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In addition to its purchase of these 12 life insurance
policies, the Lakewood Plan, during the subject years, purchased
three group annuities designated for certain Lakewood employees.
None of these annuities funded the life insurance provided under
the plan. The Lakewood Plan generally purchased these annuities
to accumulate wealth to pay future premiums on the C-group term
policies. The attributes of these annuities are as follows.
1. Plus II Group Annuity
Effective December 31, 1990, Inter-American issued to the
Lakewood Plan a Plus II group annuity (#C15518/C91063). The
Lakewood Plan deposited $78,240 into the annuity on the day it
was effective and $92,700 in 1991. The Lakewood Plan closed the
annuity in April 1997, withdrawing $230,169.02. The $59,229.02
difference between the total deposits ($170,940) and the amount
withdrawn ($230,169.02) represents interest.
2. Commonwealth Sygnet 24 Group Annuity Effective in 1991
Effective October 31, 1991, Commonwealth issued to the
Lakewood Plan a Sygnet 24 group annuity (#D10120/D90039). This
annuity is designed for asset accumulation over a long period of
time and has surrender charges that grade off over 6 years. The
Lakewood Plan deposited $242 into the annuity on the day it was
effective, $143,344.17 in 1992, and $33,664.37 in 1993. The
Lakewood Plan withdrew $76,442.08 from the annuity on November 4,
1994, and $93,301.59 on December 12, 1995, in closing it. The
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