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These Terms of Use ("Terms of Use") are made between the undersigned user ("you") and Lord, Abbett & Co. ("we" or "us"). They become effective on the date that you electronically execute these Terms of Use ("Effective Date").

A. You are a successful financial consultant that markets securities, including the Lord Abbett Family of Funds;

B. We have developed the Lord Abbett Intelligence System (the "Intelligence System"), a state of the art information resource that we make available to a limited community of broker/dealers through the Internet at a secure Web site (the "LAIS Site"); and

C. We wish to provide access to the Intelligence System to you as an information tool responsive to the demands of your successful business pursuant to these Terms of Use. Accordingly, you and we, intending to be legally bound, hereby agree as follows:]

1. Overview. · Scope. These Terms of Use (which we may amend from time to time) govern your use of the Intelligence System. · Revisions; Changes. We may amend these Terms of Use at any time by posting amended Terms of Use ("Amended Terms of Use") on the LAIS Site. Any Amended Terms of Use will become effective immediately upon posting. Your use of the Intelligence System after any Amended Terms of Use become effective will be deemed to constitute your acceptance of those Amended Terms of Use.We may modify or discontinue the Intelligence System at any time, temporarily or permanently, with or without notice to you. Purpose of the Intelligence System. The Intelligence System is intended to be an information resource that you may use to contribute to your business research. The Intelligence System is for broker/dealer use only; it is not to be used with the public in oral, written or electronic form. The information on the Intelligence System and LAIS Site is for your information only and is neither the tax, legal or investment advice of Lord Abbett or its third-party sources nor their recommendation to purchase or sell any security.

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3. Rights in Data. Our use of information collected from you will be in accordance with our Privacy Policy posted on the LAIS Site. Our compliance with our Privacy Policy will survive any termination of these Terms of Use or of your use of the Intelligence System.

4. Your Conduct in the Use of the Intelligence System. You may access, search, view and store a personal copy of the information contained on the LAIS Site for your use as a broker/dealer. Any other use by you of the Intelligence System and the information contained on the LAIS Site these Terms of Use is strictly prohibited. Without limiting the preceding sentence, you will not: · Engage in or permit any reproduction, copying, translation, modification, adaptation, creation of derivative works from, distribution, transmission, transfer, republication, compilation or decompilation, reverse engineering, display, removal or deletion of the Intelligence System, any portion thereof, or any data, content or information provided by us or any of our third-party sources in any form, media or technology now existing or hereafter developed, that is not specifically authorized under these Terms of Use.

· Remove, obscure or alter any notice, disclaimer or other disclosure affixed to or contained within the Intelligence System, including any copyright notice, trademark and other proprietary rights notices and any legal notices regarding the data, content or information provided through the Intelligence System.

· Create a hyperlink to, frame or use framing techniques to enclose any information found anywhere on the LAIS Site without our express prior written consent.

· Impersonate any person, or falsely state or otherwise misrepresent his or her affiliation with any person in connection with any use of the Intelligence System.

· Breach or attempt to breach the security of the Intelligence System or any network, servers, data, or computers or other hardware relating to or used in connection with the Intelligence System; nor (b) use or distribute through the Intelligence System software or other tools or devices designed to interfere with or compromise the privacy, security or use of the Intelligence System by others or the operations or assets of any person.

· Violate any applicable law, including, without limitation, any state federal securities laws. 5. Your Representations and Warranties. You hereby represent and warrant to us, for our benefit, as of the time of these Terms of Use and for so long as you continue to use the Intelligence System, that (a) you are, and will continue to be, in compliance with these Terms of Use and any applicable laws and (b) you are authorized to provide to us the information we collect, as described in our Privacy Policy.

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THE INTELLIGENCE SYSTEM, THE LAIS SITE AND ALL DATA, INFORMATION AND CONTENT ON THE LAIS SITE ARE PROVIDED "AS IS" AND “AS AVAILABLE” AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND. WITHOUT LIMITING THE PRECEDING SENTENCE, LORD ABBETT, ITS AFFILIATES, AGENTS, THIRD-PARTY SUPPLIERS AND LICENSORS, AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, DIRECTORS, OFFICERS AND SHAREHOLDERS (COLLECTIVELY, THE “LORD ABBETT GROUP”) EXPRESSLY DISCLAIM ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NONINFRINGEMENT. YOU EXPRESSLY AGREE THAT YOUR USE OF THE LAIS SITE, THE INTELLIGENCE SYSTEM, AND THE DATA, INFORMATION AND CONTENT PRESENTED THERE ARE AT YOUR SOLE RISK AND THAT THE LORD ABBETT GROUP WILL NOT BE RESPONSIBLE FOR ANY (A) ERRORS OR INACCURACIES IN THE DATA, CONTENT AND INFORMATION ON THE LAIS SITE AND THE INTELLIGENCE SYSTEM OR (B) ANY TERMINATION, SUSPENSION, INTERRUPTION OF SERVICES, OR DELAYS IN THE OPERATION OF THE LAIS SITE OR THE INTELLIGENCE SYSTEM.

· Disclaimer Regarding Investment Research.

THE INTELLIGENCE SYSTEM INCORPORATES DATA, CONTENT AND INFORMATION FROM VARIOUS SOURCES THAT WE BELIEVE TO BE ACCURATE AND RELIABLE. HOWEVER, THE LORD ABBETT GROUP MAKES NO CLAIMS, REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY, TIMELINESS, COMPLETENESS OR TRUTHFULNESS OF SUCH DATA, CONTENT AND INFORMATION. YOU EXPRESSLY AGREE THAT YOU ARE RESPONSIBLE FOR INDEPENDENTLY VERIFYING YOUR INVESTMENT RESEARCH PRIOR TO FORMING YOUR INVESTMENT DECISIONS OR RENDERING INVESTMENT ADVICE. THE LORD ABBETT GROUP WILL NOT BE LIABLE FOR ANY INVESTMENT DECISION MADE BY YOU OR ANY OTHER PERSON BASED UPON THE DATA, CONTENT AND INFORMATION PROVIDED THROUGH THE INTELLIGENCE SYSTEM OR ON THE LAIS SITE.

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THIS SECTION 6 SHALL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM..

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NONE OF THE MEMBERS OF THE LORD ABBETT GROUP WILL BE LIABLE TO YOU OR ANY OTHER PERSON FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, SPECIAL OR EXEMPLARY DAMAGES (INCLUDING LOSS OF PROFITS, LOSS OF USE, TRANSACTION LOSSES, OPPORTUNITY COSTS, LOSS OF DATA, OR INTERRUPTION OF BUSINESS) RESULTING FROM, ARISING OUT OF OR IN ANY WAY RELATING TO THE INTELLIGENCE SYSTEM, THE LAIS SITE OR YOUR USE THEREOF, EVEN IF THE LORD ABBETT GROUP HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS SECTION 7 WILL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM.

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· Governing Law. This Agreement will governed by and construed in accordance with the laws of the State of New York, without giving effect to applicable conflicts of law principles.

THE UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT OR ANY VERSION THEREOF, ADOPTED BY ANY STATE, IN ANY FORM ("UCITA") WILL NOT APPLY TO THESE TERMS OF USE. TO THE EXTENT THAT UCITA IS APPLICABLE, THE PARTIES HEREBY AGREE TO OPT OUT OF THE APPLICABILITY OF UCITA PURSUANT TO THE OPT-OUT PROVISION(S) CONTAINED THEREIN.

The Intelligence System is not intended to be used by consumers, nor are the consumer protection laws of any jurisdiction intended to apply to the Intelligence System. You agree to initiate and maintain any action, suit or proceeding relating to these Terms of Use or arising out of the use of the Intelligence System exclusively in the courts, state and federal, located in or having jurisdiction over New York County, New York.

YOU HEREBY CONSENT TO THE PERSONAL JURISDICTION AND VENUE OF THE COURTS, STATE AND FEDERAL, LOCATED IN OR HAVING JURISDICTION OVER NEW YORK COUNTY, NEW YORK. YOU AGREE THAT YOU WILL NOT OBJECT TO A PROCEEDING BROUGHT IN YOUR LOCAL JURISDICTION TO ENFORCE AN ORDER OR JUDGMENT OBTAINED IN NEW YORK.

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· Third-Party Beneficiaries. The members of the Lord Abbett Group are third-party beneficiaries of the rights and benefits provided to us under these Terms of Use. You understand and agree that any right or benefit available to us or any member of the Lord Abbett Group hereunder will also be deemed to accrue to the benefit of, and may be exercised directly by, any member of the Lord Abbett Group to the extent applicable.

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Retirement Perspectives

The rules governing in-service distributions are complex and constantly changing. It is important to be familiar with the rules and their nuances to avoid making costly errors.

An employer-sponsored retirement plan may serve as an effective and powerful tool in helping investors reach their retirement goals. Unfortunately, all plans aren’t created equal; some may lack certain features or impose restrictions that make it more challenging to achieve those goals. In-service withdrawals provide flexibility by allowing participants to withdraw and/or roll over their account while employed

That said, retirement plans are intended for retirement. Consequently, rules governing distributions generally discourage participants from withdrawing from their accounts prior to that. However, the IRS recognizes certain “distributable events,” such as separation from service, that enable participants to distribute their accounts earlier.

There also are times when plan participants are eligible to distribute or roll over all or part of their retirement accounts while still employed, and without demonstrating a specific financial need or hardship—an event referred to as an “in-service distribution.” Of particular importance is an understanding of the rules governing when participants may be eligible for an in-service withdrawal.

Although permitted by the regulations, a plan sponsor (employer) is not required to offer in-service withdrawals. It is an optional plan provision employers might choose. A recent survey by the Profit Sharing Council of America (PSCA) indicated that 77% of 401(k) plans allow for in-service withdrawals.1

In-service distributions potentially are available from a variety of qualified retirement plans, such as 401(k)s, profit-sharing plans, pension plans, employee stock ownership plans (ESOPs) and 403(b) plans. But they do not follow a one-size-fits-all approach: different withdrawal rules govern different types of contributions (e.g., salary deferral, match, profit sharing, rollover, etc.). The in-service rules that apply to qualified plans do not apply to employer-sponsored IRA plans, such as SEP, SAR SEP, or SIMPLE IRAs. Generally speaking, IRA distribution rules allow a participant to roll over their assets at any time.

Why Take an In-service Distribution?
There are several things that might prompt employees to withdraw their savings from their employer-sponsored plan, such as high fees, limited investment choices, or an inability to customize the plan to an individual’s specific needs. But by rolling over assets into an IRA, participants have more control and options.

It is important to know that an in-service distribution, by itself, typically is treated as ordinary income and could trigger a tax liability. Participants younger than 59½ could also incur a 10% early-withdrawal penalty. But if the distribution is rolled over into an IRA, a participant will continue to benefit from tax-deferral status and not incur an immediate tax liability or penalty.

Which Plans Permit In-service Distributions?
Many, but not all, employers offer non-hardship withdrawals during employment. To find out if your clients (or prospects) are eligible, ask your clients to provide a copy of their employer’s Summary Plan Description (SPD), which offers a simplified explanation of the company’s retirement plan rules set out in a Q&A format. Usually, there is a section titled: “When are benefits available for distribution?” 

For advisors seeking out IRA rollover opportunities, Lord Abbett offers Insights & Intelligence—a proprietary, easy-to-use tool that can assist you in locating qualified retirement plans that offer in-service withdrawal options through companies in your community.

Here are general plan-by plan guidelines to assist in your client discussions.

401(k) Plans

- Regulations restrict access to employee salary-deferral contributions (pretax and/or Roth), and employers’ safe harbor contributions (match and/or non-elective) before the participant is 59½ years old. In other words, these specific pools of money are off limits to participants younger than 59½, even in plans that permit in-service withdrawals. That makes older individuals ideal candidates.

- However, the age restriction does not apply to an account that was previously rolled over from a prior employer’s plan or from an IRA. Rollover accounts often are unrestricted. The SPD will provide guidance.

- Aftertax (not Roth) contributions are generally eligible for an in-service withdrawal. Recent taxpayer-friendly rules offer participants the capability of moving these dollars to a Roth IRA—potentially tax-free.

- Small-business owners have the option to amend their plan to permit in-service distributions; but this option must be available to all employees.

Profit-Sharing Plans

- Plans may offer in-service distributions at any age.

- Participants may take a distribution after as little as two years of service.

- Only assets that have been in the plan for at least two years are eligible.

- Some plans allow in-service withdrawals of aftertax amounts (not Roth). The SPD will provide guidance.

Pension Plans (Defined Benefit, Money Purchase and Target Benefits Plans)

- In general, pension plans do not allow for in-service distributions except at the normal retirement age. The Pension Protection Act of 2006 added language to allow plans to make in-service distributions available as early as age 62. The SPD should provide guidance.

SEP IRA and SIMPLE IRAs

SEP IRAs generally are easier to handle, because the assets are already in IRA accounts. There are no applicable withdrawal restrictions, which makes transfers easier.

SIMPLE IRA accounts must be established for at least two years before funds can be transferred to any other account except another SIMPLE.

- SIMPLE IRAs can accept rollovers only from another SIMPLE IRA.

403(b) Plans

- Participant may be eligible for an in-service distribution upon turning age 59½, provided that the plan document permits such distributions.

- A “contract exchange” allows for the transfer of all or some portion of a participant’s account to another 403(b) vendor included in the employer’s plan.

- The plan document must list all eligible 403(b) providers.

Governmental 457(b) Plan

- In general, an in-service distribution is available at 70½ (not 59½).

- Permits one-time only, “in-service, small-account-balance distribution” that applies to accounts valued at $5,000 or less and to which no contributions were made for the preceding two years, assuming  the plan offers this provision.

Why Should a Participant Consider an In-service Rollover to an IRA?

- More diverse selection of investments.

- Additional contributions permitted after rolling over.

Beneficiary flexibility—Participants who are married generally can name anyone as their beneficiary. (Note: Different rules apply for community property states.)

- IRA assets can be accessed (rolled over) once a year without taxes and/or penalties, as long as they are repaid within 60 days.

- Potential access before age 59½ to periodic payments, without being assessed the 10% early-withdrawal penalty, under Section 72(t) of the Internal Revenue Code.

- Ability to convert assets to a Roth IRA.

- Additional exceptions to the 10% early-withdrawal penalty include: 1) higher education; 2) first-time home purchase; and 3) medical insurance premiums while unemployed.

- Legacy planning via Stretch IRAs

That said, there are times when rolling over assets into an IRA may not be appropriate or the optimum choice. (For an overview, see our blog, “IRA Rollovers: Finding the Right Fit.”)

Individuals should consult with their advisors. Advisors should familiarize themselves with the rules governing in-service withdrawals, which can provide another route of access to the $7.2 trillion IRA market.

 

1 PSCA’s 57th Annual Survey of Profit-Sharing and 401(k) Plans.

 

401(k) is a qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on an after tax and/or pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.

Traditional IRA contributions plus earnings, interest, dividends, and capital gains may compound tax-deferred until you withdraw them as retirement income. Amounts withdrawn from traditional IRA plans are generally included as taxable income in the year received and may be subject to 10% federal tax penalties if withdrawn prior to age 59½, unless an exception applies.

Roth IRA is a tax-deferred and potentially tax-free savings plan available to all working individuals and their spouses who meet the IRS income requirements. Distributions, including accumulated earnings, may be made tax-free if the account has been held at least five years and the individual is at least 59½, or if any of the IRS exceptions apply. Contributions to a Roth IRA are not tax deductible, but withdrawals during retirement are generally tax-free.

An IRA rollover may involve the application of fees and charges to the investor.

There may be fees, expenses, taxes and penalties associated with early IRA withdrawals.

SEP IRA—A Simplified Employee Pension Plan is a retirement plan specifically designed for self-employed people and small-business owners. When establishing a SEP IRA plan for your business, you and any eligible employees establish your own separate SEP IRA; employer contributions are then made into each eligible employee's SEP IRA.

SIMPLE  IRA—A Savings Incentive Match Plan for Employees' IRA is an IRA-based plan that gives small-business employers a simplified method to make contributions toward their employees' retirement and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions and the employer makes matching or non-elective contributions. All contributions are made directly to an individual retirement account (IRA) set up for each employee (a SIMPLE IRA). SIMPLE IRA plans are maintained on a calendar-year basis.

To comply with Treasury Department regulations, we inform you that, unless otherwise expressly indicated, any tax information contained herein is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed under the Internal Revenue Code or any other applicable tax law, or (ii) promoting, marketing, or recommending to another party any transaction, arrangement, or other matter.

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