Equitable Accumulator Plus(SM)
A variable deferred annuity contract
PROSPECTUS DATED MAY 1, 2000
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 prospectus for EQ Advisors Trust, which contains important information about
its portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR PLUS?
Equitable Accumulator Plus is a deferred annuity contract 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 death
benefit protection and a number of payout options. You invest to accumulate
value on a tax-deferred basis in one or more of our variable investment options.
This contract may not currently be available in all states.
- -------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- -------------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o J.P. Morgan Core Bond(3)
o Alliance Common Stock o Lazard Large Cap Value
o Alliance High Yield o Lazard Small Cap Value
o Alliance Money Market o MFS Growth with Income
o EQ/Alliance Premier Growth o MFS Research
o Alliance Small Cap Growth o MFS Emerging Growth
o EQ/Alliance Technology(2) Companies
o BT Equity 500 Index o Morgan Stanley Emerging
o BT International Equity Index Markets Equity
o BT Small Company Index o EQ/Putnam Growth & Income
o Capital Guardian International Value
o Capital Guardian Research o EQ/Putnam International Value
o Capital Guardian U.S. Equity Equity
o EQ/Putnam Investors Growth
- -------------------------------------------------------------------------------
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "JPM Core Bond."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust. Your investment results in a variable investment
option will depend on the investment performance of the related portfolio.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An annuity that is an investment vehicle for a qualified defined contribution
or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract. We add an
amount ("credit") to your contract with each contribution you make. Over time,
the amount of the credit may be more than offset by fees and charges associated
with the credit.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of the registration statement.
The SAI 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 Web site 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.
<PAGE>
CONTENTS OF THIS PROSPECTUS
- -------------
2
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR PLUS(SM)
- -----------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator Plus at a glance - key features 8
- -----------------------------------------------------------------
FEE TABLE 10
- -----------------------------------------------------------------
Examples 13
Condensed financial information 14
- -----------------------------------------------------------------
- -----------------------------------------------------------------
1
CONTRACT FEATURES AND BENEFITS 15
- -----------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 18
How you can make your contributions 18
What are your variable investment options under the
contract? 18
Allocating your contributions 21
Credits 21
Guaranteed minimum death benefit 21
Your right to cancel within a certain number of days 22
- -----------------------------------------------------------------
- -----------------------------------------------------------------
2
DETERMINING YOUR CONTRACT'S VALUE 23
- -----------------------------------------------------------------
Your account value and cash value 23
Your contract's value in the variable investment options 23
- --------------------------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life.
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 that are issued
under group contracts in some states.
<PAGE>
- ----------
3
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
3
TRANSFERRING YOUR MONEY AMONG THE
VARIABLE INVESTMENT OPTIONS 24
- -------------------------------------------------------------------
Transferring your account value 24
Market timing 24
Dollar cost averaging your account value 24
Rebalancing your account value 24
- -------------------------------------------------------------------
4
ACCESSING YOUR MONEY 26
- -------------------------------------------------------------------
Withdrawing your account value 26
How withdrawals are taken from your account value 27
How withdrawals affect your guaranteed minimum
death benefit 27
Loans under rollover TSA contracts 28
Surrendering your contract to receive its cash value 29
When to expect payments 29
Your annuity payout options 29
- -------------------------------------------------------------------
5
CHARGES AND EXPENSES 33
- -------------------------------------------------------------------
Charges that Equitable Life deducts 33
Charges that EQ Advisors Trust deducts 35
Group or sponsored arrangements 35
- -------------------------------------------------------------------
6
PAYMENT OF DEATH BENEFIT 37
- -------------------------------------------------------------------
Your beneficiary and payment of benefit 37
How death benefit payment is made 38
Beneficiary continuation option 38
- -------------------------------------------------------------------
7
TAX INFORMATION 40
- -------------------------------------------------------------------
Overview 40
Transfers among variable investment options 40
Taxation of nonqualified annuities 40
Individual retirement arrangements (IRAs) 42
Special rules for nonqualified contracts in qualified plans 52
Tax Sheltered Annuity contracts (TSAs) 52
Federal and state income tax withholding and
information reporting 56
Impact of taxes to Equitable Life 58
- -------------------------------------------------------------------
8
MORE INFORMATION 59
- -------------------------------------------------------------------
About our Separate Account No. 49 59
About EQ Advisors Trust 59
About the general account 60
About other methods of payment 60
Dates and prices at which contract events occur 60
About your voting rights 61
About legal proceedings 62
About our independent accountants 62
Financial statements 62
Transfers of ownership, collateral assignments, loans,
and borrowing 62
Distribution of the contracts 62
- -------------------------------------------------------------------
9
INVESTMENT PERFORMANCE 64
- -------------------------------------------------------------------
Benchmarks 64
Communicating performance data 74
- -------------------------------------------------------------------
APPENDICES
- -------------------------------------------------------------------
I - Condensed financial information A-1
II - Purchase considerations for QP contracts B-1
III - Guaranteed minimum death benefit example C-1
- -------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- -------------------------------------------------------------------
<PAGE>
INDEX OF KEY WORDS AND PHRASES
- --------
4
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE IN
TERM PROSPECTUS
account value 23
annuitant 15
annuity payout options 29
beneficiary 37
business day 60
cash value 23
conduit IRA 46
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 49
rollovers and direct transfers 49
conversion contributions 50
contributions to traditional IRAs 43
rollovers and transfers 44
credit 21
EQAccess 6
guaranteed minimum death benefit 21
IRA cover
IRS 40
NQ cover
participant 18
portfolio cover
processing office 6
QP cover
recharacterizations 46
Required Beginning Date 47
Rollover IRA cover
Rollover TSA cover
Roth IRA 49
Roth Conversion IRA cover
SAI cover
SEC cover
TOPS 6
TSA cover
traditional IRA 43
unit 24
variable investment options 18
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your registered representative can provide
further explanation about your contract or supplemental materials.
- -------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- -------------------------------------------------------------------------------
variable investment options Investment Funds
account value Annuity Account Value
unit Accumulation Unit
- --------------------------------------------------------------------------------
<PAGE>
WHO IS EQUITABLE LIFE?
- -----------
5
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has 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.
<PAGE>
- ----------
6
- --------------------------------------------------------------------------------
HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
- -------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- -------------------------------------------------------------------------------
Equitable Accumulator Plus
P.O. Box 13014
Newark, NJ 07188-0014
- -------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- -------------------------------------------------------------------------------
Equitable Accumulator Plus
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- -------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- -------------------------------------------------------------------------------
Equitable Accumulator Plus
P.O. Box 1547
Secaucus, NJ 07096-1547
- -------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- -------------------------------------------------------------------------------
Equitable Accumulator Plus
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- -------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- -------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter (four
per year); and
o annual statement of your contract values as of the close of the contract
year.
- -------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND EQACCESS SYSTEMS:
- -------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the variable
investment options (anticipated to be available through EQAccess by the end
of 2000);
o change your personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of
<PAGE>
- ----------
7
- --------------------------------------------------------------------------------
telephone or Internet instructions, we may be liable for any losses arising out
of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market timing" in "Transferring
your money among investment options").
- -------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- -------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to
speak with one of our customer service representatives. Our
customer service representatives are available on any business
day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your registered representative;
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
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 variable investment options; and
(4) contract surrender and withdrawal requests.
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) dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
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.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
EQUITABLE ACCUMULATOR PLUS AT A GLANCE - KEY FEATURES
- ---------
8
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL Equitable Accumulator Plus' variable investment options invest in different portfolios managed
INVESTMENT by professional investment advisers.
MANAGEMENT
- --------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest, or capital gains until you
contract make withdrawals from your contract or receive annuity
payments.
---------------------------------------------------------------------------------------------------------
o On transfers inside the No tax on transfers among variable investment options.
contract
---------------------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral under
sections of the Internal Revenue Code, you should do so for the contract's features and benefits
other than tax deferral. In such situations, the tax deferral of the contract does not provide
necessary or additional benefits.
- --------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic
investment program (NQ contracts)
---------------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- --------------------------------------------------------------------------------------------------------------------------------
CREDIT We allocate your contributions to your account value. We allocate a credit to your account
value at the same time that we allocate your contributions. The amount of the credit is equal to
4% of each contribution. The credit is subject to recovery by us in certain limited circumstances.
- --------------------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract.
You may also incur income tax and a tax penalty.
- --------------------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- --------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing
home
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality and expense
risks, administrative, and distribution charges at a current annual rate of 1.60% current (1.70%
maximum).
o No sales charge deducted at the time you make contributions and no annual contract fee.
o During the first nine 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 date anniversary to calculate the 15% amount available. The charge is 8% in
each of the first two contract years following a contribution. It declines by 1% each year
beginning in the third contract year to 1% in the ninth contract year. There is no withdrawal
charge in the tenth and later contract years following a contribution.
---------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we
receive the properly completed and signed application, along with any other required documents, and
your initial contribution. Your contract date will be shown in your contract. The 12-month period
beginning on your contract date and each 12-month period after that date is a "contract year." The
end of each 12-month period is your "contract date anniversary."
---------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. This charge is generally deducted from the amount applied to an
annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate
Annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage of the average
daily net assets invested in each portfolio. These expenses include management fees ranging from
0.25% to 1.15% annually, 12b-1 fees of 0.25% annually, and other expenses.
- --------------------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-80
Rollover IRA, Roth Conversion IRA, Rollover TSA: 20-78
QP: 20-70
- --------------------------------------------------------------------------------------------------------------------------------
</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.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life that he
or she distributes. You can also contact us to find out more about any of the
Equitable Life annuity contracts.
<PAGE>
FEE TABLE
- --------
10
- --------------------------------------------------------------------------------
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 designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this prospectus.
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET
ASSETS
- -------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%*
Administrative 0.25% current (0.35% maximum)
Distribution 0.25%
-----
Total annual expenses 1.60% current (1.70% maximum)
- -------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- -------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions* (deducted if you Contract year
surrender your contract or make certain withdrawals. The withdrawal charge 1 ............ 8.00%
percentage we use is determined by the contract year in which you make the 2 ............ 8.00%
withdrawal or surrender your contract. For each contribution, we consider the 3 ............ 7.00%
contract year in which we receive that contribution to be "contract year 1")(2) 4 ............ 6.00%
5 ............ 5.00%
6 ............ 4.00%
7 ............ 3.00%
8 ............ 2.00%
9 ............ 1.00%
10+ .......... 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- -------------------------------------------------------------------------------------------------------
</TABLE>
* These charges compensate us for certain risks we assume and expenses we incur
under the contract. They also compensate us for the expense associated with
the credit. We expect to make a profit from these charges.
<PAGE>
- -----
11
- -------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(3) 12B-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
-------------- ----------------- ---------------- ---------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
J.P. Morgan Core Bond 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Value Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) Deducted upon a withdrawal of amounts in excess of the 15% free
withdrawal amount and upon surrender of a contract.
(3) The management fees shown reflect revised management fees, effective on
or about May 1, 2000 which were approved by shareholders. The management
fees shown for, EQ/Putnam Growth & Income Value and Lazard Large Cap
Value, do not reflect the waiver of a portion of each portfolio's
investment management fees that are currently in effect. The management
fee for each portfolio cannot be increased without a vote of each
portfolio's shareholders.
(4) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 fee will
not be increased for the life of the contracts. Prior to October 18,
1999, the total annual expenses for the Alliance Small Cap Growth
portfolio were
<PAGE>
- -----
12
- --------------------------------------------------------------------------------
limited to 1.20% under an expense limitation arrangement related to that
portfolio's Rule 12b-1 Plan. The arrangement is no longer in effect. The
amounts shown have been restated to reflect the expenses that would have
been incurred in 1999, absent the expense limitation agreement.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (6) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the year
ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(6) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses
and 12b-1 fees) are limited as a percentage of the average daily net
assets of each of the following portfolios: 1.75% for Morgan Stanley
Emerging Markets Equity; 1.25% for EQ/Putnam International Equity; 1.20%
for Capital Guardian International and Mercury World Strategy; 1.15% for
EQ/Alliance Premier Growth and EQ/Alliance Technology; 1.10% for Lazard
Small Cap Value; 1.00% for BT International Equity Index and MFS Emerging
Growth Companies; 0.95% for Capital Guardian U.S. Equity, Capital
Guardian Research, Lazard Large Cap Value, MFS Growth with Income, MFS
Research, EQ/Putnam Growth & Income Value and, EQ/Putnam Investors
Growth; 0.80% for J.P. Morgan Core Bond; 0.75% for BT Small Company
Index; and 0.60% for BT Equity 500 Index. These expense limitations for
the BT Equity 500 Index, EQ/Putnam Growth & Income Value, and EQ/Putnam
International Value Equity, MFS Growth with Income, MFS Research, and MFS
Emerging Growth companies, portfolios reflect an increase effective on
May 1, 2000. The expense limitation for the Lazard Small Cap Value
portfolios reflect a decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.32% for EQ/Putnam
International Value Equity; 0.66% for Capital Guardian International;
0.23% for EQ/Alliance Premier Growth; 0.10% for EQ/Alliance Technology;
0.26% for Lazard Small Cap Value; 0.49% for BT International Equity Index;
0.17% for MFS Emerging Growth Companies; 0.34% for Capital Guardian U.S.
Equity; 0.47% for Capital Guardian Research; 0.21% for Lazard Large Cap
Value; 0.37% for MFS Growth with Income; 0.17% for MFS Research; 0.16% for
EQ/Putnam Growth & Income Value; 0.19% for EQ/Putnam Investors Growth;
0.20% for J.P. Morgan Core Bond; 0.71% for BT Small Company Index; and
0.18% for BT Equity 500 Index. Initial seed capital was invested on April
30, 1999 for the EQ/Alliance Premier Growth, Capital Guardian U.S. Equity
and Capital Guardian Research portfolios and will be invested on or about
May 1, 2000 for the EQ/Alliance Technology portfolio and therefore
expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life 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. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
- -----
13
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution plus a
$40 credit is invested in one of the variable investment options listed and a
5% annual return is earned on the assets in that option.(1) The charges used in
the examples are the maximum charges rather than the lower current charges.
The 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 OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
--------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 108.17 $ 156.47 $ 197.47 $ 312.63
Alliance Common Stock $ 106.64 $ 151.90 $ 189.88 $ 297.66
Alliance High Yield $ 108.28 $ 156.80 $ 198.01 $ 313.69
Alliance Money Market $ 105.44 $ 148.30 $ 183.88 $ 285.76
EQ/Alliance Premier Growth $ 112.21 $ 168.49 $ 217.32 $ 351.17
Alliance Small Cap Growth $ 110.14 $ 162.33 $ 207.17 $ 331.56
EQ/Alliance Technology $ 111.12 $ 165.25 $ 211.98 $ 340.89
BT Equity 500 Index $ 105.12 $ 147.31 $ 182.24 $ 282.48
BT International Equity Index $ 109.48 $ 160.38 $ 203.94 $ 325.29
BT Small Company Index $ 106.75 $ 152.23 $ 190.42 $ 298.74
Capital Guardian International $ 111.67 $ 166.87 $ 214.65 $ 346.04
Capital Guardian Research $ 108.94 $ 158.75 $ 201.25 $ 320.03
Capital Guardian U.S. Equity $ 108.94 $ 158.75 $ 201.25 $ 320.03
J.P. Morgan Core Bond $ 107.30 $ 153.86 $ 193.14 $ 304.10
Lazard Large Cap Value $ 108.94 $ 158.75 $ 201.25 $ 320.03
Lazard Small Cap Value $ 110.58 $ 163.63 $ 209.31 $ 335.72
MFS Growth with Income $ 108.94 $ 158.75 $ 201.25 $ 320.03
MFS Research $ 108.94 $ 158.75 $ 201.25 $ 320.03
MFS Emerging Growth Companies $ 109.48 $ 160.38 $ 203.94 $ 325.29
Morgan Stanley Emerging Markets Equity $ 117.67 $ 184.59 $ 243.63 $ 400.97
EQ/Putnam Growth & Income Value $ 108.94 $ 158.75 $ 201.25 $ 320.03
EQ/Putnam International Value Equity $ 112.21 $ 168.49 $ 217.32 $ 351.17
EQ/Putnam Investors Growth $ 110.03 $ 162.01 $ 206.63 $ 330.52
- -------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 28.17 $ 86.47 $ 147.47 $ 312.63
Alliance Common Stock $ 26.64 $ 81.90 $ 139.88 $ 297.66
Alliance High Yield $ 28.28 $ 86.80 $ 148.01 $ 313.69
Alliance Money Market $ 25.44 $ 78.30 $ 133.88 $ 285.76
EQ/Alliance Premier Growth $ 32.21 $ 98.49 $ 167.32 $ 351.17
Alliance Small Cap Growth $ 30.14 $ 92.33 $ 157.17 $ 331.56
EQ/Alliance Technology $ 31.12 $ 95.25 $ 161.98 $ 340.89
BT Equity 500 Index $ 25.12 $ 77.31 $ 132.24 $ 282.48
BT International Equity Index $ 29.48 $ 90.38 $ 153.94 $ 325.29
BT Small Company Index $ 26.75 $ 82.23 $ 140.42 $ 298.74
Capital Guardian International $ 31.67 $ 96.87 $ 164.65 $ 346.04
Capital Guardian Research $ 28.94 $ 88.75 $ 151.25 $ 320.03
Capital Guardian U.S. Equity $ 28.94 $ 88.75 $ 151.25 $ 320.03
J.P. Morgan Core Bond $ 27.30 $ 83.86 $ 143.14 $ 304.10
Lazard Large Cap Value $ 28.94 $ 88.75 $ 151.25 $ 320.03
Lazard Small Cap Value $ 30.58 $ 93.63 $ 159.31 $ 335.72
MFS Growth with Income $ 28.94 $ 88.75 $ 151.25 $ 320.03
MFS Research $ 28.94 $ 88.75 $ 151.25 $ 320.03
MFS Emerging Growth Companies $ 29.48 $ 90.38 $ 153.94 $ 325.29
Morgan Stanley Emerging Markets Equity $ 37.67 $ 114.59 $ 193.63 $ 400.97
EQ/Putnam Growth & Income Value $ 28.94 $ 88.75 $ 151.25 $ 320.03
EQ/Putnam International Value Equity $ 32.21 $ 98.49 $ 167.32 $ 351.17
EQ/Putnam Investors Growth $ 30.03 $ 92.01 $ 156.63 $ 330.52
- -----------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution plus the $40 credit
could not be paid in the form of an annuity payout option at the end of
any of the periods shown in the examples. This is because if the amount
applied to purchase an annuity payout option 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
"Accessing your money."
<PAGE>
- -----
14
- --------------------------------------------------------------------------------
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
examples for "if you do not surrender your contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout
options in 1999. See "Annuity administrative fee" in "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
1
CONTRACT FEATURES AND BENEFITS
- --------
15
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 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
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ 0 through 80 o After-tax money. o No additional contributions
after age 81.
o Paid to us by check or transfer
of contract value in a
tax-deferred exchange under
Section 1035 of the Internal
Revenue Code.
- ----------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 78 o Rollovers from a qualified o No contributions after age 79.
plan. o Contributions after age 70 1/2
o Rollovers from a must be net of required
Tax-Sheltered Annuity minimum distributions.
("TSA"). o Only rollover and direct
o Rollovers from another transfer contributions are
traditional individual permitted under the Rollover
retirement arrangement. IRA contract.
o Direct custodian-to-custodian o Regular IRA contributions
transfers from another limited to $2,000 per year.
traditional individual o Although we accept regular
retirement arrangement. contributions under the
o Regular IRA contributions. Rollover IRA contracts, we
intend that this contract be
used for rollover and direct
transfer contributions. Please
refer to "Withdrawals,
payments and transfers of
funds out of traditional IRAs"
in "Tax Information" for a
discussion of conduit IRAs.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
16
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roth 20 through 78 o Rollovers from another Roth o No additional rollover or
Conversion IRA. direct transfer contributions
IRA after age 79.
o Conversion rollovers from a
traditional IRA. o Conversion rollovers after
age 70 1/2 must be net of
o Direct transfers from another required minimum
Roth IRA. distributions for the
traditional IRA you are rolling
over.
o You cannot roll over funds
from a traditional IRA if your
adjusted gross income is
$100,000 or more.
o Regular contributions are not
permitted.
o Only rollover and direct
transfer contributions are
permitted.
- ----------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 78 o Rollovers from another TSA o Additional rollover or direct
contract or arrangement. transfer contributions may be
made up to age 79.
o Rollovers from a traditional
IRA which was a "conduit" for o Contributions after age 70 1/2
TSA funds previously rolled must be net of required
over. minimum distributions.
o Direct transfer from another o Ongoing payroll contributions
contract or arrangement are not permitted.
under Section 403(b) of the o Employer-remitted
Internal Revenue Code, contributions are not
complying with IRS Revenue permitted.
Ruling 90-24.
This contract may not be available in your state.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
QP 20 through 70 o Only transfer contributions o Regular ongoing payroll
from an existing qualified contributions are not
plan trust as a change of permitted.
investment vehicle under the o Only one additional
plan. contribution may be made
o The plan must be qualified during a contract year.
under Section 401(a) of the o No additional transfer
Internal Revenue Code. contributions after age 71.
o For 401(k) plans, transferred o For defined benefit plans,
contributions may only employee contributions are
include employee pre-tax not permitted.
contributions.
Please refer to Appendix II for a discussion of purchase considerations of QP contracts.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of
contributions and 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 may
also refuse to accept any contribution if the sum of all contributions under
all Equitable Life annuity accumulation contracts that you own would then total
more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this prospectus.
<PAGE>
- ----------
18
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
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 all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II for more
information on QP contracts.
- --------------------------------------------------------------------------------
A participant is an individual who is currently, or was formerly, participating
in an eligible employer's QP or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. 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 our ability to
collect the funds. We reserve the right to reject a payment if it is received in
an unacceptable form.
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 in "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 after we receive an
incomplete application or form, 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.
- --------------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
- --------------------------------------------------------------------------------
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
Plus 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 YOUR VARIABLE INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment results in any one of the 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.
- -----------------------------------------------------------------------------
You can choose from among the variable investment options.
- --------------------------------------------------------------------------------
<PAGE>
- -----
19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- ----------------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income Alliance Capital Management L.P.
and, to the extent consistent with that
objective, capital appreciation
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Standard & Poor's 500
Composite Stock Price Index
- ----------------------------------------------------------------------------------------------------------------------------
BT International Equity Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Morgan Stanley Capital
International Europe, Australia, Far East Index
- ----------------------------------------------------------------------------------------------------------------------------
BT Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Russell 2000 Index
- ----------------------------------------------------------------------------------------------------------------------------
Capital Guardian International Long-term growth of capital by investing Capital Guardian Trust Company
primarily in non-United States equity securities
- ----------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- ----------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- ----------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond High total return consistent with moderate risk J.P. Morgan Investment Management Inc.
of capital and maintenance of liquidity
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lazard Large Cap Value Capital appreciation Lazard Asset Management
- ----------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value Capital appreciation Lazard Asset Management
- ----------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- ----------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- ----------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income a secondary Putnam Investment Management, Inc.
Value objective
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Value Capital appreciation Putnam Investment Management, Inc.
Equity
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth Long-term growth of capital any increased Putnam Investment Management, Inc.
income that results from this growth
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
- ----------
21
- --------------------------------------------------------------------------------
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to one or more, or all, of the variable
investment 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%. Once contributions are allocated to the variable investment options they
become part of your account value. We discuss account value in "Determining your
contract's value."
CREDITS
A credit will also be allocated to your account value at the same time that we
allocate your contribution. The amount of the credit is equal to 4% of the
amount of each contribution. Credits are allocated to the same variable
investment options based on the same percentages used to allocate your
contributions.
We will recover the amount of the credit if you exercise your right to cancel
the contract. See "Your right to cancel within a certain number of days" below.
Also, if you start receiving annuity payments within three years of making any
additional contribution, we will recover the amount of the credit that applies
to that contribution.
We do not consider credits to be contributions for purposes of any discussion in
this prospectus. Credits are also not considered to be your investment in the
contract for tax purposes.
We use a portion of the mortality and expense risks charge and withdrawal charge
to help recover the cost of providing the credit. See "Charges and expenses"
below. Under certain circumstances (such as a period of poor market
performance), the cost associated with the credit may exceed the sum of the
credit and any related earnings. You should consider this possibility before
purchasing the contract.
GUARANTEED MINIMUM DEATH BENEFIT
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 78 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER 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
is equal to your initial contribution plus the credit. Thereafter, the
guaranteed minimum death benefit will be credited with interest each day through
the annuitant's age 80. The effective annual interest rate is 5% except for
amounts invested in the Alliance Money Market option and amounts in the loan
reserve account (applicable to Rollover TSA contracts only). Amounts in the
Alliance Money Market option and in the loan reserve account will be credited
with interest at a 3% effective annual rate. 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 plus
the amount of the credit on the date the contribution is allocated to your
variable 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.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution plus the credit. 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
<PAGE>
- ----------
22
- --------------------------------------------------------------------------------
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 plus the amount
of the credit on the date the contribution is allocated to your variable
investment options. If you take a withdrawal from your contract, we will reduce
your guaranteed minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR AN ANNUITANT THAT IS AGE 80 AT
ISSUE.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution plus the credit. 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 death benefit" in
"Accessing your money" for information on how withdrawals affect your guaranteed
minimum death benefit.
See Appendix III 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. If state
law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification to cancel the contract and will reflect any
investment gain or loss in the variable investment options that also reflect the
daily charges we deduct through the date we receive your contract. Please note
that you will forfeit the credit by exercising this right of cancellation. Some
states require that we refund the full amount of your contribution (not
reflecting any investment gain or loss). For any IRA contract returned to us
within seven days after you receive it, we are required to refund the full
amount of your contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office or your registered representative can provide you with the
cancellation instructions.
<PAGE>
2
DETERMINING YOUR CONTRACT'S VALUE
- ----------------
23
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total value you have in the variable investment
options and in the loan reserve account (applies for Rollover TSA contracts
only). These amounts are subject to certain fees and charges discussed in
"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: (i) any
applicable withdrawal charge and (ii) the amount of any outstanding loan plus
accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable 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.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative, and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for deducted
from 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 they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal
charges);
(iii) increased to reflect transfer into, or decreased to reflect
transfer out of a variable investment option; or
(iv) decreased to reflect your loan amount to the loan reserve account
under a Rollover TSA contract.
A description of how unit values are calculated is found in the SAI.
<PAGE>
3
TRANSFERRING YOUR MONEY AMONG THE VARIABLE INVESTMENT OPTIONS
- ----------------
24
- --------------------------------------------------------------------------------
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 variable investment options.
You may request a transfer in writing or by telephone using TOPS. (We anticipate
that transfers will be available online by using EQAccess by the end of 2000)
You must send in all written transfer requests directly to our processing
office. 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.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action including,
but not limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
DOLLAR COST AVERAGING YOUR ACCOUNT VALUE
Dollar cost averaging allows you to gradually transfer amounts from the Alliance
Money Market option to the other 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. This plan of investing,
however, does not guarantee that you will earn a profit or be protected against
losses.
- -----------------------------------------------------------------------------
Units measure your value in each variable investment option
- -----------------------------------------------------------------------------
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 day of the month. You can also specify the number of
transfers or instruct us to continue making the transfers until all amounts in
the Alliance Money Market option have been transferred out.
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.
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 dollar cost averaging program will then
end. You may change the transfer amount once each contract year or cancel this
program at any time.
You may not elect dollar cost averaging if you are participating in the
rebalancing program.
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:
<PAGE>
- ----------
25
- --------------------------------------------------------------------------------
(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. Rebalancing 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. Your
entire account value must be included in the rebalancing program.
- -----------------------------------------------------------------------------
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; the rebalancing program will remain in effect unless you
request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the dollar
cost averaging or special dollar cost averaging program.
<PAGE>
4
ACCESSING YOUR MONEY
- ----------------
26
- --------------------------------------------------------------------------------
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."
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Roth
Conversion
IRA Yes Yes Yes No
- --------------------------------------------------------------------------------
Rollover
TSA* Yes No No Yes
- --------------------------------------------------------------------------------
QP Yes No No Yes
- --------------------------------------------------------------------------------
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity Contracts (TSAs)" in "Tax Information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time. (Rollover
TSA contracts may have restrictions). The minimum amount you may withdraw is
$300. 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 (see "15% free
withdrawal amount" in "Charges and expenses") may be subject to a withdrawal
charge. Under Rollover 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 plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover IRA, and Roth Conversion IRA 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 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 an IRA
contract, you may elect this withdrawal method only if you are between ages
59 1/2 and 70 1/2.
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
(Rollover IRA and Roth Conversion IRA contracts only)
The substantially equal withdrawals option allows you to receive distributions
from your account value without
<PAGE>
- ----------
27
- --------------------------------------------------------------------------------
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 after 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
based on the method you choose from the choices we offer. The 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.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Rollover TSA and QP contracts only - See "Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. 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 annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution withdrawals
if a loan is outstanding.
- -----------------------------------------------------------------------------
For Rollover IRA, Rollover TSA and QP contracts, we will send a form outlining
the distribution options available in the year 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
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed minimum death benefit on either a
dollar-for-dollar basis or on a pro rata basis as explained below:
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
<PAGE>
- ----------
28
- --------------------------------------------------------------------------------
and any subsequent withdrawals in that same contract year will reduce your
current guaranteed minimum death benefit on a pro rata basis.
The timing of your withdrawals and whether they exceed, the 5% threshold
described above can have a significant impact on your guaranteed minimum death
benefit.
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 age 80 - If your contract was issued when the annuitant was age
80, 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).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover 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
Security 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 Rollover TSA contracts subjected 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"
below, 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 the
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 outstanding loan will be deducted from
the death benefit amounts).
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 Baa
bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT
On the date your loan is processed, we will transfer the amount of your loan to
the loan reserve account. Unless you specify otherwise, we will subtract your
loan on a pro rata basis from your value in the variable investment options.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment,
<PAGE>
- ----------
29
- --------------------------------------------------------------------------------
unless you specify otherwise, we will transfer the dollar amount of the loan
repaid from the loan reserve account to the investment options according to the
allocation percentages we have on our records. Loan repayments are not
considered contributions and therefore are not eligible for additional credits.
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. (Rollover
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 "Your annuity payout options" 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 amount you withdraw
(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 options.
We also may defer payments for a reasonable amount of time (not to exceed 10
days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator Plus offers you several choices of annuity payout options.
Some enable you to receive fixed annuity payments which can be either level or
increasing, and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue.
<TABLE>
<S> <C>
- --------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- --------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- --------------------------------------------------------------
Income Manager payout Life annuity with period
options certain
Period certain annuity
- --------------------------------------------------------------
</TABLE>
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 continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
<PAGE>
- ----------
30
- --------------------------------------------------------------------------------
o Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contracts that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount applied
to purchase the annuity option has been recovered, payments to the
beneficiary 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 guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of the
payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with 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. We may offer other payout options not outlined here. Your financial
professional can provide you with details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers a
fixed annuity payout option that can be elected in combination with the variable
annuity payout options. 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.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout annuity
contracts. The other payout annuity contracts 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. Income Manager payout options are
described in a separate prospectus that is available from your registered
representative. Before you select an Income Manager payout option, you should
read the prospectus which contains important information that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and IRA
contracts). The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only). You may not elect a period
certain Income Manager payout option unless withdrawal charges are no longer in
effect under your Equitable Accumulator Plus.
<PAGE>
- ----------
31
- --------------------------------------------------------------------------------
For QP and Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator Plus contract to an Income Manager payout annuity. In this case, we
will consider any amounts applied as a withdrawal from your Equitable
Accumulator Plus. For the tax consequences of withdrawals, see "Tax
information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult you tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on the
payout option that you choose, and the timing of your purchase as it relates to
any withdrawal charges.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under your
Equitable Accumulator Plus is imposed if you select a period certain. If the
period certain is more than 5 years, then the withdrawal charge deducted will
not exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under the
Equitable Accumulator Plus. If the withdrawal charge that otherwise would have
been applied to your account value under your Equitable Accumulator Plus is
greater than 2% of the contributions that remain in your contract at the time
you purchase your payout option, the withdrawal charges under the Income Manager
will apply. For this purpose, the year in which your account value is applied to
the payout option will be "contract year 1."
SELECTING AN 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, unless you are applying only some of
your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
five years from the contract date. Except with respect to Income Manager annuity
payout options, where payments are made on the 15th day of each month, 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.
If you elect to start receiving annuity payments within three years of making an
additional contribution, we will recover the amount of any credit that applies
to that contribution.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments have
begun, no change can be made other than: (i) transfers (if permitted in the
future) among the variable investment options if a Variable Immediate Annuity
payout option is selected; and (ii) withdrawals or contract surrender if an
Income Manager annuity payout option is chosen.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity and the applicable annuity purchase factors, discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
<PAGE>
- ----------
32
- --------------------------------------------------------------------------------
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 single sum rather than as
payments under the payout option chosen.
<PAGE>
5
CHARGES AND EXPENSES
- ----------------
33
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your state.
An annuity administrative fee may also apply.
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.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your registered
representative for more information.
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. A portion of this charge also compensates us for the
contract credit. For a discussion of the credit, see "Credits" in "Contracts
features and benefits." We expect to make a profit from this charge.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative 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%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales 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.
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. A portion of this charge also compensates us for the
contract credit. For a discussion of the credit, see "Credits" in "Contracts
features and benefits." We expect to make a profit from this charge.
<PAGE>
- ----------
34
- --------------------------------------------------------------------------------
The withdrawal charge equals a percentage of the contributions withdrawn. We do
not consider credits to be contributions. Therefore, there is no withdrawal
charge associated with a credit.
The percentage of the withdrawal charge that applies to each contribution
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:
- --------------------------------------------------------------------------------
CONTRACT YEAR
- --------------------------------------------------------------------------------
1 2 3 4 5 6 7 8 9 10+
- --------------------------------------------------------------------------------
Percentage of
contribution 8% 8% 7% 6% 5% 4% 3% 2% 1% 0%
- --------------------------------------------------------------------------------
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."
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to the same
withdrawal charge percentage. We deduct the charge in proportion to the amount
of the withdrawal subtracted from each variable investment option. 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.
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.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
o The annuitant has qualified to receive Social Security disability benefits as
certified by the Social Security Administration; or
o We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
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, or U.S. Virgin Islands) 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.
<PAGE>
- ----------
35
- --------------------------------------------------------------------------------
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a preexisting
condition or a condition that began within 12 months of the contract date. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your registered representative can provide more information or
you may contact our processing office.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed by us varies by state and ranges from 0% to 3.5% (1% in
Puerto Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to the Variable Immediate annuity payout
option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
o Management fees ranging from 0.25% 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. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
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 or offer variable investment options that invest in shares of 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 Rollover IRA and Roth Conversion 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 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 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 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, the
Employee Retirement Income Security Act of 1974 or both. We make no
representations with regard to the impact of these and other applicable laws on
such programs. We recommend that employers, trustees,
<PAGE>
- ----------
36
- --------------------------------------------------------------------------------
and others purchasing or making contracts available for purchase under such
programs seek the advice of their own legal and benefits advisers.
<PAGE>
6
Payment of death benefit
- ----------------
37
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you can
designate in a Rollover TSA contract. In a QP contract, the beneficiary must be
the trustee.
The death benefit is equal to your account value, or, if greater, the guaranteed
minimum death benefit. We determine the amount of the death benefit (other than
the guaranteed minimum death benefit) as of the date we receive satisfactory
proof of the annuitant's death and any required instructions for the method of
payment. We determine (other than the guaranteed minimum death benefit) the
amount of the guaranteed death benefit as of the date of the annuitant's death.
Under Rollover TSA contracts, we will deduct the amount of any outstanding loan
plus accrued interest from the amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
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 successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes the
sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of 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
successor owner for this purpose, the entire interest in the contract must be
distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner (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).
o The successor owner may instead 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).
If the surviving spouse is the successor owner 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.
<PAGE>
- ----------
38
- --------------------------------------------------------------------------------
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 single 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 "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract 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. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Therefore, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the guaranteed minimum death benefit
will continue to grow, we will use your surviving spouse's age (as of the
contract date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death, under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal the death benefit if the death benefit is
greater than the account value. Except as noted in the next sentence, the
beneficiary continuation option will be available on or after May 1, 2000
depending on when we receive regulatory clearance in your state. For Rollover
IRA contracts, a similar beneficiary continuation option will be available until
the beneficiary continuation option described in this prospectus is available.
Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The death benefit (including the guaranteed minimum death benefit) provision
will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract; and
(b) The pattern of minimum distribution withdrawals you chose was based in part
on the life of the designated beneficiary.
<PAGE>
- ----------
39
- --------------------------------------------------------------------------------
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For both kinds of IRA contracts, if you die BEFORE the Required Beginning Date
(and, for a Rollover IRA, therefore you were not taking minimum distribution
withdrawals under the contract), the beneficiary may choose one of the following
two beneficiary continuation options.
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may choose to delay
beginning the minimum distributions until December 31st of the calendar year in
which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts remaining
under the contract to the beneficiary by that date. If you have more than one
beneficiary, and one of them elects this option, then all of your beneficiaries
will receive this option.
<PAGE>
7
Tax information
- ----------------
40
- --------------------------------------------------------------------------------
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator Plus contracts owned by United
States taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA. Therefore, we
discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
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.
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.
If you are buying a contract to fund a retirement plan that already provides tax
deferral under sections of the Internal Revenue Code (IRA, QP and Rollover TSA),
you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not provide
additional benefits.
TRANSFERS AMONG VARIABLE INVESTMENT OPTIONS
You can make transfers among variable investment options inside the contract
without triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to 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 investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
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 Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating 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. You get back the remaining portion without paying taxes on it. This is
your "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
<PAGE>
- ----------
41
- --------------------------------------------------------------------------------
of the contract, and (2) multiplying the result by the amount of the payment.
For variable annuity payments, your tax-free portion of each payment is your
investment in the contract divided by the number of expected payments.
Once you have received the amount of your investment in the contract, all
payments after that 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.
PAYMENTS 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 as of
the date 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 that is the source of the funds you 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 Plus 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
Plus NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of exchange.
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"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single 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 to pre-age 59 1/2 distributions made:
o on or after your death; or
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.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to your
nonqualified annuity contract. In that case, income and gains attributable to
such portfolio shares would be included in your gross income for federal income
<PAGE>
- ----------
42
- --------------------------------------------------------------------------------
tax purposes. Under current rules, however, we believe that Equitable Life, and
not the owner of a nonqualified annuity contract, would be considered the owner
of the portfolio shares.
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
calculation 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. There are 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 two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
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
combine 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 Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). This prospectus contains the information that the 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 Plus IRA contract has been approved by the IRS as to
form for use as a traditional IRA. 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 Plus IRA contract. Although
we do not have IRS approval as to form, we believe that the version of the Roth
IRA currently offered complies with the requirements of the Internal Revenue
Code.
CANCELLATION
You can cancel an Equitable Accumulator Plus IRA contract by following the
directions under "Your right to cancel
<PAGE>
- ----------
43
- --------------------------------------------------------------------------------
within a certain number of days" in "Contract features and benefits" earlier in
the prospectus. You can cancel an Equitable Accumulator Plus Roth Conversion IRA
contract issued as a result of a full conversion of an Equitable Accumulator
Plus Rollover 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 an IRA contract, we may have to
withhold tax, and we must report the transaction to the IRS. A contract
cancellation could have an 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 regular contributions out of earned income or compensation.
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs ("direct
transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
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 cannot make 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 combine your compensation to determine the
amount of regular contributions you are permitted to make 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 the other spouse funded the contributions. 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, your fully deductible contribution can be 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.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER
<PAGE>
- ----------
44
- --------------------------------------------------------------------------------
FIGURE IN THE PHASE-OUT RANGE, you may not deduct any of your regular
contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $31,000 and $42,000 in 2000. 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 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 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 $10,000 contribution
limit
NONDEDUCTIBLE REGULAR 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 transfers 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 and records pertaining
to such contributions until interests in all traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE REGULAR 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.
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.
Any amount contributed to a traditional IRA after you reach 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 that can be rolled over and you roll it
over to a traditional IRA within 60 days after
<PAGE>
- ----------
45
- --------------------------------------------------------------------------------
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; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
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; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
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.
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; or
o regular contributions of more than earned income for the year, if that amount
is under $2,000; or
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
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. You do
not have to include the excess contribution withdrawn as part of your income. It
is also 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 that are attributed to the excess contribution. The withdrawn
earnings would be included in your gross income and could be subject to the 10%
penalty tax.
<PAGE>
- ----------
46
- --------------------------------------------------------------------------------
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.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
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 total amount of any distribution from a
traditional IRA must be included 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 calculate 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 determine 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; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
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. The Rollover IRA contract can be used as
a conduit IRA if amounts are not commingled.
<PAGE>
- ----------
47
- --------------------------------------------------------------------------------
Distributions from a traditional IRA are not eligible for favorable ten-year
averaging or 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 YOU 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 YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. 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 year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
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 calculating 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 calculating 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.
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 selecting any other form of life
annuity payout after you are age 70 1/2, you must have elected to recalculate
life expectancies.
Annuity-based method. 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.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR 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 WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU 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
<PAGE>
- ----------
48
- --------------------------------------------------------------------------------
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 YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The 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 the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate 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 YOU TAKE LESS THAN YOU 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 YOU 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 income 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
reached age 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 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 the value of the traditional IRA in your federal gross income. 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 to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
<PAGE>
- ----------
49
- --------------------------------------------------------------------------------
o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition); or
o used to pay certain higher education expenses (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 after the later of your reaching 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 either 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.
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 Plus Roth Conversion 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 three different types of contributions to a Roth IRA:
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Since we only permit direct transfer and rollover contributions under the
Equitable Accumulator Plus Roth Conversion 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 TSA under Section 403(b) of the
Internal Revenue
<PAGE>
- ----------
50
- --------------------------------------------------------------------------------
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 are considered to have received them under tax law 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 Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for 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 send us the rollover contribution to apply it 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 considered to have
withdrawn) 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 considered to
have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover transaction
is not tax free. 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 free.
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 calculated 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.
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 Rollover from a Roth IRA to another Roth IRA;
<PAGE>
- ----------
51
- --------------------------------------------------------------------------------
o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distribution from a Roth IRA; and
o Return of excess contributions or amounts 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; or
o you die; or
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 five-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). It is not possible to have a
tax-free qualified distribution before the year 2003 because of the five-year
aging requirement.
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 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 you 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
Generally the same as traditional IRA.
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.
For Roth IRAs, special penalty rules may apply to amounts withdrawn attributable
to 1998 conversion rollovers.
<PAGE>
- ----------
52
- --------------------------------------------------------------------------------
SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section covers some of the special tax rules that apply to TSA 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 your Rollover 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 Rollover 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
deferral" contributions. However, a TSA can also be wholly or partially funded
through non-elective 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 Rollover 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; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
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 Equitable Accumulator contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to a Rollover 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
<PAGE>
- ----------
53
- --------------------------------------------------------------------------------
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 Rollover 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 Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
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 distribution from or with respect to
the TSA from which you are making your contribution to the Rollover 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 Rollover TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
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 the 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 occurs:
1. the requirements for minimum distribution (discussed under "Required minimum
distributions" below and in the prospectus) are met; or
2. death; or
3. retirement; or
<PAGE>
- ----------
54
- --------------------------------------------------------------------------------
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 contributions. 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. 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.
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. 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.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax treatment
as distribution 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 when made exceeds permissible limits under federal income tax rules, 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 (paying down) 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
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 conditions:
<PAGE>
- ----------
55
- --------------------------------------------------------------------------------
o The amount of a loan to a participant, when combined with all other loans to
the participant from all qualified plans of the employer, cannot exceed the
lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable accrued
benefits; and
(2) $50,000 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. Rollover TSA contracts
have a term limit of 10 years for loans used to acquire the participant's
primary residence.
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.
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, hardship withdrawals, 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
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking annual
distribution 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 the start 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 distribution is extended to
April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distribution 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 Rollover TSA by direct Revenue
Ruling 90-24 transfers. If you do not give us the amount of your December 31,
1986 account balance that is being transferred to the Rollover TSA on the
form used to establish the TSA, you do not qualify.
<PAGE>
- ----------
56
- --------------------------------------------------------------------------------
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Rollover 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. A qualified joint and survivor annuity is 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
distribution 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; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income tax
definition); or
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 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 and/or report 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 it is considered a withdrawal from the traditional IRA
and 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
<PAGE>
- ----------
57
- --------------------------------------------------------------------------------
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.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, 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
generally withhold 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 traditional 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; or
o any distributions which are required minimum distributions after age 70 1/2
or separation from service; or
o hardship withdrawals; or
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; or
o substantially equal periodic payments made for a specified period of 10 years
or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse; or
o a qualified domestic relations order distribution to a beneficiary who is not
your current spouse or former spouse.
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.
<PAGE>
- ----------
58
- --------------------------------------------------------------------------------
IMPACT OF TAXES TO EQUITABLE LIFE
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.
<PAGE>
8
MORE INFORMATION
- ----------------
59
- --------------------------------------------------------------------------------
ABOUT OUR 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. 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. The results of Separate Account No. 49's operations
are accounted for without regard to Equitable Life's other operations.
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 Life 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 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
(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 EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan
relating to its Class IB shares, and other aspects of its operations, appears in
the prospectus for EQ Advisors Trust attached at the end of this prospectus, or
in its SAI which is available upon request.
<PAGE>
- ----------
60
- --------------------------------------------------------------------------------
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees, as well
as our general obligations. Credits allocated to your account value are funded
from our general account.
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, nor is the general account
an investment company under the Investment Company Act of 1940.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account. The disclosure with regard
to the general account, however, may be subject to certain provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in prospectuses.
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 you
can make your contributions" under "Contract features and benefits."
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 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 contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP contracts, or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options. You choose the day of the month you wish to have your account debited.
However, you may not choose a date later than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
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 any day the New York Stock Exchange is open for trading. Our
business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the
<PAGE>
- ----------
61
- --------------------------------------------------------------------------------
date when contributions are applied and any other transaction requests are
processed. We may, however, close due to emergency conditions. 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
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
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 the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS, CREDITS, AND TRANSFERS
o Contributions and credits allocated to the variable investment options are
invested at the value next determined after the close of the business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust 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 EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held by separate accounts of insurance companies both
affiliated and 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 Board of
Trustees of EQ Advisors Trust 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 annuity unit value for that option. We will cast votes attributable to
any
<PAGE>
- ----------
62
- --------------------------------------------------------------------------------
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 LEGAL PROCEEDINGS
Equitable Life 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 of Equitable Life at December 31, 1999 and
1998, and for the three years ended December 31, 1999 incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as consolidated
financial statements of Equitable Life, are in the SAI. The SAI is available
free of charge. You may request one by writing to our processing office or
calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive written
notification of any change at our processing office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" earlier in this prospectus.
You cannot assign or transfer ownership of a Rollover IRA, Roth Conversion IRA,
QP or Rollover TSA contract except by surrender to us. Loans are not available
and you cannot assign Rollover IRA, Roth Conversion IRA, and QP contracts as
security for a loan or other obligation. If the employer that provided the funds
does not restrict them, loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA 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.
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned subsidiary of
Equitable Life, is the distributor of the contracts and has responsibility for
sales and marketing functions for Separate Account No. 49. EDI serves as the
principal underwriter of Separate Account No. 49. 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. Under a distribution agreement between EDI, Equitable
Life, and certain of Equitable Life's separate accounts, including Separate
Account No. 49, Equitable Life paid EDI distribution fees of $46,957,345 for
1999, $35,452,793 for 1998 and $9,566,343 for 1997 as the Distributor of certain
contracts and as the principal underwriter of several Equitable Life separate
accounts, including Separate Account No. 49.
<PAGE>
- ----------
63
- --------------------------------------------------------------------------------
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. We pay broker-dealer sales compensation that will not exceed
an amount equal to 7% annually of the account value on a contract date
anniversary. EDI may also receive compensation and reimbursement for its
marketing services under the terms of its distribution agreement with Equitable
Life. 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.
<PAGE>
9
INVESTMENT PERFORMANCE
- ----------------
64
- --------------------------------------------------------------------------------
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.
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 plus the 4% credit
invested in the variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment plus a $40 credit
in the variable investment options over the periods shown. Both Tables 1 and 2
take into account all current fees and charges under the contract, but do not
reflect the charges designed to approximate certain taxes imposed on us, such as
premium taxes in your state or any applicable annuity administrative fee.
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 current fees and charges under the contract, but do not reflect the
withdrawal charge or any charges designed to approximate certain taxes imposed
on us, such as premium taxes in your state, or any applicable annuity
administrative fee. If the charges were reflected they would effectively reduce
the rates of return shown. The credit is not included.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or 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 variable investment options and/or contracts been
available. The contracts are being offered for the first time in 1999.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios 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 portfolio 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.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust. In each case, the
performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessor that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios, including
the measurements reflected in the tables below. We will indicate that the 4%
credit is reflected when we show performance numbers that give effect to the
credit.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
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
<PAGE>
- ----------
65
- --------------------------------------------------------------------------------
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, administrative
charge, distribution charge, or any withdrawal 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:
- -------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50% Standard & Poor's Mid-Cap
Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield Master Index and
Benchmark #2 - Credit Suisse First Boston Global High Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital International Europe,
Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN INTERNATIONAL: Morgan Stanley Capital International Europe,
Australia, Far East Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
J.P. MORGAN CORE BOND: Salomon Brothers Broad Investment Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 2000 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
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 INTERNATIONAL EQUITY: Morgan Stanley Capital International Europe,
Australia and Far East Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper 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. (Lipper), 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 Plus performance
relative to other variable annuity products.
<PAGE>
- -----
66
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:+
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------------------
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- --------------------------- ---- ----- ----- ----- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 13.32% 7.12% 14.44% 14.96% 7.08% 15.99%
Alliance Common Stock 19.81% 25.76% 26.31% 16.86% 26.10% 14.78%
Alliance High Yield (9.34)% (0.06)% 7.96% 8.62% 1.03% 7.67%
Alliance Money Market (0.83)% 2.49% 3.37% 3.63% 2.88% 5.22%
Alliance Small Cap Growth 22.60% - - - 15.44% 15.44%
BT Equity 500 Index 15.12% - - - 19.83% 19.83%
BT International Equity Index 22.45% - - - 20.89% 20.89%
BT Small Company Index 15.55% - - - 5.25% 5.25%
J.P. Morgan Core Bond (7.30)% - - - 0.02% 0.02%
Lazard Large Cap Value (2.05)% - - - 8.25% 8.25%
Lazard Small Cap Value (3.89)% - - - (6.62)% (6.62)%
MFS Emerging Growth Companies 69.74% - - - 46.68% 46.68%
MFS Growth with Income 3.26% - - - 3.26% 3.26%
MFS Research 18.00% - - - 21.90% 21.90%
Morgan Stanley Emerging Markets Equity 92.32% - - - 16.56% 2.96%
EQ/Putnam Growth & Income Value (7.06)% - - - 7.68% 7.68%
EQ/Putnam International Equity 56.00% - - - 30.14% 30.14%
EQ/Putnam Investors Growth 25.31% - - - 32.87% 32.87%
</TABLE>
- --------------------------------------------------------------------------------
+ If you start receiving annuity payments within three years of making an
additional contribution we will recover the amount of any credit that applied
to that contribution.
* The variable investment option inception dates are: Alliance Money Market,
Alliance High Yield, Alliance Common Stock and EQ/Aggressive Stock (October
16, 1996); Alliance Small Cap Growth, MFS Research, MFS Emerging Growth
Companies, EQ/Putnam Growth & Income Value, EQ/Putnam International Equity,
and EQ/Putnam Investors Growth (May 1, 1997); BT Equity 500 Index, BT Small
Company Index, BT International Equity Index, J.P. Morgan Core Bond, Lazard
Large Cap Value, Lazard Small Cap Value, Morgan Stanley Emerging Markets
Equity (December 31, 1997), and MFS Growth with Income (December 31, 1998).
The inception dates for the variable investment options that became available
less than one year ago, and are therefore not shown in this table are:
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, Capital Guardian
Research, and Capital Guardian International (April 30, 1999) and EQ/Alliance
Technology (May 1, 2000).
<PAGE>
- -----
67
- --------------------------------------------------------------------------------
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on October 18, 1999. The portfolio inception dates are:
Alliance Money Market (July 13, 1981); Alliance High Yield (January 2, 1987);
Alliance Common Stock (January 13, 1976); EQ/Aggressive Stock (January 27,
1986); Alliance Small Cap Growth, MFS Research, MFS Emerging Growth
Companies, EQ/Putnam Growth & Income Value, EQ/Putnam International Equity,
EQ/Putnam Investors Growth (May 1, 1997); Morgan Stanley Emerging Markets
Equity (August 20, 1997); BT Equity 500 Index, BT Small Company Index, BT
International Equity Index, JPM Core Bond, Lazard Large Cap Value, and Lazard
Small Cap Value (January 1, 1998); and MFS Growth with Income (December 31,
1998). The inception dates for the portfolios that became available after
December 31, 1998 and are therefore not shown in the tables are: EQ/Alliance
Premier Growth, Capital Guardian U.S. Equity, Capital Guardian Research, and
Capital Guardian International (April 30, 1999); EQ/Alliance Technology (May
1, 2000).
<PAGE>
- -----
68
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,040 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:+
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
-----------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- --------------------------- ---- ----- ----- ----- ----------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $1,133.16 $1,229.11 $1,963.11 $4,031.00 $ 7,893.17
Alliance Common Stock $1,198.06 $1,988.79 $3,214.66 $4,750.89 $27,177.91
Alliance High Yield $ 906.65 $ 998.11 $1,466.27 $2,285.78 $ 2,611.16
Alliance Money Market $ 991.72 $1,076.72 $1,180.41 $1,428.90 $ 2,558.95
Alliance Small Cap Growth $1,226.03 - - - $ 1,467.04
BT Equity 500 Index $1,151.15 - - - $ 1,435.92
BT International Equity Index $1,224.47 - - - $ 1,461.50
BT Small Company Index $1,155.52 - - - $ 1,107.70
J.P. Morgan Core Bond $ 927.03 - - - $ 1,000.34
Lazard Large Cap Value $ 979.55 - - - $ 1,171.76
Lazard Small Cap Value $ 961.14 - - - $ 872.03
MFS Emerging Growth Companies $1,697.36 - - - $ 2,779.33
MFS Growth with Income $1,032.59 - - - $ 1,032.59
MFS Research $1,179.96 - - - $ 1,696.39
Morgan Stanley Emerging Markets Equity $1,923.25 - - - $ 1,071.33
EQ/Putnam Growth & Income Value $ 929.42 - - - $ 1,218.31
EQ/Putnam International Equity $1,559.98 - - - $ 2,019.90
EQ/Putnam Investors Growth $1,253.07 - - - $ 2,134.70
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ If you start receiving annuity payments within three years of making an
additional contribution we will recover the amount of any credit that applied
to that contribution.
* Portfolio inception dates are shown in Table 1.
<PAGE>
- -----
69
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 7.69% 14.12% 14.51% - 15.67%
Lipper Mid-Cap Growth 51.65% 24.68% 19.97% 14.78% - 15.86%
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
ALLIANCE COMMON STOCK 22.89% 25.56% 25.70% 16.41% 16.21% 14.59%
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
Benchmark 21.03% 27.56% 28.56% 18.21% 17.88% 16.19%
ALLIANCE HIGH YIELD (5.13)% 0.90% 7.83% 8.19% - 7.34%
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
ALLIANCE MONEY MARKET 3.05% 3.31% 3.42% 3.23% - 5.00%
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 15.77%
Lipper Small Company Growth 34.26% - - - - 19.49%
Benchmark 43.09% - - - - 25.88%
BT EQUITY 500 INDEX 18.38% - - - - 20.73%
Lipper S&P 500 Index 19.36% - - - - 23.16%
Benchmark 21.03% - - - - 24.76%
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 21.75%
Lipper International 43.24% - - - - 26.76%
Benchmark 26.96% - - - - 23.43%
BT SMALL COMPANY INDEX 18.80% - - - - 6.86%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
J.P. MORGAN CORE BOND (3.17)% - - - - 1.92%
Lipper Intermediate Investment Grade Debt (0.83)% - - - - 3.84%
Benchmark (1.77)% - - - - 2.64%
LAZARD LARGE CAP VALUE 1.88% - - - - 9.71%
Lipper Capital Appreciation 43.66% - - - - 32.61%
Benchmark 21.03% - - - - 24.76%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
70
- -------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE 0.11% - - - - (4.32)%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 45.89%
Lipper Mid-Cap 51.65% - - - - 32.50%
Benchmark 21.26% - - - - 16.99%
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
Lipper Growth & Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.15% - - - - 21.96%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 4.01%
Lipper Emerging Markets 82.53% - - - - 2.90%
Benchmark 66.41% - - - - (0.88)%
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 8.35%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
EQ/PUTNAM INTERNATIONAL EQUITY 57.69% - - - - 29.89%
Lipper International 43.24% - - - - 20.38%
Benchmark 26.96% - - - - 18.32%
EQ/PUTNAM INVESTORS GROWTH 28.18% - - - - 32.52%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and benchmark
"Since portfolio inception" information is as of the month-end closest to
actual date of portfolio inception.
<PAGE>
- -----
71
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 24.90% 93.56% 287.60% - 658.94%
Lipper Mid-Cap Growth 51.65% 102.87% 158.98% 311.69% - 683.45%
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
ALLIANCE COMMON STOCK 22.89% 97.94% 213.88% 356.81% 1,916.29% 2,513.58%
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.48%
ALLIANCE HIGH YIELD (5.13)% 2.71% 45.81% 119.82% - 151.11%
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
ALLIANCE MONEY MARKET 3.05% 10.26% 18.30% 37.39% - 146.07%
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 47.80%
Lipper Small Company Growth 34.26% - - - - 62.98%
Benchmark 43.09% - - - - 84.91%
BT EQUITY 500 INDEX 18.38% - - - - 45.76%
Lipper S&P 500 Index 19.36% - - - - 51.69%
Benchmark 21.03% - - - - 55.65%
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 48.22%
Lipper International 43.24% - - - - 61.58%
Benchmark 26.96% - - - - 52.35%
BT SMALL COMPANY INDEX 18.80% - - - - 14.20%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
J.P. MORGAN CORE BOND (3.17)% - - - - 3.88%
Lipper Intermediate Investment Grade Debt (0.83)% - - - - 7.83%
Benchmark (1.77)% - - - - 5.96%
LAZARD LARGE CAP VALUE 1.88% - - - - 20.36%
Lipper Capital Appreciation 43.66% - - - - 79.44%
Benchmark 21.03% - - - - 55.65%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
72
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE 0.11% - - - - (8.45)%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 173.96%
Lipper Mid-Cap 51.65% - - - - 120.85%
Benchmark 21.26% - - - - 52.05%
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
Lipper 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.15% - - - - 69.84%
Lipper Growth 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 9.74%
Lipper Emerging Markets 82.53% - - - - 7.48%
Benchmark 66.41% - - - - 5.32%
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 23.87%
Lipper 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
EQ/PUTNAM INTERNATIONAL EQUITY 57.69% - - - - 100.96%
Lipper 43.24% - - - - 65.44%
Benchmark 26.96% - - - - 56.70%
EQ/PUTNAM INVESTORS GROWTH 28.18% - - - - 111.99%
Lipper 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and benchmark
information are as of the month-end closest to the actual date of portfolio
inception.
<PAGE>
- -----
73
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 6.16% 83.43% (4.95)% 14.59% (5.59)%
Alliance Common Stock (9.82)% 35.34% 1.31% 22.52% (3.94)%
Alliance High Yield (2.95)% 22.17% 10.23% 20.88% (4.58)%
Alliance Money Market 6.23% 4.23% 1.65% 1.06% 2.10%
Alliance Small Cap Growth - - - - -
BT Equity 500 Index - - - - -
BT International Equity Index - - - - -
BT Small Company Index - - - - -
J.P. Morgan Core Bond - - - - -
Lazard Large Cap Value - - - - -
Lazard Small Cap Value - - - - -
MFS Emerging Growth Companies - - - - -
MFS Growth with Income
MFS Research - - - - -
Morgan Stanley Emerging Markets Equity - - - - -
EQ/Putnam Growth & Income Value
EQ/Putnam International Equity
EQ/Putnam Investors Growth
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 29.21% 19.93% 8.77% (1.55)% 16.65%
Alliance Common Stock 30.01% 21.97% 26.84% 27.00% 22.89%
Alliance High Yield 17.71% 20.60% 16.28% (6.90)% (5.13)%
Alliance Money Market 3.80% 3.37% 3.48% 3.40% 3.05%
Alliance Small Cap Growth - - 25.16%+ (5.97)% 25.58%
BT Equity 500 Index - - - 23.13% 18.38%
BT International Equity Index - - - 18.17% 25.43%
BT Small Company Index - - - (3.87)% 18.80%
J.P. Morgan Core Bond - - - 7.28% (3.17)%
Lazard Large Cap Value - - - 18.14% 1.88%
Lazard Small Cap Value - - - (8.56)% 0.11%
MFS Emerging Growth Companies - - 21.11%+ 32.37% 70.90%
MFS Growth with Income 6.98%
MFS Research - - 14.80%+ 22.12% 21.15%
Morgan Stanley Emerging Markets Equity - - (20.66)%+ (28.19)% 92.62%
EQ/Putnam Growth & Income Value 14.96%+ 11.02% (2.94)%
EQ/Putnam International Equity 8.40%+ 17.56% 57.69%
EQ/Putnam Investors Growth 23.32%+ 34.11% 28.18%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio inception date as shown in Table 1.
<PAGE>
- ----------
74
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges applicable
under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
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).
<PAGE>
- ----------
75
- --------------------------------------------------------------------------------
"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. The current yields and
effective yields assume the deduction of all current contract charges and
expenses other than the withdrawal charge, and any charge designed to
approximate certain taxes that may be imposed on us, such as premium taxes in
your state. For more information, see "Yield Information for the Alliance Money
Market Option and Alliance High Yield Option" in the SAI.
<PAGE>
APPENDIX I: CONDENSED FINANCIAL INFORMATION
- --------
A-1
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account No. 49 with the same daily asset based charges of
1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR THE
FIRST TIME ON MAY 1, 2000.
- --------------------------------------------------------------------------------
FOR THE YEAR ENDING
-------------------
DEC. 31, 1999
-------------
EQ/AGGRESSIVE STOCK
Unit value $ 78.30
Number of units outstanding (000s) 141
ALLIANCE COMMON STOCK
Unit value $275.01
Number of units outstanding (000s) 255
ALLIANCE HIGH YIELD
Unit value $ 25.73
Number of units outstanding (000s) 574
ALLIANCE MONEY MARKET
Unit value $ 25.55
Number of units outstanding (000s) 5,805
EQ/ALLIANCE PREMIER GROWTH
Unit value $ 11.77
Number of units outstanding (000s) 5,630
ALLIANCE SMALL CAP GROWTH
Unit value $ 14.78
Number of units outstanding (000s) 818
BT EQUITY 500 INDEX
Unit value $ 14.58
Number of units outstanding (000s) 6,216
BT INTERNATIONAL EQUITY INDEX
Unit value $ 14.82
Number of units outstanding (000s) 992
BT SMALL COMPANY INDEX
Unit value $ 11.42
Number of units outstanding (000s) 522
- --------------------------------------------------------------------------------
<PAGE>
- -----
A-2
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION (CONTINUED)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDING
-------------------
DEC. 31, 1999
-------------
CAPITAL GUARDIAN INTERNATIONAL
Unit value $13.93
Number of units outstanding (000s) 1,286
CAPITAL GUARDIAN RESEARCH
Unit value $10.60
Number of units outstanding (000s) 987
CAPITAL GUARDIAN U.S. EQUITY
Unit value $10.26
Number of units outstanding (000s) 2,436
J.P. MORGAN CORE BOND
Unit value $10.39
Number of units outstanding (000s) 2,026
LAZARD LARGE CAP VALUE
Unit value $12.04
Number of units outstanding (000s) 1,532
LAZARD SMALL CAP VALUE
Unit value $ 9.15
Number of units outstanding (000s) 988
MFS EMERGING GROWTH COMPANIES
Unit value $27.40
Number of units outstanding (000s) 1,680
- --------------------------------------------------------------------------------
<PAGE>
- -----
A-3
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION (CONTINUED)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDING
-------------------
DEC. 31, 1999
-------------
MFS GROWTH WITH INCOME
Unit value $10.70
Number of units outstanding (000s) 2,906
MFS RESEARCH
Unit value $16.99
Number of units outstanding (000s) 1,725
MORGAN STANLEY EMERGING MARKETS EQUITY
Unit value $10.97
Number of units outstanding (000s) 962
EQ/PUTNAM GROWTH AND INCOME VALUE
Unit value $12.39
Number of units outstanding (000s) 978
EQ/PUTNAM INTERNATIONAL EQUITY FUND
Unit value $20.10
Number of units outstanding (000s) 771
EQ/PUTNAM INVESTORS GROWTH
Unit value $21.20
Number of units outstanding (000s) 576
- --------------------------------------------------------------------------------
<PAGE>
APPENDIX II: PURCHASE CONSIDERATIONS FOR QP CONTRACTS
- --------
B-1
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator Plus 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 and the payment of death benefits in accordance
with the requirements of the federal income tax rules. The QP contract and this
prospectus should be reviewed in full, and the following factors, among others,
should be noted. Assuming continued plan qualification and operation, earnings
on qualified plan assets will accumulate value on a tax-deferred basis even if
the plan is not funded by the Equitable Accumulator Plus QP contract or another
annuity. Therefore, you should purchase an Equitable Accumulator Plus QP
contract to fund a plan for the contract's features and benefits other than tax
deferral. 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. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan participant/
employee's normal retirement benefit that 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 Life 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 may apply.
Further, Equitable Life 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.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider that the QP contract
may not be appropriate purchase for annuitants approaching or over age 70 1/2.
Finally, because the method of purchasing the QP contract, including the large
initial contribution 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.
<PAGE>
APPENDIX III: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
- --------
C-1
- --------------------------------------------------------------------------------
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), no additional contributions,
no transfers, no withdrawals, and no loans under a Rollover TSA contract the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
END OF 5% ROLL UP TO 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.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option and
Alliance High Yield Option 3
Financial Statements 5
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR PLUS STATEMENT OF ADDITIONAL INFORMATION
FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator Plus
P.O. Box 1547
Secaucus, NJ 07096-1547
- ------------------------------------------------------------------------------
Please send me an Equitable Accumulator Plus SAI for Separate Account No. 49
dated May 1, 2000:
- ------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City State Zip
(SAI 10AMLF(05/00))
