Exhibit 4(j)


 


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

35202-0648


 


TAX SHELTERED ANNUITY (TSA) ENDORSEMENT FOR ANNUITY CONTRACTS


 


The Contract to which this Tax Sheltered Annuity
(TSA) Endorsement is attached is amended to qualify as a tax-sheltered annuity
under section 403(b) of the Internal Revenue Code of 1986, as amended (the “Code”)
which is not subject to the requirements of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). Accordingly, all provisions of the
Contract and this Endorsement shall be interpreted in accordance with
qualification as a tax-sheltered annuity under Code section 403(b) and the
regulations thereunder.


 


The Contract is amended as of
the Effective Date 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. The Owner must be an employee or former
employee of an organization described in Code section 403(b)(1)(A) for whose
benefit the organization has established an annuity program under Code section
403(b) in connection with which this Contract was purchased. Except as
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 (within the meaning of Code section 401(g)) and
is non-forfeitable. In particular, except as permitted by federal tax law, 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.


 


3.             PURCHASE PAYMENTS


 


All
Purchase Payments must be made only (a) as rollover contributions (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)); or (b) as non-taxable transfers from other
contracts qualifying under Code section 403(b) or custodial accounts qualifying
under Code section 403(b)(7). Purchase Payments must consist only of amounts
that are not subject to the requirements of ERISA. The Company will not accept
a Purchase Payment that includes after-tax contributions.


 


When allowed, Purchase Payments made pursuant to
a salary reduction agreement shall not exceed the limits set forth in Code
section 402(g), except as permitted under Code section 414(v), if applicable. Purchase
Payments also must not exceed the limitations on contributions under Code
sections 403(b) and 415, as applicable. To the extent Purchase Payments are in
excess of the amounts permitted under Code sections 402(g), 403(b), 414(v), or
415, we may distribute amounts equal to such excess as permitted by applicable
federal tax law. Any Contract provision requiring a specific minimum amount for
a subsequent Purchase Payment is deleted.


 


4.             REQUIRED DISTRIBUTIONS GENERALLY


 


The Owner’s entire interest in the Contract
shall be distributed as required under Code sections 401(a)(9) and 403(b)(10)
and applicable federal income tax regulations. The provisions of this
Endorsement reflecting these requirements override any provision of the
Contract that is inconsistent with such requirements.


 


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5.             REQUIRED BEGINNING DATE


 


As
used in this Endorsement, the term “Required Beginning Date” means April 1 of
the calendar year following the calendar year following the later of (1) the
calendar year in which the Owner attains age 701⁄2; or (2) the calendar year in
which the Owner retires, or such later date as provided by law. However, unless
the Owner’s interest in the Contract is on account of the Owner’s participation
in a governmental plan (as defined in Code section 414(d)) or church plan (as
defined in Code section 401(a)(9)(C)), if the Owner is a 5-percent owner (as
defined in IRC section 416) of the organization described in section 1 of this
Endorsement with respect to the plan year ending in the calendar year in which
the Owner attains age 701⁄2, the Required Beginning Date is April 1 of the
calendar year following the calendar year in which the Owner attains age 701⁄2.


 


6.             DISTRIBUTIONS DURING OWNER’S LIFE


 


A.                                   Unless
otherwise permitted under applicable law, the Owner’s entire interest in the
Contract shall be distributed, or 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 intervals of no longer than one year. In addition, payments
must be either non-increasing or they may increase only as 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,
including the incidental death benefit requirements of Code section
401(a)(9)(G) and the regulations thereunder, including the minimum distribution
incidental benefit requirement under such regulations.


 


7.             DISTRIBUTIONS AFTER DEATH OF THE
OWNER


 


A.                                   Unless
otherwise permitted under applicable federal tax law, if the Owner dies before
distribution of his or her interest in the Contract has begun, distribution of
the Owner’s entire interest will be distributed in accordance with one of the
following three provisions:


 


(i)                                     The entire interest will be distributed
by December 31 of the calendar year containing the fifth anniversary of the
Owner’s death.


 


(ii)                                  If
the interest is payable to an individual who is the Owner’s designated beneficiary,
except as provided in paragraph (iii) below, the entire interest will be
distributed beginning on or before December 31 of the calendar year immediately
following the calendar year in which the Owner died and will be made over the
life of the designated beneficiary or over a period not extending


 


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beyond the
life expectancy of the designated beneficiary. The irrevocable election of this
method of distribution must be made by the designated beneficiary no later than
December 31 of the calendar year immediately following the calendar year in
which the Owner died.


 


(iii)          If the designated
beneficiary is the Owner’s surviving spouse, the spouse may irrevocably elect
to receive payments over the life of the surviving spouse or over a period not
extending beyond the life expectancy of the surviving spouse, commencing at any
date prior to the later of: (a) December 31 of the calendar year immediately
following the calendar year in which the Owner died; and (b) December 31 of the
calendar year in which the Owner would have attained age 701⁄2. Such election by
the surviving spouse must be made no later than the earlier of December 31 of
the calendar year containing the fifth anniversary of the Owner’s death or the
date distributions are required to begin pursuant to the preceding sentence.


 


If the
surviving spouse dies before distributions begin, the limitations of this
section 7.A (without regard to this paragraph iii) shall be applied as if the
surviving spouse were the Owner.


 


B.                                     Unless
otherwise permitted under applicable federal tax law, if the Owner dies after
distribution of his or her interest in the Contract has begun, the remaining
portion of such interest, if any, will continue to be distributed at least as
rapidly as under the method of distribution being used at the time of the Owner’s
death.


 


C.                                     Distributions
under this section are considered to have begun if distributions are made on
account of the Owner reaching his or her Required Beginning Date or if prior to
the Required Beginning Date the distributions (except for acceleration) irrevocably
commence to the Owner over a period permitted and in an annuity form acceptable
under the applicable federal tax law.


 


8.             LIFE EXPECTANCY CALCULATIONS


 


Unless otherwise provided by
applicable federal tax law, life expectancy is computed using the expected
return multiples in Tables V and VI of Section 1.72-9 of the Federal income tax
regulations in accordance with Code sections 401(a)(9) and the regulations thereunder.
Life expectancy will not be recalculated with respect to payments under an
annuity option under the Contract. In other situations, life expectancy will
not be recalculated unless otherwise permitted under Code section 401(a)(9) and
the regulations thereunder.


 


9.             ANNUITY OPTIONS


 


All annuity options under the
Contract must meet the requirements of Code sections 401(a)(9) and 403(b)(10). 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 an annuity option, the period over which the guaranteed payments
are to be made must not exceed the period permitted under Q&A-3 of Section
1.401(a)(9)-6 of the Income Tax Regulations (except as otherwise provided by
applicable federal tax law).


 


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10.          WITHDRAWAL OF SALARY REDUCTION
CONTRIBUTIONS


 


Notwithstanding any other
provision of the Contract, withdrawals and other distributions attributable to
contributions after December 31, 1988, made pursuant to a salary reduction
agreement, and the earnings on such contributions and on amounts held as of
December 31, 1988, shall not be paid unless the Owner has reached age 591⁄2, had
a severance from employment, died, become disabled (within the meaning of Code
section 72(m)(7)), or incurred a hardship (in accordance with Code section
403(b)(11) and as provided by the Company); provided that amounts permitted to
be distributed in the event of hardship shall be limited to actual salary
deferral contributions (excluding earnings thereon); and provided further that
amounts may be distributed pursuant to a qualified domestic relations order to
the extent permitted by Code section 414(p).


 


11.          WITHDRAWAL OF CUSTODIAL ACCOUNT
CONTRIBUTIONS


 


Notwithstanding any other
provision of the Contract, Purchase Payments made by a nontaxable transfer from
a custodial account qualifying under Code section 403(b)(7) (or amounts
attributable to such amounts), and earnings of such amounts, shall not be paid
or made available before the Owner has attained age 591⁄2, had a severance from
employment, died, become disabled (within the meaning of Code section
72(m)(7)), or in the case of such amounts attributable to contributions made
under the custodial account pursuant to a salary reduction agreement,
encounters financial hardship (in accordance with Code section 403(b)(7)(A)(ii)
and as provided by the Company); provided that such amounts permitted to be
paid or made available in the event of financial hardship shall be limited to
amounts attributable to actual salary deferral contributions made under the
custodial account (excluding earnings thereon); and provided further that
amounts may be distributed pursuant to a qualified domestic relations order to
the extent permitted by Code section 414(p).


 


Section 10 of this Endorsement
shall not apply to payments or earnings subject to this section 11 which shall
instead govern.


 


12.          TAX-FREE DIRECT TRANSFERS


 


Direct transfers to another
contract qualifying under Code section 403(b) or to a custodial account
qualifying under Code section 403(b)(7) may be made only as permitted by the
Contract or under applicable law. To the extent provided by federal tax law,
amounts subject to distribution restrictions under the Code may only be
transferred to such a contract or account with the same or more stringent
restrictions. Direct trustee-to-trustee transfers may be made to a defined
benefit governmental plan (as defined in Code section 414(d)) as provided in
Code section 403(b)(13).


 


13.          DIRECT ROLLOVERS


 


A distributee may elect, at the
time and in the manner prescribed by us, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.


 


A.                                   A
distributee includes an Owner. In addition, the Owner’s surviving spouse and
the Owner’s spouse or former spouse who is the alternative payee under a
qualified domestic relations order, as defined in Code section 414(p), are
distributees with regard to the interest of the spouse or former spouse.


 


B.                                     An
eligible rollover distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible rollover
distribution does not


 


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include (i)
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint and last survivor
expectancies) of the distributee and the distributee’s designated beneficiary,
or for a specified period of ten years or more; (ii) any distribution to the
extent such distribution is required under Code section 401(a)(9); (iii) the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities); (iv) any hardship distribution described in Code section
403(b)(11) or 403(b)(7)(A)(ii) made to your after 1998; and (v) any other
amounts designated in published federal income tax guidance.


 


C.                                     An
eligible retirement plan is an annuity described in Code section 403(b), an
individual retirement account described in Code section 408(a), or an
individual retirement annuity described in Code section 408(b) that accepts the
distributee’s eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.


 


D.                                    A
direct rollover is a payment by us to the eligible retirement plan specified by
the distributee. All eligible rollover distributions shall be made in accordance
with the requirements of Code sections 403(b)(8), 403(b)(10), and 401(a)(31)
applicable to tax sheltered annuity contracts.


 


E.                                      Except
as otherwise provided under applicable federal tax law, the following
provisions shall apply to distributions after December 31, 2001, for purposes
of this section 13.


 


(i)            An eligible retirement
plan also shall mean an annuity plan described in Code section 403(a), a
qualified plan described in Code section 401(a), and an eligible plan under
Code section 457(b) which is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of
a state and which agrees to separately account for amounts transferred into
such plan from this Contract. The definition of eligible retirement plan also
shall apply in the case of a distribution to a surviving spouse, or to a spouse
or former spouse who is the alternate payee under a qualified domestic
relations order.


 


(ii)           Any amount that is
distributed on account of hardship shall not be an eligible rollover
distribution, and the distributee may not elect to have any portion of such a
distribution paid directly to an eligible retirement plan.


 


(iii)          To the extent permitted
by federal tax law, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
employee contributions that are not includible in gross income. However, such
after-tax portion may be transferred only to an eligible retirement plan that
is permitted by law to accept such contributions. If required by law, the
receiving plan must agree to separately account for amounts so transferred,
including separately accounting for the portion of the distribution which is
includible in gross income and the portion of the distribution which is not so
includible.


 


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14.          CODE SECTION 72(s)


 


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


 


15.          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.


 


16.          GROUP CONTRACT


 


If this Endorsement is used
with a certificate issued under a group contract, the term “Owner” refers to
the Participant/Annuitant and the term “Contract” refers to your Certificate.


 


Signed for the Company as of
the Effective Date.


 


Protective Life and Annuity Insurance
Company


	
  

  	
   

  
	
  Deborah J. Long

  	
   

  
	
  Secretary

  	
   

  



 


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