Exhibit 4(h)


 


PROTECTIVE LIFE AND ANNUITY
INSURANCE COMPANY • P. O. BOX 10648 • BIRMINGHAM, ALABAMA

35202-0648


 


TRADITIONAL INDIVIDUAL RETIREMENT ANNUITY (IRA) ENDORSEMENT


FOR ANNUITY CONTRACTS


 


The Contract to which this Individual
Retirement Annuity Endorsement is attached is issued as an individual
retirement annuity under Section 408(b) of the Internal Revenue Code of 1986,
as amended (the “Code”). Accordingly, the applicable provisions of the Contract
are restricted or amended by this Endorsement as required by Code Section 408.


 


The Contract is amended as
follows:


 


1.             OWNER AND ANNUITANT


 


The
Annuitant must be an individual who is the sole Owner, and all payments made
from the Contract while the Annuitant is alive must be made to the Annuitant. Except
as permitted under Section 8 of this Endorsement, and otherwise permitted under
the Code and applicable regulations, neither the Owner nor the Annuitant can be
changed.


 


2.             NONTRANSFERABLE AND NONFORFEITABLE


 


The Contract is established for the exclusive benefit
of the Owner and his or her beneficiaries. The Owner’s interest under the
Contract is nontransferable, and except as provided by law, is non-forfeitable.
In particular, the Contract may not be sold, assigned, discounted or pledged as
collateral for a loan or as security for the performance of any obligation or
for any other purpose, to any person other than the Company (other than a
transfer incident to a divorce or separation instrument in accordance with Code
Section 408(d)(6)).


 


3.             UNISEX RATES


 


If the Contract is issued in connection
with a Simplified Employee Pension, the method of calculating Purchase Payments
and benefits under the Contract are to be based on unisex rates, and any
references to sex (with regard to rates and benefits) in the Contract are
deleted.


 


4.             PURCHASE PAYMENTS


 


Purchase
Payments may not include any amounts other than a rollover contribution (as
permitted by Code Sections 402(c), 402(e)(6), 403(a)(4), 403(b)(8), 403(b)(10),
408(d)(3) and 457(e)(16)), a nontaxable transfer from an Individual Retirement
Account under Code Section 408(a) or another Individual Retirement Annuity
under Code Section 408(b), a contribution made in accordance with the terms of
a Simplified Employee Pension as described in Code Section 408(k), and a
contribution in cash not to exceed the amount permitted under Code Sections
219(b) and 408(b), (or such other amount provided by applicable federal tax
law). In particular, unless otherwise provided under applicable federal tax law
or limited by the provisions of the Contract:


 


A.                                   The total cash contributions shall not
exceed $3,000 for any taxable year
beginning in 2002 through 2004, $4,000 for any taxable year beginning in 2005
through 2007, and $5,000 for any taxable year beginning in 2008 and years thereafter.
After 2008, the limit will be adjusted by the Secretary of the Treasury for
cost-of-living increases under Code Section 219(b)(5)(C). Such adjustments will
be in multiples of $500.


 


B.                                     In the case of an
individual who is 50 or older, the annual cash contribution limit is increased
by $500 for any taxable year beginning in 2002 through 2005, and $1,000 for any
taxable year beginning in 2006 and years thereafter.


 


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No contribution will be accepted under a
SIMPLE IRA plan established by any employer pursuant to Code Section 408(p). No
transfer or rollover of funds attributable to contributions made by a
particular employer under its SIMPLE IRA plan will be accepted from a SIMPLE
IRA, that is, an Individual Retirement Account under Code Section 408(a) or an
Individual Retirement Annuity under Code Section 408(b) used in conjunction
with a SIMPLE IRA plan, prior to the expiration of the 2-year period beginning
on the date the Owner first participated in that employer’s SIMPLE IRA plan.


 


5.             REQUIRED DISTRIBUTIONS GENERALLY


 


Notwithstanding
any provision of the Contract to the contrary, the distribution of the Owner’s
interest in the Contract shall be made in accordance with the requirements of
Code Sections 401(a)(9) and 408(b)(3) and the regulations thereunder, the
provisions of which are herein incorporated by reference. If distributions are
not made in the form of an annuity on an irrevocable basis (except for
acceleration), then distribution of the interest in the Contract (as determined
under Section 8.C. of this Endorsement) must satisfy the requirements of Code
Section 408(a)(6) and the
regulations thereunder, rather than Sections 7 and 8 of this Endorsement.


 


6.             REQUIRED BEGINNING DATE


 


As used in this Endorsement, the term “Required
Beginning Date” means April 1 of the calendar year following the calendar year
in which the participant attains age 701⁄2, or such later date as provided by
law.


 


7.                                      DISTRIBUTIONS
DURING OWNER’S LIFE


 


A.           Unless
otherwise permitted under applicable law, the Owner’s entire interest in the
Contract will commence to be distributed no later than the Required Beginning
Date over:


 


(i)            the life of the Owner,
or the lives of the Owner and his or her designated beneficiary (within the meaning
of Code Section 401(a)(9)), or


 


(ii)           a period certain not
extending beyond the life expectancy of the Owner, or the joint and last
survivor expectancy of the Owner and his or her designated beneficiary.


 


Payments must
be made in periodic payments at intervals of no longer than one year. Unless
otherwise provided by applicable federal tax law, payments must be either non-increasing
or they may increase only as provided in
Q&As-1 and -4 of Section 1.401(a)(9)-6 of the Income Tax Regulations, and
any distribution must satisfy the incidental benefit requirements specified in
Q&A-2 of Section 1.401(a)(9)-6 of the Income Tax Regulations.


 


The
distribution periods described in this subsection A cannot exceed the periods
specified in Section 1.401(a)(9)-6 of the Income Tax Regulations (except as
otherwise provided by applicable federal tax law).


 


B.                                     If
the Owner’s interest is to be distributed over a period greater than one year,
the amount to be distributed by December 31 of each year (including the year in
which the Required Beginning Date occurs) will be made in accordance with the
requirements of Code Section 401(a)(9) and the regulations thereunder. If
annuity payments commence on or before the Required Beginning Date, the first required payment can be made as late as
the Required Beginning Date and must be the payment that is required for one
payment interval. The second payment need not be made until the end of the next
payment interval.


 


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8.                                      DISTRIBUTIONS
AFTER DEATH OF THE OWNER


 


A.                                   If
the Owner dies on or after required distributions commence, the remaining
portion of his or her interest in the Contract, if any, will be distributed at
least as rapidly as under the annuity option chosen.


 


B.                                     If
the Owner dies before required distributions commence, his or her entire
interest in the Contract will be distributed at least as rapidly as follows:


 


(i)                                     If the designated beneficiary is someone
other than the Owner’s surviving spouse, the entire interest will be distributed,
starting by the end of the calendar year following the calendar year of the
Owner’s death, over the remaining life expectancy of the designated
beneficiary, with such life expectancy determined using the age of the
beneficiary as of his or her birthday in the year following the year of the
individual’s death, or, if elected, in accordance with paragraph B(iii) below.


 


(ii)                                  If the Owner’s sole designated
beneficiary is the Owner’s surviving spouse, the entire interest will be
distributed, starting by the end of the calendar year following the calendar
year of the Owner’s death (or by the end of the calendar year in which the
Owner would have attained age 701⁄2, if later), over the surviving spouse’s life,
or, if elected, in accordance with paragraph B(iii) below. If the surviving
spouse dies before required distributions commence to him or her, the remaining
interest will be distributed, starting by the end of the calendar year
following the calendar year of the spouse’s death, over the spouse’s designated
beneficiary’s remaining life expectancy determined using such beneficiary’s age
as of his or her birthday in the year following the death of the spouse, or, if
elected, will be distributed in accordance with paragraph B(iii) below. If the
surviving spouse dies after required distributions commence to him or her, any
remaining interest will be distributed at least as rapidly as under the annuity
option chosen.


 


(iii)                               If there is no designated beneficiary, or
if applicable by operation of paragraph B(i) or B(ii) above, the entire
interest will be distributed by the end of the calendar year containing the
fifth anniversary of the individual’s death (or of the spouse’s death in the
case of the surviving spouse’s death before distributions are required to begin
under paragraph B(ii) above).


 


(iv)                              Life expectancy is determined using the
Single Life Table in Q&A-1 of Section 1.401(a)(9)-9 of the Income Tax
Regulations. If distributions are being made to a surviving spouse as the sole
designated beneficiary, such spouse’s remaining life expectancy for a year is
the number in the Single Life Table corresponding to such spouse’s age in the
year. In all other cases, remaining life expectancy for a year is the number in
the Single Life Table corresponding to the beneficiary’s age in the year
specified in paragraph B(i) or (ii) and reduced by 1 for each subsequent year.


 


C.                                     The “interest” in the Contract includes
the amount of any outstanding rollover, transfer and recharacterization under
Q&As-7 and -8 of Section 1.408-8 of the Income Tax Regulations. Also,
prior to the date that annuity payments commence on an irrevocable basis
(except for acceleration) the “interest” in the Contract includes


 


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the actuarial value of any other benefits
provided under the Contract, such as guaranteed death benefits.


 


D.                                    For purposes of subsections A and B
above, required distributions are considered to commence on the Required
Beginning Date or, if applicable, on the date distributions are required to
begin to the surviving spouse under paragraph B(ii) above. However, if
distributions start prior to the applicable date in the preceding sentence on
an irrevocable basis (except for acceleration) in accordance with the
requirements of Section 1.401(a)(9)-6 of the Income Tax Regulations, then
required distributions are considered to commence on the annuity starting date.


 


E.                                      If the sole designated beneficiary is the
Owner’s surviving spouse, the surviving spouse may elect to treat the Contract
as his or her own IRA. This election will be deemed to have been made if such
surviving spouse makes a contribution to the Contract or fails to take required
distributions as a beneficiary.


 


9.             ANNUITY OPTIONS


 


All annuity options under the Contract must
meet the requirements of Code Sections 401(a)(9) and 408(b)(3). The provisions
of this Endorsement reflecting the requirements of these Code Sections override
any annuity option that is inconsistent with such requirements.


 


If guaranteed payments are to be made
under the Contract, the period over which the guaranteed payments are to be
made must not exceed the period permitted under Section 1.401(a)(9)-6 of the
Income Tax Regulations (except as otherwise provided by applicable federal tax
law).


 


10.          ANNUAL REPORTS


 


The Company will furnish annual calendar
year reports concerning the status of this Contract and such information
concerning required minimum distributions as is prescribed by the Commissioner
of the Internal Revenue Service.


 


11.                               CODE
SECTION 72(s)


 


All references in the Contract to Code
Section 72(s) are deleted.


 


12.          AMENDMENT OF THIS ENDORSEMENT


 


The Company reserves the right, and the
Owner agrees the Company shall have such right, to make any amendments to this
Endorsement from time to time as may be necessary to comply with the Code, as
amended, and the regulations thereunder. We will obtain all necessary approvals
including, where required, that of the Owner and will send you a copy of the
endorsement that modifies your Contract. We will not be responsible for any
adverse tax consequences resulting from the rejection of such an amendment.


 


Signed for the Company as of
the Effective Date.


 


Protective Life and Annuity Insurance
Company


 


	
  

  	
   

  	
   

  
	
  Deborah J. Long

  Secretary

  	
   

  	
   

  



 


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