SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 1 (File No. 811-07623) [X]
---------
(Check appropriate box or boxes)
IDS LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT
(formery IDS Life of New York Flexible Portfolio Annuity Account)
- --------------------------------------------------------------------------------
(Exact Name of Registrant)
IDS Life Insurance Company of New York
- --------------------------------------------------------------------------------
(Name of Depositor)
20 Madison Avenue Extension, Albany, NY 12203
- --------------------------------------------------------------------------------
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-3678
- --------------------------------------------------------------------------------
Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8 (a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to Section 8 (a) may
determine.
<PAGE>
Prospectus
___________, 1999
American Express Retirement Advisor Variable AnnuitySM
Individual flexible premium deferred combination fixed/variable annuity.
IDS Life of New York Variable Annuity Account
Issued by: IDS Life Insurance Company of New York (IDS Life of New York)
20 Madison Avenue Extension
Albany, NY 12203
Telephone: 800-541-2251
http://www.americanexpress.com/advisors
This prospectus contains information that you should know before investing. You
also will receive the prospectuses for:
o American Express Variable Portfolio Funds
o AIM Variable Insurance Funds, Inc.
o American Century Variable Portfolios, Inc.
o Fidelity Variable Insurance Products Funds - Service Class
o Franklin Templeton Variable Insurance Products Trust - Class 2
o Goldman Sachs Variable Insurance Trust (VIT)
o Lazard Retirement Series, Inc.
o Putnam Variable Trust
o Royce Capital Fund
o Third Avenue Variable Series Trust
o Wanger Advisors Trust
o Warburg Pincus Trust
Please read the prospectuses carefully and keep them for future reference. This
contract is available for qualified and nonqualified plans.
The Securities and Exchange Commission (SEC) has not approved or disapproved
these securities or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
An investment in this contract is not a deposit of a bank or financial
institution and is not insured or guaranteed by the federal deposit insurance
corporation or any other government agency. An investment in this contract
involves investment risk including the possible loss of principal.
A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the SEC and is available without charge by contacting IDS Life at the telephone
number above or by completing and sending the order form on the last page of
this prospectus. The table of contents of the SAI is on the last page of this
prospectus.
<PAGE>
Table of Contents
Key Terms
The Contract in Brief
Expense Summary
Condensed Financial Information (Unaudited)
Financial Statements
Performance Information
The Variable Account and the Funds
The Fixed Account
Buying Your Contract
Charges
Valuing Your Investment
Making the Most of Your Contract
Surrenders
TSA -- Special Surrender Provisions
Changing Ownership
Benefits in Case of Death
The Annuity Payout Period
Taxes
Voting Rights
Substitution of Investments
About the Service Providers
Year 2000
Table of Contents of the Statement of Additional Information
<PAGE>
Key Terms
These terms can help you understand details about your contract.
Accumulation unit -- A measure of the value of each subaccount before annuity
payouts begin.
Annuitant -- The person on whose life or life expectancy the annuity payouts are
based.
Annuity payouts -- An amount paid at regular intervals under one of several
plans.
Beneficiary -- The person you designate to receive annuity benefits in case of
the owner's or annuitant's death while the contract is in force and before
annuity payouts begin.
Close of business -- When the New York Stock Exchange (NYSE) closes, normally 4
p.m. Eastern time.
Contract value -- The total value of your contract before we deduct any
applicable charges.
Contract year -- A period of 12 months, starting on the effective date of your
contract and on each anniversary of the effective date.
Fixed account -- An account to which you may allocate purchase payments. Amounts
you allocate to this account earn interest at rates that we declare
periodically.
Funds -- Mutual funds and/or portfolios that are investment options under your
contract, each with a different investment objective. You may allocate your
purchase payments into subaccounts investing in shares of any or all of these
funds.
Owner (you, your) -- The person who controls the contract (decides on investment
allocations, transfers, payout options, etc.). Usually, but not always, the
owner is also the annuitant. The owner is responsible for taxes, regardless of
whether he or she receives the contract's benefits.
Qualified annuity -- A contract that you purchase for one of the following
retirement plans that is subject to applicable federal law and any rules of the
plan itself:
o Individual Retirement Annuities (IRAs)
o Simplified Employee Pension (SEP) plans
o Section 401(k) plans
o Custodial and trusteed pension and profit sharing plans
o Tax-Sheltered Annuities (TSAs)
All other contracts are considered nonqualified annuities.
Settlement date -- The date when annuity payouts are scheduled to begin.
Surrender value -- The amount you are entitled to receive if you make a full
surrender from your contract. It is the contract value minus any applicable
charges.
Valuation date -- Any normal business day, Monday through Friday, that the NYSE
is open. Each valuation date ends at the close of business. We calculate the
value of each subaccount at the close of business on each valuation date.
Variable account -- Consists of separate subaccounts to which you may allocate
purchase payments; each invests in shares of one fund. The value of your
investment in each subaccount changes with the performance of the particular
fund.
<PAGE>
The Contract in Brief
Purpose: The purpose of the contract is to allow you to accumulate
money for retirement. You do this by making one or more
investments (purchase payments) that may earn returns that
increase the value of the contract. The contract provides
lifetime or other forms of payouts beginning at a specified
date (the settlement date).
Free look period: You may return your contract to our office within 10 days
after it is delivered to you and receive a full refund of
all your purchase payments. We will not deduct any charges.
Accounts: Currently, you may allocate your purchase payments among any
or all of:
o the subaccounts, each of which invests in a fund with a
particular investment objective. The value of each
subaccount varies with the performance of the
particular fund in which it invests. We cannot
guarantee that the value at the settlement date will
equal or exceed the total purchase payments you
allocate to the subaccounts. (p. __)
o the fixed account, which earns interest at a rate that
we adjust periodically. (p. __)
Buying your
contract: We will help you complete and submit an application.
Applications are subject to acceptance at our office. You
may buy a nonqualified annuity or a qualified annuity. After
your initial purchase payment, you have the option of making
additional purchase payments in the future.
o Minimum initial purchase payment -- $2,000 ($1,000 for
qualified annuities) unless you pay in installments by
means of a bank authorization or under a group billing
arrangement such as a payroll deduction.
o Minimum additional purchase payment -- $50.
o Minimum installment purchase payment -- $50 monthly;
$23.08 biweekly (scheduled payment plan billing).
o Maximum first-year purchase payments -- $100,000 to
$1,000,000 depending on your age.
o Maximum purchase payment for each subsequent year --
$50,000 to $100,000 depending upon your age. (p. __)
Transfers: Subject to certain restrictions you currently may
redistribute your money among the subaccounts and the fixed
account without charge at any time until annuity payouts
begin, and once per contract year among the subaccounts
after annuity payouts begin. You may establish automated
transfers among the fixed account and subaccounts. Fixed
account transfers are subject to special restrictions.
(p.__)
<PAGE>
Surrenders: You may surrender all or part of your contract value at any
time before the settlement date. You also may establish
automated partial surrenders. Surrenders may be subject to
charges and tax penalties (including a 10% IRS penalty if
you surrender prior to your reaching age 59 1/2) and may
have other tax consequences; also, certain restrictions
apply. (p. __)
Changing ownership: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax
consequences. Restrictions apply to changing ownership of a
qualified annuity. (p. --)
Benefits in case
of death: If you or the annuitant die before annuity payouts begin, we
will pay the beneficiary an amount at least equal to the
contract value. (p. --)
Annuity Payouts: You can apply your contract value to an annuity payout plan
that begins on the settlement date. You may choose from a
variety of plans to make sure that payouts continue as long
as you like. If you purchased a qualified annuity, the
payout schedule must meet the requirements of the qualified
plan. We can make payouts on a fixed or variable basis, or
both. Total monthly payouts may include amounts from each
subaccount and the fixed account. During the annuity payout
period, you cannot be invested in more than five subaccounts
at any one time unless we agree otherwise. (p. __)
Taxes: Generally, your contract grows tax-deferred until you
surrender it or begin to receive payouts. (Under certain
circumstances, IRS penalty taxes may apply.) Even if you
direct payouts to someone else, you will be taxed on the
income if you are the owner. (p. __)
Charges:
o $30 annual contract administrative charge;
o for nonqualified annuities a 0.95% mortality and
expense risk fee;
o for qualified annuities a 0.75% mortality and expense
risk fee;
o surrender charge;
o the operating expenses of the funds.
Expense Summary
The purpose of the following information is to help you understand the various
costs and expenses associated with your contract.
You pay no sales charge when you purchase your contract. We show all costs that
you bear directly or indirectly for the subaccounts and funds below. Some
expenses may vary as we explain under "Charges." Please see the funds'
prospectuses for more information on the operating expenses for each fund.
<PAGE>
Contract owner expenses:
Surrender charge: contingent deferred sales charge as a percentage of
purchase payment surrendered.
Surrender charge schedule
Years from purchase payment
receipt Surrender charge percentage
1 7 %
2 7
3 7
4 6
5 5
6 4
7 2
Thereafter 0
Withdrawal Charge under Annuity Payout Plan E - Payouts for a specified period.
The amount equal to the difference in the present value of remaining payments
using the assumed invested rate and such present value using the assumed
investment rate plus 1.60%.
Annual contract administrative charge $30*
* We will waive this charge when your contract value, or total purchase
payments less any payments surrendered, is $50,000 or more on the current
contract anniversary.
Annual subaccount expenses (as a percentage of average subaccount value):
Mortality and expense risk fee 0.95% for nonqualified annuities
0.75% for qualified annuities
Annual operating expenses of the funds after fee waivers and/or expense
reimbursements, if applicable, as a percentage of average daily net assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Management 12b-1 Other
Fees Fees Expenses Total
AXPSM Variable Portfolio - Blue Chip Advantage Fund .56% .13 .26 .95%1
AXPSM Variable Portfolio - Bond Fund .60% .13 .07 .80%2
AXPSM Variable Portfolio - Capital Resource Fund .59% .13 .07 .79%2
AXPSM Variable Portfolio - Cash Management Fund .50% .13 .06 .69%2
AXPSM Variable Portfolio - Diversified Equity Income .56% .13 .26 .95%1
Fund
AXPSM Variable Portfolio - Extra Income Fund .62% .13 .09 .84%2
AXPSM Variable Portfolio - Federal Income Fund .61% .13 .14 .88%1
AXPSM Variable Portfolio - Global Bond Fund .83% .13 .13 1.09%2
AXPSM Variable Portfolio - Growth Fund .63% .13 .19 .95%1
AXPSM Variable Portfolio - International Fund .83% .13 .15 1.11%2
AXPSM Variable Portfolio - Managed Fund .59% .13 .04 .76%2
AXPSM Variable Portfolio - New Dimensions Fund .61% .13 .06 .80%2
<PAGE>
AXPSM Variable Portfolio - Small Cap Advantage Fund .79% .13 .31 1.23%1
AXPSM Variable Portfolio - Strategy Aggressive Fund .59% .13 .09 .81%2
AIM V.I. Capital Appreciation Fund .62% -- .05 .67%3
AIM V.I. Capital Development Fund (after fee waivers --% -- 1.21 1.21%3,4
and expense reimbursements)
American Century VP International Fund 1.48% -- -- 1.48%2
American Century VP Value Fund 1.00% -- -- 1.00%2
Fidelity VIP III Growth & Income Portfolio (Service .49% .10 .11 .70%5
Class) (after expense reimbursements)
Fidelity VIP III Mid Cap Portfolio (Service Class) .59% .10 .41 1.10%2
Fidelity VIP Overseas Portfolio (Service Class) (after .74% .10 .13 .97%5
expense reimbursements)
FT VIP Franklin Real Estate Fund - Class 2 .52% .25 .02 .79%6,7
FT VIP Templeton International Smaller Companies Fund - 1.00% .25 .10 1.35%6,7
Class 2
FT VIP Franklin Value Securities Fund - Class 2 .75% .25 .08 1.08%6,8
Goldman Sachs VIT CORESM Small Cap Equity Fund (after .75% -- .15 .90%9
expense reimbursement)
Goldman Sachs VIT CORESM U.S. Equity Fund (after .70% -- .10 .80%9
expense reimbursement)
Goldman Sachs VIT Mid Cap Value Fund (after expense .80% -- .15 .95%10
reimbursement)
Lazard Retirement International Equity Portfolio (after .75% .25 .25 1.25%11
fee waivers and expense reimbursements)
Putnam VT International New Opportunities Fund - Class 1.18% .15 .68 2.01%12
IB Shares (after expense limitation)
Putnam VT Vista Fund - Class IB Shares .65% .15 .12 .92%1
Royce Micro-Cap Portfolio (after fee waivers and 1.25% -- .10 1.35%13
expense reimbursements)
Third Avenue Value Portfolio .90% -- .40 1.30%14
Wanger International Small Cap 1.27% -- .28 1.55%3
Wanger U.S. Small Cap .96% -- .06 1.02%3
Warburg Pincus Trust - Emerging Growth Portfolio (after .84% -- .41 1.25%15
fee waivers and expense reimbursements)
</TABLE>
1Based on estimated expenses.
2Annualized operating expenses of funds at Dec. 31, 1998.
3Figures in "Management Fees," "Other Expenses" and "Total" are based on actual
expenses for the fiscal year ended Dec. 31, 1998.
4Had there been no fee waivers or expense reimbursement, expenses would have
been: 0.75%, 0.00%, 5.05% and 5.80%, respectively.
5Fidelity Management and Research Company agreed to reimburse a portion of the
class' expenses during the period. Without this reimbursement, the Management
Fees, 12b-1 Fee, Other Expenses and Total as a percentage of average net assets
for the following funds would have been: Fidelity VIP Growth & Income Portfolio
(0.49%, 0.10%, 0.12% and 0.71%) and Fidelity VIP Overseas Portfolio (0.74%,
0.10%, 0.17% and 1.01%).
<PAGE>
6The figure shown under Management Fees, combines both the Management and
Portfolio Administration Fees. The Portfolio Administration Fee is a direct
expense for the Templeton International Smaller Companies Fund and the Franklin
Value Securities Fund; the Franklin Real Estate Fund pays for similar services
indirectly through the Management Fee.
7Because no Class 2 shares were issued as of Dec. 31, 1998, figures (other than
rule 12b-1 fees) are based on the Portfolio's Class 1 actual expenses for the
fiscal year ended Dec. 31, 1998 plus Class 2's annual Rule 12b-1 fee of 0.25%.
(While the maximum amount payable under each Portfolio's Class 2 Rule 12b-1 plan
is 0.35% per year of the Portfolio's average daily net assets, the Board of
Trustees of Franklin Templeton Variable Insurance Products Trust has set the
current rate at 0.25% per year).
8The Franklin Value Securities Fund commenced operations May 1, 1998, therefore,
Management Fees and Rule 12b-1 Fees are annualized and Other Expenses are
estimated for 1999. (While the maximum amount payable under the Portfolio's
Class 2 Rule 12b-1 plan is 0.35% per year of the Portfolio's average daily net
assets, the Board of Trustees of Franklin Templeton Variable Insurance Products
Trust has set the current rate at 0.25% per year.)
9The Goldman Sachs VIT CORE Small Cap Equity and CORE U.S. Equity Funds'
expenses are based on actual expenses for fiscal year ended Dec. 31, 1998. The
Investment Adviser to the Goldman Sachs VIT CORE Small Cap Equity and CORE U.S.
Equity Funds has voluntarily agreed to reduce or limit certain "Other Expenses"
of such funds (excluding management fees, taxes, interest and brokerage fees,
litigation, indemnification and other extraordinary expenses) to the extent such
expenses exceed 0.15% and 0.10% per annum of such funds' average daily net
assets, respectively. The expenses shown include this reimbursement. If not
included, the "Other Expenses" and "Total" for the Goldman Sachs VIT CORE Small
Cap Equity and CORE U.S. Equity Funds would be 3.17% and 3.92% and 2.13% and
2.83%, respectively. The reductions or limits may be discontinued or modified by
the investment adviser in their discretion at any time.
10The Goldman Sachs VIT Mid Cap Value Fund's expenses are estimated due to the
fund being in existence for less than ten months. The Investment Adviser to the
Goldman Sachs VIT Mid Cap Value Fund has voluntarily agreed to reduce or limit
certain "Other Expenses" of such funds (excluding management fees, taxes,
interest and brokerage fees, litigation, indemnification and other extraordinary
expenses) to the extent such expenses exceed 0.15% per annum of such fund's
average daily net assets, respectively. The expenses shown include this
reimbursement. If not included, the "Other Expenses" and "Total" for the Goldman
Sachs VIT Mid Cap Value Fund would be 0.57% and 1.37%, respectively. The
reductions or limits may be discontinued or modified by the investment adviser
in their discretion at any time.
11The Portfolio's Investment Manager agrees to waive its fees and/or reimburse
the Portfolio through Dec. 31, 1999 to the extent total Portfolio annual
expenses exceed 1.25% of the Portfolio's average daily net assets. Absent fee
waivers and/or reimbursements, the Management Fees, 12b-1 Fees, Other Expenses
and Total as a percentage of average net assets for fiscal year ended Dec. 31,
1998 would have been: (0.75%, 0.25%, 47.67% and 48.67%).
12The Management Fees and Total expenses shown in the table reflect an expense
limitation. In the absence of an expense limitation, Management Fees and Total
expenses would have been 1.20% and 2.03%, respectively.
13Expense ratios are shown after fee waivers and expense reimbursements by the
investment advisor. The expense ratios before the waivers and reimbursements
would have been 1.25%, 1.34% and 2.59%.
14The Fund's expenses are estimated because the fund had not commenced
operations as of August 10, 1999.
15Expense ratios are shown after fee waivers and expense reimbursements by the
investment adviser. The expense ratios before the waivers and reimbursements
would have been: (0.90%, 0.00%, 0.51% and 1.41%).
<PAGE>
Examples:*
You would pay the following expenses on a $1,000 investment in a nonqualified
annuity and a 0.95% mortality and expense risk fee assuming a 5% annual return
and....
<TABLE>
<CAPTION>
no surrender or selection
a full surrender at the end of an annuity payout plan at the end of
of each time period each time period
<S> <C> <C> <C> <C>
1 year 3 years 1 year 3 years
AXPSM Variable Portfolio - Blue Chip $ $ $ $
Advantage Fund
AXPSM Variable Portfolio - Bond Fund
AXPSM Variable Portfolio - Capital
Resource Fund
AXPSM Variable Portfolio - Cash
Management Fund
AXPSM Variable Portfolio - Diversified
Equity Income Fund
AXPSM Variable Portfolio - Extra Income
Fund
AXPSM Variable Portfolio - Federal
Income Fund
AXPSM Variable Portfolio - Global Bond
Fund
AXPSM Variable Portfolio - Growth Fund
AXPSM Variable Portfolio - International
Fund
AXPSM Variable Portfolio - Managed Fund
AXPSM Variable Portfolio - New
Dimensions Fund
AXPSM Variable Portfolio - Small Cap
Advantage Fund
AXPSM Variable Portfolio - Strategy
Aggressive Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
American Century VP International Fund
American Century VP Value Fund
Fidelity VIP III Growth & Income
Portfolio (Service Class)
Fidelity VIP III Mid Cap Portfolio
(Service Class)
Fidelity VIP Overseas Portfolio (Service
Class)
FT VIP Franklin Real Estate Fund - Class 2
FT VIP Templeton International Smaller
Companies Fund - Class 2
FT VIP Franklin Value Securities Fund -
Class 2
Goldman Sachs VIT CORESM Small Cap
Equity Fund
Goldman Sachs VIT CORESM U.S. Equity Fund
Goldman Sachs VIT Mid Cap Value Fund
Lazard Retirement International Equity
Portfolio
Putnam VT International New
Opportunities Fund - Class IB Shares
Putnam VT Vista Fund - Class IB Shares
Royce Micro-Cap Portfolio
Third Avenue Value Portfolio
Wanger International Small Cap
Wanger U.S. Small Cap
Warburg Pincus Trust - Emerging Growth
Portfolio
</TABLE>
<PAGE>
You would pay the following expenses on a $1,000 investment in a qualified
annuity and a 0.75% mortality and expense risk fee assuming a 5% annual return
and....
<TABLE>
<CAPTION>
No surrender or selection
a full surrender at the end of an annuity payout plan at the end of
of each time period each time period
<S> <C> <C> <C> <C>
1 year 3 years 1 year 3 years
AXPSM Variable Portfolio - Blue Chip $ $ $ $
Advantage Fund
AXPSM Variable Portfolio - Bond Fund
AXPSM Variable Portfolio - Capital
Resource Fund
AXPSM Variable Portfolio - Cash
Management Fund
AXPSM Variable Portfolio - Diversified
Equity Income Fund
AXPSM Variable Portfolio - Extra Income
Fund
AXPSM Variable Portfolio - Federal
Income Fund
AXPSM Variable Portfolio - Global Bond
Fund
AXPSM Variable Portfolio - Growth Fund
AXPSM Variable Portfolio - International
Fund
AXPSM Variable Portfolio - Managed Fund
AXPSM Variable Portfolio - New
Dimensions Fund
AXPSM Variable Portfolio - Small Cap
Advantage Fund
AXPSM Variable Portfolio - Strategy
Aggressive Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
American Century VP International Fund
American Century VP Value Fund
Fidelity VIP III Growth & Income
Portfolio (Service Class)
Fidelity VIP III Mid Cap Portfolio
(Service Class)
Fidelity VIP Overseas Portfolio (Service
Class)
FT VIP Franklin Real Estate Fund - Class 2
FT VIP Templeton International Smaller
Companies Fund - Class 2
FT VIP Franklin Value Securities Fund -
Class 2
Goldman Sachs VIT CORESM Small Cap
Equity Fund
Goldman Sachs VIT CORESM U.S. Equity Fund
Goldman Sachs VIT Mid Cap Value Fund
Lazard Retirement International Equity
Portfolio
Putnam VT International New
Opportunities Fund - Class IB Shares
Putnam VT Vista Fund - Class IB Shares
Royce Micro-Cap Portfolio
Third Avenue Value Portfolio
Wanger International Small Cap
Wanger U.S. Small Cap
Warburg Pincus Trust - Emerging Growth
Portfolio
</TABLE>
You should not consider these examples as representations of past or future
expenses. Actual expenses may be more or less than those shown.
<PAGE>
Condensed Financial Information (Unaudited)
We have not provided any condensed financial information for the subaccounts
because they are new and do not have any history.
Financial Statements
(to be filed by amendment)
Performance Information
Performance information for the subaccounts may appear from time to time in
advertisements or sales literature. This information reflects the performance of
a hypothetical investment in a particular subaccount during a specified time
period. Currently, we do not provide any performance information for the
subaccounts because they are new and have not had any activity to date. However,
we show performance from the commencement date of the funds as if the contract
existed at that time, which it did not. Although we base performance figures on
historical earnings, past performance does not guarantee future results.
We include non-recurring charges (such as surrender charges) in total return
figures, but not in yield quotations. Excluding non-recurring charges in yield
calculations increases the reported value.
Total return figures reflect deduction of all applicable charges, including:
o the contract administrative charge,
o mortality and expense risk fee, and
o surrender charge (assuming a surrender at the end of the illustrated
period).
We also may make optional total return quotations that do not reflect a
surrender charge deduction (assuming no surrender). Total return quotations may
be shown by means of schedules, charts or graphs.
Average annual total return is the average annual compounded rate of return of
the investment over a period of one, five and ten years (or up to the life of
the subaccount if it is less than ten years old).
Cumulative total return is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return generally will be higher than average annual
total return.
Annualized simple yield (for subaccounts investing in money market funds)
"annualizes" the income generated by the investment over a given seven-day
period. That is, we assume the amount of income generated by the investment
during the period will be generated each seven-day period for a year. We show
this as a percentage of the investment.
Annualized compound yield (for subaccounts investing in money market funds) is
calculated like simple yield except that we assume the income is reinvested when
we annualize it. Compound yield will be higher than the simple yield because of
the compounding effect of the assumed reinvestment.
Annualized yield (for subaccounts investing in income funds) divides the net
investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage.
<PAGE>
You should consider performance information in light of the investment
objectives, policies, characteristics and quality of the fund in which the
subaccount invests and the market conditions during the specified time period.
Advertised yields and total return figures include charges that reduce
advertised performance. Therefore, you should not compare subaccount performance
to that of mutual funds that sell their shares directly to the public. (See the
SAI for a further description of methods used to determine total return and
yield.)
If you would like additional information about actual performance, please
contact us.
The Variable Account and the Funds
You may allocate payments to any or all the subaccounts of the variable account
that invest in shares of the following funds:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Investment Advisor or
Subaccount Investing in Investment Objectives and Policies: Manager
BC7 AXPSM Variable Portfolio - Objective: long-term total return exceeding that of IDS Life Insurance Company
BC8 Blue Chip Advantage Fund the U.S. stock market. Invests primarily in common (IDS Life), investment
stocks of companies included in the unmanaged S&P manager; American Express
500 Index. Financial Corporation
(AEFC) investment advisor.
BD7 AXPSM Variable Portfolio - Objective: high level of current income while IDS Life, investment
BD8 Bond Fund conserving the value of the investment for the manager; AEFC investment
longest time period. Invests primarily in advisor.
investment-grade bonds.
CR7 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
CR8 Capital Resource Fund in U.S. common stocks. manager; AEFC investment
advisor.
CM7 AXPSM Variable Portfolio - Objective: maximum current income consistent with IDS Life, investment
CM8 Cash Management Fund liquidity and conservation of capital. Invests in manager; AEFC investment
money market securities. advisor.
DE7 AXPSM Variable Portfolio - Objective: a high level of current income and, as a IDS Life, investment
DE8 Diversified Equity Income secondary goal, steady growth of capital. Invests manager; AEFC investment
Fund primarily in dividend-paying common and preferred advisor.
stocks.
EI7 AXPSM Variable Portfolio - Objective: high current income, with capital growth IDS Life, investment
EI8 Extra Income Fund as a secondary objective. Invests primarily in manager; AEFC investment
long-term, high-yielding, high-risk debt securities advisor.
below investment grade issued by U.S. and foreign
corporations.
FI7 AXPSM Variable Portfolio - Objective: a high level of current income and IDS Life, investment
FI8 Federal Income Fund safety of principal consistent with an investment manager; AEFC investment
in U.S. government and government agency advisor.
securities. Invests primarily in debt obligations
issued or guaranteed as to principal and interest
by the U.S. government, its agencies or
instrumentalities.
<PAGE>
GB7 AXPSM Variable Portfolio - Objective: high total return through income and IDS Life, investment
GB8 Global Bond Fund growth of capital. Invests primarily in debt manager; AEFC investment
securities of U.S. and foreign issuers. advisor.
GR7 AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
GR8 Growth Fund primarily in common stocks and securities manager; AEFC investment
convertible into common stocks that appear to offer advisor.
growth opportunities.
IE7 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
IE8 International Fund in common stock of foreign issuers. manager; AEFC investment
advisor. American Express
Asset Management
International, Inc., a
wholly-owned subsidiary of
AEFC, is the sub-investment
advisor.
MF7 AXPSM Variable Portfolio - Objective: maximum total investment return through IDS Life, investment
MF8 Managed Fund a combination of capital growth and current income. manager; AEFC investment
Invests primarily in stocks, convertible advisor.
securities, bonds and money market instruments.
ND7 AXPSM Variable Portfolio - Objective: long-term growth of capital. Invests IDS Life, investment
ND8 New Dimensions Fund primarily in common stocks of U.S. and foreign manager; AEFC investment
companies showing potential for significant growth. advisor.
SC7 AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
SC8 Small Cap Advantage Fund primarily in equity stocks of small companies that manager; AEFC investment
are often included in the S&P SmallCap 600 Index or advisor.
the Russell 2000 Index.
SA7 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
SA8 Strategy Aggressive Fund in common stocks of small-and medium-size companies. manager; AEFC investment
advisor.
7CA AIM V.I. Capital Objective: growth of capital. Invests primarily in A I M Advisors, Inc.
8CA Appreciation Fund common stocks, with emphasis on medium- or
small-sized growth companies.
7CD AIM V.I. Capital Objective: long term growth of capital. Invests A I M Advisors, Inc.
8CD Development Fund primarily in securities (including common stocks,
convertible securities and bonds) of small- and
medium-sized companies.
7IF American Century VP Objective: long term capital growth. Invests American Century Investment
8IF International Fund primarily in stocks of growing foreign companies. Management, Inc.
7VA American Century VP Value Objective: long-term capital growth, with income as American Century Investment
8VA Fund a secondary objective. Invests primarily in Management, Inc.
securities that management believes to be
undervalued at the time of purchase.
7GI Fidelity VIP III Growth & Objective: high total return through a combination Fidelity Management &
8GI Income Portfolio (Service of current income and capital appreciation. Invests Research Company (FMR),
Class) primarily in common stocks with a focus on those investment manager; FMR
that pay current dividends and show potential for U.K. and FMR Far East,
capital appreciation. sub-investment advisors.
<PAGE>
7MP Fidelity VIP III Mid Cap Objective: long-term growth of capital. Invests FMR, investment manager;
8MP Portfolio (Service Class) primarily in medium market capitalization common FMR U.K. and FMR Far East,
stocks. sub-investment advisors.
7OS Fidelity VIP Overseas Objective: long-term growth of capital. Invests FMR, investment manager;
8OS Portfolio (Service Class) primarily in common stocks of foreign securities. FMR U.K., FMR Far East,
Fidelity International
Investmen Advisors (FIIA) and
FIIA U.K., sub-investment advisors.
7RE Franklin Templeton VIP Objective: capital appreciation with a secondary Franklin Advisers, Inc.
8RE Franklin Real Estate Fund goal to earn current income. Invests primarily in
- Class 2 securities of companies operating in the real
estate industry, primarily equity real estate
investment trusts (REITS).
7IS Franklin Templeton VIP Objective: long-term capital appreciation. Invests Templeton Investment
8IS Templeton International primarily in equity securities of smaller companies Counsel, Inc.
Smaller Companies Fund - located outside the U.S., including in emerging
Class 2 markets.
7SI Franklin Templeton VIP Objective: long-term total return. Invests Franklin Advisory Services,
8SI Franklin Value Securities primarily in equity securities of companies the LLC
Fund - Class 2 manager believes are significantly undervalued.
7SE Goldman Sachs VIT CORESM Objective: long-term growth of capital. Invests Goldman Sachs Asset
8SE Small Cap Equity Fund primarily in a broadly diversified portfolio of Management
equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of
investment.
7UE Goldman Sachs VIT CORESM Objective: long-term growth of capital and dividend Goldman Sachs Asset
8UE U.S. Equity Fund income. Invests primarily in a broadly diversified Management
portfolio of large-cap and blue chip equity
securities representing all major sectors of the
U.S. economy.
7MC Goldman Sachs VIT Mid Cap Objective: long-term capital appreciation. Invests Goldman Sachs Asset
8MC Value Fund primarily in mid-capitalization U.S. stocks that Management
are believed to be undervalued or undiscovered by
the marketplace.
7IP Lazard Retirement Objective: long-term capital appreciation. Invests Lazard Asset Management
8IP International Equity primarily in equity securities, principally common
Portfolio stocks of relatively large non-U.S. companies
(those whose total market value is more than $1
billion) that the Investment Manager believes are
undervalued based on their earnings, cash flow or
asset values.
7IN Putnam VT International Objective: long-term capital appreciation by Putnam Investment
8IN New Opportunities Fund - investing in companies that have above-average Management, Inc.
Class IB Shares growth prospects due to
the fundamental growth of their
market sector. Invests primarily in
growth stocks outside the U.S.
7VS Putnam VT Vista Fund - Objective: capital appreciation. Invests primarily Putnam Investment
8VS Class IB Shares in a diversified portfolio of common stocks that Management, Inc.
Putnam Management believes have the
potential for above-average capital
appreciation.
<PAGE>
7MI Royce Micro-Cap Portfolio Objective: long-term growth of capital. Invests Royce & Associates, Inc.
8MI primarily in a broadly diversified portfolio of
equity securities issued by micro-cap companies
(companies with stock market capitalizations below
$300 million).
7SV Third Avenue Value Objective: long-term capital appreciation. Invests The Investment Adviser EQSF
8SV Portfolio primarily in common stocks of well-financed Advisers, Inc.
companies at a substantial discount to what the
Advisor believes is their true value.
7IT Wanger International Small Objective: long-term growth of capital. Invests Wanger Asset Management,
8IT Cap primarily in stocks of small- and medium-size L.P.
non-U.S. companies.
7SP Wanger U.S. Small Cap Objective: long-term growth of capital. Invests Wanger Asset Management,
8SP primarily in stocks of small- and medium-size U.S. L.P.
companies.
7EG Warburg Pincus Trust - Objective: maximum capital appreciation. Invests Warburg Pincus Asset
8EG Emerging Growth Portfolio primarily in equity securities of small- to medium Management, Inc.
sized U.S. emerging-growth companies.
</TABLE>
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that the investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the funds' prospectuses for facts you
should know before investing. These prospectuses are also available by
contacting us at the address or telephone number on the first page of this
prospectus.
All funds are available to serve as the underlying investments for variable
annuities. Some funds also are available to serve as investment options for
variable life insurance policies and qualified plans. It is possible that in the
future, it may be disadvantageous for variable annuity accounts and variable
life insurance accounts and/or qualified plans to invest in the available funds
simultaneously.
Although the insurance company and the funds do not currently foresee any such
disadvantages, the boards of directors or trustees of the appropriate funds will
monitor events in order to identify any material conflicts between annuity
owners, policy owners and qualified plans and to determine what action, if any,
should be taken in response to a conflict. If a board were to conclude that it
should establish separate funds for the variable annuity, variable life
insurance and qualified plan accounts, you would not bear any expenses
associated with establishing separate funds. Please refer to the fund
prospectuses for risk disclosure regarding simultaneous investments by variable
annuity, variable life insurance and qualified plan accounts.
The IRS issued final regulations relating to the diversification requirements
under Section 817(h) of the Internal Revenue Code of 1986, as amended (the
Code). Each fund intends to comply with these requirements.
The variable account was established under New York law on April 17, 1996 and
the subaccounts are registered together as a single unit investment trust under
the Investment Company Act of 1940 (the 1940 Act). This registration does not
involve any supervision of our management or investment practices and policies
by the SEC. All obligations arising under the contracts are general obligations
of IDS Life.
<PAGE>
The variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each subaccount only to that subaccount. State insurance law prohibits us from
charging a subaccount with liabilities of any other subaccount or of our general
business. The variable account includes other subaccounts that are available
under contracts that are not described in this prospectus.
The U.S. Treasury and the Internal Revenue Service (IRS) indicated that they may
provide additional guidance on investment control. This concerns how many
variable subaccounts an insurance company may offer and how many exchanges among
subaccounts it may allow before the contract owner would be currently taxed on
income earned within subaccount assets. At this time, we do not know what the
additional guidance will be or when action will be taken. We reserve the right
to modify the contract, as necessary, so that the owner will not be subject to
current taxation as the owner of the subaccount assets.
We intend to comply with all federal tax laws so that the contract continues to
qualify as an annuity for federal income tax purposes. We reserve the right to
modify the contract as necessary to comply with any new tax laws.
The Fixed Account
You also may allocate purchase payments to the fixed account. We back the
principal and interest guarantees relating to the fixed account. The value of
the fixed account increases as we credit interest to the account. Purchase
payments and transfers to the fixed account become part of our general account.
We credit interest daily and compound it annually. We will change the interest
rates from time to time at our discretion.
Interests in the fixed account are not required to be registered with the SEC.
The SEC staff does not review the disclosures in this prospectus on the fixed
account. Disclosures regarding the fixed account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. (See
"Making the Most of Your Contract -- Transfer policies" for restrictions on
transfers involving the fixed account.)
Buying Your Contract
You can fill out an application and send it along with your initial purchase
payment to our office. As the owner, you have all rights and may receive all
benefits under the contract. You can own a nonqualified annuity in joint tenancy
with rights of survivorship only in spousal situations. You cannot own a
qualified annuity in joint tenancy. You can buy a contract or become an
annuitant if you are 90 or younger.
When you apply, you may select:
o the fixed account and/or subaccounts in which you want to invest;
o how you want to make purchase payments; and
o a beneficiary.
The contract provides for allocation of purchase payments to the subaccounts of
the variable account and/or to the fixed account in even 1% increments.
If your application is complete, we will process it and apply your purchase
payment to the fixed account and subaccounts you selected within two business
days after we receive it at our office. If we accept your application, we will
send you a contract. If we cannot accept your application within five business
days, we will decline it and return your payment. We will credit additional
purchase payments you make to your accounts on the valuation date we receive
them. We will value the additional payments at the next accumulation unit value
calculated after we receive your payments at our office.
<PAGE>
The settlement date
Annuity payouts are scheduled to begin on the settlement date. When we process
your application, we will establish the settlement date to the maximum age or
date described below. You can also select a date within the maximum limits. You
can align this date with your actual retirement from a job, or it can be a
different future date, depending on your needs and goals and on certain
restrictions. You also can change the date, provided you send us written
instructions at least 30 days before annuity payouts begin.
For nonqualified annuities, the settlement date must be:
o no earlier than the 60th day after the contract's effective date; and
o no later than the annuitant's 90th birthday.
For qualified annuities, to avoid IRS penalty taxes, the settlement date
generally must be:
o on or after the date the annuitant reaches age 59 1/2; and
o for IRAs and SEPs, by April 1 of the year following the calendar year when
the annuitant reaches age 70 1/2; or
o for all other qualified annuities, by April 1 of the year following the
calendar year when the annuitant reaches age 70 1/2, or, if later retires
(except that 5% business owners may not select a settlement date that is
later than April 1 of the year following the calendar year when they reach
age 70 1/2).
If you take the minimum IRA or TSA distributions as required by the Code from
another tax-qualified investment, or in the form of partial surrenders from this
contract, annuity payouts can start as late as the annuitant's 90th birthday.
Beneficiary
If death benefits become payable before the settlement date (while the contract
is in force and before annuity payouts begin), we will pay your named
beneficiary all or part of the contract value. If there is no named beneficiary,
then you or your estate will be the beneficiary. (See "Benefits in Case of
Death" for more about beneficiaries.)
Purchase payments
Minimum allowable purchase payments
If paying by installments* under a
scheduled payment plan:
$23.08 biweekly, or
$50 per month
If paying by any other method:
$1,000 initial payment for qualified plans
$2,000 initial payment for nonqualified plans
$50 for any additional payments
* Installments must total at least $600 in the first year. If you do not
make any purchase payments for 36 months, and your previous payments total
$600 or less, we have the right to give you 30 days' written notice and
pay you the total value of your contract in a lump sum.
Maximum allowable purchase payments** based on the age of you or the
annuitant, whoever is older, on the effective date of the contract:
For the first year: For each subsequent year:
$100,000 for ages 86 to 90 $50,000 for ages 86-90
$1,000,000 up to age 85 $100,000 up to age 85
**These limits apply in total to all IDS Life of New York annuities you
own. We reserve the right to increase maximum limits. For qualified
annuities the qualified plan's limits on annual contributions also apply.
<PAGE>
We reserve the right to not accept purchase payments allocated to the fixed
account for twelve months following either:
1. a partial surrender from the fixed account; or
2. a lump sum transfer from the fixed account to a subaccount.
How to make purchase payments
1 By letter Send your check along with your name and By letter contract
number to:
Regular mail:
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
Express mail:
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
2 By Scheduled payment plan
We can help you set up:
o an automatic payroll deduction, salary reduction or other group
billing arrangement; or
o a bank authorization.
Charges
Contract administrative charge
We charge this fee for establishing and maintaining your records. We deduct $30
from the contract value on your contract anniversary at the end of each contract
year. We prorate this charge among the subaccounts and the fixed account in the
same proportion your interest in each account bears to your total contract
value.
We will waive this charge when your contract value, or total purchase payments
less any payments surrendered, is $50,000 or more on the current contract
anniversary.
If you surrender your contract, we will deduct the charge at the time of
surrender regardless of the contract value or purchase payments made. We cannot
increase the annual contract administrative charge and it does not apply after
annuity payouts begin or when we pay death benefits.
Mortality and expense risk fee
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee. For nonqualified annuities the fee totals 0.95% of the average
daily net assets on an annual basis. For qualified annuities the fee totals
0.75% of the average daily net assets on an annual basis. This fee covers the
mortality and expense risk that we assume. Approximately two-thirds of this
amount is for our assumption of mortality risk, and one-third is for our
assumption of expense risk. This fee does not apply to the fixed account.
<PAGE>
Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.
Expense risk arises because we cannot increase the contract administrative
charge and this charge may not cover our expenses. We would have to make up any
deficit from our general assets.
The subaccounts pay us the mortality and expense risk fee they accrued as
follows:
o first, to the extent possible, the subaccounts pay this fee from any
dividends distributed from the funds in which they invest;
o then, if necessary, the funds redeem shares to cover any remaining fees
payable.
We may use any profits we realize from the subaccounts' payment to us of the
mortality and expense risk fee for any proper corporate purpose, including,
among others, payment of distribution (selling) expenses. We do not expect that
the surrender charge, discussed in the following paragraphs, will cover sales
and distribution expenses.
Surrender charge
If you surrender all or part of your contract, you may be subject to a surrender
charge. A surrender charge applies if all or part of the surrender amount is
from purchase payments we received within seven (7) years before surrender.
For purposes of calculating any surrender charge, we treat amounts surrendered
from your contract value in the following order:
1. First, we surrender any contract earnings (contract value less purchase
payments received and not previously surrendered). We do not assess a
surrender charge on contract earnings.
NOTE: We determine contract earnings by looking at the entire contract value,
not the earnings of any particular subaccount or the fixed account.
2. Next, in each contract year, we surrender amounts totaling up to 10% of
your prior contract anniversary contract value, but only to the extent not
included and surrendered in Number 1 above. (Your initial purchase payment
is considered the prior contract anniversary contract value during the
first contract year.) We do not assess a surrender charge on this amount.
3. Next we surrender purchase payments received prior to the surrender charge
period you selected and shown in your contract. We do not assess a
surrender charge on these purchase payments.
4. Finally, if necessary, we surrender purchase payments received that are
still within the surrender charge period. We surrender these payments on a
first-in, first-out basis. We do assess a surrender charge on these
payments.
We determine your surrender charge by multiplying each of your payments
surrendered by the applicable surrender charge percentage, and then adding the
total surrender charges.
<PAGE>
The surrender charge percentage depends on the number of years since you made
the payments that are surrendered, depending on the schedule you selected:
Surrender charge schedule
Years from purchase payment
receipt Surrender charge percentage
1 7%
2 7
3 7
4 6
5 5
6 4
7 2
Thereafter 0
Surrender charge calculation example
Following is an example of the calculation we would make to determine the
surrender charge on a contract with this history:
o The contract date is July 1, 1999 with a contract year of July 1 through
June 30 and with an anniversary date of July 1 each year; and
o We received these payments:
-$10,000 July 1, 1999;
-$ 8,000 Dec.31, 2004
-$ 6,000 Feb. 20, 2007; and
o The owner surrenders the contract for its total surrender value of $26,500
on Aug. 5, 2009 and had not made any other surrenders during that contract
year; and
o The prior anniversary July 1, 2008 contract value was $28,000.
Surrender charge Explanation
$0 $2,500 is contract earnings surrendered without charge; and
$0 $300 is 10% of the prior anniversary contract value that is
in excess of contract earnings surrendered without charge
(from above).
10% of $28,000= $2,800 minus $2,500 = $300
$0 $10,000 July 1, 1999 payment was received eight or more
years before surrender and is surrendered without surrender
charge; and
$400 $8,000 Dec. 31, 2004 payment is in its fifth year from
receipt, surrendered with a 5% surrender charge; and
$420 $6,000 Feb.20, 2007 payment is in its third year from
receipt, surrendered with a 7% surrender charge.
-------
$820
For a partial surrender that is subject to a surrender charge, the amount we
actually surrender from your contract will be the amount you request plus any
applicable surrender charge. We apply the surrender charge to this total amount.
We pay you the amount you requested. If you make a full surrender of your
contract, we also will deduct the $30 contract administrative charge.
<PAGE>
Waiver of surrender charges
We do not assess surrender charges for:
o surrenders of any contract earnings;
o amounts totaling up to 10% of your prior contract anniversary contract
value to the extent they exceed contract earnings;
o required minimum distributions from a qualified annuity (for those amounts
required to be distributed from the contract described in this prospectus);
o contracts settled using an annuity payout plan;
o amounts we refund to you during the free look period*; and
o death benefits*.
* However, we will reverse certain purchase payment credits up to the maximum
surrender charge. (See "Valuing Your Investment - Purchase payment credits.")
Other information on charges: AEFC makes certain custodial services available to
some custodial and trusteed pension and profit sharing plans and 401(k) plans
funded by our annuities. Fees for these services start at $30 per calendar year
per participant. AEFC will charge a termination fee for owners under age 59 1/2
(fee waived in case of death or disability).
Surrender Charge under Annuity Payout Plan E - Payouts for a specified period:
Under this payout plan, you can choose to take a withdrawal. The amount that you
can withdraw is the present value of any remaining variable payouts. The
discount rate we use in the calculation will be 5.05% if the assumed investment
rate is 3.5% and 7.15% if the assumed investment rate is 5%. The surrender
charge is equal to the difference in discount values using the above discount
rates an the assumed investment rate. In no event would your surrender charge
exceed 9%.
Possible group reductions: In some cases we may incur lower sales and
administrative expenses due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the contract administrative and surrender charges. However,
we expect this to occur infrequently.
Valuing Your Investment
We value your fixed account and subaccounts as follows:
Fixed account: We value the amounts you allocated to the fixed account directly
in dollars. The fixed account value equals:
o the sum of your purchase payments and transfer amounts allocated to the
fixed account;
o plus any purchase payment credits allocated to the fixed account;
o plus interest credited;
o minus the sum of amounts surrendered (including any applicable surrender
charges) and amounts transferred out; and
o minus any prorated contract administrative charge.
Subaccounts: We convert amounts you allocated to the subaccounts into
accumulation units. Each time you make a purchase payment or transfer amounts
into one of the subaccounts or we apply any purchase payment credits to a
subaccount, we credit a certain number of accumulation units to your contract
for that subaccount. Conversely, each time you take a partial surrender,
transfer amounts out of a subaccount, or we assess a contract administrative
charge, we subtract a certain number of accumulation units from your contract.
<PAGE>
The accumulation units are the true measure of investment value in each
subaccount during the accumulation period. They are related to, but not the same
as, the net asset value of the fund in which the subaccount invests.
The dollar value of each accumulation unit can rise or fall daily depending on
the variable account expenses, performance of the fund and on certain fund
expenses. Here is how we calculate accumulation unit values:
Number of units
To calculate the number of accumulation units for a particular subaccount, we
divide your investment after deduction of any premium taxes, by the current
accumulation unit value.
Accumulation unit value
The current accumulation unit value for each subaccount equals the last value
times the subaccount's current net investment factor.
Net investment factor
We determine the net investment factor by:
o adding the fund's current net asset value per share, plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee from the result.
Because the net asset value of the fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a
subaccount.
Factors that affect subaccount accumulation units
Accumulation units may change in two ways: in number and in value. Here are the
factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments you allocate to the subaccounts;
o any purchase payment credits allocated to the subaccounts;
o transfers into or out of the subaccounts;
o partial surrenders;
o surrender charges; and/or
o prorated portions of the contract administrative charge.
Accumulation unit values will fluctuate due to:
o changes in funds' net asset value;
o dividends distributed to the subaccounts;
o capital gains or losses of funds;
o fund operating expenses; and/or
o mortality and expense risk fees.
<PAGE>
Purchase payment credits
We add a credit to your contract in the amount of 1% of each purchase payment
received if your initial purchase payment to the contract is at least $100,000.
We fund the credit from our general account. We do not consider credits to be
"investments" for income tax purposes. (See "Taxes.")
We allocate each credit to your contract value when the applicable purchase
payment is applied to your contract value. We allocate such credits to your
contract value according to allocation instructions in effect for your purchase
payments.
We will reverse credits from the contract value for any purchase payment that is
not honored.
To the extent a death benefit or surrender payment includes contract value
credits applied within twelve months preceding the date of death that results in
a lump sum death benefit under this contract, we will assess a charge, similar
to a surrender charge, equal to the amount of the purchase payment credits. The
amount we pay to you under these circumstances will always equal or exceed your
surrender value. The amount returned to you under the free look provision also
will not include any credits applied to your contract.
Making the Most of Your Contract
Automated dollar-cost averaging
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative subaccount to
a more aggressive one, or to several others, or from the fixed account to one or
more subaccounts. There is no charge for dollar-cost averaging.
This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
How dollar-cost averaging works
<TABLE>
<CAPTION>
How dollar-cost averaging works
<S> <C> <C> <C> <C>
By investing an Amount Accumulation unit Number of units
equal number of Month invested value purchased
dollars each month... Jan $100 $20 5.00
Feb 100 18 5.56
you automatically buy Mar 100 17 5.88
more units when the Apr 100 15 6.67
per unit market price May 100 16 6.25
is low... Jun 100 18 5.56
Jul 100 17 5.88
and fewer units when Aug 100 19 5.26
the per unit market Sept 100 21 4.76
price is high. Oct 100 20 5.00
</TABLE>
<PAGE>
You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any subaccount will gain in value
nor will it protect against a decline in value if market prices fall. Because
dollar-cost averaging involves continuous investing, your success with this
strategy will depend upon your willingness to continue to invest regularly
through periods of low price levels. Dollar-cost averaging can be an effective
way to help meet your long-term goals. For specific features contact us.
Transferring money between accounts
You may transfer money from any one subaccount, or the fixed account, to another
subaccount before annuity payouts begin. (Certain restrictions apply to
transfers involving the fixed account.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in switching investments.
Transfer policies
o Before annuity payouts begin, you may transfer contract values between the
subaccounts, or from the subaccounts to the fixed account at any time.
However, if you made a transfer from the fixed account to the subaccounts,
you may not make a transfer from any subaccount back to the fixed account
until the next contract anniversary.
o You may transfer contract values from the fixed account to the subaccounts
once a year during a 31-day transfer period starting on each contract
anniversary (except for automated transfers, which can be set up at any
time for certain transfer periods subject to certain minimums).
o If we receive your request within 30 days before the contract anniversary
date, the transfer from the fixed account to the subaccounts will be
effective on the anniversary.
o If we receive your request on or within 30 days after the contract
anniversary date, the transfer from the fixed account to the subaccounts
will be effective on the valuation date we receive it.
o We will not accept requests for transfers from the fixed account at any other
time.
o Once annuity payouts begin, you may not make transfers to or from the fixed
account, but you may make transfers once per contract year among the
subaccounts. During the annuity payout period, you cannot invest in more
than five subaccounts at any one time unless we agree otherwise.
How to request a transfer or surrender
1 By letter
Send your name, contract number, Social Security Number or
Taxpayer Identification Number and signed request for a
transfer or surrender to:
Regular mail:
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
<PAGE>
Express mail:
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Minimum amount
Transfers or
surrenders: $250 or entire account balance
Maximum amount
Transfers or
surrenders: Contract value
2 By automated transfers and automated partial surrenders
We can help you set up automated transfers among your
subaccounts or fixed account or partial surrenders from the
accounts.
You can startor stop this service by written request or
other method acceptable to us. You must allow 30 days for us
to change any instructions that are currently in place.
o Automated transfers from the fixed account to any one
of the subaccounts may not exceed an amount that, if
continued, would deplete the fixed account within 12
months.
o Automated surrenders may be restricted by applicable
law under some contracts.
o You may not make additional purchase payments if
automated partial surrenders are in effect.
o Automated partial surrenders may result in IRS taxes
and penalties on all or part of the amount surrendered.
Minimum amount
Transfers or
surrenders: $50
Surrenders
You may surrender all or part of your contract at any time before annuity
payouts begin by sending us a written request or calling us. We will process
your surrender request on the valuation date we receive it. For total
surrenders, we will compute the value of your contract at the next accumulation
unit value calculated after we receive your request. We may ask you to return
the contract. You may have to pay surrender charges (see "Charges - Surrender
charge") and IRS taxes and penalties (see "Taxes"). You cannot make surrenders
after annuity payouts begin except under Plan E (See "The Annuity Payout Period
Annuity payout plans").
Surrender policies
If you have a balance in more than one account and you request a partial
surrender, we will withdraw money from all your subaccounts and/or the fixed
account in the same proportion as your value in each account correlates to your
total contract value, unless you request otherwise. The minimum contract value
after partial surrender is $600.
<PAGE>
Receiving payment
By regular or express mail:
o payable to you;
o mailed to address of record.
NOTE: We will charge you a fee if you request express mail delivery.
By wire:
o request that payment be wired to your bank;
o bank account must be in the same ownership as your contract; and
o pre-authorization required.
For instructions, contact us.
Normally, we will send the payment within seven days after receiving your
request. However, we may postpone the payment if:
- -- the surrender amount includes a purchase payment check that has not cleared;
- -- the NYSE is closed, except for normal holiday and weekend closings; --
trading on the NYSE is restricted, according to SEC rules; -- an emergency, as
defined by SEC rules, makes it impractical to sell securities or value the net
assets of the accounts; or
- -- the SEC permits us to delay payment for the protection of security holders.
TSA -- Special Surrender Provisions
Participants in Tax-Sheltered Annuities: The Code imposes certain restrictions
on your right to receive early distributions from a TSA:
o Distributions attributable to salary reduction contributions (plus
earnings) made after Dec. 31, 1988, or to transfers or rollovers from other
contracts, may be made from the TSA only if:
-- you are at least age 59 1/2;
-- you are disabled as defined in the Code;
-- you separated from the service of the employer who purchased the
contract; or
-- the distribution is because of your death.
o If you encounter a financial hardship (as defined by the Code), you may
receive a distribution of all contract values attributable to salary
reduction contributions made after Dec. 31, 1988, but not the earnings on
them.
o Even though a distribution may be permitted under the above rules, it may
be subject to IRS taxes and penalties (see "Taxes").
o The employer must comply with certain nondiscrimination requirements for
certain types of contributions under a TSA contract to be excluded from
taxable income. You should consult your employer to determine whether the
nondiscrimination rules apply to you.
o The above restrictions on distributions do not affect the availability of
the amount credited to the contract as of Dec. 31, 1988. The restrictions
also do not apply to transfers or exchanges of contract value within the
contract, or to another registered variable annuity contract or investment
vehicle available through the employer.
<PAGE>
o If the contract has a loan provision, the right to receive a loan as
described in detail in your contract.
Changing Ownership
You may change ownership of your nonqualified annuity at any time by completing
a change of ownership form we approve and sending it to our office. The change
will become binding upon us when we receive and record it. We will honor any
change of ownership request that we believe is authentic and we will use
reasonable procedures to confirm authenticity. If we follow these procedures, we
will not take any responsibility for the validity of the change.
If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")
If you have a qualified annuity, you may not sell, assign, transfer, discount or
pledge your contract as collateral for a loan, or as security for the
performance of an obligation or for any other purpose except as required or
permitted by the Code. However, if the owner is a trust or custodian, or an
employer acting in a similar capacity, ownership of a contract may be
transferred to the annuitant.
Benefits in Case of Death
We will pay the death benefit to your beneficiary upon the earlier of your death
or the annuitant's death. If a contract has more than one person as the owner,
we will pay benefits upon the first to die of any owner or the annuitant.
If you or the annuitant die before annuity payouts begin while this contract is
in force, we will pay the beneficiary as follows:
If both you and the annuitant are age 80 or younger on the date of death, the
beneficiary receives the greatest of:
o the contract value;
o purchase payments, minus any "adjusted partial surrenders"; or
o the contract value as of the most recent sixth contract anniversary, plus
any purchase payments paid and minus any "adjusted partial surrenders"
since that anniversary.
If either you or the annuitant are age 81 or older on the date of death, the
beneficiary receives the greater of:
o the contract value; or
o purchase payments minus any "adjusted partial surrenders."
Adjusted partial surrenders: We calculate an "adjusted partial surrender" for
each partial surrender as the product of (a) times (b) where
(a) is the ratio of the amount of the partial surrender
(including any applicable surrender charge) to the contract
value on the date of (but prior to) the partial surrender; and
(b) is the death benefit on the date of (but prior to) the
partial surrender.
<PAGE>
Example of death benefit calculation when the owner and annuitant are age 80 or
younger:
o The contract is purchased with a payment of $20,000 on Jan. 1, 2000.
o On Jan 1, 2006 (the 6th contract anniversary) the contract value has grown
to $30,000.
o March 1, 2006 the contract value has fallen to $28,000 at which point the
owner takes a $1,500 partial surrender, leaving a contract value of
$26,500.
The death benefit on March 1, 2006 is calculated as follows:
<TABLE>
<CAPTION>
<S> <C>
The contract value on the most recent 6th contract anniversary: $30,000.00
plus any purchase payments paid since that anniversary: + 0.00
minus any "adjusted partial surrenders" taken since that anniversary calculated
as: $1,500 x $30,000
---------------- =
$28,000 - 1,607.14
-----------
for a death benefit of: $ 28,392.86
</TABLE>
If your spouse is sole beneficiary under a nonqualified annuity and you die
before the settlement date, your spouse may keep the contract as owner. To do
this your spouse must, within 60 days after we receive proof of death, give us
written instructions to keep the contract in force.
Under a qualified annuity, if the annuitant dies before the Code requires
distributions to begin, and the spouse is the only beneficiary, the spouse may
keep the contract as owner until the date on which the annuitant would have
reached age 70 1/2 or any other date permitted by the Code. To do this, the
spouse must give us written instructions within 60 days after we receive proof
of death.
Payments: Under a nonqualified annuity we will pay the beneficiary in a single
sum unless you give us other written instructions. A death benefit paid in a
single sum will be reduced by the amount of any purchase payment credits applied
to the contract within 12 months of the date of death. (See "Valuing Your
Investment-Purchase payment credits.") We must fully distribute the death
benefit within five years of your death. However, the beneficiary may receive
payouts under any annuity payout plan available under this contract if:
o the beneficiary asks us in writing within 60 days after we receive proof of
death; and
o payouts begin no later than one year after your death, or other date as
permitted by the Code; and
o the payout period does not extend beyond the beneficiary's life or life
expectancy.
When paying the beneficiary, we will process the death claim on the valuation
date our death claim requirements are fulfilled. We will determine the
contract's value at the next accumulation unit value calculated after our death
claim requirements are fulfilled. We pay interest, if any, from the date of
death at a rate no less than required by law. We will mail payment to the
beneficiary within seven days after our death claim requirements are fulfilled.
Other rules may apply to qualified annuities. (See "Taxes.")
The Annuity Payout Period
As owner of the contract, you have the right to decide how and to whom annuity
payouts will be made starting at the settlement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements.
The amount available for payouts under the plan you select is the contract value
on your settlement date (less any applicable premium tax). We do not deduct any
surrender charges under the payout plans listed below.
<PAGE>
You also decide whether we will make annuity payouts on a fixed or variable
basis, or a combination of fixed and variable. The amounts available to purchase
payouts under the plan you select is the contract value on your settlement date
(less any applicable premium tax). You may reallocate this contract value to the
fixed account to provide fixed dollar payouts and/or among the subaccounts to
provide variable annuity payouts. During the annuity payout period, you cannot
invest in more than five subaccounts at any one time unless we agree otherwise.
Amounts of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the accounts at settlement.
In addition, for variable payouts only, amounts depend on the investment
performance of the subaccounts you select. These payouts will vary from month to
month because the performance of the funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)
For information with respect to transfers between accounts after annuity payouts
begin, see "Making the Most of Your Contract -- Transfer policies."
Annuity table
The annuity table in your contract shows the amount of the first monthly payment
for each $1,000 of contract value according to the age and, when applicable, the
sex of the annuitant. (Where required by law, we will use a unisex table of
settlement rates.) The table assumes that the contract value is invested at the
beginning of the annuity payout period and earns a 5% rate of return, which is
reinvested and helps to support future payouts.
Substitution of 3.5% table
If you ask us at least 30 days before the settlement date, we will substitute an
annuity table based on an assumed 3.5% investment rate for the 5% table in the
contract. The assumed investment rate affects both the amount of the first
payout and the extent to which subsequent payouts increase or decrease. Using
the 5% table results in a higher initial payment, but later payouts will
increase more slowly when annuity unit values rise and decrease more rapidly
when they decline.
Annuity payout plans
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before contract values are used to purchase the
payout plan:
o Plan A -- Life annuity - no refund: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the
annuitant dies after we have made only one monthly payout, we will not make
any more payouts.
o Plan B -- Life annuity with five, 10 or 15 years certain: We make monthly
payouts for a guaranteed payout period of five, 10 or 15 years that you
elect. This election will determine the length of the payout period to the
beneficiary if the annuitant should die before the elected period expires.
We calculate the guaranteed payout period from the settlement date. If the
annuitant outlives the elected guaranteed payout period, we will continue
to make payouts until the annuitant's death.
<PAGE>
o Plan C -- Life annuity - installment refund: We make monthly payouts until
the annuitant's death, with our guarantee that payouts will continue for
some period of time. We will make payouts for at least the number of months
determined by dividing the amount applied under this option by the first
monthly payout, whether or not the annuitant is living.
o Plan D -- Joint and last survivor life annuity - no refund: We make monthly
payouts while both the annuitant and a joint annuitant are living. If
either annuitant dies, we will continue to make monthly payouts at the full
amount until the death of the surviving annuitant. Payouts end with the
death of the second annuitant.
o Plan E -- Payouts for a specified period: We make monthly payouts for a
specific payout period of 10 to 30 years that you elect. We will make
payouts only for the number of years specified whether the annuitant is
living or not. Depending on the selected time period, it is foreseeable
that an annuitant can outlive the payout period selected. During the payout
period, you can elect to have us determine the present value of any
remaining variable payouts and pay it to you in a lump sum. We determine
the present value of the remaining annuity payouts which are assumed to
remain level. The discount rate we use in the calculation will vary between
5.05% and 7.15% depending on the applicable assumed investment rate. (See
"Charges - Surrender Charge under Annuity Payout Plan E"). You can also
take a portion of the discounted value once a year. If you do so, your
monthly payouts will be reduced by the proportion of your surrender to the
full discounted value. A 10% IRS penalty could apply if you take a
surrender. (See "Taxes").
Restrictions for some qualified plans: If you purchased a qualified annuity, you
may be required to select a payout plan that provides for payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated beneficiary;
o for a period not exceeding the life expectancy of the annuitant; or
o for a period not exceeding the joint life expectancies of the annuitant and
a designated beneficiary.
You have the responsibility for electing a payout plan that complies with your
contract and with applicable law.
If we do not receive instructions: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's settlement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you allocated to the fixed account will provide fixed
dollar payouts and contract values that you allocated among the subaccounts will
provide variable annuity payouts.
If monthly payouts would be less than $20: We will calculate the amount of
monthly payouts at the time the contract value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the contract value to you in a lump sum or to change the
frequency of the payouts.
Death after annuity payouts begin
If you or the annuitant die after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.
Taxes
Generally, under current law, any increase in your contract value is taxable to
you only when you receive a payout or surrender (see detailed discussion below).
Any portion of the annuity payouts and any surrenders you request that represent
ordinary income are normally taxable. We will send you a tax information
reporting form for any year in which we made a taxable distribution according to
our records.
<PAGE>
Qualified annuities: We designed this contract for use with qualified retirement
plans. Special rules apply to these retirement plans. Your rights to benefits
may be subject to the terms and conditions of these retirement plans regardless
of the terms of the contract.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life and after your death. You should refer
to your retirement plan or adoption agreement or consult a tax advisor for more
information about your distribution rules.
Annuity payouts under nonqualified annuities: A portion of each payout will be
ordinary income and subject to tax, and a portion of each payout will be
considered a return of part of your investment and will not be taxed. All
amounts you receive after your investment in the contract is fully recovered
will be subject to tax.
Tax law requires that all nonqualified deferred annuities issued by the same
company (and possibly its affiliates) to the same owner during a calendar year
be taxed as a single, unified contract when you take distributions from any one
of those contracts.
Annuity payouts under qualified annuities: Under a qualified annuity, the entire
payout generally is includable as ordinary income and is subject to tax except
to the extent that contributions were made with after-tax dollars. If you or
your employer invested in your contract with deductible or pre-tax dollars as
part of a qualified retirement plan, such amounts are not considered to be part
of your investment in the contract and will be taxed when paid to you.
Surrenders: If you surrender part or all of your contract before your annuity
payouts begin, your surrender payment will be taxed to the extent that the value
of your contract immediately before the surrender exceeds your investment. You
also may have to pay a 10% IRS penalty for surrenders you make before reaching
age 59 1/2 unless certain exceptions apply. For qualified annuities, other
penalties may apply if you surrender your contract before your plan specifies
that you can receive payouts.
Death benefits to beneficiaries: The death benefit under a contract is not
tax-exempt. Any amount your beneficiary receives that represents previously
deferred earnings within the contract is taxable as ordinary income to the
beneficiary in the years he or she receives the payments.
Annuities owned by corporations, partnerships or trusts: For nonqualified
annuities any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax-deferred.
Penalties: If you receive amounts from your contract before reaching age 59 1/2,
you may have to pay a 10% IRS penalty on the amount includable in your ordinary
income. However, this penalty will not apply to any amount received by you or
your beneficiary:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal periodic
payments, made at least annually, over your life or life expectancy (or
joint lives or life expectancies of you and your beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except for
qualified annuities).
For a qualified annuity, other penalties or exceptions may apply if you
surrender your contract before your plan specifies that payouts can be made.
<PAGE>
Withholding, generally: If you receive all or part of the contract value, we may
deduct withholding against the taxable income portion of the payment. Any
withholding represents a prepayment of your tax due for the year. You take
credit for these amounts on your annual tax return.
If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial or full
surrender), we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.
Some states also impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.
Withholding from qualified annuities: If you receive directly all or part of the
contract value from a qualified annuity (except an IRA or SEP), mandatory 20%
federal income tax withholding (and possibly state income tax withholding)
generally will be imposed at the time we make payout. This mandatory withholding
is in place of the elective withholding discussed above. This mandatory
withholding will not be imposed if:
o instead of receiving the distribution check, you elect to have the
distribution rolled over directly to an IRA or another eligible plan;
o the payout is one in a series of substantially equal periodic payouts, made
at least annually, over your life or life expectancy (or the joint lives or
life expectancies of you and your designated beneficiary) or over a
specified period of 10 years or more; or
o the payout is a minimum distribution required under the Code.
Payments we make to a surviving spouse instead of being directly rolled over to
an IRA also may be subject to mandatory 20% income tax withholding.
State withholding also may be imposed on taxable distributions.
Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified
annuity without receiving adequate consideration, the transfer is a gift and
also may be a surrender for federal income tax purposes. If the gift is a
currently taxable event for income tax purposes, the original owner will be
taxed on the amount of deferred earnings at the time of the transfer and also
may be subject to the 10% IRS penalty discussed earlier. In this case, the new
owner's investment in the contract will be the value of the contract at the time
of the transfer.
Collateral assignment of a nonqualified annuity: If you collaterally assign or
pledge your contract, earnings on purchase payments you made after Aug. 13, 1982
will be taxed to you like a surrender.
Important: Our discussion of federal tax laws is based upon our understanding of
current interpretations of these laws. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax advisor if you have any questions about taxation of your contract.
<PAGE>
Tax qualification: We intend that the contract qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract are to be
interpreted to ensure or maintain such tax qualification, in spite of any other
provisions of the contract. We reserve the right to amend the contract to
reflect any clarifications that may be needed or are appropriate to maintain
such qualification or to conform the contract to any applicable changes in the
tax qualification requirements. We will send you a copy of any amendments.
Voting Rights
As a contract owner with investments in the subaccounts, you may vote on
important fund policies until annuity payouts begin. Once they begin, the person
receiving them has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes you have is determined by
applying your percentage interest in each subaccount to the total number of
votes allowed to the subaccount.
After annuity payouts begin, the number of votes you have is equal to:
o the reserve held in each subaccount for your contract; divided by
o the net asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each subaccount. We will send notice of
shareholders' meetings, proxy materials and a statement of the number of votes
to which the voter is entitled. We will vote shares for which we have not
received instructions in the same proportion as the votes for which we received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we received instructions.
Substitution of Investments
We may substitute the funds in which the subaccounts invest if:
o laws or regulations change,
o existing funds become unavailable, or
o in our judgment, the funds no longer are suitable for the subaccounts.
If any of these situations occur and if we believe it is in the best interest of
persons having voting rights under the contract, we have the right to substitute
funds other than those currently listed in this prospectus for other funds.
We may also:
o add new subaccounts;
o combine any two or more subaccounts;
o add subaccounts investing in additional funds;
o transfer assets to and from the subaccounts or the variable
account; and
o eliminate or close any subaccounts.
In the event of substitution or any of these changes, we may amend the contract
and take whatever action is necessary and appropriate without your consent or
approval. However, we will not make any substitution or change without the
necessary approval of the SEC and state insurance departments. We will notify
you of any substitution or change.
<PAGE>
About the Service Providers
Principal underwriter
American Express Financial Advisors Inc. (AEFA) is the principal underwriter for
the contracts. Its offices are located at IDS Tower 10, Minneapolis, MN
55440-0010. AEFA is a wholly-owned subsidiary of AEFC. AEFC is a wholly-owned
subsidiary of American Express Company, a financial services company
headquartered in New York City.
The AEFC family of companies offers not only insurance and annuities, but also
mutual funds, investment certificates and a broad range of financial management
services. AEFA serves individuals and businesses through its nationwide network
of more than 180 offices and 9200 advisors.
Issuer
IDS Life of New York issues the contracts. IDS Life of New York is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
AEFC is a wholly-owned subsidiary of American Express Company, a financial
services company headquartered in New York City.
IDS Life of New York is a stock life insurance company organized in 1972 under
the laws of the State of New York and is located at 20 Madison Avenue Extension,
Albany, New York 12203. Its mailing address is P.O. Box 5144, Albany, NY 12205.
IDS Life of New York conducts a conventional life insurance business.
IDS Life of New York pays total commissions of up to 7.0% of the total purchase
payments it receives on the contracts. We pay a portion of this total commission
to district managers and field vice presidents of the selling representative
Legal proceedings
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which we do business involving insurers' sales practices,
alleged agent misconduct, failure to properly supervise agents, and other
matters. We, like other life and health insurers, from time to time are involved
in such litigation. On October 13, 1998, an action entitled Richard W. And
Elizabeth J. Thoresen vs. American Express Financial Corporation, American
Centurion Life Assurance Company, American Enterprise Life Insurance Company,
American Partners life Insurance Company, IDS Life Insurance Company and IDS
Life Insurance Company of New York was commenced in Minnesota state court. The
action was brought by individuals who purchased an annuity in a qualified plan.
They allege that the sale of annuities in tax-deferred contributory retirement
investment plans (e.g., IRAs) is never appropriate. The plaintiffs purport to
represent a class consisting of all persons who made similar purchases. The
plaintiffs seek damages in an unspecified amount. We also are defendants in
various other lawsuits. In our opinion, none of these lawsuits will have a
material adverse effect on our financial condition.
Year 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of IDS Life of New York and
the Variable Account. All of the major systems used by IDS Life of New York and
by the Variable Account are maintained by AEFC and are utilized by multiple
subsidiaries and affiliates of AEFC. IDS Life of New York's and the Variable
Account's businesses are heavily dependent upon AEFC's computer systems and have
significant interactions with systems of third parties.
<PAGE>
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps have been taken to resolve potential problems including
modification to existing software and the purchase of new software. AEFC's
target date for substantially completing its program of corrective measures on
internal business critical systems was Dec. 31, 1998. As of June 30, 1999, AEFC
completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. The Year 2000 readiness of
unaffiliated investment managers and other third parties whose system failures
could have an impact on IDS Life of New York's and the Variable Account's
operations continues to be evaluated. The failure of external parties to resolve
their own Year 2000 issues in a timely manner could result in a material
financial risk to AEFC, IDS Life of New York or the Variable Account.
AEFC's Year 2000 project includes establishing Year 2000 contingency plans for
all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. These plans are being amended to include specific Year 2000
considerations and will continue to be refined throughout 1999 as additional
information related to potential Year 2000 exposure is gathered.
[This information will be updated so that it is current as of the time the
product becomes effective.]
<PAGE>
Table of Contents of the Statement of Additional Information
Performance Information p.3
Calculating Annuity Payouts p.11
Rating Agencies p.13
Principal Underwriter p.13
Independent Auditors p.13
Financial Statements
<PAGE>
Please check the appropriate box to receive a copy of the Statement of
Additional Information for:
- -- American Express Retirement Advisor Variable AnnuitySM
- -- American Express Variable Portfolio Funds
- -- AIM Variable Insurance Funds, Inc.
- -- American Century Variable Portfolios, Inc.
- -- Fidelity Variable Insurance Products Funds - Service Class
- -- Franklin Templeton Variable Insurance Products Trust - Class 2
- -- Goldman Sachs Variable Insurance Trust (VIT)
- -- Lazard Retirement Series, Inc.
- -- Putnam Variable Trust
- -- Royce Capital Fund
- -- Third Avenue Variable Series Trust
- -- Wanger Advisors Trust
- -- Warburg Pincus Trust
Mail your request to:
IDS Life of New York Annuity Service
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
We will mail your request to:
Your name _____________________________________________
Address _______________________________________________
City _____________________ State _________ Zip ________
<PAGE>
Prospectus
[_____], 1999
American Express Retirement Advisor Variable AnnuitySM - Band 3
Individual flexible premium deferred combination fixed/variable annuity for:
o current or retired employees of IDS Life of New York or its subsidiaries
and their spouses (employees),
o current or retired American Express financial advisors and their spouses
(advisors), and
o individuals investing an initial payment of $1 million (other individuals).
IDS Life of New York Variable Annuity Account
Issued by: IDS Life Insurance Company of New York (IDS Life of New York)
20 Madison Ave. Extension
Albany, NY 12203
Telephone: 800-541-2251
http://www.americanexpress.com/advisors
This prospectus contains information that you should know before investing. You
also will receive the prospectuses for:
o American Express Variable Portfolio Funds
o AIM Variable Insurance Funds, Inc.
o American Century Variable Portfolios, Inc.
o Fidelity Variable Insurance Products Funds - Service Class
o Franklin Templeton Variable Insurance Products Trust - Class 2
o Goldman Sachs Variable Insurance Trust (VIT)
o Lazard Retirement Series, Inc.
o Putnam Variable Trust
o Royce Capital Fund
o Third Avenue Variable Series Trust
o Wanger Advisors Trust
o Warburg Pincus Trust
Please read the prospectuses carefully and keep them for future reference. This
contract is available for qualified and nonqualified plans.
The Securities and Exchange Commission (SEC) has not approved or disapproved
these securities or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
An investment in this contract is not a deposit of a bank or financial
institution and is not insured or guaranteed by the federal deposit insurance
corporation or any other government agency. An investment in this contract
involves investment risk including the possible loss of principal.
A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the SEC and is available without charge by contacting IDS Life at the telephone
number above or by completing and sending the order form on the last page of
this prospectus. The table of contents of the SAI is on the last page of this
prospectus.
<PAGE>
Table of Contents
Table of Contents
Key Terms
The Contract in Brief
Expense Summary
Condensed Financial Information (Unaudited)
Financial Statements
Performance Information
The Variable Account and the Funds
The Fixed Account
Buying Your Contract
Charges
Valuing Your Investment
Making the Most of Your Contract
Surrenders
TSA -- Special Surrender Provisions
Changing Ownership
Benefits in Case of Death
The Annuity Payout Period
Taxes
Voting Rights
Substitution of Investments
About the Service Providers
Year 2000
Table of Contents of the Statement of Additional Information
<PAGE>
Key Terms
These terms can help you understand details about your contract.
Accumulation unit -- A measure of the value of each subaccount before annuity
payouts begin.
Annuitant -- The person on whose life or life expectancy the annuity payouts are
based.
Annuity payouts -- An amount paid at regular intervals under one of several
plans.
Beneficiary -- The person you designate to receive annuity benefits in case of
the owner's or annuitant's death while the contract is in force and before
annuity payouts begin.
Close of business -- When the New York Stock Exchange (NYSE) closes, normally 4
p.m. Eastern time.
Contract value -- The total value of your contract before we deduct any
applicable charges.
Contract year -- A period of 12 months, starting on the effective date of your
contract and on each anniversary of the effective date.
Fixed account -- An account to which you may allocate purchase payments. Amounts
you allocate to this account earn interest at rates that we declare
periodically.
Funds -- Mutual funds and/or portfolios that are investment options under your
contract, each with a different investment objective. You may allocate your
purchase payments into subaccounts investing in shares of any or all of these
funds.
Owner (you, your) -- The person who controls the contract (decides on investment
allocations, transfers, payout options, etc.). Usually, but not always, the
owner is also the annuitant. The owner is responsible for taxes, regardless of
whether he or she receives the contract's benefits.
Qualified annuity -- A contract that you purchase for one of the following
retirement plans that is subject to applicable federal law and any rules of the
plan itself:
o Individual Retirement Annuities (IRAs)
o Simplified Employee Pension (SEP) plans
o Section 401(k) plans
o Custodial and trusteed pension and profit sharing plans
o Tax-Sheltered Annuities (TSAs)
All other contracts are considered nonqualified annuities.
Settlement date -- The date when annuity payouts are scheduled to begin.
Surrender value -- The amount you are entitled to receive if you make a full
surrender from your contract. It is the contract value minus any applicable
charges.
Valuation date -- Any normal business day, Monday through Friday, that the NYSE
is open. Each valuation date ends at the close of business. We calculate the
value of each subaccount at the close of business on each valuation date.
Variable account -- Consists of separate subaccounts to which you may allocate
purchase payments; each invests in shares of one fund. The value of your
investment in each subaccount changes with the performance of the particular
fund.
<PAGE>
The Contract in Brief
Purpose: The purpose of the contract is to allow you to accumulate
money for retirement. You do this by making one or more
investments (purchase payments) that may earn returns that
increase the value of the contract. The contract provides
lifetime or other forms of payouts beginning at a specified
date (the settlement date).
Free look period: You may return your contract to our office within 10 days
after it is delivered to you and receive a full refund of
all your purchase payments. No charges will be deducted.
Accounts: Currently, you may allocate your purchase payments among any
or all of:
o the subaccounts, each of which invests in a fund with a
particular investment objective. The value of each
subaccount varies with the performance of the
particular fund in which it invests. We cannot
guarantee that the value at the settlement date will
equal or exceed the total purchase payments you
allocate to the subaccounts. (p. __)
o the fixed account, which earns interest at a rate that
we adjust periodically. (p. __)
Buying
your contract: We will help you complete and submit an application.
Applications are subject to acceptance at our office. You
may buy a nonqualified annuity or a qualified annuity. After
your initial purchase payment, you have the option of making
additional purchase payments in the future.
o Minimum initial purchase payment for employees/advisors
-- $2,000 ($1,000 for qualified annuities) unless you
pay in installments by means of a bank authorization or
under a group billing arrangement such as a payroll
deduction.
o Minimum initial purchase payment for other individuals
-- $1,000,000.
o Minimum additional purchase payment -- $50.
o Minimum installment purchase payment -- $50 monthly;
$23.08 biweekly (scheduled payment plan billing).
o Maximum first-year purchase payments for
employees/advisors -- $100,000 to $2,000,000 depending
on your age.
o Maximum first-year purchase payments for other
individuals -- $1,000,000 to $2,000,000 depending on
your age.
o Maximum purchase payment for each subsequent year for
employees/advisors -- $50,000 to $100,000 depending
upon your age.
o Maximum purchase payment for each subsequent year for
other individuals -- $100,000. (p. __)
<PAGE>
Transfers: Subject to certain restrictions you currently may
redistribute your money among the subaccounts and the fixed
account without charge at any time until annuity payouts
begin, and once per contract year among the subaccounts
after annuity payouts begin. You may establish automated
transfers among the fixed account and subaccounts. Fixed
account transfers are subject to special restrictions.
(p.__)
Surrenders: You may surrender all or part of your contract value at any
time before the settlement date. You also may establish
automated partial surrenders. Surrenders may be subject to
tax penalties (including a 10% IRS penalty if you surrender
prior to your reaching age 59 1/2) and may have other tax
consequences; also, certain restrictions apply. (p. __)
Changing ownership: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax
consequences. Restrictions apply to changing ownership of a
qualified annuity. (p. --)
Benefits in case
of death: If you or the annuitant die before annuity payouts begin, we
will pay the beneficiary an amount at least equal to the
contract value. (p. --)
Annuity Payouts: You can apply your contract value to an annuity payout plan
that begins on the settlement date. You may choose from a
variety of plans to make sure that payouts continue as long
as you like. If you purchased a qualified annuity, the
payout schedule must meet the requirements of the qualified
plan. We can make payouts on a fixed or variable basis, or
both. Total monthly payouts may include amounts from each
subaccount and the fixed account. During the annuity payout
period, you cannot be invested in more than five subaccounts
at any one time unless we agree otherwise. (p. __)
Taxes: Generally, your contract grows tax-deferred until you
surrender it or begin to receive payouts. (Under certain
circumstances, IRS penalty taxes may apply.) Even if you
direct payouts to someone else, you will be taxed on the
income if you are the owner. (p. __)
Charges:
o $30 annual contract administrative charge;
o a 0.55% mortality and expense risk fee;
o the operating expenses of the funds.
Expense Summary
The purpose of the following information is to help you understand the various
costs and expenses associated with your contract.
You pay no sales charge when you purchase your contract. We show all costs that
you bear directly or indirectly for the subaccounts and funds below. Some
expenses may vary as we explain under "Charges." Please see the funds'
prospectuses for more information on the operating expenses for each fund.
<PAGE>
Contract owner expenses:
Surrender charge 0%
Annual contract administrative charge $30*
Surrender Charge under Annuity Payout Plan E - Payouts for a specified period.
The amount equal to the difference in the present value of remaining payments
using the assumed investment rate and such present value using the assumed
investment rate plus 1.60%.
* We will waive this charge when your contract value, or total purchase
payments less any payments surrendered, is $50,000 or more on the current
contract anniversary.
Annual subaccount expenses (as a percentage of average subaccount value):
Mortality and expense risk fee 0.55%
Annual operating expenses of the funds (as a percentage of average daily net
assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Management 12b-1 Other
Fees Fees Expenses Total
AXPSM Variable Portfolio - Blue Chip Advantage Fund .56% .13 .26 .95%1
AXPSM Variable Portfolio - Bond Fund .60% .13 .07 .80%2
AXPSM Variable Portfolio - Capital Resource Fund .59% .13 .07 .79%2
AXPSM Variable Portfolio - Cash Management Fund .50% .13 .06 .69%2
AXPSM Variable Portfolio - Diversified Equity Income .56% .13 .26 .95%1
Fund
AXPSM Variable Portfolio - Extra Income Fund .62% .13 .09 .84%2
AXPSM Variable Portfolio - Federal Income Fund .61% .13 .14 .88%1
AXPSM Variable Portfolio - Global Bond Fund .83% .13 .13 1.09%2
AXPSM Variable Portfolio - Growth Fund .63% .13 .19 .95%1
AXPSM Variable Portfolio - International Fund .83% .13 .15 1.11%2
AXPSM Variable Portfolio - Managed Fund .59% .13 .04 .76%2
AXPSM Variable Portfolio - New Dimensions Fund .61% .13 .06 .80%2
<PAGE>
AXPSM Variable Portfolio - Small Cap Advantage Fund .79% .13 .31 1.23%1
AXPSM Variable Portfolio - Strategy Aggressive Fund .59% .13 .09 .81%2
AIM V.I. Capital Appreciation Fund .62% -- .05 .67%3
AIM V.I. Capital Development Fund (after fee waivers --% -- 1.21 1.21%3,4
and expense reimbursements)
American Century VP International Fund 1.48% -- -- 1.48%2
American Century VP Value Fund 1.00% -- -- 1.00%2
Fidelity VIP III Growth & Income Portfolio (Service .49% .10 .11 .70%5
Class) (after expense reimbursements)
Fidelity VIP III Mid Cap Portfolio (Service Class) .59% .10 .41 1.10%2
Fidelity VIP Overseas Portfolio (Service Class) (after .74% .10 .13 .97%5
expense reimbursements)
FT VIP Franklin Real Estate Fund - Class 2 .52% .25 .02 .79%6, 7
FT VIP Templeton International Smaller Companies Fund - 1.00% .25 .10 1.35%6, 7
Class 2
FT VIP Franklin Value Securities Fund - Class 2 .75% .25 .08 1.08%6, 8
<PAGE>
Goldman Sachs VIT CORESM Small Cap Equity Fund (after .75% -- .15 .90%9
expense reimbursement)
Goldman Sachs VIT CORESM U.S. Equity Fund (after .70% -- .10 .80%9
expense reimbursement)
Goldman Sachs VIT Mid Cap Value Fund (after expense .80% -- .15 .95%10
reimbursement)
Lazard Retirement International Equity Portfolio (after .75% .25 .25 1.25%11
fee waivers and expense reimbursements)
Putnam VT International New Opportunities Fund - Class 1.18% .15 .68 2.01%12
IB Shares (after expense limitation)
Putnam VT Vista Fund - Class IB Shares .65% .15 .12 .92%1
Royce Micro-Cap Portfolio (after fee waivers and 1.25% -- .10 1.35%13
expense reimbursements)
Third Avenue Value Portfolio .90% -- .40 1.30%14
Wanger International Small Cap 1.27% -- .28 1.55%3
Wanger U.S. Small Cap .96% -- .06 1.02%3
Warburg Pincus Trust - Emerging Growth Portfolio (after .84% -- .41 1.25%15
fee waivers and expense reimbursements)
</TABLE>
1Based on estimated expenses.
2Annualized operating expenses of funds at Dec. 31, 1998.
3Figures in "Management Fees," "Other Expenses" and "Total" are based on actual
expenses for the fiscal year ended Dec. 31, 1998.
4Had there been no fee waivers or expense reimbursement, expenses would have
been: 0.75%, 0.00%, 5.05% and 5.80%, respectively.
5Fidelity Management and Research Company agreed to reimburse a portion of the
class' expenses during the period. Without this reimbursement, the Management
Fees, 12b-1 Fee, Other Expenses and Total as a percentage of average net assets
for the following funds would have been: Fidelity VIP Growth & Income Portfolio
(0.49%, 0.10%, 0.12% and 0.71%) and Fidelity VIP Overseas Portfolio (0.74%,
0.10%, 0.17% and 1.01%).
6The figure shown under Management Fees, combines both the Management and
Portfolio Administration Fees. The Portfolio Administration Fee is a direct
expense for the Templeton International Smaller Companies Fund and the Franklin
Value Securities Fund; the Franklin Real Estate Fund pays for similar services
indirectly through the Management Fee.
7Because no Class 2 shares were issued as of Dec. 31, 1998, figures (other than
rule 12b-1 fees) are based on the Portfolio's Class 1 actual expenses for the
fiscal year ended Dec. 31, 1998 plus Class 2's annual Rule 12b-1 fee of 0.25%.
(While the maximum amount payable under each Portfolio's Class 2 Rule 12b-1 plan
is 0.35% per year of the Portfolio's average daily net assets, the Board of
Trustees of Franklin Templeton Variable Insurance Products Trust has set the
current rate at 0.25% per year).
8The Value Securities Fund commenced operations May 1, 1998, therefore,
Management Fees and Rule 12b-1 Fees are annualized and Other Expenses are
estimated for 1999. (While the maximum amount payable under the Portfolio's
Class 2 Rule 12b-1 plan is 0.35% per year of the Portfolio's average daily net
assets, the Board of Trustees of Franklin Templeton Variable Insurance Products
Trust has set the current rate at 0.25% per year.)
<PAGE>
9The Goldman Sachs VIT CORE Small Cap Equity and CORE U.S. Equity Funds'
expenses are based on actual expenses for fiscal year ended Dec. 31, 1998. The
Investment Adviser to the Goldman Sachs VIT CORE Small Cap Equity and CORE U.S.
Equity Funds has voluntarily agreed to reduce or limit certain "Other Expenses"
of such funds (excluding management fees, taxes, interest and brokerage fees,
litigation, indemnification and other extraordinary expenses) to the extent such
expenses exceed 0.15% and 0.10% per annum of such funds' average daily net
assets, respectively. The expenses shown include this reimbursement. If not
included, the "Other Expenses" and "Total" for the Goldman Sachs VIT CORE Small
Cap Equity and CORE U.S. Equity Funds would be 3.17% and 3.92% and 2.13% and
2.83%, respectively. The reductions or limits may be discontinued or modified by
the investment adviser in their discretion at any time.
10The Goldman Sachs VIT Mid Cap Value Fund's expenses are estimated due to the
fund being in existence for less than ten months. The Investment Adviser to the
Goldman Sachs VIT Mid Cap Value Fund has voluntarily agreed to reduce or limit
certain "Other Expenses" of such funds (excluding management fees, taxes,
interest and brokerage fees, litigation, indemnification and other extraordinary
expenses) to the extent such expenses exceed 0.15% per annum of such fund's
average daily net assets, respectively. The expenses shown include this
reimbursement. If not included, the "Other Expenses" and "Total" for the Goldman
Sachs VIT Mid Cap Value Fund would be 0.57% and 1.37%, respectively. The
reductions or limits may be discontinued or modified by the investment adviser
in their discretion at any time.
11The Portfolio's Investment Manager agrees to waive its fees and/or reimburse
the Portfolio through Dec. 31, 1999 to the extent total Portfolio annual
expenses exceed 1.25% of the Portfolio's average daily net assets. Absent fee
waivers and/or reimbursements, the Management Fees, 12b-1 Fees, Other Expenses
and Total as a percentage of average net assets for fiscal year ended Dec. 31,
1998 would have been: (0.75%, 0.25%, 47.67% and 48.67%).
12The Management Fees and Total expenses shown in the table reflect an expense
limitation. In the absence of an expense limitation, Management Fees and Total
expenses would have been 1.20% and 2.03%, respectively.
13Expense ratios are shown after fee waivers and expense reimbursements by the
investment advisor. The expense ratios before the waivers and reimbursements
would have been 1.25%, 1.34% and 2.59%.
14The Fund's expenses are estimated because the fund had not commenced
operations as of [INSERT FILING DATE].
15Expense ratios are shown after fee waivers and expense reimbursements by the
investment adviser. The expense ratios before the waivers and reimbursements
would have been: (0.90%, 0.00%, 0.51% and 1.41%).
Example:*
You would pay the following expenses on a $1,000 investment assuming a 5% annual
return and full surrender, no surrender or selection of an annuity payout plan
at the end of each time period
<TABLE>
<CAPTION>
<S> <C> <C>
1 year 3 years
AXPSM Variable Portfolio - Blue Chip Advantage Fund $ $
AXPSM Variable Portfolio - Bond Fund
AXPSM Variable Portfolio - Capital Resource Fund
AXPSM Variable Portfolio - Cash Management Fund
AXPSM Variable Portfolio - Diversified Equity Income Fund
AXPSM Variable Portfolio - Extra Income Fund
AXPSM Variable Portfolio - Federal Income Fund
AXPSM Variable Portfolio - Global Bond Fund
AXPSM Variable Portfolio - Growth Fund
AXPSM Variable Portfolio - International Fund
AXPM Variable Portfolio - Managed Fund
<PAGE>
AXPM Variable Portfolio - New Dimensions Fund
AXPSM Variable Portfolio - Small Cap Advantage Fund
AXPSM Variable Portfolio - Strategy Aggressive Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
American Century VP International Fund
American Century VP Value Fund
Fidelity VIP III Growth & Income Portfolio (Service Class)
Fidelity VIP III Mid Cap Portfolio (Service Class)
Fidelity VIP Overseas Portfolio (Service Class)
FT VIP Franklin Real Estate Fund - Class 2
FT VIP Templeton International Smaller Companies Fund - Class 2
FT VIP Franklin Value Securities Fund - Class 2
Goldman Sachs VIT CORESM Small Cap Equity Fund
Goldman Sachs VIT CORESM U.S. Equity Fund
Goldman Sachs VIT Mid Cap Value Fund
Lazard Retirement International Equity Portfolio
Putnam VT International New Opportunities Fund - Class IB Shares
Putnam VT Vista Fund - Class IB Shares
Royce Micro-Cap Portfolio
Third Avenue Value Portfolio
Wanger International Small Cap
Wanger U.S. Small Cap
Warburg Pincus Trust - Emerging Growth Portfolio
</TABLE>
* In this example, the $30 contract administrative charge is approximated as a
.083% charge based on our estimated average contract size. Premium taxes
imposed by some state and local governments are not reflected in this table.
We entered into certain arrangements under which we are compensated by the
funds' advisors and/or distributors for the administrative services we
provide to the funds.
You should not consider this example as a representation of past or future
expenses. Actual expenses may be more or less than those shown.
Condensed Financial Information (Unaudited)
We have not provided any condensed financial information for the subaccounts
because they are new and do not have any history.
(to be filed by amendment)
Financial Statements
(to be filed by amendment)
Performance Information
Performance information for the subaccounts may appear from time to time in
advertisements or sales literature. This information reflects the performance of
a hypothetical investment in a particular subaccount during a specified time
period. Currently, we do not provide any performance information for the
subaccounts because they are new and have not had any activity to date. However,
we show performance from the commencement date of the funds as if the contract
existed at that time, which it did not. Although we base performance figures on
historical earnings, past performance does not guarantee future results.
<PAGE>
Total return figures reflect deduction of all applicable charges, including:
o the contract administrative charge, and
o mortality and expense risk fee.
Total return quotations may be shown by means of schedules, charts or graphs.
Average annual total return is the average annual compounded rate of return of
the investment over a period of one, five and ten years (or up to the life of
the subaccount if it is less than ten years old).
Cumulative total return is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return generally will be higher than average annual
total return.
Annualized simple yield (for subaccounts investing in money market funds)
"annualizes" the income generated by the investment over a given seven-day
period. That is, we assume the amount of income generated by the investment
during the period will be generated each seven-day period for a year. We show
this as a percentage of the investment.
Annualized compound yield (for subaccounts investing in money market funds) is
calculated like simple yield except that we assume the income is reinvested when
we annualize it. Compound yield will be higher than the simple yield because of
the compounding effect of the assumed reinvestment.
Annualized yield (for subaccounts investing in income funds) divides the net
investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage.
You should consider performance information in light of the investment
objectives, policies, characteristics and quality of the fund in which the
subaccount invests and the market conditions during the specified time period.
Advertised yields and total return figures include charges that reduce
advertised performance. Therefore, you should not compare subaccount performance
to that of mutual funds that sell their shares directly to the public. (See the
SAI for a further description of methods used to determine total return and
yield.)
If you would like additional information about actual performance, please
contact us.
The Variable Account and the Funds
You may allocate payments to any or all the subaccounts of the variable account
that invest in shares of the following funds:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Investment Advisor or
Subaccount Investing in Investment Objectives and Policies: Manager
---------- ------------ ----------------------------------- ---------------------
BC9 AXPSM Variable Portfolio - Objective: long-term total return exceeding that of IDS Life Insurance Company
Blue Chip Advantage Fund the U.S. stock market. Invests primarily in common (IDS Life), investment
stocks of companies included in the unmanaged S&P manager; American Express
500 Index. Financial Corporation
(AEFC) investment advisor.
BD9 AXPSM Variable Portfolio - Objective: high level of current income while IDS Life, investment
Bond Fund conserving the value of the investment for the manager; AEFC investment
longest time period. Invests primarily in advisor.
investment-grade bonds.
<PAGE>
CR9 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
Capital Resource Fund in U.S. common stocks. manager; AEFC investment
advisor.
CM9 AXPSM Variable Portfolio - Objective: maximum current income consistent with IDS Life, investment
Cash Management Fund liquidity and conservation of capital. Invests in manager; AEFC investment
money market securities. advisor.
DE9 AXPSM Variable Portfolio - Objective: a high level of current income and, as a IDS Life, investment
Diversified Equity Income secondary goal, steady growth of capital. Invests manager; AEFC investment
Fund primarily in dividend-paying common and preferred advisor.
stocks.
EI9 AXPSM Variable Portfolio - Objective: high current income, with capital growth IDS Life, investment
Extra Income Fund as a secondary objective. Invests primarily in manager; AEFC investment
long-term, high-yielding, high-risk debt securities advisor.
below investment grade issued by U.S. and foreign
corporations.
FI9 AXPSM Variable Portfolio - Objective: a high level of current income and IDS Life, investment
Federal Income Fund safety of principal consistent with an investment manager; AEFC investment
in U.S. government and government agency advisor.
securities. Invests primarily in debt obligations
issued or guaranteed as to principal and interest
by the U.S. government, its agencies or
instrumentalities.
GB9 AXPSM Variable Portfolio - Objective: high total return through income and IDS Life, investment
Global Bond Fund growth of capital. Invests primarily in debt manager; AEFC investment
securities of U.S. and foreign issuers. advisor.
GR9 AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
Growth Fund primarily in common stocks and securities manager; AEFC investment
convertible into common stocks that appear to offer advisor.
growth opportunities.
IE9 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
International Fund in common stock of foreign issuers. manager; AEFC investment
advisor. American Express
Asset Management
International, Inc., a
wholly-owned subsidiary of
AEFC, is the
sub-investment advisor.
MF9 AXPSM Variable Portfolio - Objective: maximum total investment return through IDS Life investment
Managed Fund a combination of capital growth and current income. manager; AEFC investment
Invests primarily in stocks, convertible advisor.
securities, bonds and money market instruments.
ND9 AXPSM Variable Portfolio - Objective: long-term growth of capital. Invests IDS Life investment
New Dimensions Fund primarily in common stocks of U.S. and foreign manager; AEFC investment
companies showing potential for significant growth. advisor.
SC9 AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life investment
Small Cap Advantage Fund primarily in equity stocks of small companies that manager; AEFC investment
are often included in the S&P SmallCap 600 Index or advisor.
the Russell 2000 Index.
SA9 AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life investment
Strategy Aggressive Fund in common stocks of small-and medium-size companies. manager; AEFC investment
advisor.
<PAGE>
9CA AIM V.I. Capital Objective: growth of capital. Invests primarily in A I M Advisors, Inc.
Appreciation Fund common stocks, with emphasis on medium- or
small-sized growth companies.
9CD AIM V.I. Capital Development Objective: long term growth of capital. Invests A I M Advisors, Inc.
Fund primarily in securities (including common stocks,
convertible securities and bonds) of small- and
medium-sized companies.
9IF American Century VP Objective: long term capital growth. Invests American Century Investment
International Fund primarily in stocks of growing foreign companies. Management, Inc.
9VA American Century VP Value Objective: long-term capital growth, with income as American Century Investment
Fund a secondary objective. Invests primarily in Management, Inc.
securities that management believes to be
undervalued at the time of purchase.
9GI Fidelity VIP III Growth & Objective: high total return through a Fidelity Management &
Income Portfolio (Service combination of current income and capital Research Company (FMR),
Class) appreciation. Invests primarily in common stocks investment manager; FMR
with a focus on those that pay current dividends U.K. and FMR Far East,
that pay current dividends and show potential for sub-investment advisors.
capital appreciation.
9MP Fidelity VIP III Mid Cap Objective: long-term growth of capital. Invests FMR, investment manager;
Portfolio (Service Class) primarily in medium market capitalization common FMR U.K. and FMR Far East,
stocks. sub-investment advisors.
9OS Fidelity VIP Overseas Objective: long-term growth of capital. Invests FMR, investment manager;
Portfolio (Service Class) primarily in common stocks of foreign securities. FMR U.K., FMR Far East,
Fidelity Inyernational
Investment Advisors (FIIA)
and FIAA U.K., sub-investment
advisors.
9RE Franklin Templeton VIP Objective: capital appreciation with a secondary Franklin Advisers, Inc.
Franklin Real Estate Fund - goal to earn current income. Invests primarily in
Class 2 securities of companies operating in the real
estate industry, primarily equity real estate
investment trusts (REITS).
9IS Franklin Templeton VIP Objective: long-term capital appreciation. Invests Templeton Investment
Trust Templeton primarily inequity securities of amaller companies Counsel, Inc.
International Smaller located outside the U.S., including in emerging
Companies Fund - Class 2 markets.
9SI Franklin Templeton VIP Objective: long-term total return. Invests Franklin Advisory Services,
Franklin Value Securities primarily in equity securities of companies the LLC
Fund - Class 2 manager believes are significantly undervalued.
9SE Goldman Sachs VIT CORESM Objective: long-term growth of capital. Invests Goldman Sachs Asset
Small Cap Equity Fund primarily in a broadly diversified portfolio of Management
equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of
investment.
9UE Goldman Sachs VIT CORESM Objective: long-term growth of capital and dividend Goldman Sachs Asset
U.S. Equity Fund income. Invests primarily in a broadly diversified Management
portfolio of large-cap and blue chip equity
securities representing all major sectors of the
U.S. economy.
<PAGE>
9MC Goldman Sachs VIT Mid Cap Objective: long-term capital appreciation. Invests Goldman Sachs Asset
Value Fund primarily in mid-capitalization U.S. stocks that Management
are believed to be undervalued or undiscovered by
the marketplace.
9IP Lazard Retirement Objective: long-term capital appreciation. Invests Lazard Asset Management
International Equity primarily in equity securities, principally common
Portfolio stocks of relatively large non-U.S. companies
(those whose total market value is more than $1
billion) that the Investment Manager believes are
undervalued based on their earnings, cash flow or
asset values.
9IN Putnam VT International Objective: long-term capital appreciation by Putnam Investment
New Opportunities Fund - investing in companies that have above-average Management, Inc.
Class IB Shares growth prospects due to the fundamental growth of
their market sector. Invests primarily in growth
stocks outside the U.S.
9VS Putnam VT Vista Fund - Objective: capital appreciation. Invests primarily Putnam Investment
Class IB Shares in a diversified portfolio of common stocks that Management, Inc.
Putnam Management believes have the
potential for above-average capital
appreciation.
9MI Royce Micro-Cap Portfolio Objective: long-term growth of capital. Invests Royce & Associates, Inc.
primarily in a broadly diversified portfolio of
equity securities issued by micro-cap companies
(companies with stock market capitalizations below
$300 million).
9SV Third Avenue Value Objective: long-term capital appreciation. Invests The Investment Adviser EQSF
Portfolio primarily in common stocks of well-finance Advisers, Inc.
companies at a substantial discount to what the
Advisor believes is their true value.
9IT Wanger International Small Objective: long-term growth of capital. Invests Wanger Asset Management,
Cap primarily in stocks of small- and medium-size L.P.
non-U.S. companies.
9SP Wanger U.S. Small Cap Objective: long-term growth of capital. Invests Wanger Asset Management,
primarily in stocks of small- and medium-size U.S. L.P.
companies.
9EG Warburg Pincus Trust - Objective: maximum capital appreciation. Invests Warburg Pincus Asset
Emerging Growth Portfolio primarily in equity securities of small- to medium Management, Inc.
sized U.S. emerging-growth companies.
</TABLE>
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that the investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the funds' prospectuses for facts you
should know before investing. These prospectuses are also available by
contacting us at the address or telephone number on the first page of this
prospectus.
All funds are available to serve as the underlying investments for variable
annuities. Some funds also are available to serve as investment options for
variable life insurance policies and qualified plans. It is possible that in the
future, it may be disadvantageous for variable annuity accounts and variable
life insurance accounts and/or qualified plans to invest in the available funds
simultaneously.
<PAGE>
Although the insurance company and the funds do not currently foresee any such
disadvantages, the boards of directors or trustees of the appropriate funds will
monitor events in order to identify any material conflicts between annuity
owners, policy owners and qualified plans and to determine what action, if any,
should be taken in response to a conflict. If a board were to conclude that it
should establish separate funds for the variable annuity, variable life
insurance and qualified plan accounts, you would not bear any expenses
associated with establishing separate funds. Please refer to the fund
prospectuses for risk disclosure regarding simultaneous investments by variable
annuity, variable life insurance and qualified plan accounts.
The IRS issued final regulations relating to the diversification requirements
under Section 817(h) of the Internal Revenue Code of 1986, as amended (the
Code). Each fund intends to comply with these requirements.
The variable account was established under New York law on April 17, 1996 and
the subaccounts are registered together as a single unit investment trust under
the Investment Company Act of 1940 (the 1940 Act). This registration does not
involve any supervision of our management or investment practices and policies
by the SEC. All obligations arising under the contracts are general obligations
of IDS Life.
The variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each subaccount only to that subaccount. State insurance law prohibits us from
charging a subaccount with liabilities of any other subaccount or of our general
business. The variable account includes other subaccounts that are available
under contracts that are not described in this prospectus.
The U.S. Treasury and the Internal Revenue Service (IRS) indicated that they may
provide additional guidance on investment control. This concerns how many
variable subaccounts an insurance company may offer and how many exchanges among
subaccounts it may allow before the contract owner would be currently taxed on
income earned within subaccount assets. At this time, we do not know what the
additional guidance will be or when action will be taken. We reserve the right
to modify the contract, as necessary, so that the owner will not be subject to
current taxation as the owner of the subaccount assets.
We intend to comply with all federal tax laws so that the contract continues to
qualify as an annuity for federal income tax purposes. We reserve the right to
modify the contract as necessary to comply with any new tax laws.
The Fixed Account
You also may allocate purchase payments to the fixed account. We back the
principal and interest guarantees relating to the fixed account. The value of
the fixed account increases as we credit interest to the account. Purchase
payments and transfers to the fixed account become part of our general account.
We credit interest daily and compound it annually. We will change the interest
rates from time to time at our discretion.
Interests in the fixed account are not required to be registered with the SEC.
The SEC staff does not review the disclosures in this prospectus on the fixed
account. Disclosures regarding the fixed account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. (See
"Making the Most of Your Contract -- Transfer policies" for restrictions on
transfers involving the fixed account.)
Buying Your Contract
You can fill out an application and send it along with your initial purchase
payment to our office. As the owner, you have all rights and may receive all
benefits under the contract. You can own a nonqualified annuity in joint tenancy
with rights of survivorship only in spousal situations. You cannot own a
qualified annuity in joint tenancy. You can buy a contract or become an
annuitant if you are 90 or younger.
<PAGE>
When you apply, you may select:
o the fixed account and/or subaccounts in which you want to invest;
o how you want to make purchase payments; and
o a beneficiary.
The contract provides for allocation of purchase payments to the subaccounts of
the variable account and/or to the fixed account in even 1% increments.
If your application is complete, we will process it and apply your purchase
payment to the fixed account and subaccounts you selected within two business
days after we receive it at our office. If we accept your application, we will
send you a contract. If we cannot accept your application within five business
days, we will decline it and return your payment. We will credit additional
purchase payments you make to your accounts on the valuation date we receive
them. We will value the additional payments at the next accumulation unit value
calculated after we receive your payments at our office.
The settlement date
Annuity payouts are scheduled to begin on the settlement date. When we process
your application, we will establish the settlement date to the maximum age or
date described below. You can also select a date within the maximum limits. You
can align this date with your actual retirement from a job, or it can be a
different future date, depending on your needs and goals and on certain
restrictions. You also can change the date, provided you send us written
instructions at least 30 days before annuity payouts begin.
For nonqualified annuities, the settlement date must be:
o no earlier than the 60th day after the contract's effective date; and
o no later than the annuitant's 90th birthday.
For qualified annuities, to avoid IRS penalty taxes, the settlement date
generally must be:
o on or after the date the annuitant reaches age 59 1/2; and
o for IRAs and SEPs, by April 1 of the year following the calendar year when
the annuitant reaches age 70 1/2; or
o for all other qualified annuities, by April 1 of the year following the
calendar year when the annuitant reaches age 70 1/2, or, if later retires
(except that 5% business owners may not select a settlement date that is
later than April 1 of the year following the calendar year when they reach
age 70 1/2).
If you take the minimum IRA or TSA distributions as required by the Code from
another tax-qualified investment, or in the form of partial surrenders from this
contract, annuity payouts can start as late as the annuitant's 90th birthday.
Beneficiary
If death benefits become payable before the settlement date (while the contract
is in force and before annuity payouts begin), we will pay your named
beneficiary all or part of the contract value. If there is no named beneficiary,
then you or your estate will be the beneficiary. (See "Benefits in Case of
Death" for more about beneficiaries.)
<PAGE>
Purchase payments
Minimum allowable purchase payments
For employees/advisors:
If paying by installments* under a
scheduled payment plan:
$23.08 biweekly, or
$50 per month
If paying by any other method:
$1,000 initial payment for qualified plans
$2,000 initial payment for nonqualified plans
$50 for any additional payments
For other individuals:
$1 million
o Installments must total at least $600 in the first year. If you do not make
any purchase payments for 36 months, and your previous payments total $600
or less, we have the right to give you 30 days' written notice and pay you
the total value of your contract in a lump sum. This right does not apply
to contracts sold to New Jersey residents.
Maximum allowable purchase payments** based on the age of you or the annuitant,
whoever is older, on the effective date of the contract:
For employees/advisors:
First year: Each subsequent year:
$ 100,000 for ages 86 to 90 $ 50,000 for ages 86-90
$2,000,000 up to age 85 $100,000 up to age 85
For other individuals:
First year: Each subsequent year:
$1,000,000 for ages 86 to 90 $100,000
$2,000,000 up to age 85
**These limits apply in total to all IDS Life of New York annuities you
own. We reserve the right to increase maximum limits. For qualified
annuities the qualified plan's limits on annual contributions also apply.
We reserve the right to not accept purchase payments allocated to the fixed
account for twelve months following either:
1. a partial surrender from the fixed account; or
2. a lump sum transfer from the fixed account to a subaccount.
<PAGE>
How to make purchase payments
How to make purchase payments
1 By letter Send your check along with your name and By letter contract
number to:
Regular mail:
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
Express mail:
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
2 By Scheduled payment plan
For employees/advisors only
We can help you set up:
o an automatic payroll deduction, salary reduction or other group
billing arrangement; or
o a bank authorization.
Charges
Contract administrative charge
We charge this fee for establishing and maintaining your records. We deduct $30
from the contract value on your contract anniversary at the end of each contract
year. We prorate this charge among the subaccounts and the fixed account in the
same proportion your interest in each account bears to your total contract
value.
We will waive this charge when your contract value, or total purchase payments
less any payments surrendered, is $50,000 or more on the current contract
anniversary.
If you surrender your contract, we will deduct the charge at the time of
surrender regardless of the contract value or purchase payments made. We cannot
increase the annual contract administrative charge and it does not apply after
annuity payouts begin or when we pay death benefits.
Mortality and expense risk fee
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee. The fee totals 0.55% of the average daily net assets on an
annual basis. This fee covers the mortality and expense risk that we assume.
Approximately two-thirds of this amount is for our assumption of mortality risk,
and one-third is for our assumption of expense risk. This fee does not apply to
the fixed account.
Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.
Expense risk arises because we cannot increase the contract administrative
charge and this charge may not cover our expenses. We would have to make up any
deficit from our general assets.
<PAGE>
The subaccounts pay us the mortality and expense risk fee they accrued as
follows:
o first, to the extent possible, the subaccounts pay this fee from any
dividends distributed from the funds in which they invest;
o then, if necessary, the funds redeem shares to cover any remaining fees
payable.
We may use any profits we realize from the subaccounts' payment to us of the
mortality and expense risk fee for any proper corporate purpose, including,
among others, payment of distribution (selling) expenses.
Other information on charges: AEFC makes certain custodial services available to
some custodial and trusteed pension and profit sharing plans and 401(k) plans
funded by our annuities. Fees for these services start at $30 per calendar year
per participant. AEFC will charge a termination fee for owners under age 59 1/2
(fee waived in case of death or disability).
Surrender Charge under Annuity Payout Plan E - Payouts for a specified period:
Under this payout plan, you can choose to take a withdrawal. The amount that you
can withdraw is the present value of any remaining variable payouts. The
discount rate we use in the calculation will be 5.05% if the assumed investment
rate is 3.5% and 7.15% if the assumed investment rate is 5%. The surrender
charge is equal to the difference in discount values using the above discount
rates and the assumed investment rate. In no event would your surrender charge
exceed 9%.
Possible group reductions: In some cases we may incur lower sales and
administrative expenses due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the contract administrative charge. However, we expect this
to occur infrequently.
Valuing Your Investment
We value your fixed account and subaccounts as follows:
Fixed Account: We value the amounts you allocated to the fixed account directly
in dollars. The fixed account value equals:
o the sum of your purchase payments and transfer amounts allocated to the
fixed account;
o plus interest credited;
o minus the sum of amounts surrendered and amounts transferred out; and
o minus any prorated contract administrative charge.
Subaccounts: We convert amounts you allocated to the subaccounts into
accumulation units. Each time you make a purchase payment or transfer amounts
into one of the subaccounts, we credit a certain number of accumulation units to
your contract for that subaccount. Conversely, each time you take a partial
surrender, transfer amounts out of a subaccount, or we assess a contract
administrative charge, we subtract a certain number of accumulation units from
your contract.
The accumulation units are the true measure of investment value in each
subaccount during the accumulation period. They are related to, but not the same
as, the net asset value of the fund in which the subaccount invests.
The dollar value of each accumulation unit can rise or fall daily depending on
the variable account expenses, performance of the fund and on certain fund
expenses. Here is how we calculate accumulation unit values:
<PAGE>
Number of units
To calculate the number of accumulation units for a particular subaccount, we
divide your investment after deduction of any premium taxes, by the current
accumulation unit value.
Accumulation unit value
The current accumulation unit value for each subaccount equals the last value
times the subaccount's current net investment factor.
Net investment factor
We determine the net investment factor by:
o adding the fund's current net asset value per share, plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee from the result.
Because the net asset value of the fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a
subaccount.
Factors that affect subaccount accumulation units
Accumulation units may change in two ways: in number and in value. Here are the
factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments you allocate to the subaccounts;
o transfers into or out of the subaccounts;
o partial surrenders; and/or
o prorated portions of the contract administrative charge.
Accumulation unit values will fluctuate due to:
o changes in funds' net asset value;
o dividends distributed to the subaccounts;
o capital gains or losses of funds;
o fund operating expenses; and/or
o mortality and expense risk fees.
Making the Most of Your Contract
Automated dollar-cost averaging
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative subaccount to
a more aggressive one, or to several others, or from the fixed account to one or
more subaccounts. There is no charge for dollar-cost averaging.
<PAGE>
This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
How dollar-cost averaging works
<TABLE>
<CAPTION>
How dollar-cost averaging works
<S> <C> <C> <C> <C>
By investing an Amount Accumulation unit Number of units
equal number of Month invested value purchased
dollars each month... Jan $100 $20 5.00
Feb 100 18 5.56
you automatically buy Mar 100 17 5.88
more units when the Apr 100 15 6.67
per unit market price May 100 16 6.25
is low... Jun 100 18 5.56
Jul 100 17 5.88
and fewer units when Aug 100 19 5.26
the per unit market Sept 100 21 4.76
price is high. Oct 100 20 5.00
</TABLE>
You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any subaccount will gain in value
nor will it protect against a decline in value if market prices fall. Because
dollar-cost averaging involves continuous investing, your success with this
strategy will depend upon your willingness to continue to invest regularly
through periods of low price levels. Dollar-cost averaging can be an effective
way to help meet your long-term goals. For specific features contact us.
Transferring money between accounts
You may transfer money from any one subaccount, or the fixed account, to another
subaccount before annuity payouts begin. (Certain restrictions apply to
transfers involving the fixed account.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in switching investments.
Transfer policies
o Before annuity payouts begin, you may transfer contract values between the
subaccounts, or from the subaccounts to the fixed account at any time.
However, if you made a transfer from the fixed account to the subaccounts,
you may not make a transfer from any subaccount back to the fixed account
until the next contract anniversary.
o You may transfer contract values from the fixed account to the subaccounts
once a year during a 31-day transfer period starting on each contract
anniversary (except for automated transfers, which can be set up at any
time for certain transfer periods subject to certain minimums).
o If we receive your request within 30 days before the contract anniversary
date, the transfer from the fixed account to the subaccounts will be
effective on the anniversary.
o If we receive your request on or within 30 days after the contract
anniversary date, the transfer from the fixed account to the subaccounts
will be effective on the valuation date we receive it.
<PAGE>
o We will not accept requests for transfers from the fixed account at any other
time.
o Once annuity payouts begin, you may not make transfers to or from the fixed
account, but you may make transfers once per contract year among the
subaccounts. During the annuity payout period, you cannot invest in more
than five subaccounts at any one time unless we agree otherwise.
How to request a transfer or surrender
1 By letter
Send your name, contract number, Social Security Number or
Taxpayer Identification Number and signed request for a
transfer or surrender to:
Regular mail:
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
<PAGE>
Express mail:
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Minimum amount
Transfers or
surrenders: $250 or entire account balance
Maximum amount
Transfers or
surrenders: Contract value
2 By automated transfers and automated partial surrenders
We can help you set up automated transfers among your
subaccounts or fixed account or partial surrenders from the
accounts.
You can startor stop this service by written request or
other method acceptable to us. You must allow 30 days for us
to change any instructions that are currently in place.
o Automated transfers from the fixed account to any one
of the subaccounts may not exceed an amount that, if
continued, would deplete the fixed account within 12
months.
o Automated surrenders may be restricted by applicable
law under some contracts.
o You may not make additional purchase payments if
automated partial surrenders are in effect.
o Automated partial surrenders may result in IRS taxes
and penalties on all or part of the amount surrendered.
Minimum amount
Transfers or
surrenders: $50
<PAGE>
Surrenders
You may surrender all or part of your contract at any time before annuity
payouts begin by sending us a written request or calling us. We will process
your surrender request on the valuation date we receive it. For total
surrenders, we will compute the value of your contract at the next accumulation
unit value calculated after we receive your request. We may ask you to return
the contract. You may have to pay IRS taxes and penalties (see "Taxes"). You
cannot make surrenders after annuity payouts begin except under Plan E (See "The
Annuity Payout Period - Annuity payout plans").
Surrender policies
If you have a balance in more than one account and you request a partial
surrender, we will withdraw money from all your subaccounts and/or the fixed
account in the same proportion as your value in each account correlates to your
total contract value, unless you request otherwise. The minimum contract value
after partial surrender is $600.
Receiving payment
By regular or express mail:
o payable to you;
o mailed to address of record.
NOTE: We will charge you a fee if you request express mail delivery.
By wire:
o request that payment be wired to your bank;
o bank account must be in the same ownership as your contract; and
o pre-authorization required.
For instructions, contact us.
Normally, we will send the payment within seven days after receiving your
request. However, we may postpone the payment if:
- -- the surrender amount includes a purchase payment check that has not
cleared;
- -- the NYSE is closed, except for normal holiday and weekend closings;
- -- trading on the NYSE is restricted, according to SEC rules;
- -- an emergency, as defined by SEC rules, makes it impractical to sell
securities or value the net assets of the accounts; or
- -- the SEC permits us to delay payment for the protection of security holders.
TSA -- Special Surrender Provisions
Participants in Tax-Sheltered Annuities: The Code imposes certain restrictions
on your right to receive early distributions from a TSA:
o Distributions attributable to salary reduction contributions (plus
earnings) made after Dec. 31, 1988, or to transfers or rollovers from other
contracts, may be made from the TSA only if:
-- you are at least age 59 1/2;
-- you are disabled as defined in the Code;
-- you separated from the service of the employer who purchased the
contract; or -- the distribution is because of your death.
<PAGE>
If you encounter a financial hardship (as defined by the Code), you may receive
a distribution of all contract values attributable to salary reduction
contributions made after Dec. 31, 1988, but not the earnings on them.
o Even though a distribution may be permitted under the above rules, it may
be subject to IRS taxes and penalties (see "Taxes").
o The employer must comply with certain nondiscrimination requirements for
certain types of contributions under a TSA contract to be excluded from
taxable income. You should consult your employer to determine whether the
nondiscrimination rules apply to you.
o The above restrictions on distributions do not affect the availability of
the amount credited to the contract as of Dec. 31, 1988. The restrictions
also do not apply to transfers or exchanges of contract value within the
contract, or to another registered variable annuity contract or investment
vehicle available through the employer.
o If the contract has a loan provision, the right to receive a loan as
described in detail in your contract.
Changing Ownership
You may change ownership of your nonqualified annuity at any time by completing
a change of ownership form we approve and sending it to our office. The change
will become binding upon us when we receive and record it. We will honor any
change of ownership request that we believe is authentic and we will use
reasonable procedures to confirm authenticity. If we follow these procedures, we
will not take any responsibility for the validity of the change.
If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")
If you have a qualified annuity, you may not sell, assign, transfer, discount or
pledge your contract as collateral for a loan, or as security for the
performance of an obligation or for any other purpose except as required or
permitted by the Code. However, if the owner is a trust or custodian, or an
employer acting in a similar capacity, ownership of a contract may be
transferred to the annuitant.
Benefits in Case of Death
We will pay the death benefit to your beneficiary upon the earlier of your death
or the annuitant's death. If a contract has more than one person as the owner,
we will pay benefits upon the first to die of any owner or the annuitant.
If you or the annuitant die before annuity payouts begin while this contract is
in force, we will pay the beneficiary as follows:
If both you and the annuitant are age 80 or younger on the date of death, the
beneficiary receives the greatest of:
o the contract value;
o purchase payments, minus any "adjusted partial surrenders"; or
o the contract value as of the most recent sixth contract anniversary, plus
any purchase payments paid and minus any "adjusted partial surrenders"
since that anniversary.
If either you or the annuitant are age 81 or older on the date of death, the
beneficiary receives the greater of:
o the contract value; or
o purchase payments minus any "adjusted partial surrenders."
<PAGE>
Adjusted partial surrenders: We calculate an "adjusted partial surrender" for
each partial surrender as the product of (a) times (b) where
(a) is the ratio of the amount of the partial surrender to the
contract value on the date of (but prior to) the partial
surrender; and
(b) is the death benefit on the date of (but prior to) the
partial surrender.
Example of death benefit calculation when the owner and annuitant are age 80 or
younger:
o The contract is purchased with a payment of $20,000 on Jan. 1, 2000.
o On Jan 1, 2006 (the 6th contract anniversary) the contract value has grown
to $30,000.
o March 1, 2006 the contract value has fallen to $28,000 at which point the
owner takes a $1,500 partial surrender, leaving a contract value of
$26,500.
<TABLE>
<CAPTION>
<S> <C>
The contract value on the most recent 6th contract anniversary: $30,000.00
plus any purchase payments paid since that anniversary: + 0.00
minus any "adjusted partial surrenders" taken since that anniversary calculated
as: $1,500 x $30,000
---------------- =
$28,000 - 1,607.14
-----------
for a death benefit of: $ 28,392.86
</TABLE>
If your spouse is sole beneficiary under a nonqualified annuity and you die
before the settlement date, your spouse may keep the contract as owner. To do
this your spouse must, within 60 days after we receive proof of death, give us
written instructions to keep the contract in force.
Under a qualified annuity, if the annuitant dies before the Code requires
distributions to begin, and the spouse is the only beneficiary, the spouse may
keep the contract as owner until the date on which the annuitant would have
reached age 70 1/2 or any other date permitted by the Code. To do this, the
spouse must give us written instructions within 60 days after we receive proof
of death.
Payments: Under a nonqualified annuity we will pay the beneficiary in a single
sum unless you give us other written instructions. We must fully distribute the
death benefit within five years of your death. However, the beneficiary may
receive payouts under any annuity payout plan available under this contract if:
o the beneficiary asks us in writing within 60 days after we receive proof of
death; and
o payouts begin no later than one year after your death, or other date as
permitted by the Code; and
o the payout period does not extend beyond the beneficiary's life or life
expectancy.
When paying the beneficiary, we will process the death claim on the valuation
date our death claim requirements are fulfilled. We will determine the
contract's value at the next accumulation unit value calculated after our death
claim requirements are fulfilled. We pay interest, if any, from the date of
death at a rate no less than required by law. We will mail payment to the
beneficiary within seven days after our death claim requirements are fulfilled.
Other rules may apply to qualified annuities. (See "Taxes.")
The Annuity Payout Period
As owner of the contract, you have the right to decide how and to whom annuity
payouts will be made starting at the settlement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements.
<PAGE>
The amount available for payouts under the plan you select is the contract value
on your settlement date (less any applicable premium tax).
You also decide whether we will make annuity payouts on a fixed or variable
basis, or a combination of fixed and variable. The amounts available to purchase
payouts under the plan you select is the contract value on your settlement date
(less any applicable premium tax). You may reallocate this contract value to the
fixed account to provide fixed dollar payouts and/or among the subaccounts to
provide variable annuity payouts. During the annuity payout period, you cannot
invest in more than five subaccounts at any one time unless we agree otherwise.
Amounts of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the accounts at settlement.
In addition, for variable payouts only, amounts depend on the investment
performance of the subaccounts you select. These payouts will vary from month to
month because the performance of the funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)
For information with respect to transfers between accounts after annuity payouts
begin, see "Making the Most of Your Contract -- Transfer policies."
Annuity table
The annuity table in your contract shows the amount of the first monthly payment
for each $1,000 of contract value according to the age and, when applicable, the
sex of the annuitant. (Where required by law, we will use a unisex table of
settlement rates.) The table assumes that the contract value is invested at the
beginning of the annuity payout period and earns a 5% rate of return, which is
reinvested and helps to support future payouts.
Substitution of 3.5% table
If you ask us at least 30 days before the settlement date, we will substitute an
annuity table based on an assumed 3.5% investment rate for the 5% table in the
contract. The assumed investment rate affects both the amount of the first
payout and the extent to which subsequent payouts increase or decrease. Using
the 5% table results in a higher initial payment, but later payouts will
increase more slowly when annuity unit values rise and decrease more rapidly
when they decline.
Annuity payout plans
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before contract values are used to purchase the
payout plan:
o Plan A -- Life annuity - no refund: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the
annuitant dies after we have made only one monthly payout, we will not make
any more payouts.
o Plan B -- Life annuity with five, 10 or 15 years certain: We make monthly
payouts for a guaranteed payout period of five, 10 or 15 years that you
elect. This election will determine the length of the payout period to the
beneficiary if the annuitant should die before the elected period expires.
We calculate the guaranteed payout period from the settlement date. If the
annuitant outlives the elected guaranteed payout period, we will continue
to make payouts until the annuitant's death.
<PAGE>
o Plan C -- Life annuity - installment refund: We make monthly payouts until
the annuitant's death, with our guarantee that payouts will continue for
some period of time. We will make payouts for at least the number of months
determined by dividing the amount applied under this option by the first
monthly payout, whether or not the annuitant is living.
o Plan D -- Joint and last survivor life annuity - no refund: We make monthly
payouts while both the annuitant and a joint annuitant are living. If
either annuitant dies, we will continue to make monthly payouts at the full
amount until the death of the surviving annuitant. Payouts end with the
death of the second annuitant.
o Plan E -- Payouts for a specified period: We make monthly payouts for a
specific payout period of 10 to 30 years that you elect. We will make
payouts only for the number of years specified whether the annuitant is
living or not. Depending on the selected time period, it is foreseeable
that an annuitant can outlive the payout period selected. During the payout
period, you can elect to have us determine the present value of any
remaining variable payouts and pay it to you in a lump sum. We determine
the present value of the remaining variable payouts which are assumed to
remain level. The discount rate we use in the calculation will vary between
5.05% and 7.15% depending on the applicable assumed investment rate. (See
"Charges - Surrender Charge under Annuity Payout Plan E".) You can also
take a portion of the discounted value once a year. If you do so, your
monthly payouts will be reduced by the proportion of your surrender to the
full discounted value. A 10% IRS penalty could apply if you take a
surrender. (See "Taxes".)
Restrictions for some qualified plans: If you purchased a qualified annuity, you
may be required to select a payout plan that provides for payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated beneficiary;
o for a period not exceeding the life expectancy of the annuitant; or
o for a period not exceeding the joint life expectancies of the annuitant and
a designated beneficiary.
You have the responsibility for electing a payout plan that complies with your
contract and with applicable law.
If we do not receive instructions: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's settlement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you allocated to the fixed account will provide fixed
dollar payouts and contract values that you allocated among the subaccounts will
provide variable annuity payouts.
If monthly payouts would be less than $20: We will calculate the amount of
monthly payouts at the time the contract value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the contract value to you in a lump sum or to change the
frequency of the payouts.
Death after annuity payouts begin
If you or the annuitant die after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.
Taxes
Generally, under current law, any increase in your contract value is taxable to
you only when you receive a payout or surrender (see detailed discussion below).
Any portion of the annuity payouts and any surrenders you request that represent
ordinary income are normally taxable. We will send you a tax information
reporting form for any year in which we made a taxable distribution according to
our records.
<PAGE>
Qualified annuities: We designed this contract for use with qualified retirement
plans. Special rules apply to these retirement plans. Your rights to benefits
may be subject to the terms and conditions of these retirement plans regardless
of the terms of the contract.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life and after your death. You should refer
to your retirement plan or adoption agreement or consult a tax advisor for more
information about your distribution rules.
Annuity payouts under nonqualified annuities: A portion of each payout will be
ordinary income and subject to tax, and a portion of each payout will be
considered a return of part of your investment and will not be taxed. All
amounts you receive after your investment in the contract is fully recovered
will be subject to tax.
Tax law requires that all nonqualified deferred annuities issued by the same
company (and possibly its affiliates) to the same owner during a calendar year
be taxed as a single, unified contract when you take distributions from any one
of those contracts.
Annuity payouts under qualified annuities: Under a qualified annuity, the entire
payout generally is includable as ordinary income and is subject to tax except
to the extent that contributions were made with after-tax dollars. If you or
your employer invested in your contract with deductible or pre-tax dollars as
part of a qualified retirement plan, such amounts are not considered to be part
of your investment in the contract and will be taxed when paid to you.
Surrenders: If you surrender part or all of your contract before your annuity
payouts begin, your surrender payment will be taxed to the extent that the value
of your contract immediately before the surrender exceeds your investment. You
also may have to pay a 10% IRS penalty for surrenders you make before reaching
age 59 1/2 unless certain exceptions apply. For qualified annuities, other
penalties may apply if you surrender your contract before your plan specifies
that you can receive payouts.
Death benefits to beneficiaries: The death benefit under a contract is not
tax-exempt. Any amount your beneficiary receives that represents previously
deferred earnings within the contract is taxable as ordinary income to the
beneficiary in the years he or she receives the payments.
Annuities owned by corporations, partnerships or trusts: For nonqualified
annuities any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax-deferred.
Penalties: If you receive amounts from your contract before reaching age 59 1/2,
you may have to pay a 10% IRS penalty on the amount includable in your ordinary
income. However, this penalty will not apply to any amount received by you or
your beneficiary:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal periodic
payments, made at least annually, over your life or life expectancy (or
joint lives or life expectancies of you and your beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except for
qualified annuities).
For a qualified annuity, other penalties or exceptions may apply if you
surrender your contract before your plan specifies that payouts can be made.
<PAGE>
Withholding, generally: If you receive all or part of the contract value, we may
deduct withholding against the taxable income portion of the payment. Any
withholding represents a prepayment of your tax due for the year. You take
credit for these amounts on your annual tax return.
If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial or full
surrender), we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.
Some states also impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.
Withholding from qualified annuities: If you receive directly all or part of the
contract value from a qualified annuity (except an IRA or SEP), mandatory 20%
federal income tax withholding (and possibly state income tax withholding)
generally will be imposed at the time we make payout. This mandatory withholding
is in place of the elective withholding discussed above. This mandatory
withholding will not be imposed if:
o instead of receiving the distribution check, you elect to have the
distribution rolled over directly to an IRA or another eligible plan;
o the payout is one in a series of substantially equal periodic payouts, made
at least annually, over your life or life expectancy (or the joint lives or
life expectancies of you and your designated beneficiary) or over a
specified period of 10 years or more; or
o the payout is a minimum distribution required under the Code.
Payments we make to a surviving spouse instead of being directly rolled over to
an IRA also may be subject to mandatory 20% income tax withholding.
State withholding also may be imposed on taxable distributions.
Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified
annuity without receiving adequate consideration, the transfer is a gift and
also may be a surrender for federal income tax purposes. If the gift is a
currently taxable event for income tax purposes, the original owner will be
taxed on the amount of deferred earnings at the time of the transfer and also
may be subject to the 10% IRS penalty discussed earlier. In this case, the new
owner's investment in the contract will be the value of the contract at the time
of the transfer.
Collateral assignment of a nonqualified annuity: If you collaterally assign or
pledge your contract, earnings on purchase payments you made after Aug. 13, 1982
will be taxed to you like a surrender.
Important: Our discussion of federal tax laws is based upon our understanding of
current interpretations of these laws. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax advisor if you have any questions about taxation of your contract.
Tax qualification: We intend that the contract qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract are to be
interpreted to ensure or maintain such tax qualification, in spite of any other
provisions of the contract. We reserve the right to amend the contract to
reflect any clarifications that may be needed or are appropriate to maintain
such qualification or to conform the contract to any applicable changes in the
tax qualification requirements. We will send you a copy of any amendments.
<PAGE>
Voting Rights
As a contract owner with investments in the subaccounts, you may vote on
important fund policies until annuity payouts begin. Once they begin, the person
receiving them has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes you have is determined by
applying your percentage interest in each subaccount to the total number of
votes allowed to the subaccount.
After annuity payouts begin, the number of votes you have is equal to:
o the reserve held in each subaccount for your contract; divided by o the net
asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each subaccount. We will send notice of
shareholders' meetings, proxy materials and a statement of the number of votes
to which the voter is entitled. We will vote shares for which we have not
received instructions in the same proportion as the votes for which we received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we received instructions.
Substitution of Investments
We may substitute the funds in which the subaccounts invest if:
o laws or regulations change,
o existing funds become unavailable, or
o in our judgment, the funds no longer are suitable for the subaccounts.
If any of these situations occur and if we believe it is in the best interest of
persons having voting rights under the contract, we have the right to substitute
funds other than those currently listed in this prospectus for other funds.
We may also:
o add new subaccounts;
o combine any two or more subaccounts;
o add subaccounts investing in additional funds;
o transfer assets to and from the subaccounts or the variable
account; and
o eliminate or close any subaccounts.
In the event of substitution or any of these changes, we may amend the contract
and take whatever action is necessary and appropriate without your consent or
approval. However, we will not make any substitution or change without the
necessary approval of the SEC and state insurance departments. We will notify
you of any substitution or change.
<PAGE>
About the Service Providers
Principal underwriter
American Express Financial Advisors Inc. (AEFA) is the principal underwriter for
the contracts. Its offices are located at IDS Tower 10, Minneapolis, MN
55440-0010. AEFA is a wholly-owned subsidiary of AEFC. AEFC is a wholly-owned
subsidiary of American Express Company, a financial services company
headquartered in New York City.
The AEFC family of companies offers not only insurance and annuities, but also
mutual funds, investment certificates and a broad range of financial management
services. AEFA serves individuals and businesses through its nationwide network
of more than 180 offices and 9200 advisors.
Issuer
IDS Life of New York issues the contracts. IDS Life of New York is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
AEFC is a wholly-owned subsidiary of American Express Company, a financial
services company headquartered in New York City.
IDS Life of New York is a stock life insurance company organized in 1972 under
the laws of the State of New York and is located at 20 Madison Avenue Extension,
Albany, New York 12203. Its mailing address is P.O. Box 5144, Albany, NY 12205.
IDS Life of New York conducts a conventional life insurance business.
IDS Life of New York pays total commissions of up to 7.0% of the total purchase
payments it receives on the contracts. We pay a portion of this total commission
to district managers and field vice presidents of the selling representative
Legal proceedings
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which we do business involving insurers' sales practices,
alleged agent misconduct, failure to properly supervise agents, and other
matters. We, like other life and health insurers, from time to time are involved
in such litigation. On October 13, 1998, an action entitled Richard W. And
Elizabeth J. Thoresen vs. American Express Financial Corporation, American
Centurion Life Assurance Company, American Enterprise Life Insurance Company,
American Partners life Insurance Company, IDS Life Insurance Company and IDS
Life Insurance Company of New York was commenced in Minnesota state court. The
action was brought by individuals who purchased an annuity in a qualified plan.
They allege that the sale of annuities in tax-deferred contributory retirement
investment plans (e.g., IRAs) is never appropriate. The plaintiffs purport to
represent a class consisting of all persons who made similar purchases. The
plaintiffs seek damages in an unspecified amount. We also are defendants in
various other lawsuits. In our opinion, none of these lawsuits will have a
material adverse effect on our financial condition.
Year 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of IDS Life of New York and
the Variable Account. All of the major systems used by IDS Life of New York and
by the Variable Account are maintained by AEFC and are utilized by multiple
subsidiaries and affiliates of AEFC. IDS Life of New York's and the Variable
Account's businesses are heavily dependent upon AEFC's computer systems and have
significant interactions with systems of third parties.
<PAGE>
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps have been taken to resolve potential problems including
modification to existing software and the purchase of new software. AEFC's
target date for substantially completing its program of corrective measures on
internal business critical systems was Dec. 31, 1998. As of June 30, 1999, AEFC
completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. The Year 2000 readiness of
unaffiliated investment managers and other third parties whose system failures
could have an impact on IDS Life of New York's and the Variable Account's
operations continues to be evaluated. The failure of external parties to resolve
their own Year 2000 issues in a timely manner could result in a material
financial risk to AEFC, IDS Life of New York or the Variable Account.
AEFC's Year 2000 project includes establishing Year 2000 contingency plans for
all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. These plans are being amended to include specific Year 2000
considerations and will continue to be refined throughout 1999 as additional
information related to potential Year 2000 exposure is gathered.
[This information will be updated so that it is current as of the time the
product becomes effective.]
<PAGE>
Table of Contents of the Statement of Additional Information
Performance Information p.3
Calculating Annuity Payouts p.6
Rating Agencies p.8
Principal Underwriter p.8
Independent Auditors p.8
Financial Statements
<PAGE>
Please check the appropriate box to receive a copy of the Statement of
Additional Information for:
- -- American Express Retirement Advisor Variable AnnuitySM - Band 3
- -- American Express Variable Portfolio Funds
- -- AIM Variable Insurance Funds, Inc.
- -- American Century Variable Portfolios, Inc.
- -- Fidelity Variable Insurance Products Funds - Service Class
- -- Franklin Templeton Variable Insurance Products Trust - Class 2
- -- Goldman Sachs Variable Insurance Trust (VIT)
- -- Lazard Retirement Series, Inc.
- -- Putnam Variable Trust
- -- Royce Capital Fund
- -- Third Avenue Variable Series Trust
- -- Wanger Advisors Trust
- -- Warburg Pincus Trust
Mail your request to:
IDS Life of New York Annuity Service
IDS Life Insurance Company of New York
Box 5144
Albany, NY 12205
We will mail your request to:
Your name _____________________________________________
Address _______________________________________________
City _____________________ State _________ Zip ________
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITYSM
IDS Life of New York Variable Annuity Account
__________, 1999
IDS Life of New York Variable Annuity Account is a separate account established
and maintained by IDS Life Insurance Company of New York (IDS Life of New York).
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained by writing or calling us at the address and telephone number below. The
prospectus is incorporated in this SAI by reference.
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
800-541-2251
<PAGE>
TABLE OF CONTENTS
Performance Information....................................................p. 3
Calculating Annuity Payouts.............................................. p. 11
Rating Agencies...........................................................p. 13
Principal Underwriter.....................................................p. 13
Independent Auditors......................................................p. 13
Financial Statements
<PAGE>
PERFORMANCE INFORMATION
The subaccounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the subaccounts in
terms of the average annual compounded rate of return of a hypothetical
investment in the contract over a period of one, five and ten years (or, if
less, up to the life of the subaccounts), calculated according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. Currently we do not show any performance information
for the subaccounts because they are new and have not had any activity to date.
However, we show performance from the commencement date of the funds as if the
contract existed at that time, which it did not. Past performance does not
guarantee future results.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities With a Surrender For Periods
Ending _____________
Performance Since Commencement of the Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
- ---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
BC7 Blue Chip Advantage Fund+ % % % %
BD7 Bond Fund (10/81)**
CR7 Capital Resource Fund (10/81)
CM7 Cash Management Fund (10/81)
DE7 Diversified Equity Income Fund+
EI7 Extra Income Fund (5/96)
FI7 Federal Income Fund+
GB7 Global Bond Fund (5/96)
GR7 Growth Fund+
IE7 International Fund (1/92)
MF7 Managed Fund (4/86)
ND7 New Dimensions Fund (5/96)
SC7 Small Cap Advantage Fund +
SA7 Strategy Aggressive Fund (1/92)
AIM V.I.
7CA Capital Appreciation Fund (5/93)
7CD Capital Development Fund (5/98)
American Century
7IF VP International Fund (5/94)
7VA VP Value Fund (5/96)
FIDELITY VIP
7GI III Growth & Income Portfolio
(Service Class) (12/96)
7MP III Mid Cap Portfolio (Service
Class) (12/98)
7OS Overseas Portfolio (Service Class)
(12/87)
FRANKLIN TEMPLETON VIP
7RE Franklin Real Estate Fund - Class 2
(1/89)***
7IS Templeton International Smaller
Companies Fund - Class 2 (5/96)***
7SI Franklin Value Securities Fund -
Class 2 (5/98)***
GOLDMAN SACHS Variable Insurance Trust
(VIT)
7SE CORESM Small Cap Equity Fund (2/98)
7UE CORESM U.S. Equity Fund (2/98)
7MC Mid Cap Value Fund (4/98)
LAZARD RETIREMENT SERIES, INC.
7IP International Equity Portfolio (9/98)
PUTNAM VARIABLE TRUST
7IN Putnam VT International New
Opportunities Fund - Class IB Shares
(4/98)
7VS Putnam VT Vista Fund - Class IB
Shares (1/99)
ROYCE
7MI Micro-Cap Portfolio (12/96)
THIRD AVENUE VARIABLE SERIES TRUST
7SV Value Portfolio +
WANGER
7IT International Small Cap (5/95)
7SP U.S. Small Cap (5/95)
WARBURG PINCUS TRUST
7EG Emerging Growth Portfolio +
</TABLE>
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 0.95% mortality and expense risk fee and
applicable surrender charges associated with the seven-year surrender charge
schedule.
+ Fund had not commenced operations as of Dec. 31, 1998.
**(Commencement date of the Funds)
***Because Class 2 shares were not offered until Jan. 6, 1999, performance shown
represents Class 1 shares. Although invested in the same portfolio of securities
as Class 1, Class 2's standardized performance will differ because of Class 2's
additional 12b-1 fee expense which affects all performance after the inception
of Class 2. Figures assume reinvestment of dividends and capital gains.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Nonqualified Annuities Without Surrender For Periods
Ending ________________
Performance Since Commencement of the Fund*
Performance Since Commencement of the Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
- ---------- ------------- ------ ------- -------- ------------
d AXPSM VARIABLE PORTFOLIO
BC7 Blue Chip Advantage Fund+ % % % %
BD7 Bond Fund (10/81)**
CR7 Capital Resource Fund (10/81)
CM7 Cash Management Fund (10/81)
DE7 Diversified Equity Income Fund+
EI7 Extra Income Fund (5/96)
FI7 Federal Income Fund+
GB7 Global Bond Fund (5/96)
GR7 Growth Fund+
IE7 International Fund (1/92)
MF7 Managed Fund (4/86)
ND7 New Dimensions Fund (5/96)
SC7 Small Cap Advantage Fund+
SA7 Strategy Aggressive Fund (1/92)
AIM V.I.
7CA Capital Appreciation Fund (5/93)
7CD Capital Development Fund (5/98)
American Century
7IF VP International Fund (5/94)
7VA VP Value Fund (5/96)
FIDELITY VIP
7GI III Growth & Income Portfolio
(Service Class) (12/96)
7MP III Mid Cap Portfolio (Service
Class) (12/98)
7OS Overseas Portfolio (Service Class)
(12/87)
FRANKLIN TEMPLETON VIP
7RE Franklin Real Estate Fund - Class 2
(1/89)***
7IS Templeton International Smaller
Companies Fund - Class 2 (5/96)***
7SI Franklin Value Securities Fund -
Class 2 (5/98)***
GOLDMAN SACHS VARIABLE INSURANCE TRUST
(VIT)
7SE CORESM Small Cap Equity Fund (2/98)
7UE CORESM U.S. Equity Fund (2/98)
7MC Mid Cap Value Fund (4/98)
LAZARD RETIREMENT SERIES, INC.
7IP International Equity Portfolio (9/98)
PUTNAM VARIABLE TRUST
7IN Putnam VT International New
Opportunities Fund - Class IB Shares
(4/98)
7VS Putnam VT Vista Fund - Class IB
Shares (1/99)
ROYCE
7MI Micro-Cap Portfolio (12/96)
THIRD AVENUE VARIABLE SERIES TRUST
7SV Value Portfolio+
WANGER
7IT International Small Cap (5/95)
7SP U.S. Small Cap (5/95)
WARBURG PINCUS TRUST
7EG Emerging Growth Portfolio+
*Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.95% mortality and expense risk fee.
+ Fund had not commenced operations as of Dec. 31, 1998.
**(Commencement date of the Funds)
***Because Class 2 shares were not offered until Jan. 6, 1999, performance shown
represents Class 1 shares. Although invested in the same portfolio of securities
as Class 1, Class 2's standardized performance will differ because of Class 2's
additional 12b-1 fee expense which affects all performance after the inception
of Class 2. Figures assume reinvestment of dividends and capital gains.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities With Surrender For Periods
Ending ________________
Performance Since Commencement of the Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
- ---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
BC8 Blue Chip Advantage Fund+ % % % %
BD8 Bond Fund (10/81)**
CR8 Capital Resource Fund (10/81)
CM8 Cash Management Fund (10/81)
DE8 Diversified Equity Income Fund+
EI8 Extra Income Fund (5/96)
FI8 Federal Income Fund+
GB8 Global Bond Fund (5/96)
GR8 Growth Fund+
IE8 International Fund (1/92)
MF8 Managed Fund (4/86)
ND8 New Dimensions Fund (5/96)
SC8 Small Cap Advantage Fund+
SA8 Strategy Aggressive Fund (1/92)
AIM V.I.
8CA Capital Appreciation Fund (5/93)
8CD Capital Development Fund (5/98)
American Century
8IF VP International Fund (5/94)
8VA VP Value Fund (5/96)
FIDELITY VIP
8GI III Growth & Income Portfolio
(Service Class) (12/96)
8MP III Mid Cap Portfolio (Service
Class) (12/98)
8OS Overseas Portfolio (Service Class)
(12/87)
FRANKLIN TEMPLETON VIP
8RE Franklin Real Estate Fund - Class 2
(1/89)***
8IS Templeton International Smaller
Companies Fund - Class 2 (5/96)***
8SI Franklin Value Securities Fund -
Class 2 (5/98)***
GOLDMAN SACHS VARIABLE INSURANCE TRUST
(VIT)
8SE CORESM Small Cap Equity Fund (2/98)
8UE CORESM U.S. Equity Fund (2/98)
8MC Mid Cap Value Fund (4/98)
LAZARD RETIREMENT SERIES, INC.
8IP International Equity Portfolio (9/98)
PUTNAM VARIABLE TRUST
8IN Putnam VT International New
Opportunities Fund - Class IB Shares
(4/98)
8VS Putnam VT Vista Fund - Class IB
Shares (1/99)
ROYCE
8MI Micro-Cap Portfolio (12/96)
THIRD AVENUE VARIABLE SERIES TRUST
8SV Value Portfolio+
WANGER
8IT International Small Cap (5/95)
8SP U.S. Small Cap (5/95)
WARBURG PINCUS TRUST
8EG Emerging Growth Portfolio+
*Current applicable charges deducted from fund performance include a $30
contract administrative charge, a 0.75% mortality and expense risk fee and
applicable surrender charges associated with the seven-year surrender charge
schedule. + Fund had not commenced operations as of Dec. 31, 1998.
**(Commencement date of the Funds) ***Because Class 2 shares were not offered
until Jan. 6, 1999, performance shown represents Class 1 shares. Although
invested in the same portfolio of securities as Class 1, Class 2's standardized
performance will differ because of Class 2's additional 12b-1 fee expense which
affects all performance after the inception of Class 2. Figures assume
reinvestment of dividends and capital gains.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Qualified Annuities Without Surrender For Periods
Ending ________________
Performance Since Commencement of the Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
- ---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
BC8 Blue Chip Advantage Fund+ % % % %
BD8 Bond Fund (10/81)**
CR8 Capital Resource Fund (10/81)
CM8 Cash Management Fund (10/81)
DE8 Diversified Equity Income Fund+
EI8 Extra Income Fund (5/96)
FI8 Federal Income Fund+
GB8 Global Bond Fund (5/96)
GR8 Growth Fund+
IE8 International Fund (1/92)
MF8 Managed Fund (4/86)
ND8 New Dimensions Fund (5/96)
SC8 Small Cap Advantage Fund+
SA8 Strategy Aggressive Fund (1/92)
AIM V.I.
8CA Capital Appreciation Fund (5/93)
8CD Capital Development Fund (5/98)
American Century
8IF VP International Fund (5/94)
8VA VP Value Fund (5/96)
FIDELITY VIP
8GI III Growth & Income Portfolio
(Service Class) (12/96)
8MP III Mid Cap Portfolio (Service
Class) (12/98)
8OS Overseas Portfolio (Service Class)
(12/87)
FRANKLIN TEMPLETON VIP
8RE Franklin Real Estate Fund - Class 2
(1/89)***
8IS Templeton International Smaller
Companies Fund - Class 2 (5/96)***
8SI Franklin Value Securities Fund -
Class 2 (5/98)***
GOLDMAN SACHS VARIABLE INSURANCE TRUST
(VIT)
8SE CORESM Small Cap Equity Fund (2/98)
8UE CORESM U.S. Equity Fund (2/98)
8MC Mid Cap Value Fund (4/98)
LAZARD RETIREMENT SERIES, INC.
8IP International Equity Portfolio (9/98)
PUTNAM VARIABLE TRUST
8IN Putnam VT International New
Opportunities Fund - Class IB Shares
(4/98)
8VS Putnam VT Vista Fund - Class IB
Shares (1/99)
ROYCE
8MI Micro-Cap Portfolio (12/96)
THIRD AVENUE VARIABLE SERIES TRUST
8SV Value Portfolio+
WANGER
8IT International Small Cap (5/95)
8SP U.S. Small Cap (5/95)
WARBURG PINCUS TRUST
8EG Emerging Growth Portfolio+
*Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.75% mortality and expense risk fee.
+ Fund had not commenced operations as of Dec. 31, 1998.
**(Commencement date of the Funds)
***Because Class 2 shares were not offered until Jan. 6, 1999, performance shown
represents Class 1 shares. Although invested in the same portfolio of securities
as Class 1, Class 2's standardized performance will differ because of Class 2's
additional 12b-1 fee expense which affects all performance after the inception
of Class 2. Figures assume reinvestment of dividends and capital gains.
</TABLE>
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in the value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute cumulative total return by using the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period, at the
end of the period (or fractional portion thereof).
Total return figures reflect the deduction of the surrender charge which assumes
you withdraw the entire contract value at the end of the one, five and ten year
periods (or, if less, up to the life of the subaccount). We also may show
performance figures without the deduction of a surrender charge. In addition,
total return figures reflect the deduction of all other applicable charges
including the contract administrative charge and mortality and expense risk fee.
Annualized Calculation of Yield for Subaccounts Investing in Money Market Funds
Annualized Simple Yield
For the subaccounts investing in money market funds, we base quotations of
simple yield on:
(a) the change in the value of a hypothetical subaccount (exclusive of
capital changes and income other than investment income) at the
beginning of a particular seven-day period;
(b) less a pro rata share of the subaccount expenses accrued over the
period;
(c) dividing this difference by the value of the subaccount at the
beginning of the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The subaccount's value includes:
o any declared dividends,
o the value of any shares purchased with dividends paid during the period,
and
o any dividends declared for such shares.
It does not include:
o the effect of any applicable surrender charge, or
o any realized or unrealized gains or losses.
Annualized Compound Yield
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1)365/7] -1
<PAGE>
You must consider (when comparing an investment in subaccounts investing in
money market funds with fixed annuities) that fixed annuities often provide an
agreed-to or guaranteed yield for a stated period of time, whereas the
subaccount's yield fluctuates. In comparing the yield of the subaccount to a
money market fund, you should consider the different services that the contract
provides.
Annualized Yield for Subaccounts Investing in Income Funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units outstanding
during the period that were entitled to receive dividends
d = the maximum offering price per accumulation unit on the last
day of the period
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which it invests and from dividends declared and paid by the fund,
which are automatically invested in shares of the fund.
The yield on the subaccount's accumulation unit may fluctuate daily and does not
provide a basis for determining future yields.
Independent rating or statistical services or publishers or publications such as
those listed below may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare.
The Bank Rate Monitor National Index, Barron's, Business Week, CDA
Technologies, Donoghue's Money Market Fund Report, Financial Services
Week, Financial Times, Financial World, Forbes, Fortune, Global
Investor, Institutional Investor, Investor's Daily, Kiplinger's
Personal Finance, Lipper Analytical Services, Money, Morningstar,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal
Investor, Stanger Report, Sylvia Porter's Personal Finance, USA Today,
U.S. News and World Report, The Wall Street Journal and Wiesenberger
Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
The Variable Account
We do the following calculations separately for each of the subaccounts of the
variable account. The separate monthly payouts, added together, make up your
total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your contract as of the valuation date that
falls on (or closest to the valuation date that falls before) the seventh
calendar day before the settlement date and then deduct any applicable
premium tax; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
<PAGE>
The annuity table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as described below.
Annuity Units: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date that falls on (or
closest to the valuation date that falls before) the seventh calendar day before
the settlement date. The number of units in your subaccount is fixed. The value
of the units fluctuates with the performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date that falls on (or closest to
the valuation date that falls before) the seventh calendar day before the
payout is due; by
o the fixed number of annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each subaccount. To
calculate later values we multiply the last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor.
The purpose of the neutralizing factor is to offset the effect of the assumed
rate built into the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor:
We determine the net investment factor by:
o adding the fund's current net asset value per share plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee from the result.
Because the net asset value of the fund may fluctuate, the net investment factor
may be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable subaccount.
The Fixed Account
We guarantee your fixed annuity payout amounts. Once calculated, your payout
will remain the same and never change. To calculate your annuity payouts we:
o take the value of your fixed account at the settlement date or the date you
selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your contract.
<PAGE>
RATING AGENCIES
The following chart reflects the ratings given to us by independent rating
agencies. These agencies evaluate the financial soundness and claims-paying
ability of insurance companies based on a number of different factors. This
information does not relate to the management or performance of the subaccounts
of the contract. This information relates only to the fixed account and reflects
our ability to make annuity payouts and to pay death benefits and other
distributions from the contract.
Rating Agency Rating
A.M. Best A+
(Superior)
-----------------------
Duff & Phelps AAA
-----------------------
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the contract is American Express Financial
Advisors, Inc. (AEFA) which offers the contract on a continuous basis.
The contract is new and, therefore, we have not received any surrender charges
or paid any commissions.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402)
independent auditors, as stated in their report appearing herein.
FINANCIAL STATEMENTS
(to be filed by amendment)
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
AMERICAN EXPRESS RETIREMENT ADVISOR VARIABLE ANNUITYSM -BAND 3
IDS Life of New York Variable Annuity Account
_______________, 1999
IDS Life of New York Variable Annuity Account is a separate account established
and maintained by IDS Life Insurance Company of New York (IDS Life of New York).
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained by writing or calling us at the address and telephone number below. The
prospectus is incorporated in this SAI by reference.
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
800-541-2251
<PAGE>
American Express Retirement Advisor Variable Annuity-Band 3
IDS Life of New York Variable Annuity Account
TABLE OF CONTENTS
Performance Information...........................p. 3
Calculating Annuity Payouts.......................p. 6
Rating Agencies...................................p. 8
Principal Underwriter.............................p. 8
Independent Auditors..............................p. 8
Financial Statements
<PAGE>
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
The subaccounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the subaccounts in
terms of the average annual compounded rate of return of a hypothetical
investment in the contract over a period of one, five and ten years (or, if
less, up to the life of the subaccounts), calculated according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. Currently we do not show any performance information
for the subaccounts because they are new and have not had any activity to date.
However, we show performance from the commencement date of the funds as if the
contract existed at that time, which it did not. Past performance does not
guarantee future results.
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return For Periods Ending _____________
Performance Since Commencement of the Fund*
<S> <C> <C> <C> <C> <C>
Since
Subaccount Investing In: 1 Year 5 Years 10 Years Commencement
- ---------- ------------- ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
BC9 Blue Chip Advantage Fund+ % % % %
BD9 Bond Fund (10/81)**
CR9 Capital Resource Fund (10/81)
CM9 Cash Management Fund (10/81)
DE9 Diversified Equity Income Fund+
EI9 Extra Income Fund (5/96)
FI9 Federal Income Fund+
GB9 Global Bond Fund (5/96)
GR9 Growth Fund+
IE9 International Fund (1/92)
MF9 Managed Fund (4/86)
ND9 New Dimensions Fund (5/96)
SC9 Small Cap Advantage Fund+
SA9 Strategy Aggressive Fund (1/92)
AIM V.I.
9CA Capital Appreciation Fund (5/93)
9CD Capital Development Fund (5/98)
American Century
9IF VP International Fund (5/94)
9VA VP Value Fund (5/96)
FIDELITY VIP
9GI III Growth & Income Portfolio
(Service Class) (12/96)
9MP III Mid Cap Portfolio (Service
Class) (12/98)
9OS Overseas Portfolio (Service Class)
(12/87)
FRANKLIN TEMPLETON VIP
9RE Franklin Real Estate Fund - Class 2
(1/89)***
9IS Templeton International Smaller
Companies Fund - Class 2 (5/96)***
9SI Franklin Value Securities Fund -
Class 2 (5/98)***
GOLDMAN SACHS VARIABLE INSURANCE TRUST
(VIT)
9SE CORESM Small Cap Equity Fund (2/98)
9UE CORESM U.S. Equity Fund (2/98)
9MC Mid Cap Value Fund (4/98)
LAZARD RETIREMENT SERIES, INC.
9IP International Equity Portfolio (9/98)
PUTNAM VARIABLE TRUST
9IN Putnam VT International New
Opportunities Fund - Class IB Shares
(4/98)
9VS Putnam VT Vista Fund - Class IB
Shares (1/99)
ROYCE
9MI Micro-Cap Portfolio (12/96)
THIRD AVENUE VARIABLE SERIES TRUST
9SV Value Portfolio+
WANGER
9IT International Small Cap (5/95)
9SP U.S. Small Cap (5/95)
WARBURG PINCUS TRUST
9EG Emerging Growth Portfolio+
</TABLE>
* Current applicable charges deducted from fund performance include a $30
contract administrative charge and a 0.55% mortality and expense risk fee.
+ Fund had not commenced operations as of Dec. 31, 1998.
** (Commencement date of the Funds)
*** Because Class 2 shares were not offered until Jan. 6, 1999, performance
shown represents Class 1 shares. Although invested in the same portfolio of
securities as Class 1, Class 2's standardized performance will differ
because of Class 2's additional 12b-1 fee expense which affects all
performance after the inception of Class 2. Figures assume reinvestment of
dividends and capital gains.
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in the value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute cumulative total return by using the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period, at the
end of the period (or fractional portion thereof).
All total return figures reflect the deduction of all applicable charges
including the contract administrative charge and mortality and expense risk fee.
Annualized Calculation of Yield for Subaccounts Investing in Money Market Funds
Annualized Simple Yield
For the subaccounts investing in money market funds, we base quotations of
simple yield on:
(a) the change in the value of a hypothetical subaccount (exclusive
of capital changes and income other than investment income) at
the beginning of a particular seven-day period;
(b) less a pro rata share of the subaccount expenses accrued over the
period;
(c) dividing this difference by the value of the subaccount at the
beginning of the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The subaccount's value includes:
o any declared dividends,
o the value of any shares purchased with dividends paid during the period,
and
o any dividends declared for such shares.
It does not include any realized or unrealized gains or losses.
Annualized Compound Yield
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1)365/7] -1
<PAGE>
You must consider (when comparing an investment in subaccounts investing in
money market funds with fixed annuities) that fixed annuities often provide an
agreed-to or guaranteed yield for a stated period of time, whereas the
subaccount's yield fluctuates. In comparing the yield of the subaccount to a
money market fund, you should consider the different services that the contract
provides.
Annualized Yield for Subaccounts Investing in Income Funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)6 - 1]
---
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends
d = the maximum offering price per accumulation unit on the
last day of the period
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which it invests and from dividends declared and paid by the fund,
which are automatically invested in shares of the fund.
The yield on the subaccount's accumulation unit may fluctuate daily and does not
provide a basis for determining future yields.
Independent rating or statistical services or publishers or publications such as
those listed below may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare.
The Bank Rate Monitor National Index, Barron's, Business Week, CDA
Technologies, Donoghue's Money Market Fund Report, Financial Services
Week, Financial Times, Financial World, Forbes, Fortune, Global
Investor, Institutional Investor, Investor's Daily, Kiplinger's
Personal Finance, Lipper Analytical Services, Money, Morningstar,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal
Investor, Stanger Report, Sylvia Porter's Personal Finance, USA Today,
U.S. News and World Report, The Wall Street Journal and Wiesenberger
Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
The Variable Account
We do the following calculations separately for each of the subaccounts of the
variable account. The separate monthly payouts, added together, make up your
total variable annuity payout.
<PAGE>
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your contract as of the valuation date that
falls on (or closest to the valuation date that falls before) the seventh
calendar day before the settlement date and then deduct any applicable
premium tax; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
The annuity table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as described below.
Annuity Units: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date that falls on (or
closest to the valuation date that falls before) the seventh calendar day before
the settlement date. The number of units in your subaccount is fixed. The value
of the units fluctuates with the performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date that falls on (or closest to
the valuation date that falls before) the seventh calendar day before the
payout is due; by
o the fixed number of annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each subaccount. To
calculate later values we multiply the last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor.
The purpose of the neutralizing factor is to offset the effect of the assumed
rate built into the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor:
We determine the net investment factor by:
o adding the fund's current net asset value per share plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee from the result.
Because the net asset value of the fund may fluctuate, the net investment factor
may be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable subaccount.
The Fixed Account
We guarantee your fixed annuity payout amounts. Once calculated, your payout
will remain the same and never change. To calculate your annuity payouts we:
o take the value of your fixed account at the settlement date or the date you
selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
<PAGE>
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your contract.
RATING AGENCIES
The following chart reflects the ratings given to us by independent rating
agencies. These agencies evaluate the financial soundness and claims-paying
ability of insurance companies based on a number of different factors. This
information does not relate to the management or performance of the subaccounts
of the contract. This information relates only to the fixed account and reflects
our ability to make annuity payouts and to pay death benefits and other
distributions from the contract.
Rating Agency Rating
A.M. Best A+
(Superior)
-----------------------
Duff & Phelps AAA
-----------------------
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the contract is American Express Financial
Advisors Inc. (AEFA) which offers the contract on a continuous basis.
The contract is new and, therefore, we have not received any surrender charges
or paid any commissions.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN
55402), independent auditors, as stated in their report appearing herein.
FINANCIAL STATEMENTS
(to be filed by amendment)
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial statements included in Part B of this Registration Statement:
To be filed by amendment.
(b) Exhibits:
1.1 Consent in writing in lieu of Meeting of IDS Life of New York establishing
the IDS Life of New York Flexible Portfolio Annuity Account dated April 17,
1996, filed electronically as Exhibit 1 to Registrant's Initial
Registration Statement No. 333-03867 is incorporated herein by reference.
1.2 Consent in writing in Lieu of Meeting of IDS Life of New York establishing
105 additional subaccounts within the separate account dated November 19,
1999 is filed electronically herewith.
2. Not applicable.
3. Not applicable.
4.1 Form of Deferred Annuity Contract to be filed by amendment.
5. Form of Variable Annuity Application to be filed by amendment.
6.1 Certificate of Incorporation of IDS Life dated July 24, 1957, filed
electronically as Exhibit 6.1 to Registrant's Initial Registration
Statement No. 33-62407 is incorporated herein by reference.
6.2 Copy of Amended By-Laws of IDS Life of New York dated May 1992, filed
electronically as Exhibit 6.2 to Registrant's Initial Registration
Statement No. 333-03867 is incorporated herein by reference.
<PAGE>
7. Not applicable.
8. Participation Agreements to be filed by amendment.
9. Opinion of counsel and consent to its use as the legality of the securities
being registered to be filed by amendment.
10. Consent of Independent Auditors to be filed by amendment.
11. None.
12. Not applicable.
13. Copy of schedule for computation of each performance quotation provided in
the Registration Statement in response to Item 21, to be filed by
Amendment.
14. Not applicable.
15. Power of Attorney to sign this Registration Statement dated April 14, 1999,
filed electronically as Exhibit 14 to Post-Effective Amendment No.3 to
Registration Statement No. 333-03867, filed on or about April 28, 1999, is
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company of New York)
Name Principal Business Address Positions and Offices with Depositor
- ------------------------------------- ----------------------------------------- -------------------------------------
<S> <C> <C>
Timothy V. Bechtold IDS Tower 10 Director and President
Minneapolis, MN 55440
Maureen A. Buckley IDS Tower 10 Director, Vice President, Chief
Minneapolis, MN 55440 Operating Officer and Consumer
Affairs Officer
Rodney P. Burwell IDS Tower 10 Director
Minneapolis, MN 55440
John R. Cattau IDS Tower 10 Director
Minneapolis, MN 55440
James E. Choat IDS Tower 10 Executive Vice President -
Minneapolis, MN 55440 Institutional Products Group
Robert R. Grew 20 Madison Avenue Extension Director
Albany, NY
Lorraine R. Hart IDS Tower 10 Vice President - Investments
Minneapolis, MN 55440
Jay C. Hatlestad IDS Tower 10 Vice President and Controller -
Minneapolis, MN 55440 Assured Assets
Jeffrey S. Horton IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Jean B. Keffeler IDS Tower 10 Director
Minneapolis, MN 55440
Richard W. Kling IDS Tower 10 Director and Chairman of the Board
Minneapolis, MN 55440
Bruce A. Kohn IDS Tower 10 Counsel and Assistant Secretary
Minneapolis, MN 55440
Eric L. Marhoun IDS Tower 10 General Counsel and Secretary
Minneapolis, MN 55440
Thomas R. McBurney IDS Tower 10 Director
Minneapolis, MN 55440
Mary Ellyn Minenko IDS Tower 10 Counsel and Assistant Secretary
Minneapolis, MN 55440
Edward J. Muhl IDS Tower 10 Director
Minneapolis, MN 55440
Thomas V. Nicolosi Suite 220 Director
500 Mamaroneck Avenue
Harrison, NY 10528
Stephen P. Norman World Financial Center Director
New York, NY
<PAGE>
F. Dale Simmons IDS Tower 10 Vice President - Real Estate Loan
Minneapolis, MN 55440 Management
Richard M. Starr 20 Madison Avenue Extension Director
Albany, NY
William A. Stoltzmann IDS Tower 10 Counsel and Assistant Secretary
Minneapolis, MN 55440
Philip C. Wentzel IDS Tower 10 Vice President and Controller -
Minneapolis, MN 55440 Risk Management
Michael R. Woodward 20 Madison Avenue Extension Director
Albany, NY
</TABLE>
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
IDS Life Insurance Company of New York is a wholly-owned
subsidiary of IDS Life Insurance Company which is a
wholly-owned subsidiary of American Express Financial
Corporation. American Express Financial Corporation is a
wholly-owned subsidiary of American Express Company (American
Express).
The following list includes the names of major subsidiaries of
American Express.
<TABLE>
<CAPTION>
Jurisdiction of
Name of Subsidiary
Incorporation
<S> <C>
I. Travel Related Services
American Express Travel Related Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd.
Connecticut
III. Companies engaged in Financial Services
Advisory Capital Partners LLC Delaware
Advisory Capital Strategies Group Inc. Minnesota
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Asset Management Group Inc. Minnesota
American Express Asset Management International Inc. Delaware
American Express Asset Management International (Japan) Ltd. Japan
American Express Asset Management Ltd. England
American Express Client Service Corporation Minnesota
American Express Corporation Delaware
American Express Financial Advisors Inc. Delaware
American Express Financial Advisors Japan Inc. Delaware
American Express Financial Corporation Delaware
American Express Insurance Agency of Arizona Inc. Arizona
American Express Insurance Agency of Idaho Inc. Idaho
American Express Insurance Agency of Nevada Inc. Nevada
American Express Insurance Agency of Oregon Inc. Oregon
American Express Minnesota Foundation Minnesota
American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky
American Express Property Casualty Insurance Agency of Maryland Inc. Maryland
American Express Property Casualty Insurance Agency of Mississippi Inc.
Mississippi
American Express Property Casualty Insurance Agency of Pennsylvania Inc.
Pennsylvania
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Futures Brokerage Group Minnesota
IDS Futures Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc.
Massachusetts
IDS Insurance Agency of Mississippi Ltd.
Mississippi
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North
Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
IDS Insurance Agency of Utah Inc. Utah
<PAGE>
Jurisdiction of
Name of Subsidiary
Incorporation
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
Investors Syndicate Development Corp. Nevada
Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contractowners
Not applicable.
Item 28. Indemnification
The By-Laws of the depositor provide that it shall indemnify
any person who was or is a party or is threatened to be made a
party, by reason of the fact that he is or was a director,
officer, employee or agent of this Corporation, or is or was
serving at the direction of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to any
threatened, pending or completed action, suit or proceeding,
wherever brought, to the fullest extent permitted by the laws
of the State of Minnesota, as now existing or hereafter
amended, provided that this Article shall not indemnify or
protect any such director, officer, employee or agent against
any liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the
performance of his duties or by reason of his reckless
disregard of his obligations and duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to director, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
Item 29. Principal Underwriters.
<TABLE>
<CAPTION>
(a) American Express Financial Advisors acts as principal underwriter for the following investment
companies:
AXP Bond Fund, Inc.; AXP California Tax-Exempt Trust; AXP Discovery Fund, Inc.; AXP Equity
Select Fund, Inc.; AXP Extra Income Fund, Inc.; AXP Federal Income Fund, Inc.; AXP Global
Series, Inc.; AXP Growth Series, Inc.; AXP High Yield Tax-Exempt Fund, Inc.; AXP International
Fund, Inc.; AXP Investment Series, Inc.; AXP Managed Series, Inc.; AXP Market Advantage Series,
Inc.; AXP Money Market Series, Inc.; AXP New Dimensions Fund, Inc.; AXP Precious Metals Fund,
Inc.; AXP Progressive Fund, Inc.; AXP Selective Fund, Inc.; AXP Special Tax-Exempt Series
Trust; AXP Stock Fund, Inc.; AXP Strategy Series, Inc.; AXP Tax-Exempt Series, Inc.; AXP
Tax-Free Money Fund, Inc.; AXP Utilities Income Fund, Inc., Growth Trust; Growth and Income
Trust; Income Trust; Tax-Free Income Trust; World Trust; IDS Certificate Company; Strategist
Income Fund, Inc.; Strategist Growth Fund, Inc.; Strategist Growth and Income Fund, Inc.;
Strategist World Fund, Inc. and Strategist Tax-Free Income Fund, Inc.
(b) As to each director, officer or partner of the principal underwriter:
<S> <C> <C>
Name and Principal Business Address Position and Offices with Positions with Offices with
Underwriter Registrant
- ------------------------------------- ----------------------------------- -----------------------------------
Ronald. G. Abrahamson Vice President - Service Quality None
IDS Tower 10 and Reengineering
Minneapolis, MN 55440
Douglas A. Alger Senior Vice President - Human None
IDS Tower 10 Resources
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President - Vice President
IDS Tower 10 Investment Operations
Minneapolis, MN 55440
Ward D. Armstrong Vice President-American Express None
IDS Tower 10 Retirement Services
Minneapolis, MN 55440
John M. Baker Vice President - Plan Sponsor None
IDS Tower 10 Services
Minneapolis, MN 55440
Joseph M. Barsky, III Vice President - Mutual Fund None
IDS Tower 10 Equities
Minneapolis, MN 55440
Timothy V. Bechtold Vice President - Risk Management None
IDS Tower 10 Products
Minneapolis, MN 55440
[ACL & IDS Life of NY:]
Timothy V. Bechtold Vice President - Risk Management Director and President
IDS Tower 10 Products
Minneapolis, MN 55440
John D. Begley Group Vice President - None
Suite 100 Ohio/Indiana
7760 Olentangy River Rd.
Columbus, OH 43235
Brent L. Bisson Group Vice President - Los None
Suite 900 Angeles Metro
E. Westside Twr
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President - Nonproprietary None
IDS Tower 10 Products
Minneapolis, MN 55440
Walter K. Booker Group Vice President - New Jersey None
IDS Tower 10
Minneapolis, MN 55440
Bruce J. Bordelon Group Vice President - San None
1333 N. California Blvd., Suite 200 Francisco Bay Area
Walnut Creek, CA 94596
Charles R. Branch Group Vice President - Northwest None
Suite 200
West 111 North River Dr.
Spokane, WA 99201
Douglas W. Brewers Vice President - Sales Support None
IDS Tower 10
Minneapolis, MN 55440
Karl J. Breyer Corporate Senior Vice President None
IDS Tower 10
Minneapolis, MN 55440
Cynthia M. Carlson Vice President - American Express None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Mark W. Carter Senior Vice President and Chief None
IDS Tower 10 Marketing Officer
Minneapolis, MN 55440
[AEL]:
James E. Choat Senior Vice President - Third Director, President and Chief
IDS Tower 10 Party Distribution Executive Officer
Minneapolis, MN 55440
[ACL & IDS Life of NY:]
James E. Choat Senior Vice President - Third Executive Vice President -
IDS Tower 10 Party Distribution Institutional Products Group
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and General None
IDS Property Casualty Manager - IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
Paul A. Connolly Vice President - Advisor None
IDS Tower 10 Staffing, Training and Support
Minneapolis, MN 55440
Henry J. Cormier Group Vice President - Connecticut None
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President - None
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President - None
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Luz Maria Davis Vice President - Communications None
IDS Tower 10
Minneapolis, MN 55440
Arthur E. DeLorenzo Group Vice President - Upstate None
4 Atrium Drive, #100 New York
Albany, NY 12205
Scott M. DiGiammarino Group Vice President - None
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
Bradford L. Drew Group Vice President - Eastern None
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
Douglas K. Dunning Vice President - Assured Assets None
IDS Tower 10 Product Development and Management
Minneapolis, MN 55440
James P. Egge Group Vice President - Western None
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103
Gordon L. Eid Senior Vice President, General None
IDS Tower 10 Counsel and Chief Compliance
Minneapolis, MN 55440 Officer
Robert M. Elconin Vice President - Government None
IDS Tower 10 Relations
Minneapolis, MN 55440
Phillip W. Evans, Group Vice President - Rocky None
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177
Gordon M. Fines Vice President - Mutual Fund None
IDS Tower 10 Equity Investments
Minneapolis, MN 55440
Douglas L. Forsberg Vice President - International None
IDS Tower 10
Minneapolis, MN 55440
Jeffrey P. Fox Vice President and Corporate None
IDS Tower 10 Controller
Minneapolis, MN 55440
William P. Fritz Group Vice President - Gateway None
Suite 160
12855 Flushing Meadows Dr.
St. Louis, MO 63131
Carl W. Gans Group Vice President - Twin City None
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Peter A. Gallus Vice President-Investment None
IDS Tower 10 Administration
Minneapolis, MN 55440
David A. Hammer Vice President and Marketing None
IDS Tower 10 Controller
Minneapolis, MN 55440
Teresa A. Hanratty Senior Vice President-Field None
Suites 6&7 Management
169 South River Road
Bedford, NH 03110
Robert L. Harden Group Vice President - Boston None
Two Constitution Plaza Metro
Boston, MA 02129
Lorraine R. Hart Vice President - Insurance Vice President, Investments
IDS Tower 10 Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President and Controller - None
IDS Tower 10 Private Client Group
Minneapolis, MN 55440
Brian M. Heath Senior Vice President and General None
Suite 150 Sales Manager
801 E. Campbell Road
Richardson, TX 75081
Janis K. Heaney Vice President - Incentive None
IDS Tower 10 Management
Minneapolis, MN 55440
Jon E. Hjelm Group Vice President - Rhode None
310 Southbridge Street Island/Central - Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President - Tennessee None
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer None
IDS Tower 10
Minneapolis, MN 55440
David R. Hubers Chairman, President and Chief Board member
IDS Tower 10 Executive Officer
Minneapolis, MN 55440
Debra A. Hutchinson Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440
James M. Jensen Vice President and None
IDS Tower 10 Controller-Advice and Retail
Minneapolis, MN 55440 Distribution Group
Marietta L. Johns Senior Vice President - Field None
IDS Tower 10 Management
Minneapolis, MN 55440
Nancy E. Jones Vice President - Business None
IDS Tower 10 Development
Minneapolis, MN 55440
Ora J. Kaine Vice President - Financial None
IDS Tower 10 Advisory Services
Minneapolis, MN 55440
Linda B. Keene Vice President - Market None
IDS Tower 10 Development
Minneapolis, MN 55440
G. Michael Kennedy Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Richard W. Kling Senior Vice President - Products Director and Chairman of the Board
IDS Tower 10
Minneapolis, MN 55440
John M. Knight Vice President - Investment Treasurer
IDS Tower 10 Accounting
Minneapolis, MN 55440
Paul F. Kolkman Vice President - Actuarial Finance None
IDS Tower 10
Minneapolis, MN 55440
Claire Kolmodin Vice President - Service Quality None
IDS Tower 10
Minneapolis, MN 55440
David S. Kreager Group Vice President - Greater None
Suite 108 Michigan
Trestle Bridge V
5126 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice None
IDS Tower 10 President-Direct and Interactive
Minneapolis, MN 55440 Group
Mitre Kutanovski Group Vice President - Chicago None
Suite 680 Metro
8585 Broadway
Merrillville, IN 48410
Kurt A. Larson Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Lori J. Larson Vice President - Brokerage and None
IDS Tower 10 Direct Services
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and Chief U.S. None
IDS Tower 10 Economist
Minneapolis, MN 55440
Peter A. Lefferts Senior Vice President - Corporate None
IDS Tower 10 Strategy and Development
Minneapolis, MN 55440
Douglas A. Lennick Director and Executive Vice None
IDS Tower 10 President - Private Client Group
Minneapolis, MN 55440
Mary J. Malevich Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Fred A. Mandell Vice President - Field Marketing None
IDS Tower 10 Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President - Pittsburgh None
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Timothy J. Masek Vice President and Director of None
IDS Tower 10 Global Research
Minneapolis, MN 55440
Sarah A. Mealey Vice President - Mutual Funds None
IDS Tower 10
Minneapolis, MN 55440
Paula R. Meyer Vice President - Assured Assets None
IDS Tower 10
Minneapolis, MN 55440
[AEL]:
Paula R. Meyer Vice President - Assured Assets Director and Executive Vice
IDS Tower 10 President - Assured Assets
Minneapolis, MN 55440
William P. Miller Vice President and Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Shashank B. Modak Vice President - Technology Leader None
IDS Tower 10
Minneapolis, MN 55440
Pamela J. Moret Vice President - Variable Assets None
IDS Tower 10
Minneapolis, MN 55440
Barry J. Murphy Senior Vice President - Client None
IDS Tower 10 Service
Minneapolis, MN 55440
Mary Owens Neal Vice President-Consumer Marketing None
IDS Tower 10
Minneapolis, MN 55440
Thomas V. Nicolosi Group Vice President - New York None
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
[ACL & IDS Life of NY:]
Thomas V. Nicolosi Group Vice President - New York Director
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
Michael J. O'Keefe Vice President - Advisory None
IDS Tower 10 Business Systems
Minneapolis, MN 55440
James R. Palmer Vice President - Taxes None
IDS Tower 10
Minneapolis, MN 55440
Marc A. Parker Group Vice President - None
10200 SW Greenburg Road Portland/Eugene
Suite 110
Portland, OR 97223
Carla P. Pavone Vice President-Compensation None
IDS Tower 10 Services and ARD Product
Minneapolis, MN 55440 Distribution
Thomas P. Perrine Senior Vice President - Group None
IDS Tower 10 Relationship Leader/American
Minneapolis, MN 55440 Express Technologies Financial
Services
Susan B. Plimpton Vice President - Marketing None
IDS Tower 10 Services
Minneapolis, MN 55440
Larry M. Post Group Vice President - None
One Tower Bridge Philadelphia Metro
100 Front Street, 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Diana R. Prost Group Vice President - None
3030 N.W. Expressway Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112
James M. Punch Vice President and Project None
IDS Tower 10 Manager - Platform I Value
Minneapolis, MN 55440 Enhanced
Frederick C. Quirsfeld Senior Vice President - Fixed None
IDS Tower 10 Income
Minneapolis, MN 55440
Rollyn C. Renstrom Vice President - Corporate None
IDS Tower 10 Planning and Analysis
Minneapolis, MN 55440
R. Daniel Richardson Group Vice President - Southern None
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy. N
Austin, TX 78759
ReBecca K. Roloff Senior Vice President - Field None
IDS Tower 10 Management and Financial Advisory
Minneapolis, MN 55440 Service
Stephen W. Roszell Senior Vice President - None
IDS Tower 10 Institutional
Minneapolis, MN 55440
Max G. Roth Group Vice President - None
Suite 201 S. IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Erven A. Samsel Senior Vice President - Field None
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
Theresa M. Sapp Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440
Russell L. Scalfano Group Vice President - None
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President - None
Suite 205 Arizona/Las Vegas
7333 E. Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief None
IDS Tower 10 Financial Officer
Minneapolis, MN 55440
[AEL:]
Stuart A. Sedlacek Senior Vice President and Chief Executive Vice President
IDS Tower 10 Financial Officer
Minneapolis, MN 55440
Donald K. Shanks Vice President - Property Casualty None
IDS Tower 10
Minneapolis, MN 55440
F. Dale Simmons Vice President - Senior Portfolio Vice President, Real Estate Loan
IDS Tower 10 Manager, Insurance Investments Management
Minneapolis, MN 55440
Judy P. Skoglund Vice President - Quality and None
IDS Tower 10 Service Support
Minneapolis, MN 55440
James B. Solberg Group Vice President - Eastern None
466 Westdale Mall Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President - Geographic None
IDS Tower 10 Service Teams
Minneapolis, MN 55440
Paul J. Stanislaw Group Vice President - Southern None
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lisa A. Steffes Vice President - Marketing Offer None
IDS Tower 10 Development
Minneapolis, MN 55440
Lois A. Stilwell Group Vice President - Outstate None
Suite 433 Minnesota Area/North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
[AEL:]
William A. Stoltzmann Vice President and Assistant Director, Vice President, General
IDS Tower 10 General Counsel Counsel and Secretary
Minneapolis, MN 55440
James J. Strauss Vice President and General Auditor None
IDS Tower 10
Minneapolis, MN 55440
Jeffrey J. Stremcha Vice President - Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Barbara Stroup Stewart Vice President - Channel None
IDS Tower 10 Development
Minneapolis, MN 55440
Craig P. Taucher Group Vice President - None
Suite 150 Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
Neil G. Taylor Group Vice President - None
Suite 425 Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President None
IDS Tower 10
Minneapolis, MN 55440
Keith N. Tufte Vice President and Director of None
IDS Tower 10 Equity Research
Minneapolis, MN 55440
Peter S. Velardi Group Vice President - None
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President - Detroit None
Suite 100 Metro
Stanford Plaza II
7979 East Tufts Ave. Pkwy
Denver, CO 80237
Donald F. Weaver Group Vice President - Greater None
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011
Norman Weaver Jr. Senior Vice President - Alliance None
1010 Main St., Suite 2B Group
Huntington Beach, CA 92648
Michael L. Weiner Vice President - Tax Research and None
IDS Tower 10 Audit
Minneapolis, MN 55440
Jeffry M. Welter Vice President - Equity and Fixed None
IDS Tower 10 Income Trading
Minneapolis, MN 55440
Thomas L. White Group Vice President - Cleveland None
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President - Virginia None
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
William J. Williams Group Vice President - Western None
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
Edwin M. Wistrand Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Michael D. Wolf Vice President - Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Michael R. Woodward Senior Vice President - Field None
32 Ellicott St. Management
Suite 100
Batavia, NY 14020
[ACL & IDS Life of NY:]
Michael R. Woodward Senior Vice President - Field Director
32 Ellicott St. Management
Suite 100
Batavia, NY 14020
Rande L. Zellers Group Vice President-Gulf States None
1 Galleria Blvd., Suite 1900
Metairie, LA 70001
</TABLE>
Item 30. Location of Accounts and Records
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never
more than 16 months old for so long as payments under the variable
annuity contracts may be accepted.
(b) Registrant undertakes to include either (1) as part of any application
to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information,
or (2) a post card or similar written communication affixed to or
included in the prospectus that the applicant can remove to send for a
Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request.
(d) Registrant represents that it is relying upon the no-action assurance
given to the American Council of Life Insurance (pub. avail.
Nov. 28, 1988).Further, Registrant represents that it has complied with
the provisions of paragraphs (1)-(4) of that no-action letter.
(e) The sponsoring insurance company represents that the fees and charges
deducted under the contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, IDS Life Insurance Company of New York, on behalf of the Registrant, has
duly caused this Registration Statement to be signed on its behalf in the City
of Minneapolis, and State of Minnesota, on the 24th day of November, 1999.
IDS LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT
(formerly IDS Life of New York Flexible Portfolio Annuity Account)
(Registrant)
By IDS Life Insurance Company of New York
(Sponsor)
By /s/ Timothy V. Bechtold*
Timothy V. Bechtold
President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities indicated on the 24th day of
November, 1999.
/s/ Timothy V. Bechtold* /s/ Thomas R. McBurney*
Timothy V. Bechtold Thomas R. McBurney
Director and President Director
/s/ Maureen A. Buckley* /s/ Edward J. Muhl*
Maureen A. Buckley Edward J. Muhl
Director, Vice President, Chief Operating Director
Officer and Consumer Affairs Officer
/s/ Rodney P. Burwell* /s/ Thomas V. Nicolosi*
Rodney P. Burwell Thomas V. Nicolosi
Director Director
/s/ John R. Cattau* /s/ Stephen P. Norman*
John R. Cattau Stephen P. Norman
Director Director
/s/ Robert R. Grew* /s/ Richard M. Starr*
Robert R. Grew Richard M. Starr
Director Director
/s/ Jeffrey S. Horton* /s/ Philip C. Wentzel*
Jeffrey S. Horton Philip C. Wentzel
Vice President and Treasurer Vice President and
Controller - Risk
/s/ Jean B. Keffeler* Management
Jean B. Keffeler
Director /s/ Michael R. Woodward*
Michael R. Woodward
/s/ Richard W. Kling* Director
Richard W. Kling
Director and Chairman of the Board
/s/ Mary Ellyn Minenko
Mary Ellyn Minenko
Vice President and Group Counsel
*Signed pursuant Power of Attorney dated April 14, 1999, filed electronically as
Exhibit 14 to Post-Effective Amendment No. 3 to Registration Statement No.
333-03867, is incorporated herein by reference.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement is comprised of the following papers and documents:
The Cover Page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Part C.
Other Information.
The signatures.
Exhibits.
EXHIBIT INDEX
Exhibit 1.2 Consent
TO THE SECRETARY OF IDS LIFE
INSURANCE COMPANY OF NEW YORK
By a Consent in Writing in Lieu of a Meeting of the Board of Directors received
by the Secretary on April 17, 1996, the Board of Directors of IDS Life Insurance
Company of New York:
RESOLVED, That IDS Life of New York Flexible Portfolio Annuity Account,
comprised of one or more subaccounts, was established as a separate
account in accordance with Section 4240 New York Insurance Law and New
York Insurance Regulation 47; and
RESOLVED FURTHER, That the proper officers of the Corporation were
authorized and directed to establish such subaccounts within such
separate account as they determine to be appropriate; and
RESOLVED FURTHER, that the proper officers of the Corporation were
authorized and directed, as they may deem appropriate from time to time
and in accordance with applicable laws and regulations to establish
further any subaccounts and change the designation of the separate
account to another designation.
As President of IDS Life Insurance Company of New York, I hereby establish, in
accordance with the above resolutions and pursuant to authority granted by the
Board of Directors, 105 additional subaccounts within the separate account.
Three of each such subaccounts will invest in the following funds or portfolios:
AXPsm Variable Portfolio - Blue Chip Advantage Fund
AXPsm Variable Portfolio - Bond Fund
AXPsm Variable Portfolio - Capital Resource Fund
AXPsm Variable Portfolio - Cash Management Fund
AXPsm Variable Portfolio - Diversified Equity Income Fund
AXPsm Variable Portfolio - Extra Income Fund
AXPsm Variable Portfolio - Federal Income Fund
AXPsm Variable Portfolio - Global Bond Fund
AXPsm Variable Portfolio - Growth Fund
AXPsm Variable Portfolio - International Fund
AXPsm Variable Portfolio - Managed Fund
AXPsm Variable Portfolio - New Dimensions Fund
AXPsm Variable Portfolio - Small Cap Advantage Fund
AXPsm Variable Portfolio - Strategy Aggressive Fund
AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
American Century VP International Fund
American Century VP Value Fund
Fidelity Variable Insurance Products Fund III - Growth and Income Portfolio -
Service Class
Fidelity Variable Insurance Products Fund III - Mid Cap Portfolio -
Service Class
Fidelity Variable Insurance Products Fund - Overseas Portfolio -
Service Class
Franklin Templeton Variable Insurance Products Trust - Real Estate Securities
Fund - Class 2
Franklin Templeton Variable Insurance Products Trust - Templeton International
Smaller Companies Fund - Class 2
Franklin Templeton Variable Insurance Products Trust - Value Securities
Fund - Class 2
<PAGE>
Goldman Sachs Variable Insurance Trust CORE Small Cap Equity Fund
Goldman Sachs Variable Insurance Trust CORE U.S. Equity Fund
Goldman Sachs Variable Insurance Trust Mid Cap Value Fund
Lazard Retirement Series - Lazard Retirement International Equity Portfolio
Putnam VT International New Opportunities Fund - Class IB Shares
Putnam VT Vista Fund - Class IB Shares
Royce Capital Fund - Royce Micro-Cap Portfolio
Third Avenue Variable Series Trust - Third Avenue Value Portfolio
Wanger Advisors Trust - Wanger International Small Cap
Wanger Advisors Trust - Wanger U.S. Small Cap
Warburg Pincus Trust - Emerging Growth Portfolio
Further, in accordance with the above resolutions and pursuant to the authority
granted by the Board of Directors of IDS Life Insurance Company of New York, I
hereby change the designation of IDS Life of New York Flexible Portfolio Annuity
Account to IDS Life of New York Variable Annuity Account.
In accordance with the above resolutions and pursuant to authority granted by
the Board of Directors of IDS Life Insurance Company of New York, the Unit
Investment Trust comprised of IDS Life of New York Flexible Portfolio Annuity
Account and consisting of 14 subaccounts is hereby reconstituted as IDS Life of
New York Variable Annuity Account consisting of 119 subaccounts.
/s/Timothy V. Bechtold
Timothy V. Bechtold
Received by the Secretary:
/s/Eric L. Marhoun
Eric L. Marhoun
Date: November 19, 1999
