are risks relating to the Company’s administration of the Contract, including, among others, cybersecurity and infectious disease outbreak risks. • If the Company experiences financial distress, it may not be able to meet its obligations to you. • More information about the Company, including its financial strength ratings, is available upon request from the Company at 1-800-523-0650. For more detailed information, see “ The Penn Insurance and Annuity Company;” “ Financial Statements;” “ Insurance Company Risks” under “ Summary of Principal Risks of Investing in the Contract;” “ Other Information.” |
Restrictions | ||
Investments |
• You can allocate your Purchase Payments to the Variable Investment Options (that invest in the Portfolios) or the Fixed Account Options. • The minimum amount that may be transferred is $250 or, if less, the total amount held in the Investment Option. • The Company reserves the right to remove or substitute any of the Portfolios as Investment Options that are available under the Contract. • In addition, we may limit your ability to make transfers involving the Variable Investment Options if it is believed that a transfer may disadvantage or potentially harm or hurt the rights or interests of other Contract Owners. • We will also reject or reverse a transfer request if for any reason any of the Portfolios do not accept the purchase of its shares. • In addition, we reserve the right to reject any Purchase Payment at any time for any reason. For more detailed information, see “ How Do I Change the Contract’s Investment Allocations?;” “ Appendix B – Fixed Account Options.” | |
Optional Benefits |
The Contract offers a selection of optional benefits. • If you select an optional benefit, you are not permitted to invest in the Short-Term Fixed Account. In the future, we may change this restriction or add new ones relating to other Investment Options. • Withdrawals, including Required Minimum Distributions (“RMDs”), may reduce the value of an optional benefit by an amount greater than the value withdrawn or result in termination of the benefit and the Contract. • We will impose a surrender charge on withdrawals under the optional benefits that exceed the Free Withdrawal Amounts during the Surrender Charge Period. • Subsequent Purchase Payments are not permitted during the Withdrawal Phase of the Accumulation Income Rider, which means that the Purchase Payments cannot be used at that time to increase Contract Value, the death benefit, or the Accumulation Income Benefit Base. |
• While the Guaranteed Minimum Accumulation Rider provides a guarantee that is designed to provide a minimum Contract Value, additional Purchase Payments made after the first 12 months of the Accumulation Benefit Period will not be included in the Accumulation Benefit Base. Any additional Purchase Payments made after the first 12 months will increase the Contract Value but not the Accumulation Benefit Base and may reduce the likelihood of receiving the benefit provided b y the Guaranteed Minimum Accumulation Rider.• We may modify or stop offering an o p tional benefit at any time, and the availability of such benefits may vary by state.For more detailed information, see “What Are the Supplemental Riders and Benefits That Are Available?” | ||
Taxes | ||
Tax Implications |
• Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract. • If you purchase the Contract through a tax-qualified plan or individual retirement account (“IRA”), you do not get any additional tax benefit. • Withdrawals from your Contract are taxed at ordinary income tax rates, and may be subject to a tax penalty before age 59 1 ⁄2 .For more detailed information, see “Summary of Principal Risks of Investing in the Contract — Taxes and Tax Risks;” “How Is the Contract Treated Under Federal Income Tax Law?” | |
Conflicts of Interest | ||
Investment Professional Compensation |
Your financial professional may receive compensation for selling this Contract to you, in the form of commissions, asset-based compensation, allowances for expenses, and other compensation programs, and the Company may share the revenue it earns on this Contract with the professional’s firm. (Your financial professional may be your broker, investment adviser, insurance agent, or someone else.) For these reasons, these financial professionals may have a financial incentive to recommend this Contract over another annuity contract or investment. For more detailed information, see “Distribution Arrangements.” | |
Exchanges |
Some financial professionals may have a financial incentive to offer you a new contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is preferable for you to purchase the new contract rather than continue to own your existing contract. For more detailed information, see “How Do I Purchase the Contract? — Tax Free ‘Section 1035’ Insurance Contract Exchanges.” |
1. |
Purpose of the Contract |
2. |
Phases of the Contract |
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The Contract allows you to allocate your Contract Value among the different Variable Investment Options which each invest in a specified mutual fund portfolio (each, a “Portfolio”). Your Contract Value will increase or decrease Appendix A to this Prospectus lists the Portfolios currently available in the Contract and includes additional information about the Portfolios. |
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In addition to the Variable Investment Options, the Contract allows you to allocate your Contract Value to the Fixed Account Options. The Fixed Account Options are the Short-Term Fixed Account and the Fixed Dollar Cost Averaging Options. The optional benefits do not permit you to invest in the Short-Term Fixed Account. The Fixed Account Options are designed to be safe investments that provide fixed returns, where the Company pays a fixed rate of interest (that it declares periodically, subject to a minimum) and where the Company bears the investment risk. The Fixed Account Options are described in Appendix B to this Prospectus. |
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You can change the Investment Options in which you invest throughout the Accumulation Period. |
3. |
Contract Features |
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Enhanced Death Benefit Rider — offers a Death Benefit Enhancement; |
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Accumulation Income Rider — provides for guaranteed Lifetime Withdrawals under the terms of the Rider; |
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Guaranteed Income Rider — provides for living benefit Withdrawals under the terms of the Rider; and |
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Guaranteed Minimum Accumulation Rider — provides for a return of a minimum value at the end of the Accumulation Benefit Period. |
Sales Load Imposed on Purchases (as a percentage of Purchase Payments) |
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Maximum Surrender Charges (as a percentage of Purchase Payment surrendered) |
2 |
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Maximum Transfer Fee |
$ 3 |
1 | As of the date of this Prospectus state premium taxes generally range from 0.00% to 4.265%. |
2 |
Number of full years since Purchase Payment |
Applicable Surrender Charge |
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0 |
% | |||
1 |
% | |||
2 |
% | |||
3 |
% | |||
4 |
% | |||
5 |
% | |||
6 |
% | |||
7 |
% |
3 |
Administrative Expenses |
$ 1 |
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Base Contract Expenses (as a percentage of Variable Account Value) 2 |
Optional Benefit Expenses (as a percentage of benefit base or Variable Account Value as applicable): |
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Accumulation Income Rider |
% 3 | |||
Guaranteed Income Rider |
% 4 | |||
Enhanced Death Benefit Rider |
% 5 | |||
Guaranteed Minimum Accumulation Rider |
% 6 |
1 | You pay $40 or 2.00% of the Variable Account Value, whichever is less. You do not pay this charge if your Variable Account Value is $50,000 or more. |
2 |
3 |
4 |
5 |
6 |
Annual Portfolio Expenses 1 |
Minimum |
Maximum |
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1 |
One Year |
Three Years |
Five Years |
Ten Years |
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Deferred Variable Annuity |
$ |
$ |
$ |
$ |
One Year |
Three Years |
Five Years |
Ten Years |
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Deferred Variable Annuity |
$ |
$ |
$ |
$ |
One Year |
Three Years |
Five Years |
Ten Years |
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Deferred Variable Annuity |
$ |
$ |
$ |
$ |
One Year |
Three Years |
Five Years |
Ten Years |
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Deferred Variable Annuity |
$ |
$ |
$ |
$ |
1 |
Assumes the Accumulation Income Rider and the Enhanced Death Benefit Rider are purchased and maximum Rider Charges of 3.25%. This Example also assumes maximum Portfolio expenses of 0.34%. |
2 | Assumes that no optional benefit Riders are purchased and minimum Portfolio expenses of 0.11%. |
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portfolio management decisions driven by the need to maintain higher than normal liquidity or the inability to sustain an investment objective; |
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increased administrative and Portfolio brokerage expenses; and/or |
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dilution of the interests of long-term investors. |
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Withdrawals, including RMDs could significantly reduce the values under the Riders, perhaps by more than the amount of the withdrawal, and could terminate the Riders and the Contract. |
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We will impose a surrender charge on withdrawals under the optional benefits that exceed the Free Withdrawal Amounts during the Surrender Charge Period. |
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The Guaranteed Income Rider and Accumulation Income Rider provide a contingent guarantee that may never come into effect because withdrawals taken while Contract Value is greater than zero are withdrawals of the Contract Owner’s own money, and the Company is only required to make guaranteed payments from its general account if and when the Contract Value is reduced to zero. |
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Subsequent Purchase Payments are not permitted during the Withdrawal Phase of the Accumulation Income Rider, which means that the Purchase Payments cannot be used at that time to increase Contract Value, the death benefit, or the Accumulation Income Benefit Base. |
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The Guaranteed Minimum Accumulation Rider provides a guarantee that may never come into effect because Contract Value may never be less than the Guaranteed Minimum Accumulation Benefit Amount, and the possibility that the Company will be required to pay the Guaranteed Minimum Accumulation Benefit Amount may be minimal. |
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While the Guaranteed Minimum Accumulation Rider provides a guarantee that is designed to provide a minimum Contract Value, additional Purchase Payments made after the first 12 months of the Accumulation Benefit Period will not be included in the Accumulation Benefit Base. Any additional Purchase Payments made after the first 12 months will increase the Contract Value but not the Accumulation Benefit Base and may reduce the likelihood of receiving the benefit provided by the Guaranteed Minimum Accumulation Rider. |
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110 |
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an Accumulation Period, during which you make one or more Purchase Payments , |
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an Annuity Payout Period, during which we make annuity payments to you. Your Annuity Payout Period begins on your Annuity Date. |
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the Variable Investment Options, through which you may invest in one or more of the available Portfolios; and |
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the Fixed Account Options. The Fixed Accounts are guaranteed and funded by PIA through its general account. |
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how often you make a Purchase Payment and how much you invest (subject to minimum and maximum limits of the Contract); |
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the Variable Investment Options and/or the Fixed Account Options into which your Purchase Payments are invested (subject to the limitations with the presence of an optional benefit); |
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whether or not to transfer money among the available Variable Investment Options and/or the Short-Term Fixed Account (subject to limitations of the Contract and the presence of an optional benefit); |
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the type of annuity that we pay and who receives the annuity payments; |
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the Beneficiary or Beneficiaries to whom we pay a death benefit (subject to limitations of the Contract and the presence of an optional benefit); and |
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the amount and frequency of withdrawals from the Contract Value (subject to limitations of the Contract). |
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the death benefit is paid; |
• |
the annuity payments end; |
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there is a full surrender of the Contract or if a withdrawal is made that falls under the conditions of “Withdrawals Treated as Surrenders” provision of the Contract. |
Market Type |
Payment Type |
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Non-Qualified / Traditional Stretch IRA / |
Minimum Initial Purchase Payment | $ | 2,000 | |||
Roth Stretch IRA |
Minimum Subsequent Purchase Payment | $ | 1,000 | |||
Traditional IRA / Roth IRA / SEP IRA / |
Minimum Initial Purchase Payment | $ | 1,000 | 2 | ||
Simple IRA / ERISA Defined Benefit Plan 1 |
Minimum Subsequent Purchase Payment | $ | 250 | 3 |
1 | ERISA Defined Benefit Plans must be approved by the Advanced Sales Department prior to opening. |
2 | For approved qualified employer-sponsored plans (SEP IRA, Simple IRA, or ERISA Defined Benefit Plan) funding the annuity through payroll deduction or on-going employer contributions, Initial Purchase Payment requirement must be satisfied by Purchase Payments made in the first Contract Year. The Contract will be terminated if the Minimum Initial Purchase Payment is not satisfied within 12 months of the issue date of your Contract, and all Purchase Payments made to date (adjusted for withdrawals) will be returned to you. The amount of Net Purchase Payments to be refunded will not be adjusted for market gains or losses incurred during this period. |
3 |
If SEP IRA, Simple IRA, or ERISA Defined Benefit Plan market types are elected at issue, the minimum Subsequent Purchase Payment is $250 annually, and $25 per payment minimum under the automatic investment program. |
• |
No more than two natural persons may be named in the Contract as Owner(s) and/or Annuitant(s). |
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If you are the sole Owner of the Contract, you may designate yourself as an Annuitant, or an Annuitant other than yourself. However, if you designate Joint Annuitants, you must be one of the Annuitants. |
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If your Contract is owned by an entity, joint ownership is not permitted, and there can only be one Annuitant. |
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If your Contract is jointly owned, both Contract Owners must be natural persons. If the Contract is jointly owned and there is one Annuitant, he/she must be a Contract Owner. If the Contract is jointly owned and there are Joint Annuitants, Annuitants must be the Contract Owners. |
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If you are not the Annuitant, you can designate yourself as Contingent Annuitant in the Contract, and become the Annuitant in the event that the Annuitant dies before the Contract is terminated or annuitized. |
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If you purchase an optional benefit in addition to your Base Contract, additional Contract Owner/Annuitant requirements may apply. |
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You may transfer your Contract Value among Variable Investment Options and the Short- Term Fixed Account. |
¡ |
The minimum amount that may be transferred is $250 or, if less, the total amount held in the Variable Investment Option or Short-Term Fixed Account. In the case of partial transfers, the amount remaining in the Variable Investment Option or Short-Term Fixed Account must be at least $250. |
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You may transfer from the Six Month Fixed Dollar Cost Averaging Account or the Twelve Month Fixed Dollar Cost Averaging Account to a Variable Investment Option as described under “What Are the Supplemental Riders and Benefits That Are Available? – Dollar Cost Averaging Program.” |
¡ |
You may not transfer from a Variable Investment Option to the Six Month Dollar Cost Averaging Account or the Twelve Month Dollar Cost Averaging Account. |
• |
We reserve the right to restrict the frequency of transfers you may make to no more than two transfers in a calendar month and no more than 12 transfers in a calendar year. Any transfer restriction we impose would not count transfers pursuant to Dollar Cost Averaging or the Automatic Asset Rebalancing programs towards this limit. |
• |
If you select an optional benefit Rider, you are not permitted to invest in the Short-Term Fixed Account. In the future we may change this restriction or add new ones relating to other Investment Options. |
(a) | The NYSE is closed (other than customary weekend and holiday closings); |
(b) | Trading on the NYSE is restricted; |
(c) | An emergency exists that makes it impractical for us to dispose of securities held in the Separate Account or to determine the value of its assets; or |
(d) | The SEC by order so permits for the protection of investors. |
Number of full years since Purchase Payment |
Applicable Surrender Charge |
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0 |
8.00% | |||
1 |
7.00% | |||
2 |
6.00% | |||
3 |
5.00% | |||
4 |
4.00% | |||
5 |
3.00% | |||
6 |
1.50% | |||
7 |
0.00% |
• |
Free Withdrawal Amount; |
• |
Purchase Payments out of the Surrender Charge Period; and |
• |
Earnings, after all Purchase Payments have been withdrawn or are out of Surrender Charge Period. |
* | The amount available for free withdrawal at any point during a Contract Year is 10% of all Purchase Payments as of the date of the request less the amount of all prior free withdrawals made during that Contract Year. The Free Withdrawal Amount, and then the amounts in excess of the Free Withdrawal Amount, will be applied to Purchase Payments on a first-in, first-out basis as described under “What Are the Fees and Charges Under the Contract? — Surrender Charge.” |
** | You can take your Free Withdrawal Amount via partial withdrawal or systematic withdrawal. Partial withdrawal of the entire Free Withdrawal Amount is available on the last day of the first Contract Year and any time during subsequent Contract Years. Systematic withdrawals are available before the end of the first Contract Year, but you must wait one modal period for systematic withdrawals to start. For example, if you request to take your Free Withdrawal Amount monthly via the systematic withdrawal option, you must wait one month (at least 30 days) from the Contract Date; if you request them quarterly, you must wait three months to receive them. |
• |
“Medically Related Withdrawal” |
• |
“Disability Related Withdrawal” |
(a) | The Contract Owner (or Annuitant for entity-owned Contracts) is first confined in a nursing home or hospital while this Contract is in force and remains confined for at least 90 days in a row. The medical care facility must be prescribed based on physical limitations which prohibit daily living in a non-institutional setting (by a licensed physician in writing). |
(b) | The Contract Owner (or Annuitant for entity-owned Contracts) is first diagnosed as having a fatal injury or illness (an injury or illness expected to result in death within two years) while this Contract is in force. |
(a) | The Contract Owner (or Annuitant for entity-owned Contracts) becomes totally disabled as defined in Section 72(m)(7) of the Code and as applied under the Social Security Act; |
(b) | The disability began after the Contract Date; and |
(c) | The disability has continued without interruption for 90 days. |
1 |
Value is determined after all withdrawals and Purchase Payments are processed, but before any charges are taken out, on the day of the deduction. If the Contract is surrendered, or the Variable Account Value is withdrawn in full, the Annual Contract Administration Charge will be part of the withdrawal transaction and Surrender Value calculation. |
Guarantee Type |
Current Rider Charge |
Maximum Rider Charge |
Maximum Rider Charge Increase |
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Single Life Guarantee |
1.40 | % | 2.50 | % | 0.50 | % | ||||||
Joint Life Guarantee |
1.65 | % | 2.50 | % | 0.50 | % |
Guarantee Type |
Current Rider Charge |
Maximum Rider Charge |
Maximum Rider Charge Increase |
|||||||||
Single Life Guarantee |
1.25 | % | 2.00 | % | 0.50 | % | ||||||
Joint Life Guarantee |
1.40 | % | 2.00 | % | 0.50 | % |
Guarantee Type |
Current Rider Charge |
Maximum Rider Charge |
Maximum Rider Charge Increase |
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Single Life Guarantee |
0.35 | % | 0.75 | % | 0.15 | % | ||||||
Joint Life Guarantee |
0.35 | % | 0.75 | % | 0.15 | % |
Current Rider Charge |
Maximum Rider Charge |
Maximum Rider Charge Increase | ||||
0.90% |
1.50% | 0.30% |
• |
by surrendering your Contract and receiving the Surrender Value; |
• |
by taking a partial withdrawal; |
• |
by taking systematic withdrawals; |
• |
by taking RMDs; or |
• |
when you start the annuity payments based on your Contract Value. |
• |
Any withdrawal initiated by your request or deduction of fees or charges by the Company that brings the Contract Value to zero (unless the Guaranteed Income Rider or the Accumulation Income Rider is present), |
• |
Any withdrawal that would result in the amount remaining in the Contract to be less than the Minimum Remaining Balance of $2,000, or less than $250 remains in each Variable Investment Option or Short-Term Fixed Account. These rules do not apply to RMDs, Lifetime Withdrawals taken under the Accumulation Income Rider, or living benefit withdrawals taken under the Guaranteed Income Rider. |
• |
Minimum Withdrawal. |
(a) | Free Withdrawal Amount (as further described under “Surrender-Charge Free Withdrawals”); |
(b) | RMD amount; or |
(c) | $500. |
• |
Minimum Remaining Balance. |
• |
Zero Contract Value. |
• |
Default Liquidity Order. |
• |
Annual Free Withdrawal Amount, |
• |
RMD, |
• |
Guaranteed Annual Withdrawal Amount as specified by the Guaranteed Income Rider and Accumulation Income Rider, |
• |
Designated Withdrawal Amount (a fixed dollar amount), and |
• |
Substantially Equal Periodic Payments under Code Section 72(q)/(t). |
• |
Period Certain-Only Option |
• |
Life-Only Option |
• |
Life with Period Certain Option |
• |
Joint and Survivor Life Option . Provides periodic payments for the lives of the Annuitant and the Joint Annuitant. Upon the death of either Annuitant, and based on the percentage initially selected, payments will continue at a level of 100%, 75%, 66 2/3%, or 50% of the original benefit amount for the lifetime of the surviving Annuitant. The initial payment will be made if either the Annuitant or the designated second Annuitant are living. Subsequent payments will continue during the joint lives of the Annuitants and thereafter during the life of the surviving Annuitant. Payments will end with the last payment due before the death of the last Annuitant to die. After the deaths of both Annuitants, payments will cease and there will be no payments to any Beneficiary. If both Annuitants die before the first payment has been made, then no payments will be made under this option. |
• |
Any other form of annuity that you and we may agree upon. |
Name of Benefit |
Purpose |
Is Benefit Standard or Optional |
Maximum Fee |
Brief Description of Restrictions/ Limitations | ||||
• Available only at Contract purchase • Withdrawals, including RMDs, could significantly reduce (perhaps by more than the amount of the withdrawal) or terminate benefit or Contract • You may not allocate to the Short-Term Fixed Account |
Name of Benefit |
Purpose |
Is Benefit Standard or Optional |
Maximum Fee |
Brief Description of Restrictions/ Limitations | ||||
• Available only at Contract purchase • Withdrawals, including RMDs, could significantly reduce (perhaps by more than the amount of the withdrawal) or terminate benefit or Contract • We will impose a surrender charge on withdrawals under the optional benefits that exceed the Free Withdrawal Amounts during the Surrender Charge Period • Subsequent Purchase Payments are not permitted during the Withdrawal Phase, which means that the Purchase Payments cannot be used at that time to increase Contract Value, the death benefit, or the Accumulation Income Benefit Base • You may not allocate to the Short-Term Fixed Account • The Rider’s guarantees are not available before the covered life (or younger covered life for a Joint Life Guarantee) attains the age of 55 |
Name of Benefit |
Purpose |
Is Benefit Standard or Optional |
Maximum Fee |
Brief Description of Restrictions/ Limitations | ||||
• Available only at Contract purchase • Withdrawals, including RMDs, could significantly reduce (perhaps by more than the amount of the withdrawal) or terminate benefit or Contract • We will impose a surrender charge on withdrawals under the optional benefits that exceed the Free Withdrawal Amounts during the Surrender Charge Period • You may not allocate to the Short-Term Fixed Account • The Rider’s guarantees are not available before the covered life (or younger covered life for a Joint Life Guarantee) attains the age of 55 | ||||||||
• Available only at Contract purchase • Withdrawals, including RMDs, could significantly reduce (perhaps by more than the amount of the withdrawal) or terminate benefit or Contract • You may not allocate to the Short-Term Fixed Account • Purchase Payments made after the first 12 months of the Accumulation Benefit Period will not be included in the Accumulation Benefit Base. Any additional Purchase Payments made after the first 12 months will increase the Contract Value but not the Accumulation Benefit Base and may reduce the likelihood of receiving the benefit provided by the Rider |
Name of Benefit |
Purpose |
Is Benefit Standard or Optional |
Maximum Fee |
Brief Description of Restrictions/ Limitations | ||||
• Must have a Contract Value of at least $10,000 • Minimum transfer amount must be at least $50 • Only new Purchase Payments may be allocated to the Fixed Dollar Cost Averaging Options • Dollar cost averaging and automatic asset rebalancing may not be elected at the same time | ||||||||
• Must have a Contract Value of at least $10,000 • Dollar cost averaging and automatic asset rebalancing may not be elected at the same time |
(a) | the Annuitant, or |
(b) | the Contract Owner. |
(1) | is the Contract Value; and |
(2) |
is the Adjusted Net Purchase Payments (total Purchase Payments less the sum of all adjusted withdrawals), where adjusted withdrawals are the greater of (a) and (b) below, where: |
(a) | is the amount of each withdrawal; and |
(b) | is the amount of each withdrawal multiplied by the ratio of (i) and (ii) where: |
(i) | is the amount of the Adjusted Net Purchase Payments just before the withdrawal; and |
(ii) | is the Contract Value just before the withdrawal. |
(1) | $90,000 — $10,000 = $80,000 |
(2) | $100,000 — (Greater of a or b) where: |
(a) | $10,000 |
(b) | $10,000 x ($100,000 / $90,000) = $11,111 |
• |
any Riders that are Single Life Guarantees, which covered the deceased Contract Owner, will be terminated; |
• |
any Riders that are Joint Life Guarantees, which covered both the deceased Contract Owner and the spousal Beneficiary, will continue; and |
• |
death benefit will be determined according to the terms of the Rider(s). |
Single Owner / Annuitant (Annuitant is same as Owner) | ||
Owner-Annuitant dies |
• Beneficiary receives Standard Death Benefit • Beneficiary has one year from death to choose the Death Benefit Settlement Option • Beneficiary may delay disbursement for up to five years • Beneficiary may elect a Non-Qualified Stretch • Spousal Beneficiary may continue the Contract |
Single Owner / Single Annuitant (Annuitant is not the same as Owner) | ||
Owner dies |
• Beneficiary receives Contract Value • Beneficiary has one year from death to choose the Death Benefit Settlement Option • Beneficiary may delay disbursement for up to five years • Beneficiary may elect a Non-Qualified Stretch • Spousal Beneficiary may continue the Contract (Contract Value only) | |
Annuitant dies |
• Contract Owner, who is Contingent Annuitant, becomes the Annuitant and may continue the Contract (no death benefit paid) • Contract Owner, as sole primary Beneficiary, may receive the Standard Death Benefit OR • If there is no Contingent Annuitant, surviving Contract Owner is deemed sole primary Beneficiary before any named Beneficiaries • Contract Owner (as deemed sole primary Beneficiary) receives Standard Death Benefit • Surviving Owner as Beneficiary has 60 days from the death of Annuitant other than Owner to choose the Death Benefit Settlement Option | |
Single Owner / Joint Annuitants (Owner must be one of the Annuitants) | ||
Owner-Annuitant dies |
• Beneficiary receives Contract Value | |
• Beneficiary has until December 31st of the year following the calendar year when the Contract Owner died to choose the Death Benefit Settlement Option • Beneficiary may delay disbursement for up to five years • Beneficiary may elect a Non-Qualified Stretch • Spousal Beneficiary may continue the Contract (Contract Value only) • New spousal Owner will become Annuitant (if not already named as such prior to death) • Standard Death Benefit is not paid until the last Annuitant’s death • Surviving Annuitant (as spousal Beneficiary) becomes Owner if permitted by federal tax law | ||
Non-Owner Annuitant dies |
• No death benefit is paid because there was no Owner death and Annuitant death benefit is paid upon the last Annuitant’s death • Surviving Annuitant who is the Contract Owner will continue the Contract • Standard Death Benefit is not paid until the last Annuitant’s death | |
Owner is an Entity (only single Annuitant permitted) | ||
Annuitant dies |
• Beneficiary receives Standard Death Benefit • Death Benefit Settlement Options available are Lump Sum (Option 1) or Five- Year Deferral (Option 2) |
Joint Owners / Single Annuitant (Annuitant must be one of Owners) | ||
Annuitant-Owner dies |
• Surviving Owner is deemed sole primary Beneficiary before any named Beneficiaries • Beneficiary receives Standard Death Benefit • Beneficiary has one year from death to choose the Death Benefit Settlement Option • Beneficiary may delay disbursement for up to five years • Beneficiary may elect a Non-Qualified Stretch • Surviving Owner (if spousal Beneficiary) may continue the Contract • Surviving Owner will become the Annuitant | |
Non-Annuitant Owner dies |
• Surviving Owner is deemed sole primary Beneficiary before any named Beneficiaries • Beneficiary receives Contract Value • Beneficiary has one year from death to choose the Death Benefit Settlement Option • Beneficiary may delay disbursement for up to five years • Beneficiary may elect a Non-Qualified Stretch • Surviving Owner (if spousal Beneficiary) may continue the Contract (Contract Value only) | |
Joint Owners / Joint Annuitants (Annuitants must be the same as Owners) | ||
First Owner-Annuitant dies |
• Surviving Owner is deemed sole primary Beneficiary before any named Beneficiaries • Beneficiary receives Contract Value • Beneficiary has one year from death to choose the Death Benefit Settlement Option • Beneficiary may delay disbursement for up to five years | |
• Beneficiary may elect a Non-Qualified Stretch • Surviving Owner (if spousal Beneficiary) may continue the Contract (Contract Value only) • Standard Death Benefit is not paid until the last Annuitant’s death • Surviving Owner-Annuitant becomes sole Owner if permitted by federal tax law |
Single Owner / Annuitant (Owner must be the Annuitant) | ||
Owner-Annuitant dies |
• Beneficiary receives Standard Death Benefit • Beneficiary has one year from death to choose the Death Benefit Settlement Option • Beneficiary may delay disbursement for up to 10 years • An eligible Beneficiary may stretch the IRA by purchasing a new PIA contract then available • Spousal Beneficiary may continue the Contract | |
Owner is an Entity (only single Annuitant permitted) | ||
Annuitant dies |
• Beneficiary receives Standard Death Benefit • Death Benefit Settlement Options available are Lump Sum (Option 1) or Five- Year Deferral (Option 2) • The Death Benefit must be distributed in accordance with applicable regulations and tax laws. |
• |
This Rider is an optional benefit added to your Contract; it provides a benefit described in this Prospectus for an additional charge. |
• |
The Rider is only available at issue on newly purchased Contracts. |
• |
You may not allocate to the Short-Term Fixed Account under the terms of the Rider. The Company can change the investment allocation restrictions with 60 days prior notice to you, and may do so as a result of changes in the economic environment or for changes in the Investment Options available under the Contract. |
• |
The Enhanced Death Benefit Base Step-Ups occur until age 80, and the Death Benefit Enhancement is payable before the Annuity Date, until the (younger) Covered Life reaches the Maturity Age, or until the Contract Value reaches zero, if earlier. |
• |
Termination of the Contract results in termination of this Rider. Termination of the Rider or the Contract will result in termination of the Enhanced Death Benefit. |
• |
The Rider Charges are non-refundable, whether or not your Enhanced Death Benefit Base exceeds the Standard Death Benefit while the Rider is in effect, or at the time of death. |
• |
The Enhanced Death Benefit provides a contingent guarantee that may never come into effect because the Enhanced Death Benefit may never exceed the Standard Death Benefit. |
• |
Withdrawals taken to satisfy the RMDs will reduce the Enhanced Death Benefit Base by the greater of a dollar-for-dollar or pro-rata reduction. |
¡ |
The RMDs could significantly reduce the values under the Enhanced Death Benefit Rider, perhaps by more than the amount of the withdrawal, and could terminate the Enhanced Death Benefit Rider and the Contract. |
¡ |
An investor should carefully consider whether they plan to take RMDs from the Contract before they purchase the Enhanced Death Benefit Rider because the RMDs could significantly reduce the values under the Enhanced Death Benefit Rider and could terminate the Rider and the Contract. |
• |
All withdrawals will reduce your Contract Value and the Enhanced Death Benefit Base, the Death Benefit and the Free Withdrawal Amount and could be subject to taxes, tax penalties, and Surrender Charges. |
• |
Withdrawals may reduce future benefits by more than the dollar amount of the withdrawal, and may result in one or more of the following: |
¡ |
a permanent reduction in your Enhanced Death Benefit; |
¡ |
termination of the Rider; and/or |
¡ |
termination of the Contract. |
• |
Amounts that may be paid under the Rider in excess of Contract Value are subject to the Company’s financial strength and claims-paying ability. |
(a) | is the withdrawal amount; and |
(b) | is the withdrawal amount multiplied by the ratio of (1) and (2) where: |
(1) | is the Enhanced Death Benefit Base immediately prior to the withdrawal; and |
(2) | is the Contract Value immediately prior to the withdrawal. |
(a) | Upon the death of the sole Contract Owner/Annuitant/Covered Life, the Standard Death Benefit, including any Death Benefit Enhancement payable under the Rider, will be paid to the Contract Owner’s Beneficiary. If permitted by federal law, a spouse of the deceased Contract Owner may exercise Spousal Step-In according to the terms of this Contract, but the Rider will terminate. |
(a) | Upon Contract Owner’s death, Contract Value will be paid as a death settlement to the Contract Owner’s Beneficiary according to the terms of the Contract. The surviving Annuitant/Covered Life (as spousal Beneficiary) may also choose to exercise Spousal Step-In according to the terms of this Contract if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death), and the Rider will continue. |
(b) | Upon Annuitant’s death, the Standard Death Benefit, including any Death Benefit Enhancement payable under the Rider, will be paid to the surviving Contract Owner, who is deemed to be sole primary Beneficiary under the Beneficiary provision of the Contract. A surviving spousal Contract Owner may also choose to exercise Spousal Step-In according to the terms of this Contract if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death), but the Rider will terminate. |
(c) | Upon Annuitant’s death where the Contract Owner is an entity, the Standard Death Benefit, including any Death Benefit Enhancement payable under the Rider, will be paid to the Contract Owner’s Beneficiary. |
(a) | Upon death of a sole Annuitant who is the Covered Life under the Rider, the Standard Death Benefit, including any Death Benefit Enhancement payable under the Rider, will be paid to the surviving Contract Owner, who is deemed to be sole primary Beneficiary under the Beneficiary provision of the Contract. The surviving spousal Contract Owner may also choose to exercise Spousal Step-In according to the terms of this Contract if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death), but the Rider will terminate. |
(b) | Upon death of the Contract Owner who is not the Annuitant and sole Covered Life, the surviving spousal Contract Owner, who is also the sole Annuitant and the Covered Life under the Rider, may continue the Contract and the Rider if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death). Surviving Contract Owner may also choose to receive the Contract Value as a death settlement. |
(a) | Upon death of the Covered Life who is the sole Annuitant and the Contract Owner, the surviving Covered Life, as sole primary Beneficiary, may choose to receive the Standard Death Benefit (and thus terminate the Contract and the Rider) or continue the Contract (under Spousal Step-In) and the Enhanced Death Benefit Rider as-is if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death). |
(b) | Upon death of the Covered Life who is designated as the Contingent Annuitant and who is not the Contract Owner, no death benefit is payable, and the Contract Owner may continue the Contract and the Rider as sole Annuitant and Covered Life. |
(a) | Upon death of the Annuitant who is not the Contract Owner, the surviving Contract Owner (as sole primary Beneficiary) may choose to receive the Standard Death Benefit (and thus terminate the Contract and the Rider). The Contract Owner who is also the surviving Covered Life, may instead become the Annuitant and continue the Contract and the Rider as-is. |
(b) | Upon death of the Contract Owner who is also the Contingent Annuitant in the Contract, the surviving Covered Life, as sole primary Beneficiary, may choose to receive the Contract Value as a death settlement (and thus terminate the Contract and the Rider), or continue the Contract (under Spousal Step-In) and the Rider as-is if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death). |
(a) | Upon death of the Annuitant or Joint Annuitant who is also the Contract Owner, the surviving Covered Life, as sole primary Beneficiary, may choose to receive the Contract Value as a death settlement (and thus terminate the Contract and the Rider), or continue the Contract (under Spousal Step-In) and the Rider as-is if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death). The Standard Death Benefit is not payable until the later death of Annuitant and Joint Annuitant. |
(b) | Upon death of the Covered Life who is not the Contract Owner and is named as Annuitant or Joint Annuitant, no death benefit is payable, and the Contract Owner may continue the Contract and Rider as sole Annuitant and Covered Life. |
(a) | Upon death of the sole Annuitant, the surviving Contract Owner, who is also the surviving Covered Life, as sole primary Beneficiary, may choose to receive the Standard Death Benefit (and thus terminate the Contract and the Rider), or continue the Contract (under Spousal Step-In) and the Rider as-is if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death). |
(b) | Upon death of the Contract Owner named as Contingent Annuitant who is also a Covered Life, the surviving Covered Life, as sole primary Beneficiary, may choose to receive the Contract Value as a death settlement (and thus terminate the Contract and the Rider), or continue the Contract (under Spousal Step-In) and the Rider as-is if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death). |
(a) | Upon first death, the surviving Contract Owner who is also the surviving Annuitant and surviving Covered Life, as sole primary Beneficiary, may choose to receive the Contract Value (and thus terminate the Contract and the Rider), or continue the Contract (under Spousal Step-In) and the Rider as-is if permitted by federal law (subject to IRS requirements for distribution upon Contract Owner’s death). |
(b) | Upon later death, the Standard Death Benefit, including any Death Benefit Enhancement payable under the Rider, will be paid to the Contract Owner’s Beneficiary(ies). |
(1) | At any time on or after the first Contract Anniversary immediately following receipt by the Company of a written request by the Contract Owner to discontinue the Rider; |
(2) | Upon a change in ownership (or assignment) of the Contract unless: |
(a) | The new Contract Owner or assignee assumes full ownership of the Contract and is essentially the same person; or |
(b) | The assignment is for the purposes of effectuating a 1035 exchange of the Contract; |
(3) |
Spousal Step-In of a Contract with a Single Life Guarantee upon the Contract Owner’s death (where the Contract Owner is the sole Covered Life); or |
(4) | Annuitization under the Base Contract or, if applicable, Annuitization under the Guaranteed Income Rider or Accumulation Income Rider. |
(1) | Full surrender of the Contract; |
(2) | A Death Benefit is paid as described in this Prospectus; |
(3) | The Contract Value is reduced to zero; or |
(4) | The Enhanced Death Benefit Base is reduced to zero. |
1) | the lifetime of the last surviving Covered Life under the Lifetime Withdrawal Guarantee, or |
2) |
the earlier of the Standard Withdrawal Benefit Balance (explained below), the Guaranteed Income Benefit Base, and the Contract Value (or, after the Maximum Step-Up Age, the Standard Withdrawal Benefit Balance, and the Guaranteed Income Benefit Base) all reducing to zero or the lifetime of the last surviving Covered Life under the Standard Withdrawal Guarantee. |
• |
The Rider is an optional benefit added to your Contract, for an additional charge; it provides various benefits described in this Prospectus. |
• |
The Rider is only available at issue on newly purchased Deferred Variable Annuity Contracts. |
• |
Termination of the Contract results in termination of this Rider. Termination of the Rider or the Contract will result in termination of guaranteed living benefit withdrawals. |
• |
The Rider Charges are non-refundable, whether or not you take withdrawals while the Rider is in effect. |
• |
All withdrawals, including the withdrawals taken while the Rider is in effect, reduce your Contract Value, death benefit and the Free Withdrawal Amount and could be subject to taxes, tax penalties, and Surrender Charges. |
• |
We will impose a surrender charge on withdrawals under the Rider that exceed the Free Withdrawal Amounts during the Surrender Charge Period. |
• |
All withdrawals, including the Free Withdrawal Amount, will be subject to the terms of the Rider. If the withdrawal amount is greater than the Free Withdrawal Amount (whether or not it is below the Guaranteed Annual Withdrawal Amount), it will be subject to Surrender Charges (See “Surrender Charge” subsection of — “What Are the Fees and Charges Under the Contract?” for details). |
• |
The Rider’s guarantee does not begin until the (younger) Covered Life has reached the eligible age of 55. |
• |
The Rider provides a contingent guarantee that may never come into effect because withdrawals taken while Contract Value is greater than zero are withdrawals of the Contract Owner’s own money, and the Company is only required to make guaranteed payments from its general account if and when the Contract Value is reduced to zero. |
• |
You may not allocate to the Short-Term Fixed Account under the terms of the Rider. The Company can change the investment allocation restrictions with 60 days prior notice to you, and may do so as a result of changes in the economic environment or for changes in the Investment Options available under the Contract. |
• |
Excess Withdrawals may reduce future benefits by more than the dollar amount of the Excess Withdrawal, and may result in one or more of the following: |
(i) | a permanent reduction in your future Guaranteed Annual Withdrawal Amount; |
(ii) | termination of the Rider; |
(iii) | termination of the Contract. |
• |
Withdrawals from Qualified Contracts during the Withdrawal Phase up to the amount of RMDs are not considered Excess Withdrawals and do not incur the adverse consequences of Excess Withdrawals under the Rider. |
• |
Amounts that may be paid under the Rider in excess of Contract Value are subject to the Company’s financial strength and claims-paying ability. |
• |
Death of a Covered Life; or |
• |
Removal of a Covered Life by the Contract Owner(s). |
1) | The Guaranteed Growth Base will be credited with a Guaranteed Growth Increase prorated for any partial year since the prior Contract Anniversary, if in the Guaranteed Growth Period. If the Guaranteed Growth Base exceeds the Guaranteed Income Benefit Base, the Guaranteed Income Benefit Base will be increased to equal the Guaranteed Growth Base. |
2) | The Guaranteed Income Benefit Base will then be evaluated for a Step-Up to the Contract Value immediately prior to the first lifetime withdrawal, if prior to the Maximum Step-Up Age. |
(1) |
the (younger) Covered Life reaches the Maturity Age or the Annuity Date (if earlier); |
(2) | the 10th Contract Anniversary since the Contract Date; and |
(3) | the end of the Deferral Phase. |
(a) |
One of the Living Benefit Guarantee withdrawal options is exercised (Lifetime Withdrawal Guarantee and Standard Withdrawal Guarantee not available before Actual Age 55 is attained by the (younger) Covered Life), |
(b) | The Contract Value is reduced to zero and the Living Benefit Guarantee is not available, |
(c) | Annuitization upon the earlier of: |
(1) | The Contract Value is reduced to zero and the Living Benefit Guarantee is available, |
(2) |
The (younger) Covered Life reaching Maturity Age or the Annuity Date (if earlier) and the Contract enters the Annuity Payout Period, |
(d) | Termination of the Contract or Rider, or |
(e) | The death of the sole Covered Life for a Single Life Guarantee, or the later death of both Covered Lives for a Joint Life Guarantee. |
(a) | Termination of the Contract or Rider; |
(b) | Annuitization upon the earlier of: |
(1) | The Contract Value is reduced to zero; |
(2) |
The (younger) Covered Life reaching Maturity Age or the Annuity Date (if earlier) and the Contract enters the Annuity Payout Period; |
(c) | The death of a sole Covered Life for a Single Life Guarantee, or the later death of both Covered Lives for a Joint Life Guarantee. |
(a) | is the Early Access Withdrawal amount; and |
(b) | is the Early Access Withdrawal amount multiplied by the ratio of (1) and (2) where: |
(1) | is the applicable Base just prior to the Early Access Withdrawal; and |
(2) | is the Contract Value just prior to the Early Access Withdrawal. |
(a) | $10,000 |
(b) | $10,000 x ($100,000/$90,000) = $11,111 |
Actual Age at the Start of Withdrawal Phase |
Lifetime Withdrawal Rate for Single Life Guarantee |
Lifetime Withdrawal Rate for Joint Life Guarantee |
||||||||||
At Least |
But Less Than |
|||||||||||
55 |
60 | 4.00% | 3.50% | |||||||||
60 |
65 | 4.60% | 4.10% | |||||||||
65 |
70 | 5.80% | 5.30% | |||||||||
70 |
75 | 6.00% | 5.50% | |||||||||
75 and over |
6.25% | 5.75% |
(a) | is the Excess Withdrawal Amount; and |
(b) | is the Excess Withdrawal Amount multiplied by the ratio of (1) to (2), where: |
(1) | is the Guaranteed Income Benefit Base immediately prior to the Excess Withdrawal; and |
(2) | is the difference between (i) and (ii), where: |
(i) | is the Contract Value immediately prior to the Excess Withdrawal; and |
(ii) | is the Guaranteed Annual Withdrawal Amount remaining prior to the Excess Withdrawal. |
(a) | $5,000 |
(b) | $5,000 x (($200,000) / ($150,000—$6,800)) = $6,983.24 |
• |
For as long as cumulative withdrawals in the Contract Year are less than or equal to the Guaranteed Annual Withdrawal Amount, the Standard Withdrawal Benefit Balance will be reduced by the dollar amount of the withdrawal taken, up to the Guaranteed Annual Withdrawal Amount. |
• |
If cumulative withdrawals in the Contract Year exceed the Guaranteed Annual Withdrawal Amount, the Standard Withdrawal Benefit Balance will be reduced as outlined below for any Excess Withdrawals at the time the Excess Withdrawal is taken. |
(a) | is the Excess Withdrawal Amount, and |
(b) | is the Excess Withdrawal Amount multiplied by the ratio of (1) to (2), where: |
(1) | is the difference between (i) and (ii), where: |
(i) | is the Standard Withdrawal Benefit Balance immediately prior to the Excess Withdrawal, and |
(ii) | is the Guaranteed Annual Withdrawal Amount remaining prior to the Excess Withdrawal, and |
(2) | is the difference between (i) and (ii), where: |
(i) | is the Contract Value immediately prior to the Excess Withdrawal, and |
(ii) | is the Guaranteed Annual Withdrawal Amount remaining prior to the Excess Withdrawal. |
(a) | is the Excess Withdrawal Amount, and |
(b) | is the Excess Withdrawal Amount multiplied by the ratio of (1) to (2), where: |
(1) | is the Guaranteed Income Benefit Base immediately prior to the Excess Withdrawal, and |
(2) | is the difference between (i) and (ii), where: |
(i) | is the Contract Value immediately prior to the withdrawal, and |
(ii) | is the Guaranteed Annual Withdrawal Amount remaining prior to the withdrawal. |
(a) | $5,000 |
(b) | $5,000 x (($200,000) / ($150,000 – $6,800)) = $6,983.24 |
• |
Every Contract Year the Guaranteed Annual Withdrawal Amount will be calculated as outlined above. This amount will not be changed based on the RMD requirement (which will be calculated every calendar year-end). |
• |
If the RMD amount is greater than the Guaranteed Annual Withdrawal Amount: |
• | Standard Withdrawal Benefit Balance will be reduced by the dollar amount of withdrawals up to the RMD; |
• | Guaranteed Income Benefit Base will not be reduced for withdrawals up to the RMD amount; |
• | Withdrawals in excess of RMD Amount will be treated as Excess Withdrawals. |
• |
Every Contract Year the Guaranteed Annual Withdrawal Amount will be calculated as outlined above. This amount will not be changed based on the RMD requirement (which will be calculated every calendar year-end). |
• |
If the RMD amount is greater than the Guaranteed Annual Withdrawal Amount: |
• |
Guaranteed Income Benefit Base will not be reduced for withdrawals up to the RMD amount; |
• |
Withdrawals in excess of RMD Amount will be treated as Excess Withdrawals. |
• |
If the Guaranteed Income Benefit Base is greater than zero and the Covered Life (or younger Covered Life for a Joint Life Guarantee) has attained the age of 55, the Contract will be annuitized using the Lifetime Withdrawal Guarantee. The Guaranteed Annual Withdrawal Amount will be determined based on the Guaranteed Income Benefit Base at the time of Annuitization and the then applicable Lifetime Withdrawal Rate (based on age of the (younger) Covered Life). |
• |
If the Guaranteed Income Benefit Base is greater than zero but the Covered Life (or younger Covered Life for a Joint Life Guarantee) has not attained the age of 55, the Rider and the Contract will be terminated. |
• |
If the Guaranteed Income Benefit Base also goes to zero, the Rider and the Contract will be terminated. The Guaranteed Income Benefit Base could only reduce to zero as a result of Early Access Withdrawals and/ or Excess Withdrawals. |
• |
If the Standard Withdrawal Benefit Balance is greater than zero, the Contract will be annuitized at the Guaranteed Annual Withdrawal Amount using the Guaranteed Income Benefit Base at the time of Annuitization and the Standard Withdrawal Rate. Payments will continue until the Standard Withdrawal Benefit Balance is reduced to zero or for the lifetime of the last surviving Covered Life(ves) (whichever ends earlier). |
• |
If the Standard Withdrawal Benefit Balance also reduces to zero, the Contract will be terminated. |
• |
If the Guaranteed Income Benefit Base is greater than zero, the Contract will be annuitized at the Guaranteed Annual Withdrawal Amount using the Guaranteed Income Benefit Base at the time of Annuitization and the Lifetime Withdrawal Rate. Payments will continue for the lifetime of the Covered Life(ves). |
• |
If the Guaranteed Income Benefit Base also reduces to zero, the Contract will be terminated. The Guaranteed Income Benefit Base could only reduce to zero as a result of Early Access Withdrawals and/ or Excess Withdrawals. |
(1) | Surrender the Contract and receive a Surrender Value; |
(2) | Apply the Contract Value to any of the Annuity options described in the “Annuity Options” section of the Contract; |
(3) | Annuitize your Contract under the terms of the Rider. |
• |
If the Contract is in the Deferral Phase as of the Annuity Date, and the Lifetime Withdrawal Guarantee is available based on the age of the (younger) Covered Life, it will be annuitized under the Lifetime Withdrawal Guarantee at the Guaranteed Annual Withdrawal Amount using the Lifetime Withdrawal Rate applicable at the time of Annuitization. This amount will be payable during the lifetime of the last surviving Covered Life. |
• |
If the Contract is in the Deferral Phase as of the Annuity Date, but the Lifetime Withdrawal Guarantee is not available based on the age of the (younger) Covered Life and the Standard Withdrawal Guarantee is not available based on the age of the (younger) Covered Life, the Contract will be annuitized according to the terms of the Contract. |
• |
If the Contract has entered the Withdrawal Phase under the Lifetime Withdrawal Guarantee |
• |
If the Contract has entered the Withdrawal Phase under the Standard Withdrawal Guarantee |
(1) | At any time on or after the third Contract Anniversary, immediately following receipt by the Company of a written request by the Contract Owner to discontinue the Rider; |
(2) | Upon a change in ownership (or assignment) of the Contract unless: |
(a) | The new Contract Owner or assignee assumes full ownership of the Contract and is essentially the same person; or |
(b) | The assignment is for the purposes of effectuating a 1035 exchange of the Contract. |
(3) | Spousal Step-In of a Contract with a Single Life Guarantee upon the Contract Owner’s death (where the Contract Owner is the sole Covered Life); |
(4) | Annuitization under the Base Contract; |
(5) | The Guaranteed Income Benefit Base reduces to zero after the Maximum Step-Up Age. |
• |
Charges for the Rider stop accruing (accrued but un-assessed Rider charges will be deducted on the next applicable date when Rider Charges are deducted); |
• |
Investment Allocation restrictions no longer apply; and |
• |
Guaranteed minimum withdrawals available under the Rider will terminate. |
(a) | Full surrender of the Contract; |
(b) | a Death Benefit is paid as described in this Prospectus; |
(c) | The Contract Value is reduced to zero and the Guaranteed Income Benefit Base is also reduced to zero. The Guaranteed Income Benefit Base could only reduce to zero as a result of Early Access Withdrawals and/ or Excess Withdrawals; |
(d) | The Contract Value is reduced to zero and you are not eligible for a Living Benefit Guarantee based on your age as defined in your Contract, regardless of the value of the Guaranteed Income Benefit Base. |
• |
The Rider is an optional benefit added to your Contract, for an additional charge; it provides various benefits described in this Prospectus. |
• |
The Rider is only available at issue on newly purchased Deferred Variable Annuity Contracts. |
• |
Termination of the Contract results in termination of this Rider. Termination of the Rider or the Contract will result in termination of guaranteed Lifetime Withdrawals. |
• |
The Rider Charges are non-refundable, whether or not you take withdrawals while the Rider is in effect. |
• |
All withdrawals, including the withdrawals taken while the Rider is in effect, reduce your Contract Value, death benefit and the Free Withdrawal Amount and could be subject to taxes, tax penalties, and Surrender Charges. |
• |
We will impose a surrender charge on withdrawals under the Rider that exceed the Free Withdrawal Amounts during the Surrender Charge Period. |
• |
All withdrawals, including the Free Withdrawal Amount, will be subject to the terms of the Rider. If the withdrawal amount is greater than the Free Withdrawal Amount (whether or not it is below the Guaranteed Annual Withdrawal Amount), it will be subject to Surrender Charges (See “What Are the Fees and Charges Under the Contract? – Surrender Charge” for details). |
• |
The Rider’s guarantee does not begin until the (younger) Covered Life has reached the eligible age of 55. |
• |
Subsequent Purchase Payments are not permitted during the Withdrawal Phase, which means that the Purchase Payments cannot be used at that time to increase Contract Value, the death benefit, or the Accumulation Income Benefit Base. |
• |
The Rider provides a contingent guarantee that may never come into effect because withdrawals taken while Contract Value is greater than zero are withdrawals of the Contract Owner’s own money, and the Company is only required to make guaranteed payments from its general account if and when the Contract Value is reduced to zero. |
• |
You may not allocate to the Short-Term Fixed Account under the terms of the Rider. The Company can change the investment allocation restrictions with 60 days prior notice to you, and may do so as a result of changes in the economic environment or for changes in the Investment Options available under the Contract. |
• |
Excess Withdrawals may reduce future benefits by more than the dollar amount of the Excess Withdrawal, and may result in one or more of the following: |
(a) | a permanent reduction in your future Guaranteed Annual Withdrawal Amount; |
(b) | termination of the Rider; |
(c) | termination of the Contract. |
• |
Withdrawals from Qualified Contracts during the Withdrawal Phase up to the amount of RMDs are not considered Excess Withdrawals and do not incur the adverse consequences of Excess Withdrawals under the Rider. |
• |
Amounts that may be paid under the Rider in excess of Contract Value are subject to the Company’s financial strength and claims-paying ability. |
(a) | Death of a Covered Life; or |
(b) | Removal of a Covered Life by the Contract Owner(s). |
I. |
Deferral Phase |
(a) |
Lifetime Withdrawal Guarantee is exercised (not available before Actual Age 55 is attained by the (younger) Covered Life), |
(b) | The Contract Value is reduced to zero and the Lifetime Withdrawal Guarantee is not available, |
(c) | Annuitization upon the earlier of: |
(1) | Contract Value is reduced to zero and the Lifetime Withdrawal Guarantee is available, |
(2) |
The (younger) Covered Life reaching Maturity Age or the Annuity Date (if earlier) and the Contract enters the Annuity Payout Period, |
(d) | Termination of the Contract or Rider, or |
(e) | The death of the sole Covered Life for a Single Life Guarantee, or the later death of both Covered Lives for a Joint Life Guarantee. |
II. |
Withdrawal Phase |
(a) | Termination of the Contract or Rider; |
(b) | Annuitization upon the earlier of: |
(1) |
Contract Value is reduced to zero; |
(2) |
The (younger) Covered Life reaching Maturity Age or the Annuity Date (if earlier) and the Contract enters the Annuity Payout Period; or |
(c) | The death of a sole Covered Life for a Single Life Guarantee, or the later death of both Covered Lives for a Joint Life Guarantee. |
(a) | is the Early Access Withdrawal amount, and |
(b) | is the Early Access Withdrawal amount multiplied by the ratio of (1) and (2) where: |
(1) | is the Accumulation Income Benefit Base just prior to the Early Access Withdrawal, and |
(2) | is the Contract Value just prior to the Early Access Withdrawal. |
Actual Age at the Start of Withdrawal Phase |
Age-Based Lifetime Withdrawal Rate for Single Life Guarantee |
Age-Based Lifetime Withdrawal Rate for Joint Life Guarantee |
||||||||||
At Least |
But Less Than |
|||||||||||
55 |
60 | 3.75% | 3.25% | |||||||||
60 |
65 | 4.25% | 3.75% | |||||||||
65 |
70 | 5.50% | 5.00% | |||||||||
70 |
75 | 5.75% | 5.25% | |||||||||
75 and over |
6.00% | 5.50% |
(1) | is (a) times (b) times (c), where: |
(a) | is the Age of the Purchase Payment at the time Lifetime Withdrawals begin; |
(b) | is the Annual Adjustment Rate of 0.25%; and |
(c) | is the Purchase Payment amount; and |
(2) | the total amount of Purchase Payments at the time the Lifetime Withdrawals begin. |
(a) | is the Excess Withdrawal Amount; and |
(b) | is the Excess Withdrawal Amount multiplied by the ratio of (1) to (2) where: |
(1) | is the Accumulation Income Benefit Base immediately prior to the Excess Withdrawal ; |
(2) | is the difference between (i) and (ii) where: |
(i) | is the Contract Value immediately prior to the Excess Withdrawal; and |
(ii) | is the Guaranteed Annual Withdrawal Amount remaining prior to the Excess Withdrawal. |
(a) | $5,000 |
(b) | $5,000 x (($200,000) / ($150,000 – $6,800)) = $6,983.24 |
• |
Every Contract Year the Guaranteed Annual Withdrawal Amount will be calculated as outlined above. This amount will not be changed based on the RMD requirement (which will be calculated every calendar year-end). |
• |
If the RMD amount is greater than the Guaranteed Annual Withdrawal Amount: |
• |
Accumulation Income Benefit Base will not be reduced for withdrawals up to the RMD amount; |
• |
Withdrawals in excess of RMD Amount will be treated as Excess Withdrawals. |
• |
If the Accumulation Income Benefit Base is greater than zero and the Covered Life (or younger Covered Life for a Joint Life Guarantee) has attained the age of 55, the Contract will be annuitized. The Guaranteed Annual Withdrawal Amount will be determined based on Accumulation Income Benefit Base at the time of Annuitization and the then applicable Lifetime Withdrawal Rate (based on age of the (younger) Covered Life). The Lifetime Withdrawal Rate is based on the Age-Based Lifetime Withdrawal Rate and Effective Waiting Bonus (if applicable) at the time the Contract Value is reduced to zero. |
• |
If the Accumulation Income Benefit Base is greater than zero but the Covered Life (or younger Covered Life for a Joint Life Guarantee) has not attained the age of 55, the Rider and the Contract will be terminated. |
• |
If the Accumulation Income Benefit Base also goes to zero, the Rider and the Contract will be terminated. The Accumulation Income Benefit Base could only reduce to zero as a result of Early Access Withdrawals and/ or Excess Withdrawals. |
• |
If the Accumulation Income Benefit Base is greater than zero, the Contract will be annuitized at the Guaranteed Annual Withdrawal Amount using the Accumulation Income Benefit Base at the time of Annuitization and the Lifetime Withdrawal Rate. Payments will continue for the lifetime of the Covered Life(ves). |
• |
If the Accumulation Income Benefit Base also reduces to zero, the Contract will be terminated. The Accumulation Income Benefit Base could only reduce to zero as a result of Early Access Withdrawals and/ or Excess Withdrawals. |
(1) | Surrender the Contract and receive a Surrender Value, |
(2) | Apply the Contract Value to any of the Annuity options described in the “Annuity Options” section of the Contract, |
(3) | Annuitize your Contract under the terms of the Rider. |
• |
If the Contract is in the Deferral Phase as of the Annuity Date, it will be annuitized at the Guaranteed Annual Withdrawal Amount using the Lifetime Withdrawal Rate applicable at the time of Annuitization (based on the Actual Age of the (younger) Covered Life). The Lifetime Withdrawal Rate is based on the Age-Based Lifetime Withdrawal Rate and Effective Waiting Bonus (if applicable) at the time of Annuitization. This amount will be payable for the last surviving Covered Life’s Lifetime. After Annuitization, Step-Ups will no longer apply. |
• |
If the Contract is in the Deferral Phase as of the Annuity Date, but the Lifetime Withdrawal Guarantee is not available based on the age of the (younger) Covered Life, the Contract will be annuitized according to the terms of the Contract. |
• |
If the Contract has entered the Withdrawal Phase |
(1) | At any time on or after the third Contract Anniversary, immediately following receipt by the Company of a written request by the Contract Owner to discontinue the Rider; |
(2) | Upon a change in ownership (or assignment) of the Contract unless: |
(a) | The new Contract Owner or assignee assumes full ownership of the Contract and is essentially the same person; or |
(b) | The assignment is for the purposes of effectuating a 1035 exchange of the Contract. |
(3) | Spousal Step-In of a Contract with a Single Life Guarantee upon the Contract Owner’s death (where the Contract Owner is the sole Covered Life); |
(4) | Annuitization under the Base Contract; |
(5) | The Guaranteed Income Benefit Base reduces to zero after the Maximum Step-Up Age. |
• |
Charges for the Rider stop accruing (accrued but un-assessed Rider charges will be deducted on the next applicable date when Rider Charges are deducted); |
• |
Investment Allocation restrictions no longer apply; and |
• |
Guaranteed minimum withdrawals available under the Rider will terminate. |
(a) | Full surrender of the Contract; |
(b) | a Death Benefit is paid as described in this Prospectus; |
(c) | The Contract Value is reduced to zero and the Accumulation Income Benefit Base is also reduced to zero. The Accumulation Income Benefit Base could only reduce to zero as a result of Early Access Withdrawals and/ or Excess Withdrawals; or |
(d) | The Contract Value is reduced to zero and you are not eligible for a Lifetime Withdrawal Guarantee based on your age as defined in your Contract, regardless of the value of the Accumulation Income Benefit Base. |
• |
The Rider is an optional benefit added to your Contract. The Rider provides various benefits described in this Prospectus for an additional charge. |
• |
The Rider is only available at issue on newly purchased Deferred Variable Annuity Contracts. |
• |
The Rider Charges are non-refundable, whether or not your Guaranteed Minimum Accumulation Benefit Amount exceeds the Contract Value while the Rider is in effect or at the end of the Accumulation Benefit Period. |
• |
The Rider provides a guarantee that may never come into effect because Contract Value may never be less than the Guaranteed Minimum Accumulation Benefit Amount, and the possibility that the Company will be required to pay the Guaranteed Minimum Accumulation Benefit Amount may be minimal. |
• |
While the Rider provides a guarantee that is designed to provide a minimum Contract Value, additional Purchase Payments made after the first 12 months of the Accumulation Benefit Period will not be included in the Accumulation Benefit Base. Any additional Purchase Payments made after the first 12 months will increase the Contract Value but not the Accumulation Benefit Base and may reduce the likelihood of receiving the benefit provided by this Rider. Please discuss the advisability of making Subsequent Purchase Payments after the first 12 months with your financial professional. |
• |
Withdrawals taken to satisfy the RMD requirements do not receive any special treatment under the Rider. RMDs could significantly reduce the values under the Rider, perhaps by more than the amount of the withdrawal, and could terminate the Rider and the Contract. An investor should carefully consider whether they plan to take RMDs from the Contract before they purchase the Guaranteed Minimum Accumulation Rider because the RMDs could significantly reduce the values under the Guaranteed Minimum Accumulation Rider. Contract Owners who must take RMDs during the Accumulation Benefit Period should discuss the advisability of purchasing the Rider with their financial professional. |
• |
All withdrawals will reduce your Contract Value, the Accumulation Benefit Base, the Death Benefit, and the Free Withdrawal Amount and could be subject to taxes, tax penalties, and Surrender Charges. |
• |
Withdrawals may reduce future benefits by more than the dollar amount of the withdrawal, and may result in one or more of the following: |
(1) | a permanent reduction in your Guaranteed Minimum Accumulation Benefit Amount; |
(2) | termination of the Contract and the associated Rider. |
• |
You may not allocate to the Short-Term Fixed Account under the terms of the Rider. The Company can change the investment allocation restrictions with 60 days prior notice to you, and may do so as a result of changes in the economic environment or for changes in the Investment Options available under the Contract. |
• |
Amounts that may be paid under the Rider in excess of Contract Value are subject to the Company’s financial strength and claims-paying ability. |
Accumulation Benefit Period |
Accumulation Benefit Percentage | |
7 Year |
100% | |
10 Year |
106% |
Accumulation Benefit Period |
Accumulation Benefit Percentage | |
5 Year |
90% | |
7 year |
100% | |
10 Year |
106% |
• |
Initial Purchase Payment = $250,000. |
• |
A Subsequent Purchase Payment of $30,000 is made in Contract Year 1. |
• |
A Subsequent Purchase Payment of $10,000 is made in Contract Year 2. |
(1) | is the Accumulation Benefit Base immediately prior to the withdrawal; and |
(2) | is the Contract Value immediately prior to the withdrawal. |
(1) | At the end of the Accumulation Benefit Period if the new Accumulation Benefit Period will end after the Annuity Date or if the Contract Owner has provided written notice of termination within 30 days of the end of the Accumulation Benefit Period; |
(2) | On the Contract Anniversary immediately following receipt by the Company of a written request by the Contract Owner to discontinue the Rider; |
(3) | Annuitization under the Base Contract. |
(1) | Full surrender of the Contract; |
(2) | The Death Benefit is paid as described in this Prospectus; |
(3) | The Contract Value is reduced to zero and the Accumulation Benefit Base is also reduced to zero. |
1. | Six-Month Dollar Cost Averaging Period (the Six Month Fixed Dollar Cost Averaging Account); and |
2. | Twelve-Month Dollar Cost Averaging Period (the Twelve Month Fixed Dollar Cost Averaging Account). |
• |
early withdrawals that are part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and a Beneficiary; |
• |
withdrawals made on or after age 59 1 ⁄2 ; |
• |
distributions made on or after death; or |
• |
withdrawals attributable to disability, as determined under the Code. |
(i) | payment or distribution is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA established for your benefit, and |
(ii) | payment or distribution is: |
(a) | made on or after the date you reach age 59 1 ⁄2 ; |
(b) | made because you are disabled; |
(c) | made to a Beneficiary or to your estate on or after your death; or |
(d) | one that meets the requirements for the first-time home buyer exception to the tax on early distributions. |
Checks sent by regular mail: The Penn Mutual Life Insurance Company Payment Processing Center PO Box 825799 Philadelphia, PA 19182-5799 |
Checks sent by overnight delivery: The Penn Mutual Life Insurance Company Lockbox #825799 525 Fellowship Road, Suite 330 Mt. Laurel, NJ 08054-3415 |
New Business requests sent by regular mail: The Penn Mutual Life Insurance Company Payment Processing Center PO Box 825799 Philadelphia, PA 19182-5799 |
Customer Service requests sent by regular mail: The Penn Mutual Life Insurance Company C/O Annuity Services PO Box 178 Philadelphia, PA 19105 |
New Business or Customer Service requests sent by overnight delivery: The Penn Mutual Life Insurance Company 1600 Malone Street Millville, NJ 08332 |
Toll-Free Customer Service 1-800-523-0650 Monday — Friday, 8:30 a.m. to 6:00 p.m., Eastern Time |
Automated Phone Service 1-800-523-0650 Monday — Friday, 7:00 a.m. to 12:00 midnight, Eastern Time Saturday & Sunday, 8:00 a.m. to 6:00 p.m., Eastern Time |
(a) | The beginning and end dates of the current report period; |
(b) | The Contract Value, if any, at the beginning of the current report period and at the end of the current report period, including information on the Separate Account, the Variable Account Value, the number of Accumulation Units, the value per Accumulation Unit and the Fixed Account Value; |
(c) | The amounts and types of transactions that have been credited or debited to the account value during the current report period; |
(d) | The Surrender Value, if any, at the end of the current report period. |
• |
Reprint of your transaction confirmation. |
• |
Reprint of your latest statement. |
PORTFOLIO TYPE |
PORTFOLIO AND ADVISER/SUBADVISER |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) | |||||||
1 YEAR |
5 YEAR |
10 YEAR | ||||||||
Vanguard Variable Insurance Fund |
||||||||||
* | ||||||||||
* | ||||||||||
* |
Since inception (9/7/2017). |
PORTFOLIO TYPE |
PORTFOLIO AND ADVISER/SUBADVISER |
CURRENT EXPENSES |
AVERAGE ANNUAL TOTAL RETURNS (as of 12/31/2023) | |||||||
1 YEAR |
5 YEAR |
10 YEAR | ||||||||
• |
Short-Term Fixed Account; and |
• |
Fixed Dollar Cost Averaging Options. |
(a) | the value of the Short-Term Fixed Account as of the last Contract Anniversary; |
(b) | the amount of any Subsequent Purchase Payments, if applicable, allocated to that Account; |
(c) | any interest credited; and |
(d) | any transfers into the Short-Term Fixed Account; |
(a) | any amounts transferred, including any transfer fees, from the Short-Term Fixed Account; and |
(b) | any partial withdrawals, including any Surrender Charges, taken from the Short-Term Fixed Account. |
Contract Owner(s) |
Annuitant |
Covered Life | ||
John Smith |
John Smith | John Smith | ||
John Smith** |
Elisabeth Smith | Elisabeth Smith | ||
John Smith + Elisabeth Smith |
John Smith | John Smith | ||
John Smith + Elisabeth Smith |
Elisabeth Smith | Elisabeth Smith | ||
Entity |
John Smith | John Smith |
** | Not available with the Guaranteed Income Rider or Accumulation Income Rider |
Contract Owner(s) |
Annuitant Joint Annuitant (Non-Qualified Contract 1035 Exchanges Only) |
Contingent Annuitant |
Covered Lives | |||
John Smith |
John Smith | Elisabeth Smith | John Smith + Elisabeth Smith | |||
John Smith |
John Smith Elisabeth Smith | John Smith + Elisabeth Smith | ||||
John Smith |
Elisabeth Smith | John Smith | John Smith + Elisabeth Smith | |||
John Smith |
Elisabeth Smith John Smith | John Smith + Elisabeth Smith | ||||
John Smith + Elisabeth Smith |
John Smith | Elisabeth Smith | John Smith + Elisabeth Smith | |||
John Smith + Elisabeth Smith |
John Smith Elisabeth Smith | John Smith + Elisabeth Smith | ||||
John Smith + Elisabeth Smith |
Elisabeth Smith | John Smith | John Smith + Elisabeth Smith | |||
John Smith + Elisabeth Smith |
Elisabeth Smith John Smith | John Smith + Elisabeth Smith |
STATE |
LOCATION IN PROSPECTUS |
STATE VARIATION | ||||||||
FL |
“Maximum Purchase Payment” |
Maximum Purchase Payment amount has been modified to read as follows: Total Purchase Payment must not be greater than $2 million into one Contract by the same Owner/Annuitant. | ||||||||
FL |
“Free Look Period: ‘Right to Cancel’” & “Revocation Rights” |
Revocation Rights has been modified to read as follows: If you are a new purchaser of a Contract, you may cancel the Contract within 21 days of receiving it without paying fees or penalties. If this Contract is a “Replacement Contract” (i.e., it has been purchased with the proceeds from the surrender of another annuity contract you own) it may be cancelled by returning it within 30 days of receipt. In either situation, simply mail the Contract to the Company or the financial professional through whom it was purchased, along with a written request to cancel the Contract based on this provision. The Company will refund the amount calculated in accordance with state law, which is generally the Contract Value and any fees or charges deducted as of the date the notification and the Contract are received. | ||||||||
FL |
“Waiver of Surrender Charges” |
Medically Related Withdrawal provision has been revised to read as follows: You may request the waiver of Surrender Charges for your Medically Related Withdrawal of all or part of your Contract Value if certain medically related contingencies occur. The waiver of Surrender Charges is available if either of the following events occurs: (a) The Contract Owner (or Annuitant for entity- owned Contracts) is first confined in a nursing home or hospital while this Contract is in force and remains confined for at least 90 days in a row. The medical care facility must be prescribed based on physical limitations which prohibit daily living in a non-institutional setting (by a licensed physician in writing). (b) The Contract Owner (or Annuitant for entity- owned Contracts) is first diagnosed as having a fatal injury or illness (an injury or illness expected to result in death within 12 months) while this Contract is in force. |
STATE |
LOCATION IN PROSPECTUS |
STATE VARIATION | ||||||||
FL |
“What Is Annuitization and How Do I Annuitize the Contract?” |
The last paragraph of the Annuity Date provision has been revised to read as follows: A notification that an Annuity Option must be selected will be sent to you 60 days prior to your Annuity Date. You must select an Annuity Option and notify us of your election at least 30 days prior to the Annuity Date. In the event no response is received from you, and you did not specify an Annuity Option, the Contract Value will be annuitized on the Annuity Date based on an applicable default option. If the Annuity Date is less than the maximum maturity date, the Annuity Date will not be changed to the maximum maturity date allowed by the state. | ||||||||
FL |
“Termination of the Enhanced Death Benefit Rider” |
Rider will not terminate upon assignment or a change of ownership. Upon assignment or a change in ownership of the Contract, features and benefits of the Rider will continue to be based upon the age/lifetime of the Covered Life(ves) designated in the Contract. | ||||||||
FL |
“Termination of the Guaranteed Income Rider” |
Rider will not terminate upon assignment or a change of ownership. Upon assignment or a change in ownership of the Contract, features and benefits of the Rider will continue to be based upon the age/lifetime of the Covered Life(ves) designated in the Contract. | ||||||||
FL |
“Termination of the Accumulation Income Rider” |
Rider will not terminate upon assignment or a change of ownership. Upon assignment or a change in ownership of the Contract, features and benefits of the Rider will continue to be based upon the age/lifetime of the Covered Life(ves) designated in the Contract. | ||||||||
SC |
“Free Look Period: ‘Right to Cancel’” & “Revocation Rights” |
The Company will refund all Purchase Payments made as of the date the notification and the Contract are received. |
The Penn Insurance and Annuity Company (PIA) Founded in 1980, The Penn Insurance and Annuity Company ( PIA ) is a wholly owned life insurance subsidiary of Penn Mutual. Domiciled in Delaware, PIA maintains its operations in Conshohocken Pennsylvania, and is licensed to do business in 49 states and the District of Columbia. It markets its business through Penn Mutual’s distribution systems and has its in-force business serviced by the parent company. |
PM9061 |
05/24 |
STATEMENT OF ADDITIONAL INFORMATION
FOR
DEFERRED VARIABLE ANNUITY
an individual variable and fixed deferred annuity contract — flexible purchase payments
issued by
THE PENN INSURANCE AND ANNUITY COMPANY
and funded through
PIA VARIABLE ANNUITY ACCOUNT I
of
The Penn Insurance and Annuity Company
PO Box 178, Philadelphia, Pennsylvania 19105
1 -800 -523 -0650
May 1, 2024
This Statement of Additional Information (the “SAI”) is not a prospectus. It should be read in conjunction with the current Prospectus dated May 1, 2024 for the Deferred Variable Annuity Contract (the “Contract”). The Contract is funded through PIA Variable Annuity Account I (the “Separate Account”). A copy of the Prospectus is available, without charge, by writing to The Penn Insurance and Annuity Company (“PIA” or the “Company”), Customer Service Group, PO Box 178, Philadelphia, Pennsylvania 19105 or, you may call, toll free, 1 -800 -523 -0650, or access our website at www.pennmutual.com. Terms used in this SAI have the same meaning as in the Prospectus.
The financial statements of the Company and the Separate Account are incorporated by reference to the financial statements included in the Separate Account’s most recent Form N-VPFS filed with the Securities and Exchange Commission.
Table of Contents
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3 | ||||
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THE PENN INSURANCE AND ANNUITY COMPANY
The Penn Insurance and Annuity Company is a Delaware stock life insurance company. We are a wholly owned subsidiary of The Penn Mutual Life Insurance Company (“Penn Mutual”). We were chartered in 1982 and have been continuously engaged in the life insurance business since that date. We are licensed to sell insurance and annuities in 49 states and the District of Columbia. Our corporate headquarters are located at Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428, a suburb of Philadelphia. Our mailing address is The Penn Insurance and Annuity Company, PO Box 178, Philadelphia, Pennsylvania 19105.
PIA Variable Annuity Account I
PIA established the PIA Variable Annuity Account I (the “Separate Account”) as a separate investment account under Delaware law on July 13, 1994. The Separate Account is registered with the Securities and Exchange Commission (the “SEC”) as a unit investment trust under the Investment Company Act of 1940 and qualifies as a “separate account” within the meaning of the federal securities laws.
Additional Information
The Separate Account is divided into subaccounts, each of which invests exclusively in a specific mutual fund portfolio that is available for investment in the Variable Investment Options of the Separate Account (each, a “Portfolio”). The valuation of Accumulation Units in the Variable Investment Options is determined by multiplying the Accumulation Unit value for the prior Valuation Period by the net investment factor for the current Valuation Period.
For any subaccount, the net investment factor for a Valuation Period is determined by dividing (a) by (b) and subtracting (c):
Where (a) is:
The net asset value per share of the Portfolio held in the subaccount, as of the end of the Valuation Period.
plus
The per share amount of any dividend or capital gain distributions by the Portfolio if the “ex -dividend” date occurs in the Valuation Period.
Where (b) is:
The net asset value per share of the Portfolio held in the subaccount as of the end of the last prior Valuation Period.
Where (c) is:
The base Contract expenses.
The “Valuation Period” is the period from one valuation of Portfolio assets to the next. Valuation is performed each day the New York Stock Exchange (the “NYSE”) is open for trading.
Your assets in the Separate Account are held as Accumulation Units of the subaccounts that you select. We value Accumulation Units as of the close of regular trading on the NYSE (generally, 4:00 p.m. ET). When you invest in, withdraw from, or transfer money to a subaccount, you receive the Accumulation Unit value next computed after we receive and accept your Purchase Payment or your withdrawal or transfer request at our Administrative Office. Allocation, withdrawal, and transfer instructions received at our Administrative Office after the close of regular trading on the NYSE will be valued based on the Accumulation Unit value computed as of the close of regular trading on the next NYSE business day. In order to receive a
2
day’s closing price, instructions sent by facsimile transmission must be received by our fax server prior to the close of regular trading on that day. Telephone instructions must be received in full, containing all required information and confirmed back to the caller prior to the close of regular trading in order to receive that day’s closing price.
ADMINISTRATIVE AND RECORDKEEPING SERVICES
PIA performs all data processing, recordkeeping, and other related services with respect to the Contract and the Separate Account.
DISTRIBUTION OF THE CONTRACT
Hornor, Townsend & Kent, LLC (“HTK”), a wholly owned subsidiary of Penn Mutual, serves as principal underwriter of the Contract. HTK is located at Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428. HTK also acts as principal underwriter for (1) Penn Mutual Variable Annuity Account III, a separate account established by Penn Mutual; (2) Penn Mutual Variable Life Account I, also a separate account established by Penn Mutual; and (3) PIA Variable Life Account I, a separate account established by the Company. HTK is a registered broker -dealer under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority.
The Contract is newly offered and therefore HTK did not receive any compensation for its services related to the Contract during the last three fiscal years.
The Contract will be distributed by HTK through broker -dealers. Total commissions on Purchase Payments made under the Contract will not exceed 8.00% and trailer commissions based on a percentage of Contract Value, other allowances and overrides may be paid. The offering of the Contract is continuous, and the Company does not anticipate discontinuing the offering of the Contract, although we reserve the right to do so.
CUSTODIAN
The Company is custodian of the assets held in the Separate Account.
EXPERTS
The financial statements of the Company (i) as of December 31, 2023 and for each of the two years in the period ended December 31, 2023 and (ii) as of December 31, 2021 and for each of the two years in the period ended December 31, 2021; and the financial statements of the Separate Account as of December 31, 2023 and for the periods indicated, included in this SAI constituting part of this Registration Statement, have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP’s principal business address is at 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103.
FINANCIAL STATEMENTS
The financial statements of the Company and the Separate Account are incorporated by reference to the financial statements included in the Separate Account’s most recent Form N-VPFS filed with the SEC. The financial statements of the Company should be distinguished from any financial statements of the Separate Account and should be considered only as bearing upon the Company’s ability to meet its obligations under the Contract.
3
Part C
Other Information
Item 27: Exhibits
Item 28: Directors and Officers of the Depositor
The following table sets forth the names of the executive officers of the Depositor and the officers and trustees of the Company who are engaged directly or indirectly in activities relating to the Separate Account or the variable annuity and variable life policies offered by the Separate Account. Unless otherwise noted, the principal business address of each of the officers is The Penn Mutual Life Insurance Company, Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428.
Name and Principal Business Address | Position and Offices with Depositor | |
David M. O’Malley | Director and Chief Executive Officer | |
Thomas H. Harris | Director and President | |
Richard M. Klenk | Director and Chief Financial Officer | |
Karthick Dalawai | Director and Chief Risk Officer | |
Victoria M. Robinson | Director, Secretary and Chief Ethics and Compliance Officer | |
David M. Raszeja | Director | |
Ann-Marie Mason | Chief Legal Officer |
Item 29: Persons Controlled By or Under Common Control with the Depositor or Registrant
The Company established the Separate Account as a separate investment account under Delaware law on July 13, 1994. The Company is a wholly-owned subsidiary of Penn Mutual.
Penn Mutual’s Wholly-Owned Subsidiaries as of December 31, 2023
Corporation | Principal Business | State of Incorporation | ||
The Penn Insurance and Annuity Company | Life Insurance and Annuities | Delaware | ||
Penn Mutual Asset Management, LLC | Investment Adviser | Pennsylvania | ||
Penn Series Funds, Inc. | Investment Company | Maryland | ||
Penn Mutual Payroll Administration, LLC | Payroll | Pennsylvania | ||
Hornor, Townsend & Kent, LLC | Registered Broker-Dealer and Investment Adviser | Pennsylvania | ||
Vantis Life Insurance Company | Life Insurance | Connecticut | ||
The Penn Insurance and Annuity Company of New York (a NY Corporation) | Life Insurance | New York | ||
ILS Holdings, LLC | Holding Company | Delaware | ||
1847 Insurance Captive, LLC | Captive Insurance | Delaware |
The Company’s Wholly-Owned Subsidiaries as of December 31, 2023
Corporation | Principal Business | State of Incorporation | ||
PIA Reinsurance Company of Delaware I | Reinsurance | Delaware | ||
Dresher Run I, LLC | Holding Company | Delaware |
Vantis Life Insurance Company’s Wholly-Owned Subsidiary as of December 31, 2023
Corporation | Principal Business | State of Incorporation | ||
The Savings Bank Life Insurance Company Agency, LLC | Life Insurance | Connecticut |
Janney Montgomery Scott LLC’s Wholly-Owned Subsidiaries as of December 31, 2023
Corporation | Principal Business | State of Incorporation | ||
JMS Resources, Inc. | Investments | Pennsylvania | ||
Janney Capital Management, LLC | Investments | Delaware | ||
Janney Trust Company, LLC | Investments | New Hampshire | ||
TM Capital, LLC | Investments | Georgia |
JMS Resources, Inc.’s Wholly-Owned Subsidiary as of December 31, 2023
Corporation | Principal Business | State of Incorporation | ||
Janney Private Equity Company, Inc. | Investments | Delaware |
Hornor, Townsend & Kent, LLC’s Wholly-Owned Subsidiary as of December 31, 2023
Corporation | Principal Business | State of Incorporation | ||
HTK Insurance Agency, LLC | Insurance Agents or Brokers | Pennsylvania |
All subsidiaries listed above are included in Penn Mutual’s consolidated financial statements.
Item 30. Indemnification
Article IV of the By-Laws of the Company provides that, in accordance with the provisions of the Section, the Company shall indemnify directors and officers against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such directors or officers in connection with such action, suit or proceeding to the extent that such person is not otherwise indemnified and the power to do so has been or may be granted by statute.
Pennsylvania law (15 Pa. C.S.A. §§ 1741-1750) authorizes Pennsylvania corporations to provide indemnification to directors, officers and other persons. Penn Mutual owns a directors and officers liability insurance policy covering liabilities that trustees and officers of Penn Mutual and its subsidiaries may incur in acting as trustees and officers. The Company is a wholly- owned subsidiary of Penn Mutual.
Insofar as indemnification for liability arising under the Securities Act of 1933 (the “1933 Act”) 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 Commission such indemnification is against public policy as expressed in the 1933 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 1933 Act and will be governed by the final adjudication of such issue.
Item 31. Principal Underwriters
Hornor, Townsend & Kent, LLC serves as principal underwriter of the securities of the Registrant. Hornor, Townsend & Kent, LLC also serves as distributor of variable annuity and variable life policies issued through Penn Mutual Variable Annuity Account III and Penn Mutual Variable Life Account I, each a separate account of Penn Mutual, and PIA Variable Life Account I, a separate account established by the Company.
Hornor, Townsend & Kent, LLC — Board of Managers and Officers*
David M. O’Malley | Manager and Chairman of the Board | |
Aaron J. Gordon | Manager, President | |
Thomas H. Harris | Manager | |
Karthick Dalawai | Manager | |
Victoria M. Robinson | Manager and Chief Compliance Officer | |
Keith G. Huckerby | Manager | |
Cristina M. Leder | Treasurer and Financial Operations Principal | |
Ann-Marie Mason | Chief Legal Officer and Corporate Secretary | |
Tiffany MacLean | Anti-Money Laundering Officer | |
Jessica F. Swarr | Assistant Vice President, Corporate Tax |
* | The principal business address of the managers and officers is The Penn Mutual Life Insurance Company, Eight Tower Bridge, 161 Washington Street, Conshohocken, Pennsylvania 19428. |
Commissions and Other Compensation Received by Each Principal Underwriter during the last Fiscal Year*:
Name of Principal Underwriter |
Net Underwriting Discounts and Commissions |
Compensation on Redemption |
Brokerage Commissions |
Other Compensation |
||||||||||||
Hornor, Townsend & Kent, LLC | $ | 0 | $ | 0 | $ | 0 | $ | 0 |
* | Sales had not yet commenced in the last Fiscal Year. |
Item 32. Location of Accounts and Records
The name and address of the person who maintains physical possession of each account, book or other documents required by Section 31(a) of the Investment Company Act of 1940, as amended, is provided in the Registrant’s most recent report on Form N-CEN.
Item 33. Management Services
Not applicable.
Item 34. Fee Representation
The Company represents that the fees and charges deducted under the Deferred Variable Annuity Contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under rule 485(b) under the Securities Act and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the city of Horsham Township, and Commonwealth of Pennsylvania, on April 25, 2024.
PIA VARIABLE ANNUITY ACCOUNT I | ||
(Registrant) | ||
By: | /s/ David M. O’Malley | |
David M. O’Malley | ||
Chief Executive Officer | ||
THE PENN INSURANCE AND ANNUITY COMPANY | ||
(Depositor) | ||
By: | /s/ David M. O’Malley | |
David M. O’Malley | ||
Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date | ||||
/s/ David M. O’Malley |
Chairman of the Board of Directors and | April 25, 2024 | ||||
David M. O’Malley |
Chief Executive Officer | |||||
/s/ David M. Raszeja |
Director (Comptroller) | April 24, 2024 | ||||
David M. Raszeja | ||||||
*Rick Klenk |
Director and Chief Financial Officer | April 25, 2024 | ||||
Rick Klenk | ||||||
*Thomas H. Harris |
Director and President | April 25, 2024 | ||||
Thomas H. Harris | ||||||
*Karthick Dalawai |
Director | April 25, 2024 | ||||
Karthick Dalawai | ||||||
*Victoria M. Robinson |
Director | April 25, 2024 | ||||
Victoria M. Robinson | ||||||
*By: | /s/ David M. O’Malley |
|||||
David M. O’Malley, attorney-in-fact |
Exhibit Index
Exhibit No. |
Exhibit | |
(l) | Consent of Independent Registered Public Accounting Firm. |