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Transcript
Agreement for 403(b) Tax-Sheltered Annuity Loan Repayment
Standard Insurance Company
Individual Annuities 800.247.6888 Tel 800.378.4570 Fax
1100 SW Sixth Avenue Portland OR 97204-1093 www.standard.com
1
Participant
NAME
2
PLAN OR POLICY NUMBER
Repayment Agreement
I own the above tax sheltered annuity Contract, purchased under the provisions of §403(b) of the Internal Revenue Code
(IRC). I have requested a Loan on the Contract. It is my desire that this Loan not be treated as a distribution from my
Contract. I intend to comply with the requirements of IRC §72(p)(2). I understand that I may make a Loan in an amount
equal to or less than the cash surrender value of the Contract. Accordingly, in consideration for obtaining the Loan, I state
and agree:
1. The amount of this Loan, plus the outstanding balance of all other Loans, including any amounts treated as a
Deemed Distribution, from all qualified plans of my employer, may cause me to incur severe tax penalties if the total
amount exceeds the lesser of:
a.
$50,000, reduced by the excess (if any) of the highest outstanding balance of Loans from the plan during the
1-year period ending on the day before the date on which such Loan was made over the outstanding balance of
Loans from the plan on the date on which such Loan was made; or
b.
One-half the present value of the nonforfeitable accrued benefit of the employee under the plan (nonetheless,
at least $10,000).
For purposes of clause (b), the present value of the nonforfeitable accrued benefit shall be determined without
regard to any accumulated deductible employee contributions (as defined in IRC §72 (o)(5)(B)).
2. I understand that the minimum amount of this Loan shall not be less than $1,000.
3. Check a or b:
❏ a.
This Loan will not be used to acquire any dwelling unit, which is to be used as my principal residence. I
agree to make substantially equal payments (at least quarterly) in order to repay this Loan by the Repayment
Date. The Repayment Date is five (5) years after the date of this Loan, or the maturity date of the above
Contract, if earlier.
❏ b.
This Loan will be used to acquire a dwelling unit, which is to be used as my principal residence. I agree to make substantially equal payments (at least quarterly) in order to repay this Loan by the Repayment Date.
The Repayment Date shall be within a reasonable time of the date of this Loan and is determined by the
undersigned policyholder to be _________ years (max of 15 years) after the date of this Loan, or the maturity
date of the above Contract, if earlier.
If payments are not made at least quarterly or the Loan is not repaid by the applicable Repayment Date, I
understand and acknowledge that the entire outstanding balance of the Loan will be treated as a Deemed
Distribution, and Standard Insurance Company will report the outstanding Loan balance as taxable income.
However, I understand that I may cure a Deemed Distribution resulting from the failure to make a regularly
scheduled Loan repayment if I pay in full such scheduled Loan repayment within 90 days of the applicable
Repayment Date. The Loan shall remain outstanding and shall accrue interest until repaid. At any time after a
Deemed Distribution has occurred I may continue to make Loan payments to reduce the outstanding Loan
balance. If any portion of the Loan has been treated as a Deemed Distribution, that portion of the Loan will be
deducted from the value of the Annuity Fund once Standard Insurance Company receives written notification that
I am subject to a distributable event. To qualify for a distributable event, one of the following must apply: (a)
Disability; (b) Severance from Service with my employer; or (c) Attainment of age 59½. I understand that the
repayment amount will include Contractual withdrawal charges incurred at the time of the Deemed Distribution. I
further understand that Standard Insurance Company will send a form 1099 to the Internal Revenue Service for the
full amount withdrawn from the Annuity Fund.
There is no penalty for prepayment (excess Loan payment). The excess payment amount will be applied to the
outstanding principal; thus, no offsetting credit to future required quarterly payments can be made.
Filing Number LNAGR (09/01) VT
10631-VT (01/05) of 2
4. I confirm that currently there are no default of any repayment amounts currently due or past due for any Loans
under the Contract, and I understand that no further Loans will be available on the Contract at any time any
portion of the Loan is in default or otherwise treated as a Deemed Distribution under IRC §72(p).
5. I understand and acknowledge that interest will be assessed on the total balance of any outstanding Loans. The
interest rate assessed may vary each calendar year quarter. The interest rate will be determined based on Moody’s
Corporate Bond Yield Average — Monthly Average Corporates published by Moody’s Investor’s Services, Inc. The
annual interest rates published for the months of November, February, May and August will apply to the total
balance of outstanding Loans as of the first day of the next respective calendar quarter. In the event the Moody’s
Corporate Bond Yield Average — Monthly Average Corporates is no longer published, Standard Insurance Company
will use a comparable published average, subject to regulatory approval. However, in no event will the annual interest
rate be less than 4½% or greater than 8%.
6. I understand and acknowledge that, if I have a spouse, I must have my spouse’s written consent to effect a Loan.
In such event, the date of my spouse’s written consent must be no more than 90 days before the date of the Loan.
The written consent must acknowledge the effect of the Loan, and must be signed by my spouse in the presence of a
notary public or the Plan Administrator. Such spousal consent will thereafter be binding with respect to my spouse
or any subsequent spouse regarding the Loan. A new spousal consent will be required if the value of the Annuity
Fund is used for: (a) renegotiation, (b) extension; (c) renewal; or (d) any other revision of the terms of the Loan.
7. This Loan Repayment Agreement is not a part of my Annuity Contract. This is a separate agreement that I am
voluntarily signing in order to obtain the tax results provided by meeting the requirements of IRC §72(p)(2) and
should be so interpreted, unless I request a Loan which when added to all other Loans under the Contract, including
any applicable Deemed Distribution, exceeds the limits under IRC §72(p)(2).
8. If this Loan is repaid by a withdrawal from the Annuity Fund as authorized in paragraph 3 above, I specifically
request that Standard Insurance Company not withhold any income tax from the amount withdrawn.
3
Authorization
In consideration of Standard Insurance Company accepting this Loan Repayment Agreement, I hold Standard Insurance
Company harmless from any state or federal taxes, costs, fees, penalties, interest, expenses or other charges of any kind
incurred as a result of not complying with the Internal Revenue Code, regulations, revenue rulings, or other applicable laws
as they relate to this Loan, including but not limited to the amount of the Loan and the timing of its repayment.
_______________________________________________________________________________________________________________________________
PARTICIPANT SIGNATURE
4
_______________________________
DATE
Received by Standard Insurance Company (To be completed only by a Standard Insurance Company representative.)
_______________________________________________________________________________________________________________________________
AUTHORIZED STANDARD INSURANCE COMPANY HOME OFFICE REPRESENTATIVE
Filing Number LNAGR (09/01) VT
10631-VT (01/05) of 2
_______________________________
DATE