Registration No. 333-05593
Registration No. 811-07659
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 9 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 19 [X]
(Check appropriate box or boxes)
--------------------
SEPARATE ACCOUNT No. 49
of
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact Name of Registrant)
--------------------
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Name of Depositor)
1290 Avenue of the Americas, New York, New York 10104
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (212) 554-1234
--------------------
MARY P. BREEN
VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas, New York, New York 10104
(Name and Address of Agent for Service)
--------------------
Please send copies of all communications to:
PETER E. PANARITES
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036
<PAGE>
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective (check
appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] On ____________ pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
[X] On April 15, 1999, pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
previously filed post-effective amendment.
Title of Securities Being Registered:
Units of interest in Separate Account under variable annuity contracts.
<PAGE>
[Outside Wrapper]
EQUITABLE ACCUMULATOR(SM)
A COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CONTRACT
PROSPECTUS DATED MAY 1, 1999
[EQUITABLE AXA LOGO]
<PAGE>
EQUITABLE ACCUMULATOR(SM)
A combination variable and fixed deferred annuity Contract
May 1, 1999
[Equitable AXA Logo]
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your Contract. Also, at the end of this prospectus you will
find attached the prospectuses for The Hudson River Trust and EQ Advisors Trust,
which contain important information about their Portfolios.
WHAT IS THE EQUITABLE ACCUMULATOR? The Equitable Accumulator Contract is issued
by THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for
the accumulation of retirement savings and for income. The Contract offers
income and death benefit protection. It also offers a number of payout options.
You invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed interest options ("investment options").
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
o ALLIANCE MONEY MARKET o EQ/EVERGREEN o MERRILL LYNCH BASIC VALUE EQUITY
o ALLIANCE HIGH YIELD o EQ/EVERGREEN FOUNDATION o MERRILL LYNCH WORLD STRATEGY
o ALLIANCE COMMON STOCK o JPM CORE BOND o MORGAN STANLEY EMERGING MARKETS
o ALLIANCE AGGRESSIVE STOCK o LAZARD LARGE CAP VALUE EQUITY
o ALLIANCE SMALL CAP GROWTH o LAZARD SMALL CAP VALUE o EQ/PUTNAM GROWTH & INCOME VALUE
o BT EQUITY 500 INDEX o MFS GROWTH WITH INCOME o EQ/PUTNAM INVESTORS GROWTH
o BT SMALL COMPANY INDEX o MFS RESEARCH o EQ/PUTNAM INTERNATIONAL EQUITY
o BT INTERNATIONAL EQUITY INDEX o MFS EMERGING GROWTH
COMPANIES
- -------------------------------------------------------------------------------------------------------------
</TABLE>
You may allocate amounts to any of the variable investment options. They,
in turn, invest in a corresponding securities portfolio ("Portfolio") of The
Hudson River Trust or EQ Advisors Trust. Your investment results in a variable
investment option will depend on the investment performance of the related
Portfolio. Each variable investment option is a subaccount of our Separate
Account No. 49.
FIXED INTEREST OPTIONS. You may allocate amounts to one or more fixed
interest options. These amounts will receive a fixed rate of interest for a
specified period. Interest is earned at a guaranteed rate we set. We make a
market value adjustment (up or down) if you make transfers or withdrawals from a
fixed interest option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account also pays fixed
interest at guaranteed rates. It may be used for dollar cost averaging during
your Contract's first year only.
<PAGE>
<TABLE>
<CAPTION>
TYPES OF CONTRACTS. We offer the Contracts for use as:
<S> <C>
o A nonqualified annuity ("NQ") for o An investment vehicle for a
after tax contributions only qualified defined contribution or
defined benefit plan ("QP")
o An individual retirement annuity o An Internal Revenue Code Section
("IRA"), either Traditional IRA or 403(b) tax sheltered annuity ("TSA")
Roth IRA
</TABLE>
A contribution of at least $5,000 is required to purchase a Contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 1999, is a part of the registration statement.
It is available free of charge. You may request one by writing to our Processing
Office or calling 1-800-789-7771. The SAI has been incorporated by reference
into this prospectus. This prospectus and the SAI can also be obtained from the
SEC's website at http://www.sec.gov. The table of contents for the SAI appears
at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
COPYRIGHT 1999 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES,
NEW YORK, NEW YORK 10104. ALL RIGHTS RESERVED. ACCUMULATOR IS A SERVICE MARK,
AND BASEBUILDER AND INCOME MANAGER ARE REGISTERED SERVICE MARKS OF THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES.
PROS 1AML (5/99)
<PAGE>
WHO IS EQUITABLE? We are The Equitable Life Assurance Society of the United
States ("Equitable"), a stock life insurance company that issues the Equitable
Accumulator. We are a New York corporation and have been doing business since
1859. Equitable is a wholly owned subsidiary of The Equitable Companies
Incorporated, whose majority shareholder is AXA, a French insurance holding
company. As a majority shareholder, and under its other arrangements with
Equitable's parent, AXA exercises significant influence over the operations and
capital structure of Equitable and its parent. Equitable's related companies,
however, have no legal responsibility to pay amounts that Equitable owes under
the Contract.
We managed over $__________ billion in assets as of December 31, 1998. For over
100 years we have been among the largest insurance companies in the United
States. We are licensed to sell life insurance and annuities in all fifty
states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our
home office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
HOW TO REACH US. You may communicate with our Processing Office as listed below
for any of the following purposes:
<TABLE>
<CAPTION>
<S> <C>
o FOR CONTRIBUTIONS SENT BY REGULAR MAIL: o FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
Equitable Accumulator Equitable Accumulator
P.O. Box 13014 c/o First Chicago National Processing Center
Newark, NJ 07188-0014 300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
o FOR ALL OTHER COMMUNICATIONS (E.G., o FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, REQUESTS FOR TRANSFERS, WITHDRAWALS,
OR REQUIRED NOTICES) SENT BY REGULAR OR REQUIRED NOTICES) SENT BY EXPRESS
MAIL: DELIVERY:
Equitable Accumulator Equitable Accumulator
P.O. Box 1547 200 Plaza Drive, 4th Floor
Secaucus, NJ 07096-1547 Secaucus, NJ 07094
</TABLE>
o TOLL-FREE TELEPHONE SERVICE: You may reach us toll-free by calling
1-800-789-7771 for a recording of:
o Daily unit values for the variable investment options.
o Guaranteed rates for the fixed interest options.
o Guaranteed interest rates for the account for special dollar cost
averaging.
o TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") SYSTEM
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. You can obtain information on:
2
<PAGE>
o Your current account value;
o Your current allocation percentages;
o The number of units you have in the variable investment options; and
o To change your allocation percentages and/or transfer among the
investment options.
TOPS is normally available seven days a week, 24 hours a day, by calling
toll-free 1-888-909-7770. However, we will not be responsible for the
unavailability of the system for any reason.
We have established procedures to reasonably confirm that the instructions
communicated by telephone are genuine. For example, we will require certain
personal identification information before we will act on telephone instructions
and we will provide written confirmation of your transfers. We will not be
liable for following telephone instructions we reasonably believe to be genuine.
During our regular business hours you may also use our toll-free number to speak
with one of our customer service representatives or to make telephone transfers
among the investment options.
---------------------
You should send all contributions, notices, and requests to our Processing
Office at the address above.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfer by your registered
representative;
(2) cancellation of your Roth IRA contract and return to a Traditional
IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) to obtain a personal identification number required for TOPS;
(6) requests for loans under TSA Contracts;
(7) spousal consent for loans under TSA Contracts;
(8) tax withholding election; and
(9) beneficiary continuation option election.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options;
(4) withdrawal requests;
(5) Contract surrender; and
3
<PAGE>
(6) requests to exercise your guaranteed minimum income benefit.
You must sign and date all these requests. Any written request that is
not on one of our forms must include your name and your Contract number
along with adequate details about the notice you wish to give or the
action you wish us to take.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
SIGNATURES: The proper person to sign forms, notices and requests would normally
be the owner. If there are joint owners both must sign. Any irrevocable
beneficiary or assignee that we have on our records also must sign certain types
of requests.
4
<PAGE>
CONTENTS OF THIS PROSPECTUS
PAGE IN
PROSPECTUS
----------
EQUITABLE ACCUMULATOR AT A GLANCE -- KEY FEATURES..............................7
FEE TABLE.....................................................................10
Examples...................................................................14
CONDENSED FINANCIAL INFORMATION...............................................15
DECIDING TO PURCHASE -- CONTRACT FEATURES AND BENEFITS........................16
How Do I Purchase and Contribute to My Contract?...........................16
Owner and Annuitant Requirements...........................................18
How do I Make My Contributions?............................................18
What Are My Investment Options?............................................19
Portfolios of The Hudson River Trust.......................................19
Portfolios of EQ Advisors Trust............................................20
Allocating Your Contributions..............................................24
Our baseBUILDER Option.....................................................26
Guaranteed Minimum Death Benefit...........................................30
Your Right to Cancel Within a Certain Number of Days.......................31
DETERMINING YOUR CONTRACT'S VALUE.............................................32
Your Account Value.........................................................32
Your Contract's Value in the Variable Investment Options...................32
Your Contract's Value in the Fixed Interest Options........................33
Your Contract's Value in the Account for Special Dollar Cost Averaging.....33
TRANSFERRING AND ACCESSING YOUR MONEY.........................................33
Transferring Your Account Value............................................33
Rebalancing Your Account Value.............................................34
Withdrawing Your Account Value.............................................34
How Withdrawals Are Taken From Your Account Value..........................37
How Withdrawals Affect Your Guaranteed Minimum Income Benefit and
Guaranteed Minimum Death Benefit ..........................................38
Loans under TSA Contracts..................................................39
Surrendering Your Contract to Receive its Cash Value.......................39
When To Expect Payments....................................................40
Choosing Your Annuity Payout Options.......................................40
CHARGES AND EXPENSES..........................................................44
Charges That Equitable Deducts.............................................44
Charges That the Trusts Deduct.............................................47
Group Or Sponsored Arrangements............................................47
Other Distribution Arrangements............................................48
PAYMENT OF DEATH BENEFIT......................................................48
Your Beneficiary and Payment of Benefit....................................48
How Death Benefit Payment is Made..........................................50
Beneficiary Continuation Option for Traditional IRA Contracts..............50
TAX INFORMATION...............................................................51
5
<PAGE>
Overview...................................................................51
Transfers among Investment Options.........................................51
Taxation of Nonqualified Annuities.........................................52
Special Rules for NQ Contracts Issued in Puerto Rico.......................54
Individual Retirement Arrangements ("IRAs")................................54
Special Rules for Nonqualified Contracts in Qualified Plans................69
Tax Sheltered Annuity Contracts (TSAs).....................................69
Federal and State Income Tax Withholding and Information Reporting.........76
Impact of Taxes to Equitable...............................................78
MORE INFORMATION..............................................................78
About Separate Account No. 49..............................................78
About The Hudson River Trust and EQ Advisors Trust.........................79
About the Fixed Interest Options...........................................79
About the General Account..................................................81
About Other Methods of Payment.............................................82
Date and Prices at Which Contract Events Occur.............................83
About Your Voting Rights...................................................83
About Our Year 2000 Progress...............................................84
About Legal Proceedings....................................................85
About Our Independent Accountants..........................................85
Transfers of Ownership, Collateral Assignments, Loans, and Borrowing.......85
Distribution of the Contracts..............................................86
INVESTMENT PERFORMANCE........................................................87
Benchmarks.................................................................88
Communicating Performance Data.............................................89
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................98
APPENDIX I: CONDENSED FINANCIAL INFORMATION...................................99
APPENDIX II: MARKET VALUE ADJUSTMENT EXAMPLE.................................100
APPENDIX III: PURCHASE CONSIDERATIONS FOR QP CONTRACTS.......................101
APPENDIX IV: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE........................102
APPENDIX V: AN INDEX OF KEY WORDS AND PHRASES...............................103
STATEMENT OF ADDITIONAL INFORMATION..........................................104
TABLE OF CONTENTS............................................................104
"WE," "OUR" AND "US" REFERS TO EQUITABLE.
WHEN WE ADDRESS THE READER OF THIS PROSPECTUS WITH WORDS SUCH AS "YOU" AND
"YOUR," WE MEAN THE PERSON WHO HAS THE RIGHT OR RESPONSIBILITY THAT THE
PROSPECTUS IS DISCUSSING AT THAT POINT. THIS IS USUALLY THE CONTRACT OWNER.
WHEN WE USE THE WORD "CONTRACT" IT ALSO INCLUDES CERTIFICATES WHICH ARE ISSUED
UNDER GROUP CONTRACTS IN SOME STATES. ALSO, TO MAKE THIS PROSPECTUS EASIER TO
READ, WE SOMETIMES USE DIFFERENT WORDS THAN IN THE CONTRACT. YOUR REGISTERED
REPRESENTATIVE CAN PROVIDE FURTHER EXPLANATION ABOUT YOUR CONTRACT.
PLEASE SEE APPENDIX V FOR AN INDEX OF KEY WORDS AND PHRASES USED IN THIS
PROSPECTUS. THE INDEX WILL REFER YOU TO THE PAGE WHERE PARTICULAR TERMS ARE
DEFINED OR EXPLAINED.
6
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE ACCUMULATOR AT A GLANCE -- KEY FEATURES
- ---------------------------------------------------------------------------------------------------------
<S> <C>
PROFESSIONAL Equitable Accumulator's variable investment options invest in 22
INVESTMENT different Portfolios managed by professional investment advisers.
MANAGEMENT
- ---------------------------------------------------------------------------------------------------------
FIXED INTEREST o 10 fixed interest options with maturities ranging from approximately
OPTIONS 1 to 10 years.
o Each fixed interest option offers a guarantee of principal and interest
rate if you hold it to maturity.
o Principal guarantees.
-If you make withdrawals or transfers from the fixed
interest options prior to maturity, there will be a
market value adjustment due to differences in interest
rates. This may increase or decrease your value in the
fixed interest options.
- ---------------------------------------------------------------------------------------------------------
ACCOUNT FOR SPECIAL Available for dollar cost averaging of your initial contribution.
DOLLAR COST
AVERAGING
- ---------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o ON EARNINGS No tax on any dividends, interest or capital gains
INSIDE THE until you make withdrawals or receive
CONTRACT distributions. However, all earnings will be taxed
at your ordinary income tax rate when they are
withdrawn or distributed.
o ON TRANSFERS No tax on transfers among investment options.
INSIDE THE
CONTRACT
- ---------------------------------------------------------------------------------------------------------
baseBUILDER baseBUILDER combines a guaranteed minimum income benefit with
PROTECTION a guaranteed minimum death benefit. This optional feature provides
income protection for you while the annuitant lives, as well as a death
benefit for the beneficiary should the annuitant die.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONTRIBUTION o INITIAL MINIMUM: $5,000
AMOUNTS o ADDITIONAL MINIMUM: $1,000
$100 monthly, $300 quarterly under our
automatic investment program (NQ and
Traditional IRA Contracts)
o MAXIMUM INVESTMENT: $1,500,000 (higher with our approval)
- ---------------------------------------------------------------------------------------------------------
ACCESS TO YOUR o Lump sum withdrawals
MONEY o Several withdrawal options on a periodic basis
o Loans under TSA Contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals. You may
also incur income tax and a tax penalty.
- ---------------------------------------------------------------------------------------------------------
PAYOUT ALTERNATIVES o Traditional annuity payout options
o Income Manager(R) payout annuity options
- ---------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Unlimited free transfers
o Waiver of withdrawal charge for disability
- ---------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
<S> <C>
FEES AND o 1.35% annual rate on assets invested in variable investment options
CHARGES for mortality and expense risks and administration charges.
o Annual 0.30% benefit base charge for the optional baseBUILDER
benefit. The benefit base is described under "Your Guaranteed
Minimum Income Benefit under baseBUILDER." No annual charge
if you want a guaranteed minimum death benefit only.
o No sales charge deducted at the time you make contributions and no
annual contract fee.
o During the first seven Contract Years following a contribution, a
charge will be deducted from amounts that you withdraw that exceed
15% of your account value. We use the account value on the most
recent Contract anniversary to calculate the 15% amount available.
The charge begins at 7% in the first Contract Year following a
contribution. It declines each year to 1% in the seventh Contract
Year. There is no withdrawal charge in the eighth and later Contract
Years following a contribution.
[Sidebar: The 12-month period beginning on your Contract Date and
each anniversary of that date is a "Contract Year." The "Contract
Date" is the effective date of a Contract. This usually is the business
day wereceive your initial contribution.]
o Annual expenses of The Hudson River Trust and EQ Advisors Trust
Portfolios are calculated as a percentage of the average daily net
assets invested in each Portfolio. These expenses include
management and advisory fees ranging from 0.35% to 1.15%
annually, 12b-1 fees of 0.25% and other expenses.
- ---------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE NQ: 0-83 IRA: 20-78
AGES QP: 20-70 TSA: 20-78
- ---------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your Contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
9
<PAGE>
FEE TABLE
The fee table below will help you understand the various charges and
expenses that apply to your Contract. The table reflects charges you will
directly incur under the Contract, as well as charges and expenses of the
Portfolios that you will bear indirectly. Charges for taxes, such as state or
local premium taxes, may also apply. Each of the charges and expenses is more
fully described under "Charges and Expenses" later in this prospectus. For a
complete description of Portfolio charges and expenses, please see the attached
prospectuses for The Hudson River Trust and EQ Advisors Trust.
The fixed interest options and the account for special dollar cost
averaging are not covered by the fee table and examples. Generally, the only
charge shown in the table that is applicable to the fixed interest options and
the account for special dollar cost averaging is the withdrawal charge. A market
value adjustment (up or down) may apply as a result of a withdrawal, transfer or
surrender of amounts from a fixed interest option.
10
<PAGE>
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EACH DAY
- ----------------------------------------------------------------
MORTALITY AND EXPENSE RISKS(1) 1.10%
ADMINISTRATION(2) 0.25%
-----
TOTAL ANNUAL EXPENSES 1.35%
=====
<TABLE>
<CAPTION>
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- --------------------------------------------------------------------------------------
<S> <C> <C>
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted if you CONTRACT
surrender your Contract or make certain withdrawals. The withdrawal YEAR
charge percentage we use is determined by the Contract Year in which --------
you make the withdrawal or surrender your Contract. For each 1.......................7.00%
contribution, we consider the Contract Year in which we receive that 2.......................6.00
contribution to be "Contract Year 1").(3) 3.......................5.00
4.......................4.00
5.......................3.00
6.......................2.00
7.......................1.00
8+......................0.00
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- -------------------------------------------------------------------------------------
baseBUILDER BENEFIT CHARGE (calculated as a percentage of the
benefit base. Deducted annually on each Contract Date anniversary)(4) 0.30%
</TABLE>
You also bear your proportionate share of all fees and expenses paid by a
Portfolio that corresponds to any variable investment option you are using:
This table shows the fees and expenses paid by each Portfolio for the year ended
December 31, 1998. These fees and expenses are reflected in the value of the
Portfolio's net assets each day. Therefore, they reduce the investment return of
the Portfolio and of the related variable investment option. Actual fees and
expenses are likely to fluctuate from year to year. All figures are expressed as
an annual percentage of each Portfolio's daily average net assets.
<TABLE>
<CAPTION>
INVESTMENT TOTAL
MANAGEMENT & OTHER ANNUAL
ADVISORY FEES 12B-1 FEE (5) EXPENSES EXPENSES
------------- --------- -------- --------
<S> <C> <C> <C> <C>
PORTFOLIOS
Alliance Money Market(6) 0.35% 0.25%
Alliance High Yield(6) 0.60% 0.25%
Alliance Common Stock(6) 0.37% 0.25%
Alliance Aggressive Stock (6) 0.54% 0.25%
Alliance Small Cap Growth(6) 0.90% 0.25%
BT Equity 500 Index(7) 0.25% 0.25%
BT Small Company Index(7) 0.25% 0.25%
BT International Equity Index(7) 0.35% 0.25%
EQ/Evergreen(7) 0.75% 0.25%
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT TOTAL
MANAGEMENT & OTHER ANNUAL
PORTFOLIOS ADVISORY FEES 12B-1 FEE (5) EXPENSES EXPENSES
---------- ------------- --------- -------- --------
<S> <C> <C> <C> <C>
EQ/Evergreen Foundation(7) 0.63% 0.25%
JPM Core Bond(7) 0.45% 0.25%
Lazard Large Cap Value(7) 0.55% 0.25%
Lazard Small Cap Value(7) 0.80% 0.25%
MFS Growth with Income(7) 0.55% 0.25%
MFS Research(7) 0.55% 0.25%
MFS Emerging Growth Companies(7) 0.55% 0.25%
Merrill Lynch Basic Value Equity(7) 0.55% 0.25%
Merrill Lynch World Strategy(7) 0.70% 0.25%
Morgan Stanley Emerging Markets
Equity(7) 1.15% 0.25%
EQ/Putnam Growth & Income
Value(7) 0.55% 0.25%
EQ/Putnam Investors Growth(7) 0.55% 0.25%
EQ/Putnam International Equity(7) 0.70% 0.25%
- --------------------
</TABLE>
See footnotes below.
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) We reserve the right to increase this charge to a maximum annual rate of
0.35%.
(3) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount, and upon surrender of a Contract.
(4) The benefit base is described under "Your Guaranteed Minimum Income
Benefit under baseBUILDER."
(5) Portfolio shares are all subject to fees imposed under distribution plans
(the "Rule 12b-1 Plans" ) adopted by The Hudson River Trust and EQ
Advisors Trust pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended. The 12b-1 fee will not be increased for the life of the
Contracts. The Rule 12b-1 Plan for the Alliance Small Cap Growth Portfolio
provides that Equitable Distributors, Inc. ("EDI") will receive an annual
fee not to exceed the lesser of (a) 0.25% of the average daily net assets
of the Portfolio attributable to Class IB shares and (b) an amount that,
when added to certain other expenses of the Class IB shares, would result
in the ratio of expenses to average daily net assets attributable to Class
IB shares equaling 1.20%.
12
<PAGE>
(6) The investment management and advisory fees for each Portfolio of The
Hudson River Trust may vary from year to year depending upon the average
daily net assets of the respective Portfolio. The maximum investment
management and advisory fees, however, cannot be increased without a vote
of that Portfolio's shareholders. The other direct operating expenses will
also fluctuate from year to year depending on actual expenses.
(7) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. The amounts shown as "Other Expenses" will fluctuate from
year to year depending on actual expenses. However, EQ Financial
Consultants, Inc. ("EQ Financial"), EQ Advisors Trust's manager, has
entered into an expense limitation agreement with respect to each
Portfolio. Under this agreement EQ Financial has agreed to waive or limit
its fees and assume other expenses. Under the expense limitation
agreement, total annual operating expenses of each Portfolio (other than
interest, taxes, brokerage commissions, capitalized expenditures,
extraordinary expenses, and 12b-1 fees) are limited for the average daily
net assets of each Portfolio as follows: BT Equity 500 Index - 0.30%; BT
Small Company Index - 0.35%; BT International Equity Index and JPM Core
Bond - 0.55%; MFS Research, MFS Emerging Growth Companies, Merrill Lynch
Basic Value Equity, EQ/Putnam Growth & Income Value, and EQ/Putnam
Investors Growth - 0.60%; Lazard Large Cap Value - 0.65%; MFS Growth with
Income - 0.85%; Merrill Lynch World Strategy, EQ/Putnam International
Equity, Lazard Small Cap Value, and EQ/Evergreen Foundation, - 0.95%;
EQ/Evergreen - 1.05%; Morgan Stanley Emerging Markets Equity - 1.50%.
Absent the expense limitation, the "Other Expenses" for 1998 on an
annualized basis for each of the following Portfolios would have been
as follows: EQ/Putnam Growth & Income Value - ____%; MFS Research
- ____%; MFS Emerging Growth Companies - ____%; Merrill Lynch Basic Value
Equity - ____%; and Merrill Lynch World Strategy - ____%; Morgan
Stanley Emerging Markets Equity - ____%; EQ/Putnam Investors Growth -
____%; and EQ/Putnam International Equity - ____%. BT Equity 500 Index
- ____%; BT Small Company Index - ____%; BT International Equity Index
- ____%; JPM Core Bond - ____%; Lazard Large Cap Value - ____%; Lazard
Small Cap Value - ____%. For the following Portfolios, which had
initial seed capital invested on December 31, 1998, the "Other
Expenses" for 1999, absent the expense limitation, are estimated to be
as follows: EQ/Evergreen and MFS Growth with Income - 0.78%;
EQ/Evergreen Foundation - 0.85%.
Each Portfolio may at a later date make a reimbursement to EQ Financial
for any of the management fees waived or limited and other expenses
assumed and paid by EQ Financial pursuant to the expense limitation
agreement provided that, among other things, such Portfolio has reached
sufficient size to permit such reimbursement to be made and provided
that the Portfolio's current annual operating expenses do not exceed
the operating expense limit determined for such Portfolio.
13
<PAGE>
EXAMPLES
- --------
The examples below show the expenses that a hypothetical contract owner (who has
elected baseBUILDER) would pay in the two situations illustrated assuming a
$1,000 contribution is invested in one of the variable investment options
listed, and a 5% annual return on assets.(1)
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE
OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE: END OF EACH PERIOD SHOWN, THE EXPENSES WOULD
BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THE HUDSON RIVER TRUST
- ----------------------
OPTIONS
-------
Alliance Money
Market
Alliance High Yield
Alliance Common
Stock
Alliance Aggressive
Stock
Alliance Small Cap
Growth
EQ ADVISORS TRUST OPTIONS
- -------------------------
BT Equity 500 Index
BT Small Company Index
BT International Equity Index
EQ/Evergreen
EQ/Evergreen Foundation
JPM Core Bond
Lazard Large Cap Value
Lazard Small Cap Value
MFS Growth with Income
MFS Research
MFS Emerging
Growth Companies
Merrill Lynch Basic Value
Equity
Merrill Lynch World Strategy
Morgan Stanley Emerging
Markets Equity
EQ/Putnam Growth
& Income Value
EQ/Putnam
Investors Growth
EQ/Putnam International
Equity
- --------------------
</TABLE>
14
<PAGE>
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity at the end of any of the periods shown in the
examples. This is because if the amount applied to purchase an annuity is
less than $2,000, or the initial payment is less than $20, we may pay the
amount to you in a single sum instead of as payments under an annuity
payout option. See "Transferring and Accessing Your Money."
CONDENSED FINANCIAL INFORMATION
We began offering the Contracts on August 1, 1997. Please see APPENDIX I,
at the end of this prospectus, for the unit values, as of the dates shown, for
each of the variable investment options since each of the variable investment
options was first available under the Contracts.
15
<PAGE>
DECIDING TO PURCHASE -- CONTRACT FEATURES AND BENEFITS
HOW DO I PURCHASE AND CONTRIBUTE TO MY CONTRACT?
You may purchase and contribute to a Contract by making payments to us we
call "contributions." We require a minimum initial contribution of $5,000 for
you to purchase a Contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your Contract. All ages in the table refer
to the age of the annuitant named in the Contract. The "annuitant" is the person
who is the measuring life for determining Contract benefits. The annuitant is
not necessarily the contract owner.
<TABLE>
<CAPTION>
AVAILABLE FOR LIMITATIONS ON
CONTRACT TYPE ANNUITANT ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ 0 through 83 o After-tax money. o No additional
contributions after
age 84.
o Paid to us by check or transfer
of contract value in a tax
deferred exchange under
Section 1035 of the
Internal Revenue Code.
- ----------------------------------------------------------------------------------------------------------------------
o Rollovers from a qualified plan. o No additional
Traditional IRA 20 through 78 rollover or direct
o Rollovers from a TSA. transfer
contributions after
age 79.
o Rollovers from another o Contributions
traditional individual after age 70 1/2
retirement arrangement. must be net of
required minimum
o Direct custodian-to-custodian distributions.
transfers from other traditional
individual retirement arrangements. o No additional
regular IRA
o "Regular" IRA contributions are contributions after
only accepted as additional age 70 1/2.
contributions and they may not
exceed $2,000 each year.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
AVAILABLE FOR LIMITATIONS ON
CONTRACT TYPE ANNUITANT ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roth IRA 20 through 78 o Rollovers from another Roth IRA. o No additional
rollover or direct
o Conversion rollovers from a transfer
Traditional IRA. contributions after
age 79.
o Direct transfers from another
Roth IRA. o Conversion
rollovers after age
o You cannot roll over funds from 70 1/2 must be net of
a Traditional IRA if your adjusted required minimum
gross income is $100,000 or more. distributions for
the Traditional IRA
o "Regular" after-tax you are rolling over.
contributions are not permitted.
- ----------------------------------------------------------------------------------------------------------------------
QP 20 through 70 o Only transfer contributions o Regular ongoing
from an existing qualified plan payroll
trust as a change of investment contributions are
vehicle under the plan. not permitted.
o The plan must be qualified o No additional
under Section 401(a) of the transfer
Internal Revenue Code. contributions after
the annuitant
o For 401(k) plans, transferred attains age 71.
contributions may only include
employee pre-tax contributions.
o For defined benefit plans,
employee contributions are not
permitted.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
AVAILABLE FOR LIMITATIONS ON
CONTRACT TYPE ANNUITANT ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TSA 20 through 78 o Rollovers from another TSA o No additional
contract or arrangement. rollover or direct
transfer
o Rollovers from a Traditional contributions after
IRA which was a "conduit" for TSA age 79.
funds previously rolled over.
o Contributions
o Direct transfers from another after age 70 1/2 must
contract or arrangement complying be net of required
with Section 403(b) of the Internal minimum
Revenue Code, under IRS Revenue distributions.
Ruling 90-24.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax Information" for a more detailed discussion of certain
contribution limitations. We may refuse to accept any contribution if the sum of
all contributions under all Equitable Accumulator Contracts with the same
annuitant would then total more than $1,500,000. We reserve the right to limit
aggregate contributions made after the first Contract Year to 150% of first-year
contributions. We may also refuse to accept any contribution if the sum of all
contributions under all Equitable annuity accumulation contracts that you own
would then total more than $2,500,000.
OWNER AND ANNUITANT REQUIREMENTS
Under IRA and TSA Contracts, the owner and annuitant must be the same
person.
Under NQ Contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under QP Contracts, the owner must be the trustee of the qualified plan and
the annuitant must be the plan participant/employee.
HOW DO I MAKE MY CONTRIBUTIONS?
Except as noted below, contributions must be by check drawn on a bank
in the U.S. clearing through the Federal Reserve System, in U.S. dollars, and
made payable to Equitable. We do not accept third party checks endorsed to us
except for rollover contributions, tax-free exchanges or trustee checks that
involve no refund. All checks are subject to collection. We reserve the right to
reject a payment if it is received in an unacceptable form.
18
<PAGE>
For your convenience, we will accept initial and additional contributions
by wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail under "More
Information" later in this prospectus.
Your initial contribution must generally be accompanied by an application
and any other form we need to process the payments. If any information is
missing or unclear, we will try to obtain that information. If we are unable to
obtain all of the information we require within five Business Days, we will
inform the registered representative submitting the application, on your behalf.
We will then return the contribution to you unless you specifically direct us to
keep your contribution until we receive the required information.
[Side bar: Our "Business Day" generally is any day on which the New
York Stock Exchange is open for trading.]
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity
contract (or life insurance or endowment contract) to purchase an Equitable
Accumulator NQ Contract in a tax-free exchange if you follow certain procedures
as shown in the form that we require you to use. Also see "Tax Information"
later in this prospectus.
WHAT ARE MY INVESTMENT OPTIONS?
We allocate your contributions among the investment options available under
the Contracts as you direct us to. Your investment options are the variable
investment options, the fixed interest options, and the account for special
dollar cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the 22 variable investment options
will depend on the investment performance of the underlying Portfolios. Listed
below are the currently available Portfolios, their investment objectives, and
their advisers.
[Sidebar: You can choose among 22 variable investment options.]
<TABLE>
<CAPTION>
PORTFOLIOS OF THE HUDSON RIVER TRUST
- ----------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Money Market High level of current income while Alliance Capital Management L.P.
preserving assets and maintaining
liquidity
- ----------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance High Yield High return by maximizing current Alliance Capital Management L.P.
income and, to the extent
consistent with that objective,
capital appreciation
- ----------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and Alliance Capital Management L.P.
increasing income
- ----------------------------------------------------------------------------------------------------------
Alliance Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- ----------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
BT Equity 500 Index Replicate as closely as possible Bankers Trust Company
the total return of the Standard &
Poor's 500
- ----------------------------------------------------------------------------------------------------------
BT Small Company Index Replicate the total return of the Bankers Trust Company
Russell 2000 Index
- ----------------------------------------------------------------------------------------------------------
BT International Equity Replicate as closely as possible Bankers Trust Company
Index the total return of the Morgan
Stanley Capital International
Europe, Australia, Far East Index
- ----------------------------------------------------------------------------------------------------------
EQ/Evergreen Capital appreciation Evergreen Asset
Management Corp.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Evergreen Foundation In order of priority, reasonable Evergreen Asset
income conservation of capital and Management Corp.
capital appreciation
- ----------------------------------------------------------------------------------------------------------
JPM Core Bond Provide high total return J.P. Morgan Investment Management Inc.
consistent with moderate risk of
capital and maintenance of
liquidity
- ----------------------------------------------------------------------------------------------------------
Lazard Large Cap Value Capital appreciation by investing Lazard Asset Management
primarily in equity securities of
companies with relatively large
capitalizations
- ----------------------------------------------------------------------------------------------------------
Lazard Small Cap Value Capital appreciation by investing Lazard Asset Management
in equity securities of U.S.
companies with small market
capitalizations
- ----------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and Massachusetts Financial Services Company
long-term growth of capital and
income
- ----------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- ----------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and Massachusetts Financial Services Company
future income
- ----------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Capital appreciation and Merrill Lynch Asset Management, L.P.
Value Equity secondarily, income
- ----------------------------------------------------------------------------------------------------------
Merrill Lynch World High total investment return Merrill Lynch Asset Management, L.P.
Strategy
- ------------------------------------ ------------------------------------ --------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Morgan Stanley Emerging Long-term capital appreciation by Morgan Stanley Asset
Markets Equity investing primarily in equity Management Inc.
securities of emerging country
issuers
- ----------------------------------------------------------------------------------------------------------
EQ/Putnam Growth Capital growth, current income is Putnam Investment Management, Inc.
& Income Value a secondary objective
- ----------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Long-term growth of capital and Putnam Investment Management, Inc.
Growth any increased income that results
from this growth
- ----------------------------------------------------------------------------------------------------------
EQ/Putnam International Capital appreciation Putnam Investment Management, Inc.
Equity
- --------------------------------------------------------------- -------------------------------------------
</TABLE>
Other important information about the Portfolios is included in the
separate prospectuses for The Hudson River Trust and EQ Advisors Trust attached
at the end of this prospectus.
FIXED INTEREST OPTIONS
We offer fixed interest options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
interest options. These amounts become part of our general account assets. They
will accumulate interest at guaranteed rates. The total amount you allocate to
and accumulate in each fixed interest option is called the "guaranteed period
amount." The fixed interest options are not available in Contracts issued in
Maryland.
[Sidebar: Fixed interest options ranging from one to ten years to
maturity.]
The guaranteed rate you will receive for each guaranteed period amount is
the interest rate in effect for new contributions allocated to that fixed
interest option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed interest option before the maturity date,
we will make a market value adjustment that may increase or decrease your
guaranteed period amount. We discuss the market value adjustment below, and in
greater detail later in this prospectus under "More Information."
On the maturity date of your fixed interest option, your guaranteed period
amount, assuming you have not made any withdrawals or transfers, will equal your
contribution to that
22
<PAGE>
fixed interest option plus interest to the date of calculation. This is the
fixed interest option's maturity value. On the maturity date, your guaranteed
period amount and maturity value are the same. Prior to maturity, the current
value we will report for your guaranteed period amounts will reflect the market
value adjustment that we would make if you were to withdraw all of your
guaranteed period amounts on the date of the report.
FIXED INTEREST OPTIONS AND MATURITY DATES. We currently offer fixed
interest options ending on February 15th for each of the maturity years 2000
through 2009. Not all of these fixed interest options will be available for
annuitant ages 76 and older. See "Allocating Your Contributions," below. As
fixed interest options expire, we expect to add maturity years so that generally
10 are available at any time.
We will not accept allocations to a fixed interest option if on the date
the contribution is to be applied:
o The fixed interest option's maturity date is within the current
calendar year.
o The guaranteed rate is 3%.
o For annuitants ages 76 or older, the fixed interest option's
maturity date is later than the February 15th immediately
following the date annuity payments are to begin.
OPTIONS AT MATURITY DATE. We will notify you on or before December 31st of
the year before each of your fixed interest options is scheduled to mature. At
that time, you may choose to have one of the following options take place on the
maturity date, as long as none of the conditions listed above or in "Allocating
Your Contributions," below would apply:
(a) transfer the maturity value into another available fixed interest
option, or into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed interest option's
maturity date, we will automatically transfer your maturity value into the fixed
interest option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals, (including
transfers, surrender of your Contract or deductions we make for charges), from a
fixed interest option before it matures we will make a market value adjustment,
which will increase or decrease any guaranteed period amount you have left in
that fixed interest option. The amount of the adjustment will depend on two
factors:
(a) the difference between the guaranteed rate that applies to the
amount being withdrawn and the guaranteed rate in effect at that
time for new allocations to that same fixed interest option, and
(b) the length of time remaining until the maturity date.
23
<PAGE>
In general, if interest rates rise between the time that you originally
allocated an amount to a fixed interest option and the time that you take a
withdrawal, the market value adjustment will be negative. Likewise, if interest
rates drop between that time period, the market value adjustment will be
positive. Also, the amount of the market value adjustment, either up or down,
will be greater the longer the time remaining until the fixed interest option's
maturity date. Therefore, it is possible that the market value adjustment could
greatly reduce your value in the fixed interest options, particularly in the
fixed interest options with later maturity dates.
We provide an illustration of the present value of target maturity values,
an explanation of how we calculated the market value adjustment, and information
concerning our general account and investments purchased with amounts allocated
to the fixed interest options, under "More Information" later in this
prospectus. Appendix II of this prospectus provides an example of how the market
value adjustment is calculated.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general
account. We pay interest at guaranteed rates in this account. We will credit
interest to the amounts that you have in the account for special dollar cost
averaging every day. We set the interest rates periodically, according to
procedures that we have. We reserve the right to change these procedures.
The account for special dollar cost averaging is available for allocation
of your initial contribution only under the special dollar cost averaging
program. It is available only for the first year of your Contract. We will
guarantee to pay our current interest rate that is in effect on the date that
your contribution is allocated to this account. Your guaranteed interest rate
will be shown in your Contract. The rate will never be less than 3%. See
"Allocating Your Contributions," below for the rules and restrictions that apply
to the special dollar cost averaging program.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under
your Contract: self-directed, principal assurance or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed interest options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed interest options if their maturities are
five years or less. Also, you may not allocate amounts to fixed interest options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
24
<PAGE>
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program, we specify the portion of your initial
contribution to be allocated to one of the fixed interest options in an amount
that will cause the maturity value to equal the amount of your entire initial
contribution on the fixed interest option's maturity date. The maturity date
generally may not be later than 10 years, or earlier than seven years from your
Contract Date. You allocate the rest of your contribution to the variable
investment options however you choose.
For example, if your initial contribution is $10,000, and you choose the
fixed interest option with a maturity date of February 15, 2009, since the
guaranteed rate was _____% on April 15, 1999, we would allocate $__________ to
that fixed interest option and the balance to the variable investment options
you select. On the maturity date your value in the fixed interest option would
be $10,000.
The principal assurance allocation is only available for annuitant issue
ages 75 or younger when the Contract is issued. If you are purchasing a
Traditional IRA or TSA Contract, before you select a maturity year that would
extend beyond the year in which you will attain age 70 1/2, you should consider
whether your value in the other variable investment options, or your other
Traditional IRA or TSA funds are sufficient to meet your minimum distribution
requirements. See "Tax Information."
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program allows you to
gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low and fewer units if the unit's value is high. Therefore, you may get
a lower average cost per unit over the long term. These plans of investing,
however, do not guarantee that you will earn a profit or be protected against
losses.
[Sidebar: Units measure your value in the variable investment option.]
SPECIAL DOLLAR COST AVERAGING PROGRAMS. You may dollar cost average from
the account for special dollar cost averaging into any of the variable
investment options. You must allocate your entire initial contribution into the
account. We will transfer your value in the account for special dollar cost
averaging into the variable investment options that you select over the next 12
months. All amounts will be transferred out by the end of the first Contract
Year. You may not allocate additional contributions to the account for special
dollar cost averaging.
[Sidebar: The account for special dollar cost averaging provides guaranteed
interests.]
The only amounts that we can transfer from the account for special dollar
cost averaging are your regularly scheduled monthly transfers to the variable
investment options. If you request to transfer or withdraw any other amounts, we
will transfer all of the value that you have remaining in the account for
special dollar cost averaging to the investment options according to
25
<PAGE>
the allocation percentages we have on file for you. As a result, you will no
longer be able to participate in the special dollar cost averaging program. You
may also ask us to cancel your participation at any time.
If the account for special dollar cost averaging is not available in your
state, we offer a special dollar cost averaging program in the Alliance Money
Market option. Under this program we will not deduct the mortality and expense
risks and administration charges from assets in the Alliance Money Market
option. You may not allocate amounts other than your initial contribution to
this program, which is in effect only for your first Contract Year. We reserve
the right to discontinue offering the Alliance Money Market special dollar cost
averaging program for new Contracts once the account for special dollar cost
averaging becomes available in a state. Your registered representative can
provide information about state availability. You may also contact us directly.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that option
to the other variable investment options. You can select to have transfers made
on a monthly, quarterly or annual basis. The transfer date will be the same
calendar day of the month as the Contract Date, but not later than the 28th.
The minimum amount that we will transfer each time is $250. The maximum
amount we will transfer is equal to your value in the Alliance Money Market
option at the time the program is elected, divided by the number of transfers
scheduled to be made in the next 12 months.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each Contract Year, or
cancel this program at any time.
--------------------
Dollar cost averaging may not be elected if you are participating in the
rebalancing program or are receiving systematic withdrawals. See "Transferring
and Accessing Your Money" below.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a combined guaranteed minimum income
benefit and guaranteed minimum death benefit. The combined benefit is available
if the annuitant is between the ages of 20 and 75. There is an additional charge
for this benefit. See "baseBUILDER Benefit Charge" under "Charges and Expenses."
[Side bar: baseBUILDER provides income protection if you elect an income
payout while the annuitant is alive and a death benefit if the annuitant dies.]
The guaranteed minimum income benefit component of baseBUILDER is described
below under "Your Guaranteed Minimum Income Benefit under baseBUILDER." As part
of
26
<PAGE>
baseBUILDER you have a choice of two guaranteed minimum death benefit options:
either a "5% roll up to age 80" or an "annual ratchet to age 80." The two
options are described under "Guaranteed Minimum Death Benefit." The guaranteed
minimum death benefit is provided under the Contract even if you do not elect
baseBUILDER, and for a broader range of annuitant ages at Contract issue than
those available under baseBUILDER. baseBUILDER is not currently available in New
York.
YOUR GUARANTEED MINIMUM INCOME BENEFIT UNDER BASEBUILDER
The guaranteed minimum income benefit guarantees you a minimum amount of
lifetime income under our Income Manager (Life Annuity with a Period Certain)
payout annuity contract. The Income Manager (Life Annuity with a Period Certain)
payout annuity contract provides payments during a specified period of time
(called a period certain) and will continue for the rest of the annuitant's life
thereafter. If the annuitant dies before the period certain has ended, payments
will continue to the beneficiary for the time remaining in the period certain.
[Sidebar: We also refer to the guaranteed minimum income benefit as the
"Living Benefit."]
GUARANTEED MINIMUM INCOME BENEFIT'S BENEFIT BASE. On the Contract Date,
your guaranteed minimum income benefit's benefit base ("benefit base") is equal
to the initial contribution. Thereafter, the benefit base is credited with
interest on each Contract Date anniversary (compounded annually) through the
annuitant's age 80. The interest rate is 5% for amounts in the variable
investment options (other than the Alliance Money Market option) and in the
special dollar cost averaging programs. Amounts in the Alliance Money Market
option, the fixed interest options, and in a TSA Contract loan reserve account
will be credited with interest at 3%. No interest is credited after age 80.
If you make an additional contribution to your Contract, we will increase
your current benefit base by the dollar amount of the additional contribution on
the date that the contribution is allocated to your investment options. If you
take a withdrawal from your Contract, we will adjust your benefit base for the
withdrawal on the date that you make the withdrawal. See "How Withdrawals Affect
Your Guaranteed Minimum Income Benefit and Guaranteed Minimum Death Benefit"
under "Transferring and Accessing Your Money" for more detailed information. The
benefit base will also be reduced by any withdrawal charge remaining when you
exercise your guaranteed minimum income benefit.
[Sidebar: Your benefit base is not an account value or a cash value and
is used solely for purposes of calculating your guaranteed minimum income
benefit.]
---------------------
EXERCISING YOUR BENEFIT AND INCOME YOU WILL RECEIVE. If you exercise the
guaranteed minimum income benefit, the annual lifetime income that you will
receive under the Income Manager (Life Annuity with a Period Certain) payout
annuity contract, will be the greater of (i)
27
<PAGE>
your guaranteed minimum income benefit, and (ii) the income provided by applying
your actual account value at our then current annuity purchase factors.
The guaranteed minimum income benefit is based on conservative actuarial
factors. Therefore, even if your account value is less than your benefit base,
you may generate more income by applying your account value to current annuity
purchase factors. We will make this comparison for you when the need arises.
[Sidebar: The guaranteed minimum income benefit should be regarded as a
safety net only.]
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below
illustrates the guaranteed minimum income benefit amounts per $100,000 of
initial contribution, for a male annuitant age 60 (at issue) on the Contract
Date anniversaries indicated, assuming no additional contributions, withdrawals,
or loans under TSA Contracts, and assuming there were no allocations to the
Alliance Money Market option or the fixed interest options.
- --------------------------------------------------------------------------------
GUARANTEED MINIMUM
INCOME BENEFIT -- ANNUAL INCOME
CONTRACT DATE PAYABLE FOR LIFE WITH
ANNIVERSARY AT EXERCISE 10 YEAR PERIOD CERTAIN
- --------------------------------------------------------------------------------
7 $ 8,315
10 10,341
15 14,924
- --------------------------------------------------------------------------------
Under NQ, Traditional IRA, and Roth IRA Contracts, you may exercise the
guaranteed minimum income benefit only within 30 days following the seventh or
later Contract Date anniversary under your Contract. However, you may not
exercise the benefit before the annuitant is age 60, or after the annuitant is
age 83. There is an exception if the annuitant is between ages 20 and 44 when
your Contract is issued. In this case you may exercise the benefit following the
15th or later Contract Date anniversary, but not after the annuitant is age 83.
See "Exercise of Guaranteed Minimum Income Benefit under QP and TSA Contracts"
below regarding exercising the benefit under QP and TSA Contracts.
Your Contract will terminate when you exercise your guaranteed minimum
income benefit. You will then receive an Income Manager (Life Annuity with a
Period Certain) payout annuity contract. Your period certain will be based on
the annuitant's age at the time the benefit is exercised, as follows:
28
<PAGE>
- --------------------------------------------------------------------------------
LEVEL PAYMENTS*
PERIOD CERTAIN YEARS
ANNUITANT'S TRADITIONAL
AGE AT EXERCISE AND ROTH IRA NQ
- --------------------------------------------------------------------------------
60 to 75 10 10
76 9 10
77 8 10
78 7 10
79 7 10
80 7 10
81 7 9
82 7 8
83 7 7
- ----------
* Other forms and periods certain may also be available. For Traditional IRA
Contracts, please see "Minimum Distributions" under "Tax Information," as to how
this option may be affected if exercised after age 70 1/2.
You will begin receiving payments one payment period after the payout
annuity contract is issued. For example, if you select monthly annuity payments,
we will send your first payment to you approximately one month from the date
your Contract is issued.
Each year on your Contract Date anniversary, if you are eligible to
exercise the guaranteed minimum income benefit, we will send you an eligibility
notice illustrating how much income could be provided as of the Contract Date
anniversary. You may then notify us within 30 days following the Contract Date
anniversary if you want to exercise the guaranteed minimum income benefit. You
must return your Contract to us in order to exercise this benefit. The amount of
income you actually receive will be determined when we receive your request to
exercise the benefit.
You may also apply your cash value at any time to an Income Manager (Life
Annuity with a Period Certain) payout annuity contract, and you may always apply
your account value to any of our traditional annuity payout options. The
traditional annuity payout options are discussed under "Transferring and
Accessing Your Money." These options differ from the Income Manager payout
annuity contracts. They may provide higher or lower income levels, but do not
have all the features of the Income Manager payout annuity contract. You may
request an illustration of the Income Manager payout annuity contract from your
registered representative.
The Income Manager (Life Annuity with a Period Certain) payout annuity
contracts are offered through our prospectus for the Income Manager payout
annuities. You may obtain a copy of the most current version from your
registered representative. You should read it carefully before you decide to
exercise your guaranteed minimum income benefit.
SUCCESSOR ANNUITANT/CONTRACT OWNER. If the successor annuitant/contract
owner (discussed under "More Information" below) elects to continue the Contract
after your death, the guaranteed minimum income benefit will continue to be
available on the Contract Date
29
<PAGE>
anniversaries specified above based on the Contract Date. However, the
guaranteed minimum income benefit must be exercised based on the age of the
successor annuitant/contract owner.
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT UNDER QP AND TSA CONTRACTS.
Under QP Contracts, the guaranteed minimum income benefit may be exercised in
the same manner as described above only after the trustee of the qualified plan
directly rolls over the QP Contract to a Traditional IRA Contract. In this
process the ownership of the QP Contract is changed to the annuitant. The
rollover to a Traditional IRA Contract and change of ownership may only occur
when the annuitant will no longer be a participant in the qualified plan.
Similarly, under TSA Contracts the contract owner must convert the TSA
Contract in a direct rollover to a Traditional IRA Contract according to our
rules. The rollover to a Traditional IRA Contract may only occur when you are
eligible for a rollover distribution from a TSA. This may generally occur when
you are age 59 1/2, or you are separated from service from the employer who
provided the TSA funds. See "Rollover or Direct Transfer Contributions" under
"Tax Information" later in this prospectus.
GUARANTEED MINIMUM DEATH BENEFIT
Applicable for annuitant ages 0 through 79 at issue of NQ Contracts;
20 through 78 at issue of Traditional IRA, Roth IRA and TSA Contracts;
and 20 through 70 at issue of QP Contracts.
You may elect either the "5% roll up to age 80" or the "annual ratchet
to age 80" guaranteed minimum death benefit when you apply for a Contract. Once
you have made your election, you may not change it.
5% ROLL UP TO AGE 80. On the Contract Date, the guaranteed minimum death
benefit equals your initial contribution. Thereafter, the guaranteed minimum
death benefit will be credited with interest on each Contract Date anniversary
(compounded annually) through the annuitant's age 80. The interest rate is 5%
for amounts in the variable investment options (other than the Alliance Money
Market option) and in the special dollar cost averaging programs. Amounts in the
Alliance Money Market option, the fixed interest options and in a TSA Contract
loan reserve account will be credited with interest at 3%. No interest is
credited after the annuitant is age 80.
If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the additional
contribution on the date the contribution is allocated to your investment
options. If you take a withdrawal from your Contract, we will adjust your
guaranteed minimum death benefit for the withdrawal on the date you take the
withdrawal.
The 5% roll up to age 80 guaranteed minimum death benefit is not available
in New York.
30
<PAGE>
ANNUAL RATCHET TO AGE 80. On the Contract Date, your guaranteed minimum
death benefit equals your initial contribution. Then, on each Contract Date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value on
that Contract Date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum death
benefit to equal your account value. On the other hand, if your account value on
the Contract Date anniversary is less than your guaranteed minimum death
benefit, we will not adjust your guaranteed minimum death benefit either up or
down.
If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on the
date the contribution is allocated to your investment options. If you take a
withdrawal from your Contract, we will adjust your guaranteed minimum death
benefit on the date you take the withdrawal.
Applicable for annuitant ages 80 through 83 when the Contract is issued.
On the Contract Date, your guaranteed minimum death benefit equals your
initial contribution. Thereafter, it will be increased by the dollar amount of
any additional contributions. We will adjust your guaranteed minimum death
benefit if you take any withdrawals.
--------------------
Please see "How Withdrawals Affect Your Guaranteed Minimum Income Benefit
and Guaranteed Minimum Death Benefit" under "Transferring and Accessing Your
Money" for information on how withdrawals affect your guaranteed minimum death
benefit. For Contracts issued in New York, the guaranteed minimum death benefit
at the annuitant's death will never be less than your value in the variable
investment options, plus the sum of the guaranteed period amounts in each fixed
interest option.
See Appendix IV for an example of how we calculate the guaranteed
minimum death benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your Contract, you may return
it to us for a refund. To exercise this cancellation right you must mail the
Contract directly to our Processing Office within 10 days after you receive it.
In some states, this "free look" period may be longer.
Your refund will equal your account value under the Contract and will
reflect (i) any investment gain or loss in the variable investment options, (ii)
any positive or negative market value adjustments in the fixed interest options,
and (iii) any guaranteed interest in the account for special dollar cost
averaging, through the date we receive your Contract. Some states or Federal
income tax regulations may require us to calculate the refund differently. If
you cancel your Contract during the free look period, we may require that you
wait six months before you may apply for a Contract with us again.
31
<PAGE>
We follow these same procedures if you change your mind before you receive
your Contract, but after you have made a contribution. Please see "Tax
Information" for possible consequences of canceling your Contract.
If you fully convert an existing Traditional IRA Contract to a Roth IRA
Contract, you may cancel your Roth IRA Contract and return to a Traditional IRA
Contract. Our Processing Office, or your registered representative, can provide
you with the cancellation instructions. Ask for the form entitled "Request for
Full Conversion."
DETERMINING YOUR CONTRACT'S VALUE
YOUR ACCOUNT VALUE
We credit your contributions to your Contract as "account value." Your
account value is always the total of the amounts you have allocated to the (i)
variable investment options, (ii) fixed interest options, and (iii) account for
special dollar cost averaging, plus (iv) any amount in a loan reserve account if
you have a loan under a TSA Contract. These amounts are subject to certain fees
and charges discussed under "Charges and Expenses."
Your Contract also has a "cash value." At any time before annuity payments
begin, your Contract's cash value is equal to the account value, less any
withdrawal charge that may apply if you surrender your Contract. If you have a
TSA Contract with an outstanding loan, your cash value also is reduced by the
amount of the loan balance. Please see "Surrendering Your Contract to Receive
its Cash Value" below.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
You may allocate your contributions to one or more of the variable
investment options. Each investment option invests in shares of a corresponding
Portfolio. Your value in each variable investment option is measured by "units."
The value of your units will increase or decrease as though you had invested it
in the corresponding Portfolio's shares directly. Your value, however, will be
reduced by the amount of the fees and charges that we deduct under the Contract.
Your value will also be reduced by the dollar amount of any withdrawals that you
make.
The unit value for each variable investment option depends on the
investment performance of that option, minus daily charges. On any day, your
value in any variable investment option equals the number of units credited to
your Contract under that option, multiplied by that day's value for one unit.
The number of your Contract units in any variable investment option does not
change unless you make additional contributions, make a withdrawal, or transfer
amounts between investment options. In addition, when we deduct the baseBUILDER
benefit charge and any withdrawal charge the number of units credited to your
Contract will be reduced. A description of how unit values are calculated is
found in the SAI.
32
<PAGE>
YOUR CONTRACT'S VALUE IN THE FIXED INTEREST OPTIONS
Your value in the fixed interest options is the sum of the present value of
the maturity value in each fixed interest option. We use the guaranteed rate in
effect for new allocations to the fixed interest option to discount the maturity
value to the present value. This is equivalent to your guaranteed period amount
increased or decreased by the market value adjustment. Your value, therefore,
may be higher or lower than your contributions (less withdrawals) accumulated at
the guaranteed rate. At the maturity date of a fixed interest option, your value
in the fixed interest option will equal its maturity value.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time
will equal your initial contribution allocated to that option, plus interest,
less the sum of all amounts that have been transferred to the variable
investment options you have selected.
TRANSFERRING AND ACCESSING YOUR MONEY
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar
cost averaging.
o You may not transfer to a fixed interest option that matures in
the current calendar year, or if its guaranteed rate is 3%.
o If the annuitant is 76 or older, you must limit your transfers to
fixed interest options to those with maturities of five years or
less. Also, the maturity dates may be no later than the February
15th immediately following the date annuity payments are to begin.
o If you make transfers out of a fixed interest option other than at
its maturity date the transfer may cause a market value
adjustment.
You must send all transfer requests directly to our Processing Office. You
may request a transfer in writing or by telephone. Transfer requests should
specify:
(1) the Contract number,
(2) the dollar amounts or percentages of your current account value
to be transferred, and
(3) the investment options to and from which you are transferring.
You can also use our TOPS system to make transfers among the investment
options.
33
<PAGE>
We may, at any time, restrict the use of market timers and other agents
acting under a power of attorney who are acting on behalf of more than one
contract owner. Any agreements to use market timing services to make transfers
are subject to our rules in effect at that time.
We will confirm all transfers in writing.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option
(whole percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually,
or annually on a Contract Year basis. However, it will occur on the
same day of the month as the Contract Date).
While your rebalancing program is in effect, we will transfer amounts among
each variable investment option so that the percentage of your account value
that you specify is invested in each option at the end of each rebalancing date.
[Sidebar: Rebalancing does not assure a profit or protect against loss. You
should periodically review your allocation percentages as your needs change. You
may want to discuss the rebalancing program with your registered representative
or other financial adviser before electing the program.]
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested and then cancel the rebalancing program.
You may not elect the rebalancing program if a dollar cost averaging
program is in effect. Rebalancing is not available for amounts you have
allocated in the fixed interest options.
WITHDRAWING YOUR ACCOUNT VALUe
You have several ways to withdraw your account value before annuity
payments begin. The table below shows the methods available under each type of
Contract. More information follows the table. For the tax consequences of
withdrawals, see "Tax Information."
34
<PAGE>
METHOD OF WITHDRAWAL
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- -------- -------- ---------- ----- ------------
NQ Yes Yes No No
Traditional IRA Yes Yes Yes Yes
Roth IRA Yes Yes Yes No
QP Yes No No No
TSA Yes* No No Yes*
- ---------------------
*For some TSA Contracts, your ability to take withdrawals, loans or surrender
your Contract may be limited. You must provide this information when you apply
for a Contract. See "Tax Information -- Tax Sheltered Annuity Contracts (TSAs)"
below.
LUMP SUM WITHDRAWALS
(All Contracts)
You may take lump sum withdrawals of your account value at any time. (TSA
Contracts may have restrictions.) The minimum amount you may withdraw is $1,000.
If you request to withdraw more than 90% of a Contract's current cash value we
will treat it as a request to surrender the Contract for its cash value. See
"Surrendering your Contract to Receive its Cash Value" below.
Lump sum withdrawals in excess of the 15% free withdrawal amount may be
subject to a withdrawal charge. Under TSA Contracts, if a loan is outstanding,
you may only take lump sum withdrawals as long as the cash value remaining after
any withdrawal equals at least 10% of the outstanding loan balance.
SYSTEMATIC WITHDRAWALS
(Traditional IRA, Roth IRA and NQ Contracts Only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly or annual basis
as long as the withdrawals do not exceed the following percentages of your
account value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum
amount you may take in each systematic withdrawal is $250. If the amount
withdrawn would be less than $250 on the date a withdrawal is to be taken, we
will not make a payment and we will terminate your systematic withdrawal
election.
We will make the withdrawals on any day of the month that you select as
long as it is not later than the 28th day of the month. If you do not select a
date, we will make the withdrawals
35
<PAGE>
on the same calendar day of the month as the Contract Date. You must wait at
least 28 days after your Contract is issued before your systematic withdrawals
can begin.
You may elect to take systematic withdrawals at any time. If you own a
Traditional IRA or Roth IRA Contract, you may elect this withdrawal method only
if you are between ages 59 1/2 and 70 1/2. You may not elect the systematic
withdrawal method if you have balances in the account for special dollar cost
averaging.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each Contract Year. However, you may not change the
amount or percentage in any Contract Year in which you have already taken a lump
sum withdrawal. You can cancel the systematic withdrawal option at any time.
Systematic withdrawals are not subject to a withdrawal charge, except to
the extent that, when added to a lump sum withdrawal previously taken in the
same Contract Year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Traditional IRA and Roth IRA Contracts only)
The substantially equal withdrawals option allows you to receive
distributions from your account value without triggering the 10% additional
federal tax penalty which normally applies to distributions made before age 59
1/2. See "Tax Information." Once you begin to take substantially equal
withdrawals, you should not stop them or change the pattern of your withdrawals
until the later of age 59 1/2 or five full years after the first withdrawal. If
you stop or change the withdrawals or take a lump sum withdrawal, you may be
liable for the 10% federal tax penalty that would have otherwise been due on
prior withdrawals made under this option and for any interest on those
withdrawals.
You may elect to take substantially equal withdrawals at any time before
age 59 1/2. We will make the withdrawal on any day of the month that you select
as long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same Contract Year in which you took a lump sum
withdrawal. We will calculate the amount of your substantially equal withdrawals
under a method we select and payments will be made monthly, quarterly or
annually as you select. These payments will continue until we receive written
notice from you to cancel this option or you take a lump sum withdrawal. You may
elect to start receiving substantially equal withdrawals again, but the payments
may not restart in the same Contract Year in which you took a lump sum
withdrawal. We will calculate the new withdrawal amount.
You may not elect substantially equal withdrawals if you have balances in
the account for special dollar cost averaging.
Substantially equal withdrawals are not subject to a withdrawal charge.
36
<PAGE>
MINIMUM DISTRIBUTION WITHDRAWALS
(Traditional IRA and TSA Contracts only -- See "Tax Information")
We offer the minimum distribution withdrawal option to help you meet
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you attain age 70 1/2. The minimum amount we
will pay out is $250. You may elect minimum distribution withdrawals for each
Traditional IRA or TSA Contract you own, subject to our rules then in effect.
Currently, minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals
except if when added to a lump sum withdrawal previously taken in the same
Contract Year, the minimum distribution withdrawal exceeds the 15% free
withdrawal amount.
We will calculate your payment each year based on your account value at the
end of each calendar year, using the recalculation method of determining
payments.
Under TSA Contracts, you may not elect minimum distribution withdrawals if
a loan is outstanding.
[Sidebar: For Traditional IRA retirement benefits subject to minimum
distribution requirements, we will send a form outlining the distribution
options available before you reach age 70 1/2 (if you have not begun your
annuity payments before that time).]
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Lump Sum Withdrawal
You must specify the investment options from which you want to take the
withdrawal. If we receive only partial information, our Processing Office will
contact you for complete instructions before processing your request. A market
value adjustment may apply to amounts withdrawn from the fixed interest options.
Systematic Withdrawals, Substantially Equal Withdrawals, and Minimum
Distribution Withdrawals
Unless you specify otherwise, we will subtract your withdrawals on a pro
rata basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed interest options in order of the
earliest maturity date(s) first. A market value adjustment may apply.
37
<PAGE>
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT
Benefit base - Your current benefit base will be reduced on a dollar-for-dollar
basis as long as the sum of your withdrawals in a Contract Year is 5% or less of
the guaranteed minimum death benefit on the most recent Contract Date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a Contract Year to exceed 5% of the guaranteed minimum death benefit on the
most recent Contract Date anniversary, that withdrawal and any subsequent
withdrawals in that same Contract Year will reduce your current benefit base on
a pro rata basis.
DEATH BENEFIT
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed minimum
death benefit, your current guaranteed minimum death benefit will be reduced on
a dollar-for-dollar basis as long as the sum of your withdrawals in a Contract
Year is 5% or less of the guaranteed minimum death benefit on the most recent
Contract Date anniversary. Once you take a withdrawal that causes the sum of
your withdrawals in a Contract Year to exceed 5% of the guaranteed minimum death
benefit on the most recent Contract Date anniversary, that withdrawal and any
subsequent withdrawals in that same Contract Year will reduce your current
guaranteed minimum death benefit on a pro rata basis.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your current
guaranteed minimum death benefit on a pro rata basis.
Annuitant Issue Ages 80 through 83 - If your Contract was issued when the
annuitant was between ages 80 and 83, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
---------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would be
$24,000 ($40,000 - $16,000).
38
<PAGE>
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
LOANS UNDER TSA CONTRACTS
You may take loans from a TSA unless restricted by the employer who
provided the TSA funds. If you cannot take a loan, or cannot take a loan without
approval from the employer who provided the funds, we will have this information
in our records based on what you and the employer who provided the funds told us
when you purchased your Contract. The employer must also tell us whether special
employer plan rules of the Employee Retirement Income Securities Act of 1974
("ERISA") apply. We will not permit you to take a loan while you are taking
minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under TSA Contracts subject to ERISA, you may only
take a loan with the written consent of your spouse. Your Contract contains
further details of the loan provision. Also, see "Tax Information" for general
rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the Contract terminates, and
(3) the date a death benefit is paid (the loan balance will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The
loan interest rate will be equal to the Moody's Corporate Bond Yield Averages
for the calendar month ending two months before the day of the calendar quarter
in which the rate is determined.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your Contract to receive its cash value at any time while
the annuitant is living and before you begin to receive annuity payments. (TSA
Contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your Contract at our Processing Office. We will
determine your cash value on the date we receive the required information. All
benefits under the Contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one
or more of the annuity payout options. See "Choosing Your Annuity Payout
Options" below. We will usually pay the cash value within seven calendar days,
but we may delay payment as described
39
<PAGE>
in "When To Expect Payments," below. For the tax consequences of surrenders, see
"Tax Information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable
investment options within seven calendar days after the date of the transaction
to which the request relates. These transactions may include applying proceeds
to a variable annuity, payment of a death benefit, payment of any portion of
your account value (less any withdrawal charge) and, upon surrender, payment of
the cash value. We may postpone such payments or applying proceeds for any
period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people
remaining in the variable investment option.
We can defer payment of any portion of your value in the fixed interest
options and the account for special dollar cost averaging (other than for death
benefits) for up to six months while you are living. We also may defer payments
for a reasonable amount of time (not to exceed 15 days) while we are waiting for
a contribution check to clear.
CHOOSING YOUR ANNUITY PAYOUT OPTIONS
The Equitable Accumulator offers you several choices for receiving
retirement income. Each choice enables you to receive fixed or, in some cases,
variable annuity payments.
You can choose from among the six different annuity payout options listed
below. Restrictions apply, depending on the type of Contract you own.
- --------------------------------------------------------------------------------
TRADITIONAL ANNUITY PAYOUT OPTIONS Life Annuity
Life Annuity -- Period Certain
Life Annuity -- Refund Certain
Period Certain Annuity
INCOME MANAGER PAYOUT OPTIONS Life Annuity with a Period Certain
Period Certain Annuity
- --------------------------------------------------------------------------------
TRADITIONAL ANNUITY PAYOUT OPTIONS
You can choose from among the following traditional annuity payout options:
40
<PAGE>
o Life Annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before
the annuitant's death. Because there is no death benefit with this
payout option, it provides the highest monthly payment of any of the
life annuity options, so long as the annuitant is living.
o Life Annuity -- Period Certain: An annuity that guarantees payments
for the rest of the annuitant's life, and, if the annuitant dies
before the end of a selected period of time ("period certain"),
provides payments to the beneficiary for the balance of the period
certain. A life annuity with a period certain of 10 years is the
normal form of annuity under the Contracts.
o Life Annuity -- Refund Certain: An annuity that guarantees payments
for the rest of the annuitant's life, and, if the annuitant dies
before the amount applied to purchase the annuity option has been
recovered, provides payments to the beneficiary that will continue
until that amount has been recovered. This payout option is available
only as a fixed annuity.
o Period Certain Annuity: An annuity that guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years. This option
does not guarantee payments for the rest of the annuitant's life.
Currently, this payout option is available only as a fixed annuity.
All of the above payout options are available as fixed annuities. With
fixed annuities, we guarantee fixed annuity payments that will be based either
on the tables of guaranteed annuity payments in your Contract or on our then
current annuity rates, whichever is more favorable for you.
The life annuity, life annuity -- period certain, and life annuity --
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments for
the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor.
The following traditional annuity payout options are available as variable
annuities:
o Life Annuity (except in New York).
o Life Annuity -- Period Certain.
o Joint and Survivor Life Annuity.
o Joint and Survivor Life Period Certain Annuity (100% to Survivor).
Variable annuities may be funded through your choice of variable investment
options investing in Portfolios of The Hudson River Trust. The amount of each
variable annuity payment will fluctuate, depending upon the performance of the
variable investment options, and whether the actual rate of investment return is
higher or lower than an assumed base rate. Please see "Annuity Unit Values" in
the SAI.
41
<PAGE>
We may offer other payout options not outlined here. Your registered
representative can provide details.
SELECTING A TRADITIONAL ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written
agreement confirming your right to receive annuity payments. We require you to
return your Contract before annuity payments begin.
For Traditional IRA, Roth IRA, and NQ Contracts, unless you choose a
different payout option, we will pay fixed annuity payments under a life annuity
with a certain period of 10 years. The only payout options available under QP
Contracts and TSA Contracts are the Life Annuity 10 Year Period Certain and the
Joint and Survivor Life Annuity 10 Year Period Certain.
You can choose the date annuity payments are to begin. You can change the
date your annuity payments are to begin anytime before that date as long as you
do not choose a date later than the 28th day of any month. Also, that date may
not be later than the Contract Date anniversary that follows the annuitant's
90th birthday. This may be different in some states.
Before your annuity payments are to begin, we will notify you by letter
that the annuity payout options are available. Once you have selected a payout
option and payments have begun, no change can be made.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity, the type of annuity chosen and, in the case of a life
annuity, the annuitant's age (or the annuitant's and joint annuitant's ages) and
in certain instances, the sex of the annuitant(s).
The amount we apply to provide annuity payments will depend on the type of
payout option you select. If you select a payout option that provides for
payments for the rest of the annuitant's life, then we will apply your account
value. If you select a payout option that provides for payments for a period
certain, then we will apply your cash value. However, if the period certain is
more than five years, we will apply not less than 95% of the account value.
Amounts in the fixed interest options that are applied to a payout option before
a maturity date will result in a market value adjustment.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a lump sum rather than
as payments under the payout option chosen.
42
<PAGE>
INCOME MANAGER PAYOUT OPTIONS
For Traditional IRA, Roth IRA, and NQ Contracts, two Income Manager payout
options are also available. These are the Income Manager (Life Annuity with a
Period Certain) and the Income Manager (Period Certain).
For QP Contracts, the Income Manager payout options are available only
after the trustee of the qualified plan directly rolls over the QP Contract to a
Traditional IRA Contract. In this process the ownership of the QP Contract is
changed to the annuitant. The rollover to a Traditional IRA Contract and the
change of ownership may only occur when the annuitant will no longer be a
participant in the qualified plan.
For TSA Contracts, the Income Manager payout annuity options are available
only after the TSA Certificate is rolled over to a Traditional IRA Certificate.
This may generally occur when you are age 59 1/2, or you have separated from
service with the employer who provided the TSA funds.
The Income Manager (Life Annuity with a Period Certain) provides guaranteed
payments for the annuitant's life or for the annuitant's life and the life of a
joint annuitant. The Income Manager (Period Certain) provides payments for a
specified period. The contract owner and annuitant must meet the issue age and
payment requirements. Both Income Manager annuities provide guaranteed level
payments (Traditional IRA, Roth IRA, and NQ Contracts). The Income Manager (Life
Annuity with a Period Certain) also provides guaranteed increasing payments (NQ
Contracts only).
If you apply only part of the account value of your Contract to either of
the Income Manager payout annuities we will consider it a withdrawal and may
deduct a withdrawal charge. We will not deduct a withdrawal charge if you apply
all of your account value at a time when the dollar amount of the withdrawal
charge is greater than 2% of remaining contributions (after withdrawals).
However, a new withdrawal charge schedule will apply under the Income Manager
annuity. For purposes of the withdrawal charge schedule, the year in which your
account value is applied under the Income Manager annuity will be "Contract Year
1." In addition, we will not deduct a withdrawal charge if you apply all of your
account value from your Equitable Accumulator Contract when the dollar amount of
the withdrawal charge under such Contract is 2% or less. This means that no
withdrawal charge schedule will apply under the Income Manager payout annuity
contract.
You should consider the timing of your purchase as it relates to the
potential for withdrawal charges under the Income Manager annuity. No additional
contributions will be permitted under an Income Manager (Life Annuity with a
Period Certain).
You also may apply your account value to an Income Manager (Period Certain)
annuity once withdrawal charges are no longer in effect under your Contract. No
withdrawal charges will apply under that Income Manager annuity.
43
<PAGE>
The Income Manager annuities are described in a separate prospectus. Copies
of the most current version are available from your registered representative.
To purchase an Income Manager annuity we also require the return of your
Contract. We will issue an Income Manager annuity to put one of the payout
annuities into effect. Depending upon your circumstances, this may be done on a
tax-free basis. Please consult your tax adviser.
CHARGES AND EXPENSES
CHARGES THAT EQUITABLE DEDUCTS
We deduct the following charges each day from the net assets of each
variable investment option:
o A mortality and expense risks charge.
o An administration charge.
We deduct the following charges from your account value:
o At the time you make certain withdrawals or surrender your Contract --
a withdrawal charge.
o If you elect the optional benefit -- a charge for the optional
baseBUILDER benefit.
o At the time annuity payments are to begin -- charges for state premium
and other taxes.
More information about these charges appears below. We will not increase
these charges for the life of your Contract, except as noted. We may reduce
certain charges under group or sponsored arrangements. See "Group or Sponsored
Arrangements" below.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for mortality and expense risks, including the
guaranteed minimum death benefit. The daily charge is equivalent to an annual
rate of 1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will
live for a longer time than our actuarial tables predict. If that happens, we
would be paying more in annuity income than we planned. We also assume a risk
that the mortality assumptions reflected in our guaranteed annuity payment
tables, shown in each Contract, will differ from actual mortality experience.
Lastly, we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the Contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the Contracts than we expect.
44
<PAGE>
ADMINISTRATION CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for administration expenses under the Contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the Contracts to increase
this charge to an annual rate of 0.35%.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or
more withdrawals during a Contract Year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your Contract to
receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn.
The percentage that applies depends on how long each contribution has been
invested in the Contract. We determine the withdrawal charge separately for each
contribution according to the following table:
<TABLE>
<CAPTION>
CONTRACT YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7 8+
- ------------------------- ---------- ----------- ----------- ---------- ----------- ----------- ----------- ----------
Percentage of
Contribution 7% 6% 5% 4% 3% 2% 1% 0%
</TABLE>
For purposes of calculating the withdrawal charge, we treat the Contract
Year in which we receive a contribution as "Contract Year 1." Amounts withdrawn
up to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest as
being withdrawn first. We treat contributions as withdrawn before earnings for
purposes of calculating the withdrawal charge. However, federal income tax rules
treat earnings under your Contract as withdrawn first. See "Tax Information."
We deduct the withdrawal charge from your account value in the investment
options from which you have taken a withdrawal. We deduct the charge in
proportion to the amount withdrawn from each investment option. The initial
amount deducted to pay each withdrawal charge is also subject to a withdrawal
charge. The withdrawal charge helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each Contract Year you can withdraw up to 15%
of your account value without paying a withdrawal charge. The 15% free
withdrawal amount is determined using your account value on the most recent
Contract Date anniversary, minus any other withdrawals made during the
Contract Year. The 15% free withdrawal amount does not apply if you
surrender your Contract.
45
<PAGE>
Note the following special rule for NQ Contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1)
the current account value, less contributions that have not been withdrawn
(earnings in the Contract), and (2) the 15% free withdrawal amount defined
above.
MINIMUM DISTRIBUTIONS. The withdrawal charge does not apply to withdrawals
taken under our minimum distribution withdrawal option. However, those
withdrawals are counted towards the 15% free withdrawal amount if you also
make a lump sum withdrawal in any Contract Year.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The
withdrawal charge also does not apply if:
o The annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration.
o We receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six months
or less.
o The annuitant has been confined to a nursing home for more than 90
days (or such other period, as required in your state) as verified by
a licensed physician. A nursing home for this purpose means one that
is (a) approved by Medicare as a provider of skilled nursing care
service, or (b) licensed as a skilled nursing home by the state or
territory in which it is located (it must be within the United States,
Puerto Rico, U.S. Virgin Islands, or Guam) and meets all of the
following:
- its main function is to provide skilled, intermediate, or
custodial nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical
nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for
residents.
We reserve the right to impose a withdrawal charge, in accordance with your
Contract and applicable state law, for preexisting conditions or conditions
that began within 12 months of the Contract Date. Some states may not
permit us to waive the withdrawal charge in the foregoing circumstances, or
may limit the circumstances for which the withdrawal charge may not apply.
Your registered representative can provide more information or you may
contact our Processing Office.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER combined guaranteed minimum income benefit and
guaranteed minimum death benefit, we deduct a charge annually from your account
value on
46
<PAGE>
each Contract Date anniversary. The charge is equal to 0.30% of the benefit base
in effect on the Contract Date anniversary.
We will deduct this charge from your value in the variable investment
options on a pro rata basis. If there is not enough value in the variable
investment options, we will deduct all or a portion of the charge from the fixed
interest options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as state or local premium
taxes that may be imposed in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout. The current tax charge that
might be imposed varies by state and ranges from 0% to 3.5% (1% in Puerto Rico
and 5% in the U.S. Virgin Islands).
CHARGES THAT THE TRUSTS DEDUCT
The Hudson River Trust and EQ Advisors Trust each deducts charges for the
following types of fees and expenses:
o Investment advisory fees ranging from 0.35% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors'
fees, legal counsel fees, administrative service fees, custodian fees,
and liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each Portfolio. For
more information about these charges, please refer to the prospectuses of the
Trusts.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the guaranteed minimum death
benefit and the guaranteed minimum income benefit, or offer variable investment
options that invest in shares of The Hudson River Trust or EQ Advisors Trust
that are not subject to the 12b-1 fee. Group arrangements include those in which
a trustee or an employer, for example, purchases contracts covering a group of
individuals on a group basis. Group arrangements are not available for
Traditional IRA and Roth IRA Contracts. Sponsored arrangements include those in
which an employer allows us to sell Contracts to its employees or retirees on an
individual basis.
Our costs for sales, administration, and mortality generally vary with the
size and stability of the group or sponsoring organization, among other factors.
We take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years
47
<PAGE>
in existence. Group or sponsored arrangements that have been set up solely to
buy Contracts or that have been in existence less than six months will not
qualify for reduced charges.
We also may establish different guaranteed rates for the fixed interest
options under different classes of Contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in
effect when we approve a Contract for issue. We may change these rules from time
to time. Any variation in the withdrawal charge will reflect differences in
costs or services and will not be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax
rules, ERISA or both. We make no representations as to the impact of those and
other applicable laws on such programs. We recommend that employers, trustees,
and others purchasing or making Contracts available for purchase under such
programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that
result in savings of sales and administrative expenses, such as sales through
persons who are compensated by clients for recommending investments and who
receive no commission or reduced commissions in connection with the sale of the
Contracts. We will not permit a reduction or elimination of charges where it
would be unfairly discriminatory.
PAYMENT OF DEATH BENEFIT
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your Contract. You may be
limited as to the beneficiary you can designate in a TSA Contract. In a QP
Contract, the beneficiary must be the trustee. You may change your beneficiary
at any time. Under jointly owned Contracts, the surviving owner is deemed the
beneficiary, and will supersede any other beneficiary.
The death benefit is equal to your account value, or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your Contract, whether you select the combined baseBUILDER benefit or not. We
determine the amount of the death benefit as of the date we receive satisfactory
proof of the annuitant's death and any required instructions as to the method of
payment.
48
<PAGE>
WHEN THE ANNUITANT DIES BEFORE ANNUITY PAYMENTS BEGIN
If the annuitant dies before the annuity payments begin, we will pay the
death benefit to your beneficiary.
CHANGE OF OWNER ON DEATH
Under certain conditions the owner can change after the original owner's
death. Under Traditional IRA and Roth IRA Contracts only, a beneficiary who is
the surviving spouse can choose to be treated as the successor owner/annuitant.
Under NQ Contracts when the owner dies the person designated as successor owner
becomes the new owner. Only a spouse can be a successor owner/annuitant.
For Traditional IRA Contracts, a beneficiary who is not a surviving spouse
may be able to have limited ownership.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
When you are not the annuitant under an NQ Contract and you die before
annuity payments begin, the beneficiary named to receive the death benefit upon
the annuitant's death will automatically become the contract owner (unless you
have named a different person as successor owner and have notified us of the
change). If the Contract is jointly owned and the first owner to die is not the
annuitant, the surviving owner becomes the sole contract owner and will be
deemed the "beneficiary" for purposes of the distribution rules described in
this section, automatically superseding any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the designated beneficiary for this purpose, the entire interest in the Contract
must be distributed under the following rules.
The cash value of the Contract must be fully paid to the designated
beneficiary (new owner) by December 31st of the fifth calendar year after your
death (or in a joint ownership situation, the death of the first owner to die).
A permissible alternative is for the new owner to elect to receive the cash
value as a life annuity (or payments for a period certain of not longer than the
new owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the fifth
calendar year following the year of your death (or the death of the first owner
to die).
Where a surviving spouse is designated beneficiary or joint owner, the
spouse may elect to continue the Contract. No distributions are required as long
as the surviving spouse and annuitant are living.
49
<PAGE>
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a lump sum. However, subject to any exceptions in the Contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Choosing Your Annuity Payout Options." Please
note that if you are both the contract owner and the annuitant, only a life
annuity or an annuity that does not extend beyond the life expectancy of the
beneficiary may be elected.
SUCCESSOR OWNER AND ANNUITANT
If you are both the owner and the annuitant, and your spouse is the sole
beneficiary or the joint owner, then your spouse may elect to receive the death
benefit or continue the Contract as successor owner/annuitant.
If your surviving spouse decides to continue the Contract, then on the
Contract Date anniversary following your death, we will increase the account
value to equal your current guaranteed minimum death benefit, if it is higher
than the account value. In determining whether the guaranteed minimum death
benefit will continue to grow, we will use the age (as of the Contract Date
anniversary) of the successor annuitant/owner.
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA CONTRACTS
Upon the death of the annuitant under a Traditional IRA Contract, a
non-spouse beneficiary may generally elect to keep the Contract in the name of
the deceased annuitant, and receive distributions under the Contract instead of
the death benefit being paid in a lump sum. The beneficiary's choices are
subject to the conditions in the following paragraphs.
If the annuitant dies after the "Required Beginning Date" (see "Tax
Information") for required minimum distributions, the Contract will continue if:
(a) the annuitant was receiving minimum distribution withdrawals from this
Contract; and
(b) the pattern of minimum distribution withdrawals the annuitant chose
was based in part on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the
same basis as the annuitant chose before death. We will be able to tell your
beneficiary whether this option is available to them. You should contact our
Processing Office for further information.
If the annuitant dies before the "Required Beginning Date" (and therefore
was not taking minimum distribution withdrawals under the Contract), the
beneficiary may begin taking minimum distribution withdrawals under the
Contract. We will increase the account value to equal the death benefit if the
death benefit is greater than the account value. That amount will be
50
<PAGE>
used to provide the withdrawals. These withdrawals will begin by December 31st
of the calendar year following the annuitant's death and will be based on the
beneficiary's life expectancy. If there is more than one beneficiary, the
shortest life expectancy is used.
The designated beneficiary must be a natural person and of legal age at the
time of election. The beneficiary must elect this option within 30 days
following the date we receive proof of the annuitant's death. This option may
not currently be available in all states. Your registered representative can
provide information about state availability, or you may contact our Processing
Office.
While the Contract continues in the name of the deceased annuitant, the
beneficiary may make transfers among the investment options. However, additional
contributions will not be permitted and the guaranteed minimum income benefit
and the death benefit (including the guaranteed minimum death benefit)
provisions will no longer be in effect. Although the only withdrawals that will
be permitted are minimum distribution withdrawals, the beneficiary may choose at
any time to withdraw all of the account value and no withdrawal charges will
apply.
TAX INFORMATION
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax
rules that generally apply to Equitable Accumulator Contracts owned by United
States taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Traditional IRA, Roth IRA, QP or TSA Contracts. Therefore, we
discuss the tax aspects of each type of Contract separately.
We cannot provide detailed information on all tax aspects of the Contracts.
Moreover, the tax aspects that apply to a particular person's Contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the Contract, rights
under the Contract, or payments under the Contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
Federal income tax rules include the United States laws in the Internal
Revenue Code, and Treasury Department Regulations and Internal Revenue Service
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect Contracts purchased before the change.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the Contract without
triggering taxable income.
51
<PAGE>
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions for a nonqualified
annuity contract.
CONTRACT EARNINGS
Generally, you are not taxed on Contract earnings until you receive a
distribution from your Contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a Contract fails specified investment diversification requirements;
o if you transfer a Contract, for example, as a gift to someone other
than your spouse (or former spouse);
o if you use a Contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that we issue to you during the
same calendar year are linked together and treated as one contract for computing
the taxable amount of any distribution from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as
ordinary income. The remaining portion is a tax-free recovery of investment in
the contract. Generally, your investment in the Contract equals the
contributions you made, less any amounts you previously withdrew that were not
taxable.
For fixed annuity payments, the tax-free portion of each payment is
determined by (1) dividing your investment in the Contract by the total amount
you are expected to receive out of the Contract, and (2) multiplying the result
by the amount of the payment. For variable annuity payments, your investment in
the Contract divided by the number of expected payments is your tax-free portion
of each payment.
The remaining portion of each payment, and all of the payments you receive
after you received the amount of your investment in the Contract, are fully
taxable. If payments under a life annuity stop because the annuitant dies, there
is an income tax deduction for any unrecovered investment in the contract.
52
<PAGE>
PAYMENT MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your Contract,
they are taxable to you as ordinary income if there are earnings in the
Contract. Generally, earnings are your account value less your investment in the
Contract. If you withdraw an amount which is more than the earnings in the
contract measured at the time of the withdrawal, the balance of the distribution
is treated as a return of your investment in the Contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ Contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o The Contract which is the source of the funds your are using to
purchase the NQ Contract is another nonqualified deferred annuity
contract (or life insurance or endowment contract).
o The owner and the annuitant are the same under the source contract and
the Equitable Accumulator NQ Contract (if you are using a life
insurance or endowment contract the owner and the insured must be the
same on both sides of the exchange transaction).
The tax basis of the source contract carries over to the Equitable
Accumulator NQ Contract.
SURRENDERS
If you surrender or cancel the Contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the Contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of Death Benefit"
and "When an NQ Contract Owner Dies Before the Annuitant" earlier in this
prospectus. The tax treatment of a death benefit taken as a lump sum is
generally the same as the tax treatment of a withdrawal from or surrender of
your Contract. The tax treatment of a death benefit taken as annuity payments is
generally the same as the tax treatment of annuity payments under your Contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of
the taxable portion of your distribution applies in addition to the income tax.
The extra penalty tax does not apply if the distribution is covered by an
exception. No penalty tax applies to pre-age 59 1/2 distributions made:
o on or after your death;
53
<PAGE>
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your
life (or life expectancy) or the joint lives (or joint life
expectancy) of you and a beneficiary.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ Contracts as U.S.-source. A
Puerto Rico resident is subject to U.S. taxation on such U.S.-source income.
Only Puerto Rico-source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ Contracts is also subject to Puerto Rico tax. The
computation of the taxable portion of amounts distributed from a Contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement and the two basic types
of such arrangements, Individual Retirement Accounts and Individual Retirement
Annuities. In an Individual Retirement Account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets can include mutual funds and
certificates of deposit. In an Individual Retirement Annuity, an insurance
company issues an annuity contract that serves as the IRA.
There are several types of IRAs, as follows:
o "Traditional IRAs," typically funded on a pre-tax basis;
o Roth IRAs, first available in 1998, funded on an after-tax basis;
o SEP-IRAs and SIMPLE-IRAs, issued and funded in connection with
employer-sponsored retirement plans.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as
you would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
aggregate IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This Publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS Website (www.irs.usstreas.gov).
54
<PAGE>
The Equitable Accumulator IRA Contract is designed to qualify as an
"individual retirement annuity" under Section 408(b) of the Internal Revenue
Code. This prospectus contains the information that the Internal Revenue Service
("IRS") requires you to have before you purchase an IRA. This section of the
prospectus covers some of the special tax rules that apply to IRAs. The next
section covers Roth IRAs. Education IRAs are not discussed in this prospectus
because they are not available in individual retirement annuity form.
The Equitable Accumulator IRA Contract has been approved by the IRS as to
form for use as a Traditional IRA. We expect to submit the Roth IRA version for
formal IRS approval in the Spring of 1999. This IRS approval is a determination
only as to the form of the annuity. It does not represent a determination of the
merits of the annuity as an investment. The IRS approval does not address every
feature possibly available under the Equitable Accumulator IRA Contract.
CANCELLATION
You can cancel an Equitable Accumulator IRA Contract by following the
directions under "Your Right to Cancel within a Certain Number of Days" earlier
in the prospectus. You can cancel an Equitable Accumulator Roth IRA Contract
issued as a result of a full conversion of an Equitable Accumulator Traditional
IRA Contract by following the instructions in the request for full conversion
form. The form is available from our Processing Office or your registered
representative. If you cancel a Traditional IRA or Roth IRA Contract, we may
have to withhold tax, and we must report the transaction to the IRS. A contract
cancellation could have unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS
Individuals may make three different types of contributions to a
Traditional IRA:
o tax-free "rollover" contributions, or
o direct custodian-to-custodian transfers from other Traditional IRAs
("direct transfers"), or
o "regular" contributions out of earned income or compensation.
We require that your initial contribution to the Equitable Accumulator
Traditional IRA Contract must be either a rollover or a direct
custodian-to-custodian transfer. See "Rollovers and Transfers" below. Any
additional contributions you make may be rollovers, direct transfers, or
"regular" Traditional IRA contributions.
55
<PAGE>
LIMITS ON CONTRIBUTIONS
Generally, $2,000 is the maximum amount that you may contribute to all IRAs
(including Roth IRAs) in any taxable year. When your earnings are below $2,000,
your earned income or compensation for the year is the most you can contribute.
This $2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Traditional IRA. You have to stop making
regular Traditional IRA contributions for the tax year in which you reach age 70
1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES
If you are married and file a joint income tax return, you and your spouse
may aggregate your compensation to determine the permissible amount of regular
contributions to Traditional IRAs (and Roth IRAs discussed below). Even if one
spouse has no compensation or compensation under $2,000, married individuals
filing jointly can contribute up to $4,000 for any taxable year to any
combination of Traditional IRAs and Roth IRAs. (Any contributions to Roth IRAs
reduce the ability to contribute to Traditional IRAs and vice versa.) The
maximum amount may be less if earned income is less and the other spouse has
made IRA contributions. No more than a combined total of $2,000 can be
contributed annually to either spouse's Traditional and Roth IRAs. Each spouse
owns his or her Traditional IRAs and Roth IRAs even if contributions were funded
by the other spouse. A working spouse age 70 1/2 or over can contribute up to
the lesser of $2,000 or 100% of "earned income" to a Traditional IRA for a
nonworking spouse until the year in which the nonworking spouse reaches age 70
1/2.
DEDUCTIBILITY OF CONTRIBUTIONS
The amount of Traditional IRA contributions that you can deduct for a tax
year depends on whether you are covered by an employer-sponsored tax-favored
retirement plan, as defined under special federal income tax rules. Your Form
W-2 will indicate whether or not you are covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR,
you can make fully deductible contributions to your Traditional IRAs for each
tax year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and
your adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your Traditional IRAs for
each tax year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and
your AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your Traditional IRAs.
56
<PAGE>
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and
your AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not
deduct any of your regular contribution to your Traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for IRA contributions phases out with AGI between
$31,000 and $41,000 in 1999. This range will increase every year until 2005 when
the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a
retirement plan during any part of the taxable year, the deduction for
Traditional IRA contributions phases out with AGI between $51,000 and $61,000 in
1999. This range will increase every year until 2007 when the range is
$80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible Traditional IRA
contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of between
$150,000 and $160,000.
To determine the deductible amount of the contribution in 1999, you
determine AGI and subtract $31,000 if you are single, or $51,000 if you are
married and file a joint return with your spouse. The resulting amount is your
Excess AGI. You then determine the limit on the deduction for Traditional IRA
contributions using the following formula:
($10,000-Excess AGI) times $2,000 (or earned Equals the Adjusted
- -------------------- x income, if less) = deductible
Divided by contribution
$10,000 limit
NONDEDUCTIBLE CONTRIBUTIONS
If you are not eligible to deduct part or all of the Traditional IRA
contribution, you may still make nondeductible contributions on which earnings
will accumulate on a tax-deferred basis. The combined deductible and
nondeductible contributions to your Traditional IRA (or the nonworking spouse's
Traditional IRA) may not, however, exceed the maximum $2,000 per person limit.
See "Excess Contributions" below. You must keep your own records of deductible
and nondeductible contributions in order to prevent double taxation on the
distribution of previously taxed amounts. See "Withdrawals, Payments and
Transfer of Funds Out of Traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you
have made nondeductible contributions to a Traditional IRA in prior years and
are receiving distributions from any Traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible Traditional
IRA contributions, you must retain all income tax returns
57
<PAGE>
and records pertaining to such contributions until interests in all Traditional
IRAs are fully distributed.
WHEN YOU CAN MAKE CONTRIBUTIONS
If you file your tax returns on a calendar year basis like most taxpayers,
you have until the April 15 return filing deadline (without extensions) of the
following calendar year to make your regular Traditional IRA contributions for a
tax year.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o "regular" contributions of more than $2,000
o "regular" contributions of more than earned income for the year, if
that amount is under $2,000
o "regular" contributions to a Traditional IRA made after you reach age
70 1/2
o rollover contributions of amounts which are not eligible to be rolled
over (for example, after-tax contributions to a qualified plan or
minimum distributions required to be made after age 70 1/2).
You can avoid the excise tax by withdrawing an excess contribution
(rollover or "regular") before the due date (including extensions) for filing
your federal income tax return for the year. If it is an excess "regular"
Traditional IRA contribution, you cannot take a tax deduction for the amount
withdrawn. The excess contribution withdrawn is not includable in income and is
not subject to the 10% additional penalty tax on early distributions (discussed
below under "Early Distribution Penalty Tax"). You do have to withdraw any
earnings attributable to the excess contribution. The withdrawn earnings would
be includable in your gross income and could be subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if (1) the
rollover was from a qualified retirement plan to a Traditional IRA, (2) the
excess contribution was due to incorrect information that the plan provided, and
(3) you took no tax deduction for the excess contribution.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a Traditional IRA from these sources:
o qualified plans,
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts), and
o other Traditional IRAs.
58
<PAGE>
You may also re-characterize Roth IRA funds as Traditional IRA funds, in
accordance with special federal income tax rules, if you use the forms we
prescribe.
Any amount contributed to a Traditional IRA after you attain age 70 1/2
must be net of your required minimum distribution for the year in which the
rollover or direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do It Yourself
You actually receive a distribution which can be rolled over and you
roll it over to a Traditional IRA within 60 days after the date you
receive the funds. The distribution from your qualified plan or TSA
will be net of 20% mandatory federal income tax withholding. If you
want, you can replace the withheld funds yourself and roll over the
full amount.
o Direct rollover.
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary
to send the distribution directly to your Traditional IRA issuer.
Direct rollovers are not subject to mandatory federal income tax
withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan;
o "required minimum distributions" after age 70 1/2 or separation from
service;
o substantially equal periodic payments made at least annually for your
life (or life expectancy) or the joint lives (or joint life
expectancies) of you and your designated beneficiary;
o substantially equal periodic payments made for a specified period of
10 years or more;
o if you have contributed too much, corrective distributions which fit
specified technical tax rules;
o loans that are treated as deemed distributions;
o a death benefit payment to a beneficiary who is not your surviving
spouse; and
o a qualified domestic relations order distribution to a beneficiary who
is not your current spouse or former spouse.
59
<PAGE>
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one Traditional IRA to one or more of your
other Traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Traditional IRA to one or more other Traditional
IRAs. Also, in some cases, Traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court ordered divorce
or separation decree.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
No Federal Income Tax Law Restrictions on Withdrawals
You can withdraw any or all of your funds from a Traditional IRA at any
time. You do not need to wait for a special event like retirement.
Taxation of Payments
Earnings in Traditional IRAs are not subject to federal income tax until
you or your beneficiary receive them. Taxable payments or distributions include
withdrawals from your Contract, surrender of your Contract and annuity payments
from your Contract. Death benefits are also taxable. Except as discussed below,
the amount of any distribution from a Traditional IRA is fully includable in
your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any Traditional
IRA (it does not have to be to this particular Traditional IRA Contract), those
contributions are recovered tax free when you get distributions from any
Traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to Traditional IRAs. At the end of any year in which
you have received a distribution from any Traditional IRA, you compute the ratio
of your total nondeductible Traditional IRA contributions (less any amounts
previously withdrawn tax free) to the total account balances of all Traditional
IRAs you own at the end of the year plus all Traditional IRA distributions made
during the year. Multiply this by all distributions from the Traditional IRA
during the year to compute the nontaxable portion of each distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as
described under "Excess Contributions" above,
o the entire amount received is rolled over to another Traditional IRA
(see "Rollovers and Transfers" above) or
60
<PAGE>
o in certain limited circumstances, where the Traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or
TSA that accepts rollover contributions. To get this "conduit"
Traditional IRA treatment:
o the source of funds you used to establish the Traditional IRA
must have been a rollover contribution from a qualified plan, and
o the entire amount received from the Traditional IRA (including
any earnings on the rollover contribution) must be rolled over
into another qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment, if you make an eligible rollover
distribution contribution to a Traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to roll
over these eligible rollover distribution contributions and earnings to another
qualified plan (or TSA) at a future date.
Distributions from a Traditional IRA are not eligible for favorable
five-year averaging (or, in some cases, ten-year averaging and long-term capital
gain treatment) available to certain distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
Lifetime Required Minimum Distributions
You must start taking annual distributions from your Traditional IRAs
beginning at age 70 1/2.
When do I have to take the first required minimum distribution?
The first required minimum distribution is for the calendar year in which
you turn age 70 1/2. You have the choice to take this first required minimum
distribution during the calendar year you actually reach age 70 1/2, or to delay
taking it until the first three-month period in the next calendar year (January
1 - April 1). Distributions must start no later than your "Required Beginning
Date," which is April 1st of the calendar year after the calendar year in which
you turn age 70 1/2. If you choose to delay taking the first annual minimum
distribution, then you will have to take two minimum distributions in that year
- -- the delayed one for the first year and the one actually for that year. Once
minimum distributions begin, they must be made at some time each year.
How do I calculate required minimum distributions?
There are two approaches to taking required minimum distributions --
"account-based" or "annuity-based." If you choose an "account-based" method, you
divide the value of your Traditional IRA as of December 31st of the past
calendar year by a life expectancy factor from IRS tables. This gives you the
required minimum distribution amount for that particular IRA for that
61
<PAGE>
year. If you choose an account-based method, the required minimum distribution
amount will vary each year as the account value and your life expectancy factors
change. If you choose an "annuity-based" method, you do not have to do annual
calculations. You apply the account value to an annuity payout for your life or
the joint lives of you and a designated beneficiary, or for a period certain not
extending beyond applicable life expectancies.
If you pick an account-based method, you have a choice of life expectancy
factors, depending on whether you choose a method based only on your life
expectancy, or the joint life expectancies of you and another individual. You
can decide to "recalculate" your life expectancy every year by using your
current life expectancy factor. You can decide instead to use the "term certain"
method, where you reduce your life expectancy by one every year after the
initial year. If your spouse is your designated beneficiary for the purpose of
figuring out annual account-based required minimum distributions, you can also
annually "recalculate" your spouse's life expectancy if you want. If you choose
someone who is not your spouse as your designated beneficiary for the purpose of
figuring out annual account-based required minimum distributions, you have to
use the "term certain" method of calculating that person's life expectancy. If
you pick a nonspouse designated beneficiary, you may also have to do another
special calculation.
If you pick an account-based method, you can later apply your Traditional
IRA funds to a life annuity-based payout. You can only do this if you already
chose to recalculate your life expectancy annually (and your spouse's life
expectancy if you select a spousal joint annuity). For example, if you
anticipate exercising your guaranteed minimum income benefit or selecting any
other form of life annuity payout after you are age 70 1/2, you must have
elected to recalculate life expectancies.
Do I have to pick the same method to calculate my required minimum
distributions for all of my Traditional IRAs and other retirement plans?
No. If you want, you can choose a different method and a different
beneficiary for each of your Traditional IRAs and other retirement plans. For
example, you can choose an annuity payout from one IRA, a different annuity
payout from a qualified plan, and an account-based annual withdrawal from
another IRA.
Will you pay me the annual amount every year from my Traditional IRA based
on the method I choose?
No, unless you affirmatively select an annuity payout option or an
account-based withdrawal option such as our minimum distribution withdrawal
option. Because the options we offer do not cover every option permitted under
federal income tax rules, you may prefer to do your own required minimum
distribution calculations for one or more of your Traditional IRAs.
What if I take more than I need to for any year?
The correct required minimum distribution amount for your Traditional IRAs
is calculated on a year-by-year basis. There are no carry-back or carry-forward
provisions. Also, you cannot apply required minimum distribution amounts you
take from your qualified plans to
62
<PAGE>
the amounts you have to take from your Traditional IRAs and vice-versa. However,
the IRS will let you figure out the required minimum distribution for each
Traditional IRA that you maintain, using the method that you picked for that
particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall Traditional IRA required minimum distribution amount, you
may choose to take your annual required minimum distribution from any one or
more Traditional IRAs that you own.
What if I take less than I need to for any year?
Your IRA could be disqualified, and you could have to pay tax on the entire
value. Even if your IRA is not disqualified, you could have to pay a 50% penalty
tax on the shortfall (required amount for Traditional IRAs less amount actually
taken). It is your responsibility to meet the required minimum distribution
rules. We will remind you when our records show that your age 70 1/2 is
approaching. If you do not select a method with us, we will assume you are
taking your required minimum distribution from another Traditional IRA that you
own.
What are the required minimum distribution payments after I die?
If you die after either (a) the start of annuity payments, or (b) your
Required Beginning Date, your beneficiary must receive payment of the remaining
values in the Contract at least as rapidly as under the distribution method
before your death. In some circumstances, your surviving spouse may elect to
become the owner of the Traditional IRA and halt distributions until he or she
reaches age 70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal tax rules require complete distribution of your entire value in
the Contract within five years after your death. Payments to a designated
beneficiary over the beneficiary's life or over a period certain that does not
extend beyond the beneficiary's life expectancy are also permitted, if these
payments start within one year of your death. A surviving spouse beneficiary can
also (a) delay starting any payments until you would have attained 70 1/2 or (b)
roll over your Traditional IRA into his or her own Traditional IRA.
Successor Annuitant and Owner
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a Traditional IRA. You cannot use a Traditional
IRA as collateral for a loan or other obligation. If you borrow against your IRA
or use it as collateral, its
63
<PAGE>
tax-favored status will be lost as of the first day of the tax year in which
this prohibited event occurs. If this happens, you must include in federal gross
income for that year an amount equal to the fair market value of the Traditional
IRA Contract as of the first day of that tax year, less the amount of any
nondeductible contributions not previously recovered. Also, the early
distribution penalty tax of 10% will apply if you have not reached age 59 1/2
before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a Traditional IRA made before you reach age 59 1/2. The extra
penalty tax does not apply if the distribution is covered by an exception. No
penalty tax applies to pre-age 59 1/2 distributions made:
o on or after your death;
o because you are disabled (special federal income tax definition);
o used to pay certain extraordinary medical expenses (special federal
income tax definition);
o used to pay medical insurance premiums for unemployed individuals
(special federal income tax definition);
o used to pay certain first-time home buyer expenses (special federal
income tax definition);
o used to pay certain higher education expenses as (special federal
income tax definition); or
o in the form of substantially equal periodic payments made at least
annually over your life (or your life expectancy), or over the joint
lives of you and your beneficiary (or your joint life expectancy)
using an IRS-approved distribution method.
To meet this last exception, you could elect to apply your Contract value
to an Income Manager (Life Annuity with a Period Certain) payout annuity
contract (level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10% penalty
tax, they are taxable as discussed in "Withdrawals, Payments and Transfers of
Funds Out of Traditional IRAs" above. Once substantially equal withdrawals or
Income Manager annuity payments begin, the distributions should not be stopped
or changed until the later of your attaining age 59 1/2 or five years after the
date of the first distribution, or the penalty tax, including an interest charge
for the prior penalty avoidance, may apply to all prior distributions under this
option. Also, it is possible that the IRS could view any additional withdrawal
or payment you take from your Contract as changing your pattern of substantially
equal withdrawals or Income Manager payments for purposes of determining whether
the penalty applies.
64
<PAGE>
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the Prospectus covers some of the special tax rules that
apply to Roth IRAs. If the rules are the same as those that apply to the
Traditional IRA, we will refer you to the same topic under "Traditional IRAs."
The Equitable Accumulator Roth IRA Contract is designed to qualify as a
Roth individual retirement annuity under Sections 408A and 408(b) of the
Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o taxable "rollover" contributions from Traditional IRAs ("conversion"
contributions);
o tax-free rollover contributions from other Roth IRAs;
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers"); or
o "regular" after-tax contributions out of earnings.
Since we only permit direct transfer and rollover contributions under the
Equitable Accumulator Roth IRA Contract, we do not discuss regular after-tax
contributions here. If you use the forms we require, we will also accept
Traditional IRA funds which are subsequently recharacterized as Roth IRA funds
following special federal income tax rules.
Rollovers and Direct Transfers -- What Is the Difference between Rollover
and Direct Transfer Transactions?
You may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"), or
o another Traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a
taxable "conversion" rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a tax-sheltered arrangement
under Section 403(b) of the Internal Revenue Code. You may make direct transfer
contributions to a Roth IRA only from another Roth IRA.
The difference between a rollover transaction and a direct transfer
transaction is the following: In a rollover transaction you actually take
possession of the funds rolled over, or constructively receive them in the case
of a change from one type of plan to another. In a direct transfer transaction,
you never take possession of the funds, but direct the first Roth IRA custodian,
trustee, or issuer to transfer the first Roth IRA funds directly to Equitable,
as the Roth IRA issuer. You can make direct transfer transactions only between
identical plan types (for
65
<PAGE>
example, Roth IRA to Roth IRA). You can also make rollover transactions between
identical plan types. However, you can only use rollover transactions between
different plan types (for example, Traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA
to Roth IRA direct transfer transactions. This can be accomplished on a
completely tax-free basis. However you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you pay us the rollover contribution to
apply them to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court ordered divorce or separation decree.
Conversion Contributions to Roth IRAs
In a conversion rollover transaction, you withdraw (or are deemed to
withdraw) all or a portion of funds from a Traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are deemed to
receive) the Traditional IRA proceeds. Unlike a rollover from a Traditional IRA
to another Traditional IRA, the conversion rollover transaction is not tax
exempt. Instead, the distribution from the Traditional IRA is generally fully
taxable. For this reason, we are required to withhold 10% federal income tax
from the amount converted unless you elect out of such withholding. (If you have
ever made nondeductible regular contributions to any Traditional IRA -- whether
or not it is the Traditional IRA you are converting -- a pro rata portion of the
distribution is tax exempt.)
There is, however, no early distribution penalty tax on the Traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age 59
1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year
in which your adjusted gross income exceeds $100,000. (For this purpose, your
adjusted gross income is computed without the gross income stemming from the
Traditional IRA conversion.) You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the
extent that the funds in your Traditional IRA are subject to the annual required
minimum distribution rule applicable to Traditional IRAs beginning at age 70
1/2.
66
<PAGE>
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
No Federal Income Tax Law Restrictions on Withdrawals
You can withdraw any or all of your funds from a Roth IRA at any time; you
do not need to wait for a special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your Contract, surrender of your
Contract and annuity payments from your Contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollovers from a Roth IRA to another Roth IRA.
o Direct transfers from a Roth IRA to another Roth IRA.
o "Qualified Distributions" from Roth IRAs.
o Return of excess contributions (see "Excess Contributions" below) or
amount recharacterized to a Traditional IRA.
Qualified Distributions from Roth IRAs
Qualified distributions from Roth IRAs made because of one of the following
four qualifying events or reasons are not includable in income:
o you reach age 59 1/2,
o you die,
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit
for these distributions from all of your Traditional and Roth IRAs).
You also have to meet a 5-year aging period. A qualified distribution is
any distribution made after the five-taxable year period beginning with the
first taxable year for which you made any contribution to any Roth IRA (whether
or not the one from which the distribution is being made).
Nonqualified Distributions from Roth IRAs
Nonqualified distributions from Roth IRAs are distributions that do not
meet the qualifying event and five-year aging period tests described above. Such
distributions are potentially taxable as ordinary income. Nonqualified
distributions receive return-of-investment-first treatment. Only the difference
between the amount of the distribution and the amount of
67
<PAGE>
contributions to all of your Roth IRAs is taxable. You have to reduce the amount
of contributions to all of your Roth IRAs to reflect any previous tax-free
recoveries.
You must keep your own records of regular and conversion contributions to
all Roth IRAs to assure appropriate taxation. You may have to file information
on your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like Traditional IRAs, taxable distributions from a Roth IRA are not
entitled to the special favorable five-year averaging method (or, in certain
cases, favorable ten-year averaging and long-term capital gain treatment)
available in certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as Traditional IRA under "What are the required minimum distribution
payments after I die?" Lifetime Required Minimum Distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as
if the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as Traditional IRA.
EXCESS CONTRIBUTIONS
Same as Traditional IRA, except that "Regular" contributions made after age
70 1/2 are not "excess contributions."
Excess rollover contributions to Roth IRAs are contributions not eligible
to be rolled over (for example, conversion contributions from a Traditional IRA
if your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before
the due date (including extensions) for filing your federal income tax return
for the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as Traditional IRA.
68
<PAGE>
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP Contracts your plan administrator or trustee notifies you as to
tax consequences.
TAX SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the Prospectus covers some of the special tax rules that
apply to tax sheltered annuity contracts under Section 403(b) of the Internal
Revenue Code (TSAs). If the rules are the same as those that apply to another
kind of contract, for example, Traditional IRAs, we will refer you to the same
topic under "Traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
TSA Contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling
90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
Employer-Remitted Contributions
The Equitable Accumulator TSA Contract does not accept employer-remitted
contributions. However, we provide the following discussion as part of our
description of restrictions on the distribution of funds directly transferred,
which include employer-remitted contributions to other TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll
are subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits.) Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
69
<PAGE>
deferral" contributions. However, a TSA can also be wholly or partially funded
through nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
Rollover or Direct Transfer Contributions
You may make rollover contributions to your Equitable Accumulator TSA
Contract from TSAs under Section 403(b) of the Internal Revenue Code. Generally,
you may make a rollover contribution to a TSA when you have a distributable
event from an existing TSA as a result of your:
o termination of employment with the employer who provided the TSA
funds,
o the attainment of age 59 1/2 even if you are still employed, or
o disability as defined in the federal income tax rules.
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a distribution.
We accept direct transfers of TSA funds under Revenue Ruling 90-24 only if:
o you give us acceptable written documentation as to the source of the
funds, and
o the contract that receives the funds has provisions at least as
restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator TSA Contract, you may
have to obtain your employer's authorization or demonstrate that you do not need
employer authorization. For example, the transferring TSA may be subject to
Title I of ERISA, if the employer makes matching contributions to salary
reduction contributions made by employees. In that case, the employer must
continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator TSA must be net of the
required minimum distribution for the tax year in which we issue the Contract
if:
o you are or will be at least age 70 1/2 in the current calendar year,
and
o you have separated from service with the employer who provided the
funds to purchase the TSA you are transferring or rolling over to the
Equitable Accumulator TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA,
o direct rollover from another TSA, or
70
<PAGE>
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your
life expectancy (and if applicable, your spouse's life expectancy), if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to the Equitable Accumulator
TSA. You must also elect or have elected a minimum distribution calculation
method requiring recalculation of your life expectancy (and if applicable, your
spouse's life expectancy) if you elect an annuity payout for the funds in this
Contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
General
Depending on the terms of the employer plan and your employment status, you
may have to get your employer's consent to take a loan or withdrawal. Your
employer will tell us this when you establish the TSA through a direct transfer.
Withdrawal Restrictions
If this is a Revenue Ruling 90-24 direct transfer, we will treat all
amounts transferred to this Contract and any future earnings on the amount
transferred as not eligible for withdrawal until one of the following events
happens:
o you are separated from service with the employer who provided the
funds to purchase the TSA you are transferring to the Equitable
Accumulator TSA;
o you reach age 59 1/2;
o you die;
o you become disabled (special federal income tax definition);
o you take a "hardship" withdrawal (special federal income tax
definition).
If any portion of the funds directly transferred to your TSA Contract is
attributable to amounts that you invested in a 403(b)(7) custodial account, such
amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to your
TSA Contract that represents your December 31, 1988 account balance attributable
to salary reduction contributions to a TSA annuity contract and earnings. To
take advantage of this grandfathering you must properly notify us in writing at
our Processing Office of your December 31, 1988 account balance if you have
qualifying amounts transferred to your TSA Contract.
This paragraph applies only to participants in a Texas Optional Retirement
Program. Texas Law permits withdrawals only after one of the following
distributable events occur:
71
<PAGE>
(1) the requirements for minimum distribution (discussed under "Minimum
Distributions" below) are met,
(2) death,
(3) retirement, or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an employer's
first-year matching contribution. We reserve the right to change these
provisions without your consent, but only to the extent necessary to maintain
compliance with applicable law. Loans are not permitted under Texas Optional
Retirement Programs.
Tax Treatment of Distributions
Amounts held under TSAs are generally not subject to federal income tax
until benefits are distributed. Distributions include withdrawals from your TSA
Contract and annuity payments from your TSA Contract. Death benefits paid to a
beneficiary are also taxable distributions. Unless an exception applies, amounts
distributed from TSAs are includable in gross income as ordinary income.
Distributions from TSAs may be subject to 20% federal income tax withholding.
See "Federal and State Income Tax Withholding and Information Reporting" below.
In addition, TSA distributions may be subject to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your
TSA Contract, which will be recovered tax-free.
Distributions Before Annuity Payments Begin. On a total surrender, the
amount received in excess of the investment in the contract is taxable. We will
report the total amount of the distribution. Since we do not track your
investment in the Contract, if any, it is your responsibility to determine how
much of the distribution is taxable. The amount of any partial distribution from
a TSA prior to the annuity starting date is generally taxable, except to the
extent that the distribution is treated as a withdrawal of after-tax
contributions. Distributions are normally treated as pro rata withdrawals of
after-tax contributions and earnings on those contributions.
Annuity Payments. If you elect an annuity payout option, you will recover
any investment in the Contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded from
income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the Contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the Contract, a deduction is allowed on
your (or your beneficiary's) final tax return.
72
<PAGE>
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax
treatment as distributions during your lifetime. In some instances,
distributions from a TSA made to your surviving spouse may be rolled over to a
Traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for
example, under an employer plan subject to ERISA). If you cannot take a loan, or
cannot take a loan without approval from the employer who provided the funds, we
will have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your Contract.
Loans are generally not treated as a taxable distribution. If the amount of
the loan exceeds permissible limits under federal income tax rules when made,
the amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing interest and principal, the amount not repaid when due will be
treated as a taxable distribution. Under Proposed Treasury Regulations the
entire unpaid balance of the loan is includable in income in the year of the
default.
TSA loans are subject to federal income tax limits and may also be subject
to the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example, loans
offered by TSAs are subject to the following employer's conditions:
o The amount of a loan to a participant, when aggregated with all other
loans to the participant from all qualified plans of the employer,
cannot exceed the greater of $10,000 or 50% of the participant's
nonforfeitable accrued benefits, and cannot exceed $50,000 in any
event. This $50,000 limit is reduced by the excess (if any) of the
highest outstanding loan balance over the previous twelve months over
the outstanding loan balance of plan loans on the date the loan was
made.
o In general, the term of the loan cannot exceed five years unless the
loan is used to acquire the participant's primary residence. Equitable
Accumulator TSA Contracts have a term limit of 10 years for loans used
to acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above,
o the participant fails to repay the interest or principal when due, or
o in some instances, the participant separates from service with the
employer who provided the funds or the plan is terminated.
73
<PAGE>
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as a
distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into
another eligible retirement plan, either directly or within 60 days of your
receiving the distribution. To the extent rolled over, a distribution remains
tax deferred.
You may roll over a distribution from a TSA to another TSA or to a
Traditional IRA. A spousal beneficiary may roll over death benefits only to a
Traditional IRA.
The taxable portion of most distributions will be eligible for rollover,
except as specifically excluded under federal income tax rules. Distributions
that you cannot roll over generally include periodic payments for life or for a
period of 10 years or more, and required minimum distributions under federal
income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Same as Traditional IRA with these differences:
When do I have to take the first required minimum distribution?
The minimum distribution rules force TSA participants to start computing
and taking annual distributions from their TSAs by a required date. Generally,
you must take the first required minimum distribution for the calendar year in
which you turn age 70 1/2. You may be able to delay commencement of required
minimum distributions for all or part of your account balance until after age
70 1/2, as follows:
o For TSA participants who have not retired from service with the
employer who provided the funds for the TSA by the calendar year the
participant turns age 70 1/2, the Required Beginning Date for minimum
distributions is extended to April 1 following the calendar year of
retirement.
o TSA plan participants may also delay commencement to age 75 of the
portion of their account value attributable to their December 31, 1986
TSA account balance, even if retired at age 70 1/2. (We will know
whether or not you qualify for this exception because it will only
apply to people who establish their Accumulator TSAs by direct Revenue
Ruling 90-24 transfers. If you do not give us the amount of your
December 31, 1986 account balance which is being transferred to the
Equitable Accumulator TSA on the form used to establish the TSA, you
do not qualify).
74
<PAGE>
o To the April 1 following the calendar year of retirement, for TSA
participants who have not retired by the calendar year in which the
participant turns age 70 1/2, from service with the employer who
provided the funds for the TSA.
Will you pay me the annual amount every year from my TSA based on the
method I choose?
Same as Traditional IRA.
What if I take less than I need to for any year?
Same as Traditional IRA.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator TSA
by direct Revenue Ruling 90-24 transfer. Your employer will tell us on the form
used to establish the TSA whether or not you need to get spousal consent for
loans, withdrawals, or other distributions. If you do, you will need such
consent if you are married when you request a withdrawal under the TSA Contract.
In addition, unless you elect otherwise with the written consent of your spouse,
the retirement benefits payable under the plan must be paid in the form of a
qualified joint and survivor annuity ("QJSA"). A QJSA is an annuity payable for
the life of the annuitant with a survivor annuity for the life of the spouse in
an amount not less than one-half of the amount payable to the annuitant during
his or her lifetime. In addition, if you are married, the beneficiary must be
your spouse, unless your spouse consents in writing to the designation of
another beneficiary.
If you are married and you die before annuity payments have begun, payments
will be made to your surviving spouse in the form of a life annuity unless at
the time of your death a contrary election was in effect. However, your
surviving spouse may elect, before payments begin, to receive payments in any
form permitted under the terms of the TSA Contract and the plan of the employer
who provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59 1/2. This is in addition to any
income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death;
o because you are disabled (special federal income tax definition);
o used to pay certain extraordinary medical expenses (special federal
income tax definition);
o if you are separated from service, any form of payout after you are
age 55; or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your
life (or your life expectancy), or
75
<PAGE>
over the joint lives of you and your beneficiary (or your joint life
expectancy) using an IRS-approved distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity
contracts. You may be able to elect out of this income tax withholding in some
cases. Generally, we do not have to withhold if your distributions are not
taxable. The rate of withholding will depend on the type of distribution and, in
certain cases, the amount of your distribution. Any income tax withheld is a
credit against your income tax liability. If you do not have sufficient income
tax withheld or do not make sufficient estimated income tax payments, you may
incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold on amounts we pay under a free look or
cancellation.
o We are generally required to withhold on conversion rollovers of
Traditional IRAs to Roth IRAs, as the deemed withdrawal from the
Traditional IRA is taxable.
o We are required to withhold on the gross amount of a distribution from
a Roth IRA unless you elect out of withholding. This may result in tax
being withheld even though the Roth IRA distribution is not taxable in
whole or in part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here.
Certain states have indicated that state income tax withholding will also apply
to payments from the Contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our Processing Office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
76
<PAGE>
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,700 in periodic annuity payments in
1999 your payments will generally be exempt from federal income tax withholding.
You could specify a different choice of withholding exemption or request that
tax be withheld. Your withholding election remains effective unless and until
you revoke it. You may revoke or change your withholding election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS
(WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
withhold generally at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified Contracts, and to the payment amount in the case of
IRAs and Roth IRAs).
You cannot elect out of withholding if the payment is an "eligible rollover
distribution" from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an "eligible rollover distribution" then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible
rollover distributions from qualified plans and TSAs are subject to mandatory
20% withholding. An eligible rollover distribution from a TSA can be rolled over
to another TSA or a Traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or IRA. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions.
o any after-tax contributions you made to the plan;
o any distributions which are "required minimum distributions" after age
70 1/2 or separation from service;
o substantially equal periodic payments made at least annually for your
life (or life expectancy) or the joint lives (or joint life
expectancy) of you and your designated beneficiary;
o substantially equal periodic payments made for a specified period of
10 years or more;
o if you have contributed too much, corrective distributions which fit
specified technical tax rules;
o loans that are treated as deemed distributions;
o a death benefit payment to a beneficiary who is not your surviving
spouse; and
o a qualified domestic relations order distribution to a beneficiary who
is not your current spouse or former spouse.
77
<PAGE>
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE
The Contracts provide that we may charge Separate Account No. 49 for taxes.
We do not now, but may in the future set up reserves for such taxes.
MORE INFORMATION
ABOUT SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of our Separate Account No.
49. We established Separate Account No. 49 in 1996 under special provisions of
the New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts, including these Contracts.
The results of Separate Account No. 49's operations are accounted for without
regard to Equitable's other operations. We are the legal owner of all of the
assets in Separate Account No. 49 and may withdraw any amounts that exceed our
reserves and other liabilities with respect to variable investment options under
our contracts.
Separate Account No. 49 is registered under the Investment Company Act of
1940 and is classified by that Act as a "unit investment trust." The SEC,
however, does not manage or supervise Equitable or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in class IB shares issued by the corresponding Portfolio of The
Hudson River Trust and EQ Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable
investment options from, Separate Account No. 49, or to add other
separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the Contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option
as a management investment company under the Investment Company Act of
1940 (in which case, charges and expenses that otherwise would be
assessed against an underlying mutual fund would be assessed against
Separate Account No. 49 or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act
of 1940;
(6) to restrict or eliminate any voting rights as to Separate Account No.
49; and
78
<PAGE>
(7) to cause one or more variable investment options to invest some or all
of their assets in one or more other trusts or investment companies.
ABOUT THE HUDSON RIVER TRUST AND EQ ADVISORS TRUST
Both of the Trusts are registered under the Investment Company Act of 1940.
They are classified as "open-end management investment companies," more commonly
called mutual funds. Each Trust issues different series of stock relating to a
different Portfolio of the Trust.
The Trusts do not impose sales charges or "loads" for buying and selling
their shares. All dividends and other distributions on a Trust's shares are
reinvested in full. The Board of Trustees of each Trust may establish additional
Portfolios or eliminate existing Portfolios at any time. More detailed
information about the Trusts, their investment objectives, policies,
restrictions, risks, expenses, their Rule 12b-1 Plans relating to their Class IB
shares, and other aspects of their operations, appears in their prospectuses, or
in their SAIs, which are available upon request.
ABOUT THE FIXED INTEREST OPTIONS
GUARANTEED RATES AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
interest options in order to produce target maturity values. For example, we can
tell you how much you need to allocate per $100 of maturity value.
Guaranteed rates for new allocations as of April 15, 1999 and the related
price per $100 of maturity value were as follows:
- --------------------------------------------------------------------------------
FIXED INTEREST OPTIONS
WITH FEBRUARY 15TH
MATURITY DATE GUARANTEED PRICE
OF RATE AS OF PER $100 OF
MATURITY YEAR APRIL 15, 1999 MATURITY VALUE
- --------------------------------------------------------------------------------
2000 % $
2001 %
2002 %
2003 %
2004 %
2005 %
2006 %
2007 %
2008 %
2009 %
- --------------------------------------------------------------------------------
79
<PAGE>
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up
or down) we make if you withdraw all of your value from a fixed interest option
before its maturity date.
(1) We determine the present value of the maturity value on the date of
the withdrawal as follows:
(a) We determine the guaranteed period amount that would be payable
on the maturity date, using the guaranteed rate for the fixed
interest option.
(b) We determine the period remaining in your fixed interest option
(based on the withdrawal date) and convert it to fractional years
based on a 365-day year. For example, three years and 12 days
becomes 3.0329.
(c) We determine the current guaranteed rate which applies on the
withdrawal date to new allocations to the same fixed interest
option.
(d) We determine the present value of the guaranteed period amount
payable at the maturity date, using the period determined in (b)
and the rate determined in (c).
(2) We determine the guaranteed period amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market
value adjustment applicable to such fixed interest option, which may
be positive or negative.
If you withdraw only a portion of the amount in a fixed income option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire balance in that fixed
interest option. This percentage is equal to the percentage of the fixed
interest option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed income option will result in a market value adjustment
calculated in the same way. See Appendix II for an example.
For purposes of calculating the guaranteed rate for new allocations to a
fixed interest option (see (1)(c) above), we use the rate we have in effect for
new allocations to that fixed interest option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a guaranteed rate in effect for a fixed
interest option to which the "current guaranteed rate" in (1)(c) would apply, we
will use the rate at the next closest maturity date. If we are no longer
offering new fixed interest options, the "current guaranteed rate" will be
determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED INTEREST OPTIONS
Amounts allocated to the fixed interest options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due
80
<PAGE>
under the fixed interest options. Under New York Insurance Law, the portion of
the separate account's assets equal to the reserves and other contract
liabilities relating to the Contracts are not chargeable with liabilities from
any other business we may conduct. We own the assets of the separate account, as
well as any favorable investment performance on those assets. Contract owners do
not participate in the performance of the assets held in this separate account.
We may, subject to state law which applies, transfer all assets allocated to the
separate account to our general account. We guarantee all benefits relating to
your value in the fixed interest options, regardless of whether assets
supporting fixed interest options are held in a separate account or our general
account.
We have no specific formula for establishing the guaranteed rates for the
fixed interest options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed interest
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed portion of the Contracts, we are not
obligated to invest those assets according to any particular plan except as we
may be required to by state insurance laws. We will not determine the guaranteed
rates we establish by the performance of the nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed interest options and the account for
special dollar cost averaging, as well as our general obligations.
The general account is subject to regulation and supervision by the
Insurance Department of the State of New York and to the insurance laws and
regulations of all jurisdictions where we are authorized to do business. Because
of exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933. The general
account is not an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the Contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the
portions of this prospectus that relate to the general account (other than
market value adjustment interests). The disclosure, however, may be subject to
certain provisions of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
81
<PAGE>
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our Processing Office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How do I
Make My Contributions?"
Even if we accept the wire order and essential information, a Contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a Contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the Contract.
Where we require an Acknowledgement of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgement of Receipt
form.
After your Contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM - FOR NQ AND TRADITIONAL IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution into
an NQ or Traditional IRA Contract on a monthly or quarterly basis. AIP is not
available for Roth IRA, QP or TSA Contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly
(subject to $2,000 maximum each year for Traditional IRA Contracts). AIP
additional contributions may be allocated to any of the variable investment
options and available fixed interest options, but not the account for special
dollar cost averaging. You choose the day of the month you wish to have your
account debited as long as it is not later than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office in
writing at least two Business Days prior to the next scheduled transaction. We
are not responsible for any debits made to your account before the time written
notice of cancellation is received at our Processing Office.
82
<PAGE>
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events
under your Contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our Business Day is generally any day that the New York Stock Exchange is
open for trading. Our Business Day ends at 4:00 p.m., Eastern Time for purposes
of determining the date when contributions are applied and any other transaction
requests are processed. Contributions will be applied and any other transaction
requests will be processed when they are received along with all the required
information.
o If your contribution, transfer or any other transaction request,
containing all the required information, reaches us on a non-Business
Day or after 4:00 on a Business Day, we will use the next Business
Day.
o If your transaction is set to occur on the same day of the month as
the Contract Date and that date is the 29th, 30th or 31st of the
month, then the transaction will occur on either the 28th day of the
month or the 1st day of the next month, whichever is the closest
Business Day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are
invested at the value determined after the close of the Business Day.
o Contributions allocated to a fixed interest option will receive the
guaranteed rate in effect for that fixed interest option on that
Business Day.
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that Business Day.
o Transfers to or from variable investment options will be made at the
value determined after the close of the Business Day.
o Transfers to a fixed interest option will be based on the guaranteed
rate in effect for that fixed interest option on the Business Day of
the transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of The Hudson River Trust and EQ Advisors Trust
we have the right to vote on certain matters involving the Portfolios, such as:
o The election of Trustees.
o The ratification of independent auditors selected for each Trust.
83
<PAGE>
o Any other matters described in the prospectuses for the Trusts or
requiring a shareholders' vote under the Investment Company Act of
1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their Contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a Portfolio for which no instructions have been received in the
same proportion as we vote shares of that Portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a Portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control each Trust. EQ Advisors Trust shares are sold only to
our separate accounts and an affiliated qualified plan trust. The Hudson River
Trust shares are held by other separate accounts of ours and by separate
accounts of insurance companies unaffiliated with us. Shares held by these
separate accounts will probably be voted according to the instructions of the
owners of insurance policies and contracts issued by those insurance companies.
While this will dilute the effect of the voting instructions of the contract
owners, we currently do not foresee any disadvantages because of this. The
Hudson River Trust Board of Trustees intends to monitor events in order to
identify any material irreconcilable conflicts that may arise and to determine
what action, if any, should be taken in response. If we believe that a response
to any of those events insufficiently protects our contract owners, we will see
to it that appropriate action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner
approval, contract owners will be entitled to one vote for each unit they have
in the variable investment options. Each contract owner who has elected a
variable annuity payout option may cast the number of votes equal to the dollar
amount of reserves we are holding for that annuity in a variable investment
option divided by the unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under
applicable federal securities laws. To the extent that those laws or the
regulations published under those laws eliminate the necessity to submit matters
for approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT OUR YEAR 2000 PROGRESS
[To be supplied.]
84
<PAGE>
ABOUT LEGAL PROCEEDINGS
Equitable and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
Contracts, or the distribution of the Contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements and consolidated financial statement
schedules of Equitable at December 31, 1998 and 1997, and for each of the three
years in the period ended December 31, 1998 included in Equitable's Annual
Report on Form 10-K, incorporated by reference in the prospectus, have been
examined by PricewaterhouseCoopers LLP, independent accountants, whose reports
thereon are incorporated herein by reference. Such consolidated financial
statements and consolidated financial statement schedules have been incorporated
herein by reference in reliance upon the reports of PricewaterhouseCoopers LLP
given upon their authority as experts in accounting and auditing.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
NQ Contracts can be assigned at any time before annuity payments begin. You
cannot, however, assign your NQ Contract as collateral or security for a loan.
Loans are also not available under your NQ Contract. We will not be bound by an
assignment unless it is in writing and we have received it at our Processing
Office. In some cases, an assignment may have adverse tax consequences. See "Tax
Information."
You cannot assign or transfer ownership of a Traditional IRA, Roth IRA, TSA
or QP Contract except by surrender to us. Loans are not available and you cannot
assign Traditional IRA, Roth IRA, and QP Contracts as security for a loan or
other obligation. If the employer which provided the funds does not restrict
them, loans are available under a TSA Contract.
For limited transfers of ownership after the owner's death see "Payment of
Death Benefit" and "Beneficiary Continuation Option for Traditional IRA
Contracts." You may direct the transfer of the values under your Traditional
IRA, Roth IRA, TSA or QP Contract to another similar arrangement. Under federal
income tax rules, in the case of such a transfer, we will impose a withdrawal
charge, if one applies.
85
<PAGE>
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned subsidiary
of Equitable, is the distributor of the Contracts and has responsibility for
sales and marketing functions. EDI serves as the principal underwriter of the
Separate Account. EDI also acts as distributor for other Equitable annuity
products with different features, expenses, and fees. EDI is registered with the
SEC as a broker-dealer and is a member of the National Association of Securities
Dealers, Inc. EDI's principal business address is 1290 Avenue of the Americas,
New York, New York 10104. Pursuant to a distribution agreement between EDI,
Equitable, and certain of Equitable's separate accounts, including Separate
Account No. 49, Equitable paid EDI distribution fees of $________ for 1998,
$9,566,343 for 1997 and $87,157 for 1996, as the distributor of certain
contracts, including these Contracts, and as the principal underwriter of
Separate Account No. 49.
The Contracts will be sold by registered representatives of EDI, as well as
by affiliated and unaffiliated broker-dealers with which EDI has entered into
selling agreements. Broker-dealer sales compensation will generally not exceed
7% of total contributions made under the Contracts. EDI may also receive
compensation and reimbursement for its marketing services under the terms of its
distribution agreement with Equitable. Broker-dealers receiving sales
compensation will generally pay a portion of it to their registered
representatives as commissions related to sales of the Contracts. The offering
of the Contracts is intended to be continuous.
86
<PAGE>
INVESTMENT PERFORMANCE
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the Portfolios
in which they invest. We include these tables because they may be of general
interest to you. THE RESULTS SHOWN REFLECT PAST PERFORMANCE. THEY DO NOT
INDICATE HOW THE VARIABLE INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. THEY
ALSO DO NOT REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR
RESULTS WILL DIFFER.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment option for the period shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the
variable investment options over the periods shown. Both Tables 1 and 2 take
into account all fees and charges under the Contract, including the optional
baseBUILDER benefits charge, but does not take the charges for any applicable
taxes such as premium taxes into account.
Tables 3, 4, and 5 show the rates of return of the variable investment
options on an annualized, cumulative, and year-by-year basis. These tables take
into account all fees and charges under the Contract, but do not reflect the
withdrawal charge, the optional baseBUILDER benefits charge, or the charges for
any applicable taxes such as premium taxes. If the charges were reflected they
would effectively reduce the rates of return shown.
In all cases the results shown are based on the actual historical
investment experience of the Portfolio in which the variable investment option
invests. In some cases, the results shown relate to periods when the variable
investment options and/or the Contracts were not available. In those cases, we
adjusted the results of the Portfolios to reflect the charges under the
Contracts that would have applied had the investment options and/or Contracts
been available. The Contracts were first offered on August 1, 1997.
In addition, we have adjusted the results prior to October 1996, when The
Hudson River Trust Class IB shares were not available, to reflect the 12b-1 fees
currently imposed. Finally, the results shown for the Alliance Money Market and
Alliance Common Stock options for periods before March 22, 1985 reflect the
results of the variable investment options that preceded them. The "Since
Inception" figures for these options are based on the date of inception of the
preceding variable investment options. We have adjusted these results to reflect
the maximum investment advisory fee payable for the Portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
87
<PAGE>
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to
market indices that serve as benchmarks. Market indices are not subject to any
charges for investment advisory fees, brokerage commission or other operating
expenses typically associated with a managed portfolio. Also, they do not
reflect other Contract charges such as the mortality and expense risks charge,
administration charge, or any withdrawal or optional benefit charge. Comparisons
with these benchmarks, therefore, may be of limited use. We include them because
they are widely known and may help you to understand the universe of securities
from which each Portfolio is likely to select its holdings. Benchmark data
reflect the reinvestment of dividend income. The benchmarks include:
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill Index.
ALLIANCE HIGH YIELD: Merrill Lynch High Yield Master Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE AGGRESSIVE STOCK: 50% Russell 2000 Small Stock Index and 50% Standard
& Poor's Mid-Cap Total Return Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital International Europe,
Australia, Far East Index.
EQ/EVERGREEN: Russell 2000 Index.
EQ/EVERGREEN FOUNDATION: 60 % Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond
JPM CORE BOND: Salomon Brothers Board Investment Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 200 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MERRILL LYNCH BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERRILL LYNCH WORLD STRATEGY: 36% Standard & Poor's 500 Index/24% Morgan
Stanley Capital International Europe,
Australia, Far East Index/21% Salomon
Brothers U.S. Treasury bond 1 Year+14% Salomon
Brothers World Government Bond (excluding U.S.)
/and 5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley Capital International
Emerging Markets Free Price Return
Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500 Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital International Europe,
Australia, Far East Index.
88
<PAGE>
LIPPER. The Lipper Variable Insurance Products Performance Analysis Survey
records the performance of a large group of variable annuity products, including
managed separate accounts of insurance companies. According to Lipper Analytical
Services, Inc., the data are presented net of investment management fees, direct
operating expenses and asset-based charges applicable under annuity contracts.
Lipper data provide a more accurate picture than market benchmarks of the
Equitable Accumulator performance relative to other variable annuity products.
COMMUNICATING PERFORMANCE DATA
We may advertise the investment performance of the variable investment
options using the measurements shown in the tables below. We also may advertise
the current yield and effective yield of the Alliance Money Market and Alliance
High Yield options, described below.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive of
capital changes, and then "annualized" (assuming that the same seven-day result
would occur each week for 52 weeks). Current yield for the Alliance High Yield
option will be based on net changes in a hypothetical investment over a given
30-day period, exclusive of capital changes, and then "annualized" (assuming
that the same 30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized,
any income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option and monthly for the
Alliance High Yield option. The yields and effective yields assume the deduction
of all Contract charges and expenses other than the withdrawal charge, the
optional baseBUILDER benefits charge, and any charge for taxes such as premium
tax. The yields and effective yields for the Alliance Money Market option, when
used for the special dollar cost averaging program, assume that no Contract
charges are deducted. For more information, see "Alliance Money Market Option
and Alliance High Yield Option Yield Information" in the SAI.
89
<PAGE>
<TABLE>
<CAPTION>
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON
DECEMBER 31, 1998*
- ------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------------------------------
VARIABLE SINCE SINCE
INVESTMENT ONE THREE FIVE TEN OPTION PORTFOLIO
OPTION YEAR YEARS YEARS YEARS INCEPTION** INCEPTION***
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Money Market
Alliance High Yield
Alliance Common Stock
Alliance Aggressive Stock
Alliance Small Cap Growth
BT Equity 500 Index
BT Small Company Index
BT International Equity Index
EQ/Evergreen
EQ/Evergreen Foundation
JPM Core Bond
Lazard Large Cap Value
Lazard Small Cap Value
MFS Growth with Income
MFS Research
MFS Emerging Growth Companies
Merrill Lynch Basic Value Equity
Merrill Lynch World Strategy
Morgan Stanley Emerging
Markets Equity
EQ/Putnam Growth & Income
Value
EQ/Putnam Investors Growth
EQ/Putnam International Equity
- ------------------------------------------------------------------------------------------------------------------------------
- --------------------
*See footnotes below.
</TABLE>
90
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998*
- ------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------------------------------
VARIABLE
INVESTMENT ONE THREE FIVE TEN SINCE
OPTION YEAR YEARS YEARS YEARS INCEPTION***
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Money Market
Alliance High Yield
Alliance Common Stock
Alliance Aggressive Stock
Alliance Small Cap Growth
BT Equity 500 Index
BT Small Company Index
BT International Equity Index
EQ/Evergreen
EQ/Evergreen Foundation
JPM Core Bond
Lazard Large Cap Value
Lazard Small Cap Value
MFS Growth with Income
MFS Research
MFS Emerging Growth Companies
Merrill Lynch Basic Value Equity
Merrill Lynch World Strategy
Morgan Stanley Emerging
Markets Equity
EQ/Putnam Growth & Income
Value
EQ/Putnam Investors Growth
EQ/Putnam International Equity
</TABLE>
- -------------------
* The tables reflect the withdrawal charge and the optional baseBUILDER
benefits charge.
** The "Since Inception" dates for the variable investment options are as
follows: Alliance Money Market, Alliance High Yield, Alliance Common Stock,
and Alliance Aggressive Stock (October 16, 1996); Alliance Small Cap
Growth, MFS Research, MFS Emerging Growth Companies, EQ/Putnam Growth &
Income Value, EQ/Putnam Investors Growth, and EQ/Putnam International
Equity (May 1, 1997); Merrill Lynch Basic Value Equity and Merrill Lynch
World Strategy (August 1, 1997); BT Equity 500 Index, BT Small Company
Index, BT International Equity Index, JPM Core Bond, Lazard Large Cap
Value, Lazard Small Cap Value; and Morgan Stanley Emerging Markets Equity
(December 31, 1997); EQ/Evergreen, EQ/Evergreen Foundation and MFS Growth
with Income (January 4, 1999).
*** The "Since Inception" dates for the corresponding Portfolios of The Hudson
River Trust and EQ Advisors Trust are as follows: Alliance Money Market
(July 13, 1981); Alliance High Yield (January 2, 1987); Alliance Common
Stock (January 13, 1976); Alliance Aggressive Stock (January 27, 1986);
Alliance Small Cap Growth (May 1, 1997); BT Equity 500 Index (December 31,
1997); BT Small Company Index (December 31, 1997); BT International Equity
Index (December 31, 1997); EQ/Evergreen (December 31, 1998); EQ/Evergreen
Foundation (December 31, 1998); JPM Core Bond (December 31, 1997); Lazard
Large Cap Value (December 31, 1997); Lazard Small Cap Value (December 31,
1997); MFS Growth with Income (December 31, 1998); MFS Research (May 1,
1997); MFS Emerging Growth Companies (May 1, 1997); Merrill Lynch Basic
Value Equity (May 1, 1997); Merrill Lynch World Strategy (May 1, 1997);
Morgan Stanley Emerging Markets Equity (August 20, 1997); EQ/Putnam Growth
& Income Value (May 1, 1997); EQ/Putnam Investors Growth (May 1, 1997); and
EQ/Putnam International Equity (May 1, 1997).
91
<PAGE>
<TABLE>
<CAPTION>
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET
Lipper Money Market
Benchmark
ALLIANCE HIGH YIELD
Lipper High Yield
Benchmark
ALLIANCE COMMON STOCK
Lipper Growth
Benchmark
ALLIANCE AGGRESSIVE STOCK
Lipper Mid-Cap
Benchmark
ALLIANCE SMALL CAP
GROWTH
Lipper Small Cap
Benchmark
BT EQUITY 500 INDEX
Lipper S&P 500 Index
Benchmark
BT SMALL COMPANY INDEX
Lipper Small Cap
Benchmark
BT INTERNATIONAL EQUITY INDEX
Lipper International
Benchmark
EQ/EVERGREEN
Lipper Growth
Benchmark
EQ/EVERGREEN FOUNDATION
Lipper Balanced
Benchmark
JPM CORE BOND
Lipper Intermediate Investment
Grade Debt
Benchmark
LAZARD LARGE CAP VALUE
Lipper Capital Appreciation
Benchmark
</TABLE>
92
<PAGE>
<TABLE>
<CAPTION>
TABLE 3 (continued)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE
Lipper Small Cap
Benchmark
MFS GROWTH WITH INCOME
Lipper Growth & Income
Benchmark
MFS RESEARCH
Lipper Growth
Benchmark
MFS EMERGING GROWTH
COMPANIES
Lipper Mid-Cap
Benchmark
MERRILL LYNCH BASIC VALUE EQUITY
Lipper Growth & Income
Benchmark
MERRILL LYNCH WORLD STRATEGY
Lipper Global Flexible
Portfolio
Benchmark
MORGAN STANLEY EMERGING MARKETS
EQUITY
Lipper Emerging Markets
Benchmark
EQ/PUTNAM GROWTH &
INCOME VALUE
Lipper Growth & Income
Benchmark
EQ/PUTNAM INVESTORS
GROWTH
Lipper Growth
Benchmark
EQ/PUTNAM INTERNATIONAL
EQUITY
Lipper International
Benchmark
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*See footnotes on page __.
93
<PAGE>
<TABLE>
<CAPTION>
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET
Lipper Money Market
Benchmark
ALLIANCE HIGH YIELD
Lipper High Yield
Benchmark
ALLIANCE COMMON STOCK
Lipper Growth
Benchmark
ALLIANCE AGGRESSIVE STOCK
Lipper Mid-Cap
Benchmark
ALLIANCE SMALL CAP
GROWTH
Lipper Small Cap
Benchmark
BT EQUITY 500 INDEX
Lipper S&P 500 Index
Benchmark
BT SMALL COMPANY INDEX
Lipper Small Cap
Benchmark
BT INTERNATIONAL EQUITY INDEX
Lipper International
Benchmark
EQ/EVERGREEN
Lipper Growth
Benchmark
EQ/EVERGREEN FOUNDATION
Lipper Balanced
Benchmark
JPM CORE BOND
Lipper Intermediate Investment
Grade Debt
Benchmark
LAZARD LARGE CAP VALUE
Lipper Capital Appreciation
Benchmark
</TABLE>
94
<PAGE>
<TABLE>
<CAPTION>
TABLE 4 (continued)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE
Lipper Small Cap
Benchmark
MFS GROWTH WITH INCOME
Lipper Growth & Income
Benchmark
MFS RESEARCH
Lipper Growth
Benchmark
MFS EMERGING GROWTH
COMPANIES
Lipper Mid-Cap
Benchmark
MERRILL LYNCH BASIC VALUE EQUITY
Lipper Growth & Income
Benchmark
MERRILL LYNCH WORLD STRATEGY
Lipper Global Flexible Portfolio
Benchmark
MORGAN STANLEY EMERGING MARKETS
EQUITY
Lipper Emerging Markets
Benchmark
EQ/PUTNAM GROWTH &
INCOME VALUE
Lipper Growth & Income
Benchmark
EQ/PUTNAM INVESTORS
GROWTH
Lipper Growth
Benchmark
EQ/PUTNAM INTERNATIONAL
EQUITY
Lipper International
Benchmark
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*See footnotes on page __.
95
<PAGE>
<TABLE>
<CAPTION>
TABLE 5
YEAR-BY-YEAR RATES OF RETURN*
- -----------------------------------------------------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE
MONEY
MARKET*** 9.09% 6.74% 4.91% 4.93% 5.61% 7.45% 6.50% 4.49% 1.91% 1.32% 2.36% 4.06% 3.64% 3.74%
ALLIANCE HIGH
YIELD -- -- -- 3.03 7.99 3.46 (2.70) 22.48 10.51 21.19 (4.33) 18.01 20.91 16.58
ALLIANCE
COMMON
STOCK*** (3.53) 31.30 15.50 5.73 20.48 23.60 (9.59) 35.69 1.57 22.83 (3.70) 30.34 22.28 27.16
ALLIANCE
AGGRESSIVE
STOCK -- -- 33.28 5.58 (0.48) 41.22 6.43 83.89 (4.71) 14.89 (5.35) 29.54 20.24 9.04
BT EQUITY 500
INDEX
BT SMALL
COMPANY
INDEX
BT INTER-
NATIONAL
EQUITY INDEX
JPM CORE BOND
LAZARD LARGE
CAP VALUE
LAZARD SMALL
CAP VALUE
MFS GROWTH
WITH INCOME
MFS RESEARCH
MFS EMERGING
GROWTH
COMPANIES
MERRILL LYNCH
BASIC VALUE
EQUITY
MERRILL LYNCH
WORLD
STRATEGY
MORGAN
STANLEY
EMERGING
MARKETS
EQUITY
EQ/PUTNAM
GROWTH &
INCOME
VALUE
EQ/PUTNAM
INVESTORS
GROWTH
EQ/PUTNAM
INTER-
NATIONAL
EQUITY
</TABLE>
96
<PAGE>
- --------------------
* Returns do not reflect the withdrawal charge, the optional baseBUILDER
benefits charge, and any charge for tax such as premium taxes. No returns
are shown in Table 5 for any variable investment option investing in shares
of a Portfolio of EQ Advisors Trust with less than one year of performance.
** Unannualized
<TABLE>
<CAPTION>
*** Prior to 1984 the Year-by-Year Rates of
Return were: 1976 1977 1978 1979 1980 1981 1982 1983
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE COMMON STOCK 7.73% (10.69)% 6.51% 27.77% 47.74% (7.37)% 15.70% 24.11%
ALLIANCE MONEY MARKET -- -- -- -- -- 5.49 11.22 7.22
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
97
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable's annual report on Form 10-K for the year ended December 31, 1998
[and a current report on Form 8-K dated ___________, 1999, are] considered to be
a part of this prospectus because they are incorporated by reference.
After the date of this prospectus and before we terminate the offering of
the securities under this prospectus, all documents or reports we file with the
SEC under the Securities Exchange Act of 1934 ("Exchange Act"), will be
considered to become part of this prospectus because they are incorporated by
reference.
Any statement contained in a document which is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus, if a statement contained in this prospectus changes or is replaced.
Any statement which is considered to be a part of this prospectus because of its
incorporation, will be considered changed or replaced for the purpose of this
prospectus, if a statement contained in any other subsequently filed document
which is considered to be part of this prospectus, changes or replaces that
statement. Thereafter, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each
person to whom this prospectus is delivered, a copy of any or all of the
documents considered to be part of this prospectus because they are incorporated
herein. This does not include exhibits not specifically incorporated by
reference into the text of such documents. Requests for documents should be
directed to The Equitable Life Assurance Society of the United States, 1290
Avenue of the Americas, New York, New York 10104. Attention: Corporate Secretary
(telephone : (212) 554-1234).
98
<PAGE>
APPENDIX I: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
Equitable began offering the Contracts on August 1, 1997. The following table
shows the unit values, as of the applicable date each variable investment option
was first available under the Contracts and the last business day of the periods
shown.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
AUGUST 1, 1997 DEC. 31, 1997 DEC. 31, 1998 MARCH 31, 1999
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THE HUDSON RIVER TRUST OPTIONS
Alliance Aggressive Stock $ 72.38 $ 70.28
Alliance Common Stock 184.44 186.29
Alliance High Yield 28.73 29.96
Alliance Money Market 25.23 25.01
Alliance Small Cap Growth 12.21 12.54
EQ ADVISERS TRUST OPTIONS
BT Equity 500 Index* -- 10.00
BT Small Company Index* -- 10.00
BT International Equity Index* -- 10.00
EQ/Evergreen** -- -- /
EQ/Evergreen Foundation** -- --
JPM Core Bond* -- 10.00
Lazard Large Cap Value* -- 10.00
Lazard Small Cap Value* -- 10.00
MFS Research 11.69 11.50
MFS Emerging Growth Companies 12.16 12.13
MFS Growth with Income** -- --
Merrill Lynch Basic Value Equity 11.53 11.60
Merrill Lynch World Strategy 11.29 10.38
Morgan Stanley Emerging Markets Equity* -- 7.94
EQ/Putnam Growth & Income Value 11.47 11.52
EQ/Putnam Investors Growth 11.84 12.36
EQ/Putnam International Equity 11.39 10.86
- --------------------
</TABLE>
* The BT Equity 500 Index, BT Small Company Index, BT International Equity
Index, JPM Core Bond, Lazard Large Cap Value, Lazard Small Cap Value, and
Morgan Stanley Emerging Markets Equity options first became available under
the Contracts on December 31, 1997.
** The EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with Income
options first became available under the Contracts on January 4, 1999. The
unit value for each option on that date was $10.
99
<PAGE>
APPENDIX II: MARKET VALUE ADJUSTMENT EXAMPLE
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2000 to a fixed interest option with a maturity date of February
15, 2009 at a guaranteed rate of 7.00% resulting in a maturity value at the
maturity date of $183,846, and further assuming that a withdrawal of $50,000 was
made on February 15, 2004.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ASSUMED
GUARANTEED RATE ON FEBRUARY 15, 2004
5.00% 9.00%
-----------------------------------------------------------
<S> <C> <C>
As of February 15, 2004 (before withdrawal)
- -------------------------------------------
(1) Present value of maturity value,
also account value.......................................... $ 144,048 $ 119,487
(2) Guaranteed period amount.................................... 131,080 131,080
(3) Market value adjustment: (1) - (2).......................... 12,968 (11,593)
On February 15, 2004 (after withdrawal)
- ---------------------------------------
(4) Portion of (3) associated
with withdrawal: (3) x [$50,000/(1)]........................ $ 4,501 $ (4,851)
(5) Reduction in guaranteed
period amount: [$50,000 - (4)].............................. 45,499 54,851
(6) Guaranteed period amount: (2) - (5)......................... 85,581 76,229
(7) Maturity value.............................................. 120,032 106,915
(8) Present value of (7), also
account value............................................... 94,048 69,487
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please note that if a withdrawal is made when rates have increased (from 7.00%
to 9.00% in the example), a portion of a negative market value adjustment is
realized. On the other hand, if a withdrawal is made when rates have decreased
(from 7.00% to 5.00% in the example), a portion of a positive market value
adjustment is realized.
100
<PAGE>
APPENDIX III: PURCHASE CONSIDERATIONS FOR QP CONTRACTS
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator QP
Contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP Contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the Internal Revenue Code. The QP Contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted. This
QP Contract accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted. Under defined benefit plans, we will not
accept rollovers from a defined contribution plan to a defined benefit plan. We
will only accept transfers from a defined benefit plan or a change of investment
vehicles in the plan.
For defined benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's "normal retirement benefit" which can be funded by a QP
Contract is 80%. The account value under a QP Contract may at any time be more
or less than the lump sum actuarial equivalent of the "accrued benefit" for a
defined benefit plan participant/employee. Equitable does not guarantee that the
account value under a QP Contract will at any time equal the actuarial value of
80% of a participant/employee's accrued benefit. If overfunding of a plan
occurs, withdrawals from the QP Contract may be required. A withdrawal charge
and/or market value adjustment may apply. Further, Equitable will not perform or
provide any plan recordkeeping services with respect to the QP Contracts. The
plan's administrator will be solely responsible for performing or providing for
all such services. There is no loan feature offered under the QP Contracts, so
if the plan provides for loans and a participant/employee takes a loan from the
plan, other plan assets must be used as the source of the loan and any loan
repayments must be credited to other investment vehicles and/or accounts
available under the plan.
Finally, because the method of purchasing the QP Contract and the features of
the QP Contract may appeal more to plan participants/employees who are older and
tend to be highly paid, and because certain features of the QP Contract are
available only to plan participants/employees who meet certain minimum and/or
maximum age requirements, plan trustees should discuss with their advisers
whether the purchase of the QP Contract would cause the plan to engage in
prohibited discrimination in contributions, benefits or otherwise.
101
<PAGE>
APPENDIX IV: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
- --------------------------------------------------------------------------------
The death benefit under the Contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option or the fixed interest options),
no subsequent contributions, no transfers and no withdrawals, and no loans under
a TSA Contract, the guaranteed minimum death benefit for an annuitant age 45
would be calculated as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
5% ROLL UP TO
END OF AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 $105,000 $105,000(1) $105,000(3)
2 $115,500 $110,250(2) $115,500(3)
3 $129,360 $115,763(2) $129,360(3)
4 $103,488 $121,551(1) $129,360(4)
5 $113,837 $127,628(1) $129,360(4)
6 $127,497 $134,010(1) $129,360(4)
7 $127,497 $140,710(1) $129,360(4)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The account values for Contract Years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of Contract Year 1, and again at the end of Contract Years 4
through 7, the death benefit will be equal to the guaranteed minimum death
benefit.
(2) At the end of Contract Years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of Contract Years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of Contract Years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of the
prior year since it is equal to or higher than the current account value.
102
<PAGE>
APPENDIX V: AN INDEX OF KEY WORDS AND PHRASES
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in
this prospectus.
PAGE IN
TERM PROSPECTUS
- ---- ----------
account for special
dollar averaging.................24
account value.......................33
annuitant...........................16
baseBUILDER.........................26
beneficiary.........................48
benefit base........................27
business day........................83
cash value..........................32
Contract Date.......................9
Contract Year.......................9
contributions.......................16
ERISA...............................39
fixed interest options..............22
guaranteed minimum income
benefit.........................27
guaranteed minimum
death benefit...................30
guaranteed period amount............22
guaranteed rate.....................22
investment options..................19
market value adjustment.............23
maturity value......................23
NQ..................................Cover
payout option.......................40
Portfolio...........................Cover
Processing Office...................2
QP..................................Cover
Rebalancing.........................34
Required Beginning Date.............61
Roth IRA............................Cover
SAI.................................Cover
TOPS................................2
Traditional IRA.....................Cover
TSA.................................Cover
Unit................................32
variable investment options.........19
103
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
- --------------------------------------------------------------------------------
Unit Values
- --------------------------------------------------------------------------------
Annuity Unit Values
- --------------------------------------------------------------------------------
Custodian and Independent Accountants
- --------------------------------------------------------------------------------
Alliance Money Market Option and Alliance High Yield
Option Yield Information
- --------------------------------------------------------------------------------
Long-Term Market Trends
- --------------------------------------------------------------------------------
Key Factors in Retirement Planning
- --------------------------------------------------------------------------------
Financial Statements
- --------------------------------------------------------------------------------
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an Equitable Accumulator SAI dated May 1, 1999:
---------------------------------------------------------------------------
Name
---------------------------------------------------------------------------
Address
---------------------------------------------------------------------------
City State Zip
104
<PAGE>
EQUITABLE ACCUMULATOR(SM)
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999
--------------------
COMBINATION VARIABLE AND
FIXED DEFERRED ANNUITY CONTRACTS
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NY 10104
- --------------------------------------------------------------------------------
This statement of additional information ("SAI") is not a prospectus. It should
be read in conjunction with the related Equitable Accumulator prospectus, dated
May 1, 1999. That prospectus provides detailed information concerning the
Contracts and the variable investment options, as well as the fixed interest
options, that fund the Contracts. Each variable investment option is a
subaccount of Equitable's Separate Account No. 49. The fixed interest options
are part of Equitable's general account. Definitions of special terms used in
the SAI are found in the prospectus.
A copy of the prospectus is available free of charge by writing the Processing
Office (Post Office Box 1547, Secaucus, NJ 07096-1547), by calling
1-800-789-7771 toll-free, or by contacting your registered representative.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Accumulation Unit Values 2
- --------------------------------------------------------------------------------
Annuity Unit Values 2
- --------------------------------------------------------------------------------
Custodian and Independent Accountants 3
- --------------------------------------------------------------------------------
Alliance Money Market Option and Alliance High Yield
Option Yield Information 3
- --------------------------------------------------------------------------------
Long-Term Market Trends 4
- --------------------------------------------------------------------------------
Key Factors in Retirement Planning 6
- --------------------------------------------------------------------------------
Financial Statements 10
- --------------------------------------------------------------------------------
Copyright 1999 The Equitable Life Assurance Society
of the United States, New York, New York 10104.
All rights reserved. Accumulator is a service mark of
The Equitable Life Assurance Society of the United States.
(EDISAI 5/99)
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION UNIT VALUES
Accumulation unit values are determined at the end of each valuation period for
each of the variable investment options. We may off other annuity contracts and
certificates which will have their own accumulation unit values for the variable
investment options. They may be different from the accumulation unit values for
the Equitable Accumulator.
The accumulation unit value for a variable investment option for any valuation
period is equal to: (1) the accumulation unit value for the preceding valuation
period multiplied by (ii) the net Investment factor for that option for that
valuation period. A valuation period is each Business Day together with any
preceding non-business days. The net investment factor is:
[a/b]-c
where:
(a) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the valuation period. Any amounts
allocated to or withdrawn from the option for the valuation period are not
taken into account. For this purpose, we use the share value reported to us
by The Hudson River Trust or EQ Advisors Trust.
(b) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the preceding valuation period. (Any
amounts allocated or withdrawn for that valuation period are taken into
account.)
(c) is the daily mortality and expense risks charge and administration charge
relating to the Contracts, times the number of calendar days in the
valuation period. These daily charges are at an effective annual rate not
to exceed a total of 1.35%.
ANNUITY UNIT VALUES
The annuity unit value for each variable investment option was fixed at $1.00 on
each option's respective effective date (as shown in the prospectus) for
Contracts with assumed base rates of net investment return of both 5% and 3 1/2%
a year. For each valuation period after that date, it is the annuity unit value
for the immediately preceding valuation period multiplied by the adjusted net
investment factor under the Contract. For each valuation period, the adjusted
net investment factor is equal to the net investment factor reduced for each day
in the valuation period by:
o .00013366 of the net investment factor if the assumed base rate of net
investment return is 5% a year; or
o .00009425 of the net investment factor if the assumed base rate of net
investment return is 3 1/2%.
Because of this adjustment, the annuity unit value rises and falls depending on
whether the actual rate of net investment return (after deduction of charges) is
higher or lower than the assumed base rate.
All Contracts have a 5% assumed base rate of net investment return, except in
states where that rate is not permitted. Annuity payments under Contracts with
an assumed base rate of 3 1/2% will at first be smaller than those under
Contracts with a 5% assumed base rate. Payments under the 3 1/2% Contracts,
however, will rise more rapidly when unit values are rising, and payments will
fall more slowly when unit values are falling than those under 5% Contracts.
The amounts of variable annuity payments are determined as follows:
Payments normally start on the Business Day specified on your election form, or
on such other future date you specify. The payments are made on a monthly basis.
The first three payments are of equal amounts. Each of the first three payments
will be based on the amount specified in the Tables of Guaranteed Annuity
Payments in your Contract.
The first three payments depend on the assumed base rate of net investment
return and the form of annuity chosen (and any fixed period or period certain).
If the annuity involved is a life contingency, the risk class and the age of the
annuitants will affect payments.
The amount of the fourth and each later payment will vary according to the
investment performance of the variable investment options. We calculate each
monthly payment by multiplying the number of annuity units credited by the
average annuity unit value for the second calendar month immediately preceding
the due date of the payment. We calculate the number of units by dividing the
first monthly payment by the annuity unit value for the valuation period. This
includes the due date of the first monthly payment. The average annuity unit
value is the average of the annuity unit values for the valuation periods ending
in that month. Variable income annuities may also be available by separate
prospectus through other separate accounts we offer.
ILLUSTRATION OF CHANGES IN ANNUITY UNIT VALUES
To show how we determine variable annuity payments from month to month, assume
that the account value on the date annuity payments are to begin is enough to
fund an annuity with a monthly payment of $363. Also assume that the annuity
unit value for the valuation period that includes the due date of the first
annuity payment is $1.05. The number of annuity units credited under the
Contract would be 345.71 (363 divided by 1.05 = 345.71).
2
<PAGE>
- --------------------------------------------------------------------------------
If the fourth monthly payment is due in March, and the average annuity unit
value for January was $1.10, the annuity payment for March would be the number
of units (345.71) times the average annuity unit value ($1.10), or $380.28. If
the average annuity unit value was $1 in February, the annuity payment for April
would be 345.71 times $1, or $345.71.
CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable is the custodian for the shares of The Hudson River Trust and EQ
Advisors Trust owned by the variable annuity options.
The financial statements of the Separate Account (the variable investment
options) for the periods ended December 31, 1998 and 1997, and the consolidated
financial statements of Equitable at December 31, 1998 and 1997 and for each of
the three years ended December 31, 1998 included in the SAI have been audited by
PricewaterhouseCoopers LLP.
The financial statements of the Separate Account for the period ended December
31, 1998 and 1997, and the consolidated financial statements of Equitable at
December 31, 1998 and 1997 and for each of the three years ended December 31,
1998 included in this SAI have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in accounting and auditing.
ALLIANCE MONEY MARKET OPTION AND ALLIANCE HIGH YIELD OPTION YIELD INFORMATION
ALLIANCE MONEY MARKET OPTION
The Alliance Money Market option calculates yield information for seven-day
periods. The seven-day current yield calculation is based on a hypothetical
Contract with one accumulation unit at the beginning of the period. To determine
the seven-day rate of return, the net change in the unit value is computed by
subtracting the unit value at the beginning of the period from a unit value,
exclusive of capital changes, at the end of the period.
Unit values reflect all other accrued expenses of the Alliance Money Market
option but do not reflect any withdrawal charges, the optional benefit charge,
or charges for applicable taxes such as state or local premium taxes. Under the
Alliance Money Market special dollar cost averaging program, unit values also do
not reflect the mortality and expense risks charge and the administration
charge.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain what is called the adjusted base period rate of return. This
seven-day adjusted base period return is then multiplied by 365/7 to produce an
annualized seven-day current yield figure carried to the nearest one-hundredth
of one percent.
The effective yield is obtained by modifying the current yield to take into
account the compounding nature of the Alliance Money Market option's
investments, as follows: the unannualized adjusted base period return is
compounded by adding one to the adjusted base period return, raising the sum to
a power equal to 365 divided by 7, and subtracting one from the result, i.e.,
effective yield = (base period return + 1 )(365/7) - 1. The Alliance Money
Market option yields will fluctuate daily. Accordingly, yields for any given
period do not necessarily represent future results. In addition, the value of
accumulation units of the Alliance Money Market option will fluctuate and not
remain constant.
ALLIANCE HIGH YIELD OPTION
The Alliance High Yield option calculates yield information for 30-day periods.
The 30-day current yield calculation is based on a hypothetical Contract with
one unit at the beginning of the period. To determine the 30-day rate of return,
the net change in the unit value is computed by subtracting the unit value at
the beginning of the period from an accumulation unit value, exclusive of
capital changes, at the end of the period.
Unit values reflect all other accrued expenses of the Alliance High Yield option
but do not reflect any withdrawal charges, the optional benefit charge or
charges for applicable taxes such as state or local premium taxes.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain the adjusted base period rate of return. This 30-day adjusted
base period return is then multiplied by 365/30 to produce an annualized 30-day
current yield figure carried to the nearest one-hundredth of one percent.
The effective yield is obtained by modifying the current yield to give effect to
the compounding nature of the Alliance High Yield option's investments, as
follows: the unannualized adjusted base period return is compounded by adding
one to the adjusted base period return, raising the sum to a power equal to 365
divided by 30, and subtracting one from the result, i.e., effective yield =
(base period return + 1) (365/30) - 1. Alliance High Yield option yields will
fluctuate daily. Accordingly, yields for any given period do not necessarily
represent future results. In addition, the value of units of the Alliance High
Yield option will fluctuate and not remain constant.
3
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET OPTION AND ALLIANCE HIGH YIELD OPTION YIELD INFORMATION
The yields for the Alliance Money Market option and Alliance High Yield option
reflect charges that are not normally reflected in the yields of other
investments. Therefore, they may be lower when compared with yields of other
investments. The yields for Alliance Money Market option and Alliance High Yield
option should not be compared to the return on fixed rate investments which
guarantee rates of interest for specified periods, such as the fixed interest
options. Nor should the yields be compared to the yields of money market options
made available to the general public.
The seven-day current yield for the Alliance Money Market option was ____% for
the period ended December 31, 1998. The effective yield for that period was
____%.
The 30-day current yield for the Alliance High Yield option was ____% for the
period ended December 31, 1998. The effective yield for that period was _____%.
Because the above yields reflect the deduction of variable investment option
expenses, they are lower than the corresponding yield figures for the Alliance
Money Market and Alliance High Yield Portfolios which reflect only the deduction
of The Hudson River Trust-level expenses.
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return trends
for various types of securities. The information presented, while not directly
related to the performance of the variable investment options, helps to provide
a perspective on the potential returns of different asset classes over different
periods of time. By combining this information with knowledge of your own
financial needs (for example, the length of time until you retire, your
financial requirements at retirement), you may be able to better determine how
you wish to allocate contributions among the variable investment options.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long- or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus is
on long-term growth potential and protection against inflation, there may be
advantages to allocating some or all of their account value to those variable
investment options that invest in stocks.
Growth of $1 Invested on January 1, 1958
(Values are as of last business day)
[GRAPH TO BE INSERTED]
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
Over shorter periods of time, however, common stocks tend to be subject to more
dramatic changes in value than fixed-income (debt) securities. Investors who are
nearing retirement age, or who have a need to limit
4
<PAGE>
- --------------------------------------------------------------------------------
short-term risk, may find it preferable to allocate a smaller percentage of
their account value to those variable investment options that invest in common
stocks. The following graph illustrates the monthly fluctuations in value of $1
based on monthly returns of the Standard & Poor's 500 during 1990, a year that
represents [more typical volatility than 1998.]
Growth of $1 Invested on January 1, 1990
(Values are as of last business day)
[GRAPH TO BE INSERTED]
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1998 for different types
of securities: common stocks, long-term government bonds, long-term corporate
bonds, intermediate-term government bonds and U.S. Treasury Bills. For
comparison purposes, the Consumer Price Index is shown as a measure of
inflation. The average annual returns shown in the chart reflect capital
appreciation and assume the reinvestment of dividends and interest. Investment
management fees or expenses and charges typically associated with deferred
annuity products, are not reflected.
The information presented is merely a summary of past experience for unmanaged
groups of securities and is neither an estimate nor guarantee of future
performance. Any investment in securities, whether equity or debt, involves
varying degrees of potential risk, in addition to offering varying degrees of
potential reward.
The rates of return illustrated do not represent returns of the variable
investment options. In addition, there is no assurance that the performance of
the variable investment options will correspond to rates of return such as those
illustrated in the chart.
For a comparative illustration of performance results of the variable investment
options (which reflect the trusts and variable investment options charges), see
"Investment Performance" in the prospectus.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
- -------------------------------------------------------------------------------------------------------------------------------
LONG-TERM INTERMEDIATE U.S.
FOR THE FOLLOWING PERIODS COMMON LONG-TERM CORPORATE TERM TREASURY CONSUMER
ENDING 12/31/98: STOCKS GOVT. BONDS BONDS GOVT. BONDS BILLS PRICE INDEX
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year
3 Years
5 Years
10 Years
20 Years
30 Years
40 Years
50 Years
60 Years
Since 12/31/27
Inflation adjusted since 1927
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE: Ibbotson, Roger G., and Rex A. Sinquefield, Stocks, Bonds, Bills, and
Inflation (SBBI), 1982, updated in Stocks, Bonds, Bills and Inflation 1998
Yearbook (TM), Ibbotson Associates, Inc., Chicago. All rights reserved.
COMMON STOCKS (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
LONG-TERM GOVERNMENT BONDS -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
5
<PAGE>
- --------------------------------------------------------------------------------
LONG-TERM CORPORATE BONDS -- For the period 1969-1997, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers Index was backdated using Salomon Brothers
monthly yield data and a methodology similar to that used by Salomon Brothers
for 1969-1997; for the period 1927-1945, the Standard and Poor's monthly
High-Grade Corporate Composite yield data were used, assuming a 4 percent coupon
and a twenty-year maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. TREASURY BILLS -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
INFLATION -- Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
- --------------------------------------------------------------------------------
KEY FACTORS IN RETIREMENT PLANNING
INTRODUCTION
The Equitable Accumulator is available to help meet the retirement income and
investment needs of individuals. In assessing these retirement needs, some key
factors need to be addressed: (1) the impact of inflation on fixed retirement
incomes; (2) the importance of planning early for retirement; (3) the benefits
of tax deferral; (4) the selection of an appropriate investment strategy; and
(5) the benefit of receiving annuity payments. Each of these factors is
addressed below.
Unless otherwise noted, all of the following presentations use an assumed annual
rate of return of 7.5% compounded annually. This rate of return is for
illustrative purposes only and is not intended to represent an expected or
guaranteed rate of return for any investment vehicle.
In addition, unless otherwise noted, none of the illustrations reflect any
charges that may be applied under a particular investment vehicle. Such charges
would effectively reduce the actual return under any type of investment.
All earnings in these presentations are assumed to accumulate tax deferred
unless otherwise noted. Most programs designed for retirement savings offer tax
deferral. Monies are taxed upon withdrawal and a 10% penalty tax may apply to
premature withdrawals. Certain retirement programs prohibit early withdrawals.
See "Tax Information" in the prospectus. Where taxes are taken into
consideration in these presentations, a 28% tax rate is assumed.
The source of the data used by us to compile the charts which appear in this
section (other than charts 1, 2, 3, 4 and 7) is Ibbotson Associates, Inc.,
Chicago, Stocks, Bonds, Bills and Inflation [1998] Yearbook (TM). All rights
reserved.
In reports or other communications or in advertising material, we may make use
of these or other graphic or numerical illustrations that we prepare showing the
impact of inflation, planning early for retirement, tax deferral,
diversification and other concepts important to retirement planning.
INFLATION
Inflation erodes purchasing power. This means that, in an inflationary period,
the dollar is worth less as time passes. Because many people live on a fixed
income during retirement, inflation is of particular concern to them. The charts
that follow illustrate the harmful impact of inflation over an extended period
of time. Between 1968 and 1998, the average annual inflation rate was ____%. As
demonstrated in Chart 1, this ____% annual rate of inflation would cause the
purchasing power of $35,000 to decrease to only $_____ after 30 years.
In Chart 2, the impact of inflation is examined from another perspective.
Specifically, the chart illustrates the additional income needed to maintain the
purchasing power of $35,000 over a thirty-year period. Again, the 1968-1998
historical inflation rate of ____% is used. In this case, an additional $_______
would be required to maintain the purchasing power of $35,000 after 30 years.
CHART 1
[GRAPH TO BE INSERTED]
6
<PAGE>
- --------------------------------------------------------------------------------
CHART 2
[GRAPH TO BE INSERTED]
STARTING EARLY
The impact of inflation highlights the need to begin a retirement program early.
The value of starting early is illustrated in the following charts.
As shown in Chart 3, if an individual makes annual contributions of $2,500 to
his or her retirement program beginning at age 30, he or she would accumulate
$________ by age 65 under the assumptions described earlier. If that individual
waited until age 50, he or she would only accumulate $_______ by age 65 under
the same assumptions.
CHART 3
[GRAPH TO BE INSERTED]
In Table 1, the impact of starting early is demonstrated in another format. For
example, if an individual invests $300 monthly, he or she would accumulate
$_______ in thirty years under our assumptions. In contrast, if that individual
invested the same $300 per month for 15 years, he or she would accumulate only
$______ under our assumptions.
<TABLE>
<CAPTION>
TABLE 1
- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MONTHLY
CONTRI- YEAR YEAR YEAR YEAR YEAR
BUTION 10 15 20 25 30
$ 20
50
100
200
300
- -------------------------------------------------------------
</TABLE>
Chart 4 presents an additional way to demonstrate the significant impact of
starting to make contributions to a retirement program earlier rather than
later. It assumes that an individual had a goal to accumulate $250,000 (pretax)
by age 65. If he or she starts at age 30, under our assumptions he or she could
reach the goal by making a monthly pretax contribution of $___ (equivalent to
$__ after taxes). The total net cost for the 30-year-old in this hypothetical
example would be $______. If the individual in this hypothetical example waited
until age 50, he or she would have to make a monthly pretax contribution of $___
(equivalent to $___ after taxes) to attain the goal, illustrating the importance
of starting early.
CHART 4
GOAL: $250,000 BY AGE 65
[GRAPH TO BE INSERTED]
7
<PAGE>
- --------------------------------------------------------------------------------
TAX DEFERRAL
Contributing to a retirement plan early is part of an effective strategy for
addressing the impact of inflation. Another part of such a strategy is to
carefully select the types of retirement programs in which to invest. In
deciding where to invest retirement contributions, there are three basic types
of programs.
The first type offers the most tax benefits, and therefore is potentially the
most beneficial for accumulating funds for retirement. Contributions are made
with pre-tax dollars or are tax deductible and earnings grow income tax
deferred. An example of this type of program is the deductible Traditional IRA.
The second type of program also provides for tax-deferred earnings growth;
however, contributions are made with after-tax dollars. Examples of this type of
program are nondeductible Traditional IRAs and non-qualified annuities.
The third approach to retirement savings is fully taxable. Contributions are
made with after-tax dollars and earnings are taxed each year. Examples of this
type of program include certificates of deposit, savings accounts, and taxable
stock, bond or mutual fund investments.
Consider an example. For the type of retirement program that offers both pre-tax
contributions and tax deferral, assume that a $2,000 annual pre-tax contribution
is made for thirty years. In this example, the retirement funds would be
$172,339 after thirty years (assuming a 7.5% rate of return, no withdrawals and
assuming the deduction of the 1.35% Separate Account daily asset charge -- but
no withdrawal charge or other charges under the Contract, or trust charges to
Portfolios), and such funds would be $222,309 without the effect of any charges.
Assuming a lump sum withdrawal was made in year thirty and a 28% tax bracket,
these amounts would be $124,084 and $160,062, respectively.
For the type of program that offers only tax deferral, assume an after-tax
annual contribution of $1,440 for thirty years and the same rate of return. The
after-tax contribution is derived by taxing the $2,000 pre-tax contribution,
again assuming a 28% tax bracket. In this example, the retirement funds would be
$124,084 after thirty years assuming the deduction of charges and no
withdrawals, and $160,062 without the effect of charges. Assuming a lump sum
withdrawal in year thirty, the total after-tax amount would be $101,436 with
charges deducted and $127,341 without charges as described above.
For the fully taxable investment, assume an after-tax contribution of $1,440 for
thirty years. Earnings are taxed annually. After thirty years, the amount of
this fully taxable investment is $108,046.
Keep in mind that taxable investments have fees and charges, too (investment
advisory fees, administrative charges, 12b-1 fees, sales loads, brokerage
commissions, etc.). We have not attempted to apply these fees and charges to the
fully taxable amounts since this is intended merely as an example of tax
deferral.
Again, it must be emphasized that the assumed rate of return of 7.5% compounded
annually used in these examples is for illustrative purposes only. It is not
intended to represent a guaranteed or expected rate of return on any type of
investment. Moreover, early withdrawals of tax-deferred investments are
generally subject to a 10% penalty tax.
INVESTMENT FOR RETIREMENT
Selecting an appropriate retirement program is clearly an important part of an
effective retirement planning strategy. Carefully choosing among available
investment is another essential component.
During the 1968-1998 period, common stock average annual returns outperformed
the average annual returns of fixed investments such as long-term government
bonds and Treasury Bills (T-Bills). See "Notes" below. Common stocks earned an
average annual return of _____% over this period, in contrast to ____% and ____%
for the other two investment categories. Significantly, common stock returns
also outpaced inflation, which grew at ____% over this period.
Although common stock returns have historically outpaced returns of fixed
investments, people often allocate a significant percentage of their retirement
funds to fixed return investments. Their primary concern is the preservation of
principal. Given this concern, Chart 5 illustrates the impact of exposing only
the interest generated by a fixed investment to the stock market. In this
illustration, the fixed investment is represented by a Treasury Bill return and
the stock investment is represented by the Standard & Poor's 500 ("S&P 500").
The chart assumes that a $20,000 fixed investment was made on January 1, 1980.
If the interest on that investment were to accumulate based upon the return of
the S&P 500, the total investment would have been worth $_______ in 1998. Had
the interest been reinvested in the fixed investment, the fixed investment would
have grown to $______. As illustrated in Chart 5, significant opportunities for
growth exist while preserving principal. See "Notes" below.
8
<PAGE>
- --------------------------------------------------------------------------------
CHART 5
[GRAPH TO BE INSERTED]
Another variation of the example in Chart 5 is to gradually transfer principal
from a fixed investment into the stock market. Chart 6 assumes that a $20,000
fixed investment was made on January 1, 1980. For the next two years, $540 is
transferred monthly into the stock market (represented by the S&P 500).
The total investment, given this strategy, would have grown to $_______ in 1998.
In contrast, had the principal not been transferred, the fixed investment would
have grown to $______. See "Notes" below.
CHART 6
[GRAPH TO BE INSERTED]
NOTES
1. Common Stocks: Standard & Poor's ("S&P") Composite Index is an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies. Results shown assume reinvestment of
dividends. Both market value and return on common stock will vary.
2. U.S. Government Securities: Long-term Government Bonds are measured using a
one-bond portfolio constructed each year containing a bond with
approximately a 20-year maturity and a reasonably current coupon. U.S.
Treasury Bills are measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month. U.S. Government securities are guaranteed
as to principal and interest, and if held to maturity, offer a fixed rate
of return. However, market value and return on such securities will
fluctuate prior to maturity.
The Equitable Accumulator can be an effective program for diversifying ongoing
investments between various asset categories. In addition, the Equitable
Accumulator offers special features which help address the risk associated with
timing the equity markets, such as dollar cost averaging. By transferring the
same dollar amount each month from the Alliance Money Market option to other
variable investment options, dollar cost averaging attempts to shield your
investment from short-term price fluctuations. This, however, does not assure a
profit or protect against a loss in declining markets.
THE BENEFIT OF ANNUITIZATION
An individual may shift the risk of outliving his or her principal by electing a
lifetime income annuity. See "Choosing Your Annuity Payout Options" under
"Transferring and Accessing Your Money" in the prospectus. Chart 7 below shows
the monthly income that can be generated under various forms of life annuities,
as compared to receiving level payments of interest only or principal and
interest from the investment. Calculations in the Chart are based on the
following assumption: a $100,000 contribution was made at one of the ages shown,
annuity payments begin immediately, and a 5% annuitization interest rate is
used. For purposes of this example, principal and interest are paid out on a
level basis over 15 years. In the case of the interest-only scenario, the
principal is always available and may be left to other individuals at death.
Under the principal and interest scenario, a portion of the principal will be
left at death, assuming the individual dies within the 15-year period. In
contrast, under the life annuity scenarios, there is no residual amount left.
9
<PAGE>
- --------------------------------------------------------------------------------
CHART 7
MONTHLY INCOME
($100,000 CONTRIBUTION)
- -------------------------------------------------------------------
PRINCIPAL JOINT AND SURVIVOR*
AND -----------------------------
INTEREST INTEREST 50% 66.67% 100%
ONLY FOR SINGLE TO TO TO
ANNUITANT FOR LIFE 15 YEARS LIFE SURVIVOR SURVIVOR SURVIVOR
- -------------------------------------------------------------------
Male 65 $401 $785 $ 617 $560 $544 $513
Male 70 401 785 685 609 588 549
Male 75 401 785 771 674 646 598
Male 80 401 785 888 760 726 665
Male 85 401 785 1,045 878 834 757
- ----------
The numbers are based on 5% interest compounded annually and the 1983 Individual
Annuity Mortality Table "a" projected with modified Scale G. Annuity purchase
rates available at annuitization may vary, depending primarily on the
annuitization interest rate, which may not be less than an annual rate of 2.5%.
* The Joint and Survivor Annuity Forms are based on male and female Annuitants
of the same age.
FINANCIAL STATEMENTS
The consolidated financial statements of Equitable included herein should be
considered only as bearing upon the ability of Equitable to meet its obligations
under the Contracts.
10
<PAGE>
PART C
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits.
(a) Financial Statements included in Part B.
1. Separate Account No. 49:
(to be filed by amendment)
2. The Equitable Life Assurance Society of the United States:
(to be filed by amendment)
(b) Exhibits.
The following exhibits are filed herewith:
1. Resolutions of the Board of Directors of The Equitable Life
Assurance Society of the United States ("Equitable") authorizing
the establishment of the Registrant, previously filed with this
Registration Statement No. 333-05593 on June 10, 1996.
2. Not applicable.
3. (a) Form of Distribution Agreement among Equitable Distributors,
Inc., Separate Account Nos. 45 and 49 and The Equitable Life
Assurance Society of the United States, previously filed
with this Registration Statement No. 333-05593 on June 10,
1996.
(b) Form of Distribution Agreement dated as of January 1, 1998
among The Equitable Life Assurance Society of the United
States for itself and as depositor on behalf of certain
separate accounts and Equitable Distributors, Inc, previously
filed with this Registration Statement No. 333-05593 on May
1, 1998.
(c) Form of Sales Agreement among Equitable Distributors, Inc.,
as Distributor, a Broker-Dealer (to be named) and a General
Agent (to be named), previously filed with this Registration
Statement No. 333-05593 on June 10, 1996.
(d) Form of The Hudson River Trust Sales Agreement by and among,
The Equitable Life Assurance Society of the United States,
Equitable Distributors, Inc. and Separate Account No. 49 of
The Equitable Life
C-1
<PAGE>
Assurance Society of the United States, previously filed with
this Registration Statement No. 333-05593 on June 10, 1996.
4. (a) Form of group annuity contract no. 1050-94IC, incorporated
herein by reference to Exhibit 4(a) to the Registration
Statement on Form N-4 (File No. 33-83750), filed February 27,
1998.
(b) Forms of group annuity certificate nos. 94ICA and 94ICB,
incorporated herein by reference to Exhibit 4(b) to the
Registration Statement on Form N-4 (File No. 33-83750), filed
February 27, 1998.
(c) Forms of data pages no. 94ICA/BIM (IRA) and (NQ),
incorporated herein by reference to Exhibit 4(d) to the
Registration Statement on Form N-4 (File No. 33-83750), filed
February 27, 1998.
(d) Forms of data pages for Rollover IRA, IRA Assured Payment
Option, IRA Assured Payment Option Plus, Accumulator,
Assured Growth Plan, Assured Growth Plan (Flexible Income
Program), Assured Payment Plan (Period Certain) and Assured
Payment Plan (Life with a Period Certain), incorporated
herein by reference to Exhibit 4(f) to the Registration
Statement on Form N-4 (File No. 33-83750), filed August 31,
1995.
(e) Forms of data pages for Rollover IRA, IRA Assured Payment
Option Plus and Accumulator, incorporated herein by
reference to Exhibit 4(g) to the Registration Statement on
Form N-4 (File No. 33-83750), filed April 23, 1996.
(f) Forms of data pages for the Rollover IRA, previously filed
with this Registration Statement No. 333-05593 on June 10,
1996.
(g Forms of data pages for Accumulator and Rollover IRA,
previously filed with this Registration Statement No.
333-05593 on October 9, 1996.
(h) Forms of data pages for Accumulator-IRA and
Accumulator-NQ, previously filed with this Registration
Statement No. 333-05593 on April 30, 1997.
(i) Forms of data pages for Accumulator-IRA and Accumulator-NQ,
previously filed with this Registration Statement No.
333-05593 on December 31, 1997.
C-2
<PAGE>
(j) Form of endorsement No. 98ENJONQI to Contract Form No.
1050-94IC and the Certificates under the Contract,
previously filed with this Registration Statement No.
333-05593 on December 31, 1997.
(k) Form of endorsement No. 98Roth to Contract Form No. 1050-94IC
and the Certificates under the Contract, previously filed
with this Registration Statement No. 333-05593 on December
31, 1997.
(l) Form of endorsement no. 95ENLCAI to contract no. 1050-94IC
and data pages no. 94ICA/BLCA, incorporated herein by
reference to Exhibit 4(e) to the Registration Statement on
Form N-4 (File No. 33-83750), filed February 27, 1998.
(m) Forms of endorsement nos. 94ENIRAI, 94ENNQI and 94ENMVAI to
contract no. 1050-94IC and data pages nos. 94ICA/BIM and
94ICA/BMVA, incorporated herein by reference to Exhibit 4(c)
to the Registration Statement on Form N-4 (File No.
33-83750), filed February 27, 1998.
(n) Form of Guaranteed Minimum Income Benefit Endorsement to
Contract Form No. 10-50-94IC and the Certificates under the
Contract, incorporated herein by reference to Exhibit 4(h)
to the Registration Statement on Form N-4 (File No.
33-83750), filed April 23, 1996.
(o) Forms of data pages for the Accumulator, previously filed
with this Registration Statement No. 333-05593 on June 10,
1996.
(p) Form of Custodial Owned Roth IRA endorsement no. 98COROTH to
Contract No. 1050-94IC, previously filed with this Registra-
tion Statement No. 333-05593 on May 1, 1998.
(q) Form of Defined Benefit endorsement no. 98ENDBQPI to
Contract No. 1050-94IC, incorporated herein by reference to
Exhibit 4 (j) to the Registration Statement on Form N-4
(File No. 333-31131), filed May 1, 1998.
(r) Form of Guaranteed Interest Account endorsement no.
98ENGIAII, and data pages 94ICA/B, previously filed with this
Registration Statement No. 333-05593 on May 1, 1998.
(s) Form of data pages for Equitable Accumulator TSA ,
previously filed with this Registration Statement No.
333-05593, on May 22, 1998.
(t) Form of endorsement applicable to TSA Certificates,
previously filed with this Registration Statement No.
333-05593, on May 22, 1998.
(u) Form of data pages for Equitable Accumulator (IRA, NQ, QP
and TSA) previously filed with this Registration Statement
No. 333-05593, on November 30, 1998.
(v) Form of data pages (as revised) for Equitable Accumulator
(IRA, NQ, QP, and TSA), previously filed with this
Registration Statement File No. 333-05593 on December 28,
1998.
(w) Form of endorsement No. 98ENIRAI-IM to Contract No. 105094IC
and the Certificate under the Contract, previously filed
with this Registration Statement File No. 333-05593 on
December 28, 1998.
5. (a) Forms of application used with the IRA, NQ and Fixed Annuity
Markets, incorporated herein by reference to Exhibit 5(a) to
the Registration Statement on Form N-4 (File No. 33-83750),
filed February 27, 1998.
(b) Forms of Enrollment Form/Application for Rollover IRA,
Choice Income Plan and Accumulator, incorporated herein by
reference to Exhibit 5(b) to the Registration Statement on
Form N-4 (File No. 33-83750), filed May 1, 1998.
(c) Form of Enrollment Form/Application for Equitable
Accumulator, previously filed with this Registration
Statement No. 333-05593 on April 30, 1997.
(d) Form of Enrollment Form/Application for Equitable
Accumulator, previously filed with this Registration
Statement No. 333-05593 on December 31, 1997.
(e) Form of Enrollment Form/Application for Equitable Accumulator
(IRA, NQ AND QP), previously filed with this Registration
Statement No. 333-05593 on May 1, 1998.
(f) Form of Enrollment Form/Application for Equitable
Accumulator (IRA, NQ, QP and TSA), previously filed with
this Registration Statement No. 333-05593 on May 22, 1998.
(g) Form of Enrollment/Form/Application (as revised) for
Equitable Accumulator (IRA, NQ, QP and TSA), previously filed
with this Registration Statement No. 33-05593 on November 30,
1998.
(h) Form of Enrollment/Form Application (as revised) for
Equitable Accumulator (IRA, NQ, QP and TSA), previously
filed with this Registration Statement No. 333-05593 on
December 28, 1998.
6. (a) Restated Charter of Equitable, as amended January 1, 1997,
previously filed with this Registration Statement No.
333-05593 on March 6, 1997.
(b) By-Laws of Equitable, as amended November 21, 1996,
previously filed with this Registration Statement No.
333-05593 on March 6, 1997.
7. Not applicable.
8. Form of Participation Agreement among EQ Advisors Trust,
Equitable, Equitable Distributors, Inc. and EQ Financial
Consultants, Inc., incorporated by reference to the Registration
Statement of EQ Advisors Trust on Form N-1A. (File Nos. 333-17217
and 811-07953).
9. Opinion and Consent of Jonathan E. Gaines, Esq., Vice President
and Associate General Counsel of Equitable, as to the legality of
the securities being registered, previously filed with this
Registration Statement No. 333-05593 on April 30, 1997.
10. (a) Consent of PriceWaterhouseCoopers LLP. (to be filed by
amendment).
(b) Powers of Attorney, previously filed with this
Registration Statement File No. 333-05593 on May 1, 1998.
11. Not applicable.
12. Not applicable.
13. (a) Formulae for Determining Money Market Fund Yield for a
Seven-Day Period for the INCOME MANAGER, previously filed
with this Registration Statement No. 333-05593 on June 10,
1996.
(b) Formulae for Determining Cumulative and Annualized Rates of
Return for the INCOME MANAGER, previously filed with this
Registration Statement No. 333-05593 on June 10, 1996.
(c) Formulae for Determining Standardized Performance Value and
Annualized Average Performance Ratio for INCOME MANAGER
Certificates, previously filed with this Registration
Statement No. 333-05593 on June 10, 1996.
C-3
<PAGE>
Item 25: Directors and Officers of Equitable.
Set forth below is information regarding the directors and principal
officers of Equitable. Equitable's address is 1290 Avenue of Americas,
New York, New York 10104. The business address of the persons whose
names are preceded by an asterisk is that of Equitable.
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
DIRECTORS
Francoise Colloc'h Director
AXA
23, Avenue Matignon
75008 Paris, France
Henri de Castries Director
AXA
23, Avenue Matignon
75008 Paris, France
Joseph L. Dionne Director
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
Denis Duverne Director
AXA
23, Avenue Matignon
75008 Paris, France
William T. Esrey Director
Sprint Corporation
P.O. Box 11315
Kansas City, MO 64112
Jean-Rene Fourtou Director
Rhone-Poulenc S.A.
25 Quai Paul Doumer
92408 Courbevoie Cedex,
France
Norman C. Francis Director
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
C-4
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
Donald J. Greene Director
LeBouef, Lamb, Greene & MacRae
125 West 55th Street
New York, NY 10019-4513
John T. Hartley Director
Harris Corporation
1025 NASA Boulevard
Melbourne, FL 32919
John H.F. Haskell, Jr. Director
Warburg Dillion, Read LLC
535 Madison Avenue
New York, NY 10028
Mary R. (Nina) Henderson Director
International Plaza
P.O. Box 8000
Englewood Cliffs, NJ 07632-9976
W. Edwin Jarmain Director
Jarmain Group Inc.
121 King Street West
Suite 2525
Toronto, Ontario M5H 3T9,
Canada
G. Donald Johnston, Jr. Director
184-400 Ocean Road
John's Island
Vero Beach, FL 32963
George T. Lowy Director
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
C-5
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
Didier Pineau-Valencienne Director
Schneider S.A.
64-70 Avenue Jean-Baptiste Clement
92646 Boulogne-Billancourt Cedex
France
George J. Sella, Jr. Director
P.O. Box 397
Newton, NJ 07860
Dave H. Williams Director
Alliance Capital Management Corporation
1345 Avenue of the Americas
New York, NY 10105
OFFICER-DIRECTORS
- -----------------
*Michael Hegarty President, Chief Operating
Officer and Director
*Edward D. Miller Chairman of the Board,
Chief Executive Officer
and Director
* Stanley B. Tulin Vice Chairman of the Board,
Chief Financial Officer and Director
OTHER OFFICERS
- --------------
*Leon Billis Executive Vice President
and Chief Information Officer
*Harvey Blitz Senior Vice President
*Kevin R. Byrne Senior Vice President and Treasurer
*Alvin H. Fenichel Senior Vice President and
Controller
C-6
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
*Paul J. Flora Senior Vice President and Auditor
*Robert E. Garber Executive Vice President and
General Counsel
*Jerome S. Golden Executive Vice President
James D. Goodwin Vice President
*Edward J. Hayes Senior Vice President
*Mark A. Hug Senior Vice President
*Donald R. Kaplan Vice President and Chief Compliance
Officer and Associate General
Counsel
*Michael S. Martin Executive Vice President and Chief
Marketing Officer
*Douglas Menkes Senior Vice President and
Corporate Actuary
*Peter D. Noris Executive Vice President and Chief
Investment Officer
*Anthony C. Pasquale Senior Vice President
*Pauline Sherman Vice President, Secretary and
Associate General Counsel
*Samuel B. Shlesinger Senior Vice President
*Richard V. Silver Senior Vice President and Deputy
General Counsel
*Jose Suquet Senior Executive Vice President and
Chief Distribution Officer
*Naomi Weinstein Vice President
*Maureen K. Wolfson Vice President
C-7
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the Insurance
Company or Registrant.
Separate Account No. 49 of The Equitable Life Assurance Society of the
United States (the "Separate Account") is a separate account of Equitable.
Equitable, a New York stock life insurance company, is a wholly owned
subsidiary of The Equitable Companies Incorporated (the "Holding Company"), a
publicly traded company.
The largest stockholder of the Holding Company is AXA which as of
December 31, 1998 beneficially owned 58.5% of the Holding Company's outstanding
common stock. AXA is able to exercise significant influence over the operations
and capital structure of the Holding Company and its subsidiaries, including
Equitable. AXA, a French company, is the holding company for an international
group of insurance and related financial services companies.
C-8
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (l991) (Delaware)
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (41.8%) (See
Addendum B(1) for subsidiaries)
The Equitable Life Assurance Society of the United States (1859)
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
EVLICO, INC. (1995) (Delaware)
EVLICO East Ridge, Inc. (1995) (California)
GP/EQ Southwest, Inc. (1995) (Texas)
Franconom, Inc. (1985) (Pennsylvania)
Frontier Trust Company (1987) (North Dakota)
Gateway Center Buildings, Garage, and Apartment Hotel, Inc.
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
Equitable Managed Assets (Delaware)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
Alliance Capital Management L.P. (2.7% limited partnership
interest)
ACMC, Inc. (1991) (Delaware)(s)
Alliance Capital Management L.P. (1988) (Delaware)
(39.6% limited partnership interest)
EVCO, Inc. (1991) (New Jersey)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
Equitable Underwriting and Sales Agency (Bahamas) Limited (1993)
(Bahamas)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-9
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Fox Run, Inc. (1994) (Massachusetts)
STCS, Inc. (1992) (Delaware)
CCMI Corporation (1994) (Maryland)
FTM Corporation (1994) (Maryland)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
Camelback JVS, Inc. (1995) (Arizona)
ELAS Realty, Inc. (1996) (Delaware)
100 Federal Street Realty Corporation (Massachusetts)
Equitable Structured Settlement Corporation (1996) (Delaware)
Prime Property Funding II, Inc. (1997) (Delaware)
Sarasota Prime Hotels, Inc. (1997) (Florida)
ECLL, Inc. (1997) (Michigan)
Equitable Holdings LLC (1997) (New York) (into which Equitable Holding
Corporation was merged in 1997)
EQ Financial Consultants, Inc. (formerly
Equico Securities, Inc.) (l97l) (Delaware) (a) (b)
ELAS Securities Acquisition Corp. (l980) (Delaware)
100 Federal Street Funding Corporation (Massachusetts)
EquiSource of New York, Inc. (1986) (New York) (See
Addendum A for subsidiaries)
Equitable Casualty Insurance Company (l986) (Vermont)
EREIM LP Corp. (1986) (Delaware)
EREIM LP Associates (1%)
EML Associates (.02%)
Six-Pac G.P., Inc. (1990) (Georgia)
Equitable Distributors, Inc. (1988) (Delaware) (a)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-10
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holdings, LLC (cont.)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EQ and
EHC) (Delaware) (34.4%) (See Addendum B(1) for
subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
Equitable Investment Corporation (l97l) (New York)
Stelas North Carolina Limited Partnership (50% limited
partnership interest) (l984)
Equitable JV Holding Corporation (1989) (Delaware)
Alliance Capital Management Corporation (l991) (Delaware) (b)
(See Addendum B(2) for subsidiaries)
Equitable Capital Management Corporation (l985)
(Delaware)(b)
Alliance Capital Management L.P. (1988) (Delaware) (14.6%
limited partnership interest)
EQ Services, Inc. (1992) (Delaware)
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P.
EML Associates, L.P.
(a) Registered Broker/Dealer (b) Registered Investment
Advisor
C-11
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM A - SUBSIDIARY
OF EQUITABLE HOLDINGS, LLC
HAVING MORE THAN FIVE SUBSIDIARIES
-------------------------------------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet Business Corporation
of New York) has the following subsidiaries that are brokerage companies to
make available to Equitable Agents within each state traditional (non-equity)
products and services not manufactured by Equitable:
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988)
(Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource of Puerto Rico, Inc. (1997) (Puerto Rico)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-12
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM B - INVESTMENT SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
------------------------------------
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
approximately 150 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Securities Corporation (1985)
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corp. (1985)
(Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
DLJ Real Estate, Inc.
DLJ Capital Corporation (b)
DLJ Mortgage Capital, Inc. (1988) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Alliance Capital Management Corporation (as general partner) (b) has the
following subsidiaries:
Alliance Capital Management L.P. (1988) (Delaware) (b)
Alliance Capital Management Corporation of Delaware, Inc.
(Delaware)
Alliance Fund Services, Inc. (Delaware) (a)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Capital Oceanic Corp. (Delaware)
Alliance Capital Management Australia Pty. Ltd.
(Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (99.98%)
Alliance Eastern Europe Inc. (Delaware)
Alliance Barra Research Institute, Inc. (Delaware)
(50%)
Alliance Capital Management Canada, Inc. (Canada)
(99.99%)
Alliance Capital Management (Brazil) Llda
Alliance Capital Global Derivatives Corp. (Delaware)
Alliance International Fund Services S.A.
(Luxembourg)
Alliance Capital Management (India) Ltd. (Delaware)
Alliance Capital Mauritius Ltd.
Alliance Corporate Finance Group, Incorporated
(Delaware)
Equitable Capital Diversified Holdings, L.P. I
Equitable Capital Diversified Holdings, L.P. II
Curisitor Alliance L.L.C. (Delaware)
Curisitor Holdings Limited (UK)
Alliance Capital Management (Japan), Inc.
Alliance Capital Management (Asia) Ltd.
Alliance Capital Management (Turkey), Ltd.
Cursitor Alliance Management Limited (UK)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-13
<PAGE>
AXA GROUP CHART
The information listed below is dated as of December 31, 1997; percentages
shown represent voting power. The name of the owner is noted when AXA
indirectly controls the company.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Assurances Iard France 100% by AXA France Assurance
AXA Assurances Vie France 100% by AXA France Assurance
AXA Courtage Iard France 97.4% by AXA France Assurance
and UAP Iard
AXA Courtage Vie France 100% by AXA France Assurance
Alpha Assurances Vie France 100% by AXA France Assurance
AXA Direct France 100%
Direct Assurances Iard France 100% by AXA Direct
Direct Assurance Vie France 100% by AXA Direct
AXA Tellit Versicherung Germany 50% owned by AXA Direct and
50% by CKAG
Axiva France 100% by AXA France Assurance
Juridica France 88.4% by UAP Iard, 10.9% by
AXA France Assurance
AXA Assistance France France 100% by AXA Assistance SA
Monvoisin Assurances France 99.9% by different companies
and Mutuals
Societe Beaujon France 100%
Lor Finance France 100%
Jour Finance France 100% by AXA Conseil Iard and
by AXA Assurances Iard
Financiere 45 France 99.8%
Mofipar France 100%
Compagnie Auxiliaire pour le France 99.8% by Societe Beaujon
Commerce and l'Industrie
C.F.G.A. France 99.96% owned by Mutuals and
Finaxa
AXA Global Risks France 100% owned by AXA France
Assurance, UAP Iard and
Mutuals
Argovie France 100% by Axiva and SCA Argos
C-14
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Astral Finance France 99.33% by AXA Courtage Vie
Argos France N.S.
AXA France Assurance France 100%
UAP Incendie Accidents France 100% by AXA France
Assurance
UAP Vie France 100% by AXA France
Assurance
UAP Collectives France 50% by AXA Assurances
Iard, 3.3% by AXA Conseil
Iard and 46.6% UAP Vie
Thema Vie France 30% by Axiva, 11.9% by
UAP Collectives, 10.9% by
UAP Iard and 46.8% by UAP Vie.
La Reunion Francaise France 49% by UAP Iard and 51% by
AXA Global Risks
UAP Assistance France 52% by UAP Incendie-Accidents
and 48% by UAP Vie
UAP International France 50.1% by AXA and 49.9% by
AXA Global Risks
Sofinad France 100%
AXA-Colonia Konzern AG (AXA-
CKAG) Germany 39.7% by Vinci BV, 25.6% by
Kolnische Verwaltungs and
5.5% by AXA-UAP
Finaxa Belgium Belgium 100%
AXA Belgium Belgium 27.1% by AXA and 72.6%
by Finaxa Belgium
De Kortrijske Verzekering Belgium 99.8% by AXA Belgium
Juris Belgium 100% owned by Finaxa Belgium
Royale Vendome Belgium 49% by AXA and 20.2% by
AXA Global Risks
Royale Belge Belgium 51.2% by Royale Vendome and
9.5% by different companies
of the Group
Royale Belge 1994 Belgium 97.9% by Royale Belge and 2%
by UAB
UAB Belgium 99.9% by Royale Belge
Ardenne Prevoyante Belgium 99.4% by Royale Belge
GB Lex Belgium 55% by Royale Belge, 25% by
Royale Belge 1994, 10% by
Juridica and 10% by AXA
Conseil Assurance
Royale Belge Re Belgium 99.9% by Royale Belge
Parcolvi Belgium 100% by Vinci Belgium
Vinci Belgium Belgium 99.5% by Vinci BV
Finaxa Luxembourg Luxembourg 100%
AXA Assurance IARD Luxembourg Luxembourg 99.9%
AXA Assurance Vie Luxembourg Luxembourg 99.9%
Royale UAP Luxembourg 100% by Royale Belge
Paneurolife Luxembourg 90% by different companies of
the AXA Group
Paneurore Luxembourg 90% by different companies of
the AXA Group
Crealux Luxembourg 100% by Royale Belge
Futur Re Luxembourg 100% by AXA Global Risks
General Re-CKAG Luxembourg 37.8% by AXA-CKAG and 12.1%
by Colonia Nordstern
Versicherung
Royale Belge Investissements Luxembourg 100% by Royale Belge
AXA Aurora Spain 30% owned by AXA and 40%
by UAP International
Aurora Polar SA de Seguros y Spain 99.4% owned by AXA Aurora
Reaseguros
Aurora Vida SA de Seguros y Spain 90% owned by Aurora Polar and
Reaseguros 5% by AXA
AXA Gestion de Seguros y Spain 99.1% owned by AXA Aurora
Reaseguros
Hilo Direct Seguros Spain 71.4% by AXA Aurora
Ayuda Legal Spain 59% owned by Aurora Polar,
29% by AXA Gestion and 12%
by Aurora Vida
UAP Iberica Spain 100% by UAP International
General Europea (GESA) Spain 100% by Societe Generale
d'Assistance
AXA Assicurazioni Italy 100%
Eurovita Italy 30% owned by AXA Assicurazioni
Gruppo UAP Italia (GUI) Italy 97% by UAP International and
3% by UAP Vie
UAP Italiana Italy 96% by AXA and 4% by GUI
UAP Vita Italy 62.2% by GUI and 37.8% by UAP
Vie
Allsecures Assicurazioni Italy 90% by GUI and 10% by UAP
Italiana
Allsecures Vita Italy 92.9% by GUI and 7% by AXA
Centurion Assicurazioni Italy 100% by GUI
AXA Equity & Law plc U.K. 100%
AXA Equity & Law Life U.K. 100% by SLPH
Assurance Society
AXA Insurance U.K. 100% owned by SLPH
AXA Global Risks U.K. 51% owned by AXA Global
Risks (France) and 49% by
AXA Courtage IARD
Sun Life and Provincial U.K. 71.6% by AXA and AXA
Holdings (SLPH) Equity & Law Plc
Sun Life Corporation Plc U.K. 100% by AXA Sun Life Holding
Sun Life Assurance U.K. 100% by AXA Sun Life Holding
UAP Provincial Insurance U.K. 100% by SLPH
English & Scottish U.K. 100% by AXA UK
Servco U.K. 100% by AXA Sun Life Holding
AXA Sun Life U.K. 100% by AXA Sun Life Holding
AXA Leven The Nether- 100% by AXA Equity & Law Life
lands Assurance Society
UAP Nieuw Rotterdam The Nether- 51% by Royale Belge, 38.9% by
Holding BV lands Gelderland BV and 4.1% by
AXA
UNIROBE Groep BV The Nether- 100% by UAP Nieuw Rotterdam
lands Holding BV
UAP Nieuw Rotterdam Verzkerigen The Nether- 100% by UAP Nieuw Rotterdam
lands Holding BV
UAP Nieuw Rotterdam Schade The Nether- 100% by UAP Nieuw Rotterdam
lands Verzekerigen
UAP Nieuw Rotterdam Leven The Nether- 100% by UAP Nieuw Rotterdam
lands Verzekerigen
UAP Nieuw Rotterdam Zorg The Nether- 100% by UAP Nieuw Rotterdam
lands Schade
Societe Generale d'Assistance The Nether- 51% by UAP Incendie-Accidents,
lands 29% by UAP Vie and 20% by
AXA-UAP
Gelderland BV The Nether- 100% by UAP Vie
lands
Royale Belge International The Nether- 100% by Royale Belge
lands Investissements
Vinci BV The Nether- 94.8% by AXA and 5.2% by
lands Parcolvi
AXA Portugal Companhia de Portugal 43.1% by different companies
Serguros SA of the AXA Group
AXA Portugal Companhia de Portugal 95.1% by UAP Vie and 7.5% UAP
Serguros de Vida SA International
Union UAP Switzerland 99.9% by UAP International
Union UAP Vie Switzerland 95% by UAP International
AXA Oyak Hayat Sigorta Turkey 60% owned by AXA
Oyak Sigorta Turkey 11% owned by AXA
Al Amane Assurances Morocco 52% by UAP International
AXA Canada Inc. Canada 100%
AXA Boreal Insurance Inc. Canada 100% owned by Gestion Fracapar
Inc
AXA Assurances Inc Canada 100% owned by AXA Canada Inc
C-15
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Insurance Inc Canada 100% owned by AXA Canada Inc.
and AXA Assurance Inc
Anglo Canada General Insurance Canada 100% owned by AXA Canada Inc.
Cy
AXA Pacific Insurance Cy Canada 100% by AXA Boreal Insurance
Inc
AXA Boreal Assurances Canada 100% by AXA Boreal Insurance
Agricoles Inc Inc
AXA Life Insurance Japan 100%
Dongbu AXA Life Korea 50%
Insurance Co. Ltd.
Sime AXA Berhad Malaysia 30% owned by AXA and
AXA Reassurance
AXA Investment Holdings Pte Ltd Singapore 100%
AXA Insurance Singapore 100% owned by AXA Investment
Holdings Pte Ltd
AXA Insurance Hong Kong 100% owned by AXA Investment
Holdings Pte Ltd
AXA Life Insurance Hong Kong 100%
PT Asuransi AXA Indonesia Indonesia 80%
The Equitable Companies U.S.A. 58.7% of which AXA owns
Incorporated 42.0%, Financiere 45, 3.2%,
Lorfinance 6.4%, AXA Equity
& Law Life Association Society
4.1% and AXA Reassurance 3.0%
The Equitable Life Assurance U.S.A. 100% owned by The Equitable
Society of the United States Companies Incorporated
(ELAS)
National Mutual Holdings Ltd Australia 51% between AXA, 42.1%
and AXA Equity & Law Life
Assurance Society 8.9%
The National Mutual Life Australia 100% owned by National Mutual
Association of Australasia Ltd Holdings Ltd
National Mutual International Australia 100% owned by National Mutual
Pty Ltd Holdings Ltd
National Mutual (Bermuda) Ltd Australia 100% owned by National Mutual
International Pty Ltd
National Mutual Asia Ltd Australia 41% owned by National Mutual
Holdings Ltd, 20% by Datura
Ltd and 13% by National Mutual
Life Association of
Australasia
Australian Casualty & Life Ltd Australia 100% owned by National Mutual
Holdings Ltd
National Mutual Health Australia 100% owned by National Mutual
Insurance Pty Ltd Holdings Ltd
C-16
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Reassurance France 100% owned by AXA, AXA
Assurances Iard and AXA Global
Risks
AXA Re Finance France 79% owned by AXA Reassurance
AXA Cessions France 100%
AXA Re Asia Singapore 100% owned by AXA Reassurance
AXA Re U.K. Plc U.K. 100% owned by AXA Re U.K.
Holding
AXA Re U.K. Holding U.K. 100% owned by AXA Reassurance
AXA Re U.S.A. U.S.A. 100% owned by AXA America
AXA America U.S.A. 100% owned by AXA Reassurance
AXA Space U.S.A. 80% owned by AXA America
AXA Re Life U.S.A. 100% owned by AXA America
C.G.R.M. Monaco 100% owned by AXA Reassurance
C-17
<PAGE>
AXA FINANCIAL BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Compagnie Financiere de Paris France 97.2% (100% with Mutuals)
(C.F.P.)
AXA Banque France 98.7% owned by C.F.P.
AXA Credit France 65% owned by C.F.P.
AXA Gestion Interessement France 100% owned by AXA Investment
Managers
Sofapi France 100% owned by C.F.P.
Soffim France 100% owned by C.F.P.
Societe de Placements France 98.8% with Mutuals
Selectionnes S.P.S.
Presence et Initiative France 100% with Mutuals
Vamopar France 100% owned by Societe Beaujon
Financiere Mermoz France 100%
AXA Investment Managers France 100% by some AXA Group
companies
AXA Asset Management France 100% owned by AXA Investment
Partenaires Managers
AXA Investment Managers Paris France 100% owned by AXA Investment
Managers
AXA Asset Management France 99.6% owned by AXA Investment
Distribution Managers
UAP Gestione Financiere France 99.9 by AXA
Assurinvestissements France 50% by UAP Vie, 30% UAP
Collectives, 20% UAP
Incendie-Accidents
Banque Worms France 51% by CFP and 49% by
three UAP insurance companies
Colonia Bausbykasse Germany 97.8% by AXA-CKAG
Banque Ippa Belgium 99.9% by Royale Belge
Banque Bruxelles Lambert Belgium 9.3% by Royale Belge, 3.1%
Royale Belge 1994, 0.2% by
AXA Belgium
AXA Equity & Law Home Loans U.K. 100% owned by AXA Equity & Law
Plc
AXA Equity & Law Commercial U.K. 100% owned by AXA Equity & Law
Loans Plc Loans
Sun Life Asset Management U.K. 66.7% owned by SLPH and 33.4%
by AXA Asset Management Ltd.
C-18
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Alliance Capital Management U.S.A. 57.9% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 76.2% owned by Equitable
Holdings LLC and ELAS
National Mutual Funds Australia 100% owned by National
Management (Global) Ltd Mutual Holdings Ltd
National Mutual Funds USA 100% by National Mutual Funds
Management North America Management (Global) Ltd.
Holding Inc.
Cogefin Luxembourg 100% owned by AXA Belgium
ORIA France 100% owned by AXA Millesimes
AXA Oeuvres d'Art France 100% by Mutuals
AXA Cantenac Brown France 100%
AXA Suduiraut France 99.6% owned by AXA and
Societe Beaujon
C-19
<PAGE>
AXA REAL ESTATE BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Prebail France 100% owned by AXA Immobilier
Axamur France 100% by different companies
and Mutuals
Parimmo France 100% by different companies
and Mutuals
S.G.C.I. France 100% by different companies
and Mutuals
Transaxim France 100% owned by S.G.C.I. and
C.P.P.
Compagnie Parisienne de France 100% owned by S.G.C.I.
Participations (C.P.P.)
Monte Scopeto France 100% owned by C.P.P.
Matipierre France 100% by different companies
Securimo France 87.12% by different companies
and Mutuals
Paris Orleans France 100% by different companies
AXA Courtage Iard
Colisee Bureaux France 100% by different companies
and Mutuals
Colisee Premiere France 100% by different companies
and Mutuals
Colisee Laffitte France 100% by Colisee Bureaux
Fonciere Carnot Laforge France 100% by Colisee Premiere
Parc Camoin France 100% by Colisee Premiere
Delta Point du Jour France 100% owned by Matipierre
Paroi Nord de l'Arche France 100% owned by Matipierre
Falival France 100% owned by AXA Reassurance
Compagnie du Gaz d'Avignon France 100% owned by AXA Assurances
Iard
Ahorro Familiar France 44% owned by AXA Assurances
Iard, 1% by AXA Aurora Polar
and 1% by AXA Seguros
Fonciere du Val d'Oise France 100% owned by C.P.P.
Sodarec France 100% owned by C.P.P.
C-20
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Centrexpo France 99.3% owned by C.P.P.
Fonciere de la Ville du Bois France 99.6% owned by Centrexpo
Colisee Seine France 100% owned by different
companies
Translot France 100% owned by SGCI
Colisee Alpha France 100% owned by Colisee Bureaux
Colisee Silly France 100% owned by Colisee Bureaux
S.N.C. Dumont d'Urville France 100% owned by Colisee Premiere
Colisee Federation France 100% by SGCI
Colisee Saint Georges France 100% by SGCI
Drouot Industrie France 50% by SGCI and 50% by Axamur
Colisee Vauban France 99.6% by Matipierre
Fonciere Colisee France 100% by Matipierre and other
companies of the AXA Group
AXA Pierre S.C.I. France 97.6% owned by different
companies and Mutuals
AXA Millesimes France 85.4% owned by AXA and the
Mutuals
Chateau Suduirault France 100% owned by AXA Millesimes
Diznoko Hungary 95% owned by AXA Millesimes
Compagnie Fonciere Matignon France 100% by different companies
and Mutuals
Fidei France 20.7% owned by C.F.P. and
10.8% by Axamur
Fonciere Saint Sebastien France 99.9% by UAP Vie
Fonciere Vendome France 91% by different companies of
the Group
La Holding Vendome France 99.9% by AXA Global Risks
10, boulevard Haussmann France 69% by La Fonciere Vendome and
31% by AXA Conseil Iard
37-39 Le Peletier France 100% by AXA Courage Iard
Ugici France 100% by different companies of
the AXA Group of which
93.1% by UAP Vie
Ugicomi France 100% by different companies of
the AXA Group of which
63.8% by UAP Vie
Ugif France 100% by different companies of
the AXA Group of which
59.6% by UAP Vie and 32.6%
by UAP Collectives
Ugil France 93.9% by different companies
of the AXA Group of which
65.8% by UAP Vie
Ugipar France 100% by different companies
of the AXA Group of which
39.4% by UAP Vie, 35.4% by AXA
Courtage Iard and 20.8% by UAP
Collectives
AXA Immobiller France 100% by AXA
Quinta do Noval Vinhos S.A. Portugal 99.6% owned by AXA Millesimes
C-21
<PAGE>
OTHER AXA BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
A.N.F. France 95.4% owned by Finaxa
Lucia France 20.6% owned by AXA Assurances
Iard and 8.6% by Mutuals
Schneider S.A. France 10.4%
C-22
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
-----
1. The year of formation or acquisition and state or country of incorporation
of each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real estate
subsidiaries, partnerships, and joint ventures formed to operate or
develop a single real estate property or a group of related properties,
and certain inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock ownership
except: (a) The Equitable Companies Incorporated's 41.8% interest in
Donaldson, Lufkin & Jenrette, Inc. and Equitable Holdings, LLC's
34.4% interest in same; (b) as noted for certain partnership interests; (c)
Equitable Life's ACMC, Inc.'s and Equitable Capital Management
Corporation's limited partnership interests in Alliance Capital Management
L.P.; and (d) as noted for certain subsidiaries of Alliance Capital
Management Corp. of Delaware, Inc.
4. The operational status of the entities shown as having been formed or
authorized but "not yet fully operational" should be checked with the
appropriate operating areas, especially for those that are start-up
situations.
5. The following entities are not included in this chart because, while they
have an affiliation with The Equitable, their relationship is not the
ongoing equity-based form of control and ownership that is characteristic
of the affiliations on the chart, and, in the case of the first two
entities, they are under the direction of at least a majority of "outside"
trustees:
The Hudson River Trust
EQ Advisors Trust
Separate Accounts
6. This chart was last revised on January 12, 1999.
C-23
<PAGE>
Item 27. Number of Contractowners
As of December 31, 1998, there were 34,832 owners of qualified and
non-qualified contracts offered by the registrant hereunder.
Item 28. Indemnification
Indemnification of Principal Underwriter
To the extent permitted by law of the State of New York and subject to
all applicable requirements thereof, Equitable Distributors, Inc. has
undertaken to indemnify each of its directors and officers who is made or
threatened to be made a party to any action or proceeding, whether civil or
criminal, by reason of the fact the director or officer, or his or her testator
or intestate, is or was a director or officer of Equitable Distributors, Inc.
Undertaking
Insofar as indemnification for liability arising under the Securities
Act of 1933 ("Act") may be permitted to directors, 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.
Item 29. Principal Underwriters
(a) Equitable Distributors, Inc., an indirect wholly-owned subsidiary
of Equitable, is the principal underwriter for Separate Account No. 49. The
principal business address of Equitable Distributors, Inc. is 1290 Avenue of
the Americas, New York, NY 10104.
(b) Set forth below is certain information regarding the directors and
principal officers of Equitable Distributors, Inc. The business address of the
persons whose names are preceded by an asterisk is that of Equitable
Distributors, Inc.
C-24
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
- ---------------- ----------------
*Jose S. Suquet Chairman of the Board and Director
James A. Shepherdson, III Co-Chief Executive Officer, Co-President,
660 Newport Center Drive Managing Director, and Director
Suite 1200
Newport Beach, CA 92660
Greg Brakovich Co-Chief Executive Officer, Co-President,
660 Newport Center Drive Managing Director, and Director
Suite 1200
Newport Beach, CA 92660
Edward J. Hayes Director
200 Plaza Drive
Secaucus, NJ 07096-1583
*Charles Wilder Director
Hunter Allen Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Michael Dougherty. Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Elizabeth Forget Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Jennifer Hall Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Al Haworth Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
David Hughes Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Stuart Hutchins Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Ken Jaffe Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Michael McDaniel Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Mark A. Silberman Vice President and Chief
Financial Officer
*Norman J. Abrams Vice President and Counsel
Debora Buffington Vice President and Chief Compliance
660 Newport Center Drive Officer
Newport Beach, CA 92660
*Raymond T. Barry Vice President
Mark Brandengerber Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Michelle O'Haren Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
*Ronald R. Quist Treasurer
*Janet Hannon Secretary
*Linda Galasso Assistant Secretary
(c) The information under "Distribution of the Certificates" in the
Prospectus forming a part of this Registration Statement is incorporated herein
by reference.
Item 30. Location of Accounts and Records
C-25
<PAGE>
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 thereunder are
maintained by Equitable at 1290 Avenue of the Americas, New York, New York
10104, 135 West 50th Street, New York, NY 10020, and 200 Plaza Drive, Secaucus,
NJ 07096. The policies files will be kept at Vantage Computer System, Inc., 301
W. 11th Street, Kansas City, Mo. 64105.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant hereby undertakes:
(a) 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) 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
postcard 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) 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.
Equitable represents that the fees and charges deducted under the Certificates
described in this Registration Statement, in the aggregate, in each case, are
reasonable in relation to the services rendered, the expenses to be incurred,
and the risks assumed by Equitable under the respective Certificates. Equitable
bases its representation on its assessment of all of the facts and
circumstances, including such relevant factors as: the nature and extent of such
services, expenses and risks, the need for Equitable to earn a profit, the
degree to which the Certificates include innovative features, and regulatory
standards for the grant of exemptive relief under the Investment Company Act of
1940 used prior to October 1996, including the range of industry practice. This
representation applies to all certificates sold pursuant to this Registration
Statement, including those sold on the terms specifically described in the
prospectuses contained herein, or any variations therein, based on supplements,
endorsements, data pages, or riders to any Certificate or prospectus, or
otherwise.
The Registrant hereby represents that it is relying on the November 28, 1988
no-action letter (Ref. No. IP-6-88) relating to variable annuity contracts
offered as funding vehicles for retirement plans meeting the requirements of
Section 403(b) and The Internal Revenue Code. Registrant further represents that
it will comply with the provisions of paragraphs (1)-(4) of that letter.
C-26
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has caused this amendment to the Registration
Statement to be signed on its behalf, in the City and State of New York, on this
29th day of January, 1999.
SEPARATE ACCOUNT No. 49 OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
(Registrant)
By: The Equitable Life Assurance
Society of the United States
By: /s/ Jerome S. Golden
---------------------------------
Jerome S. Golden
Executive Vice President,
Product Management Group,
The Equitable Life Assurance
Society of the United States
C-27
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Depositor has caused this amendment to the Registration
Statement to be signed on its behalf, in the City and State of New York, on this
29th day of January, 1999.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
(Depositor)
By: /s/ Jerome S. Golden
---------------------------------
Jerome S. Golden
Executive Vice President,
Product Management Group,
The Equitable Life Assurance
Society of the United States
As required by the Securities Act of 1933, this amendment to the
registration statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
Michael Hegarty President, Chief Operating Officer
and Director
Edward D. Miller Chairman of the Board, Chief
Executive Officer and Director
PRINCIPAL FINANCIAL OFFICER:
Stanley B. Tulin Vice Chairman of the Board
Chief Financial Officer and Director
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel Senior Vice President and Controller
- ------------------------
Alvin H. Fenichel
January 29, 1999
DIRECTORS:
Francoise Colloc'h Donald J. Greene George T. Lowy
Henri de Castries John T. Hartley Edward D. Miller
Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau-Valencienne
Denis Duverne Michael Hegarty George J. Sella, Jr
William T. Esrey Mary R. (Nina) Henderson Stanley B. Tulin
Jean-Rene Fourtou W. Edwin Jarmain Dave H. Williams
Norman C. Francis G. Donald Johnston, Jr.
By: /s/ Jerome S. Golden
------------------------
Jerome S. Golden
Attorney-in-Fact
January 29, 1999
C-28