EQUITABLE ACCUMULATOR
SELECT(SM)
A combination variable and fixed 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 EQ Advisors Trust, which contains important information about its
portfolios.
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WHAT IS THE EQUITABLE ACCUMULATOR SELECT?
Equitable Accumulator Select 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 income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
There is no withdrawal charge under the contract. However, we deduct a
distribution charge calculated as a percentage of the amounts in the variable
investment options. We deduct this charge for the life of the contract. This
contract is not available in New York.
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VARIABLE INVESTMENT OPTIONS
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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 Emerging Growth
o EQ/Alliance Premier Growth Companies
o Alliance Small Cap Growth o MFS Growth with Income
o EQ/Alliance Technology(2) o MFS Research
o BT Equity 500 Index o Morgan Stanley Emerging
o BT Small Company Index Markets Equity
o BT International Equity Index o EQ/Putnam Growth & Income
o Capital Guardian International Value
o Capital Guardian Research o EQ/Putnam International Equity
o Capital Guardian U.S. Equity o EQ/Putnam Investors Growth
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(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.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined contribution
or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
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.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of one of the registration
statements. 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.
72043
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2
Contents of this prospectus
CONTENTS OF THIS PROSPECTUS
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EQUITABLE ACCUMULATOR(SM) SELECT
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator Select at a glance - key features 8
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FEE TABLE 11
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Example 14
Condensed financial information 15
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1
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CONTRACT FEATURES AND BENEFITS 16
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How you can purchase and contribute to your contract 16
Owner and annuitant requirements 19
How you can make your contributions 19
What are your investment options under the contract? 19
Allocating your contributions 22
Your benefit base 24
Annuity purchase factors 24
Our baseBUILDER option 25
Guaranteed minimum death benefit 26
Your right to cancel within a certain number of days 27
2
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DETERMINING YOUR CONTRACT'S VALUE 29
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Your account value and cash value 29
Your contract's value in the variable investment options 29
Your contract's value in the fixed maturity options 29
3
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TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 30
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Transferring your account value 30
Market timing 30
Rebalancing your account value 30
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"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 used the word "contract" it also includes certificates that are issued
under group contracts in some states.
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3
Contents of this prospectus
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4
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ACCESSING YOUR MONEY 32
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Withdrawing your account value 32
How withdrawals are taken from your account value 33
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 33
Loans under Rollover TSA contracts 34
Surrendering your contract to receive its cash value 34
When to expect payments 35
Your annuity payout options 35
5
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CHARGES AND EXPENSES 38
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Charges that Equitable Life deducts 38
Charges that EQ Advisors Trust deducts 39
Group or sponsored arrangements 39
6
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PAYMENT OF DEATH BENEFIT 40
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Your beneficiary and payment of benefit 40
How death benefit payment is made 41
Beneficiary continuation option 41
7
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TAX INFORMATION 43
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Overview 43
Transfers among investment options 43
Taxation of nonqualified annuities 43
Individual retirement arrangements (IRAs) 45
Special rules for nonqualified contracts in qualified plans 55
Tax-Sheltered Annuity contracts (TSAs) 55
Federal and state income tax withholding and
information reporting 59
Impact of taxes to Equitable Life 61
8
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MORE INFORMATION 62
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About our Separate Account No. 49 62
About EQ Advisors Trust 62
About our fixed maturity options 63
About the general account 64
About other methods of payment 64
Dates and prices at which contract events occur 65
About your voting rights 66
About legal proceedings 66
About our independent accountants 66
Financial statements 66
Transfers of ownership, collateral assignments, loans,
and borrowing 67
Distribution of the contracts 67
9
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INVESTMENT PERFORMANCE 68
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Benchmarks 68
Communicating performance data 77
10
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INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 79
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APPENDICES
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I - Condensed financial information A-1
II - Purchase considerations for QP contracts B-1
III - Market value adjustment example C-1
IV - Guaranteed minimum death benefit example D-1
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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4
Index of key words and phrases
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INDEX OF KEY WORDS AND PHRASES
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This index should help you locate more information on the terms used in this
prospectus.
PAGE IN
TERM PROSPECTUS
account value 29
annuitant 16
annuity payout options 35
annuity purchase factors 24
baseBUILDER 24
beneficiary 40
benefit base 24
business day 65
cash value 29
conduit IRA 49
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 52
rollovers and direct transfers 52
conversion contributions 53
contributions to traditional IRAs 46
rollovers and transfers 47
EQAccess 6
ERISA 34
fixed maturity options 21
guaranteed minimum death benefit 26
guaranteed minimum income benefit 25
IRA cover
IRS 43
investment options 19
loan reserve account 34
market adjusted amount 22
market value adjustment 22
maturity value 22
NQ cover
participant 19
portfolio cover
processing office 6
QP cover
rate to maturity 21
Required Beginning Date 41
Rollover IRA cover
Rollover TSA cover
Roth IRA 52
Roth Conversion IRA cover
SAI cover
SEC cover
TOPS 6
TSA 55
traditional IRA 45
unit 29
variable investment options 19
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. Your registered representative can provide further explanation about
your contract or supplemental materials.
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PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
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fixed maturity options Guarantee Periods (Guaranteed Fixed Interest
Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
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5
Who is Equitable Life?
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WHO IS EQUITABLE LIFE?
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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 contracts.
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.
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6
Who is Equitable Life?
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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:
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Equitable Accumulator Select
P.O. Box 13014
Newark, NJ 07188-0014
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
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Equitable Accumulator Select
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:
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Equitable Accumulator Select
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:
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Equitable Accumulator Select
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
REPORTS WE PROVIDE:
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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:
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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 rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
availabe through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end 2000);
o change your TOPS 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 the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or
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7
Who is Equitable Life?
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Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of 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:
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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 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) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
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.
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8
Equitable Accumulator Select at a Glance - key features
EQUITABLE ACCUMULATOR SELECT AT A GLANCE - KEY FEATURES
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PROFESSIONAL Equitable Accumulator Select's variable investment
INVESTMENT options invest in different portfolios managed by
MANAGEMENT professional investment advisers.
FIXED MATURITY o 10 fixed maturity options with maturities ranging from
OPTIONS approximately 1 to 10 years.
o Each fixed maturity option offers a guarantee of
principal and interest rate if you hold it to maturity.
If you make withdrawals or transfers from a fixed
maturity option before maturity, there will be a market
value adjustment due to differences in interest rates.
This may increase or decrease any value that you have
left in that fixed maturity option. If you surrender your
contract, a market value adjustment may also apply.
TAX ADVANTAGES o On earnings No tax on any dividends, interest or
inside the capital gains until you make
contract withdrawal from your contract or receive
annuity payments.
o On transfers No tax on transfers among investment
inside the 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.
BASEBUILDER(R) baseBUILDER combines a guaranteed minimum income benefit
PROTECTION with the guaranteed minimum death benefit provided
under the contract. The guaranteed minimum income
benefit provides income protection for you while
the annuitant lives. The guaranteed minimum death benefit
provides a death benefit for the beneficiary should the
annuitant die.
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.
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 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
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9
Equitable Accumulator Select at a glance - key features
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ADDITIONAL FEATURES o Guaranteed minimum death benefit
even if you do not elect
baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing
(quarterly, semiannually, and
annually)
o Free transfers
FEES AND CHARGES o Daily charges on amounts invested in the variable
investment options for mortality and expense risks,
administrative charges, and distribution charges
at a current annual rate of 1.60% (1.70% maximum).
o Annual 0.30% benefit base charge for the optional
baseBUILDER benefit until you exercise
your guaranteed minimum income payout option, or the
contract date anniversary after the annuitant reaches
age 85 (age 83 in Oregon), whichever occurs first.
The benefit base is described under "Your benefit
base" in "Contract features and benefits." If you
don't elect baseBUILDER, you still receive a
guaranteed minimum death benefit under your contract
at no additional charge.
o No sales charge deducted at the time you make
contributions, no withdrawal charge, and
no annual contract fee.
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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."
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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: 0-85
Rollover IRA, Roth Conversion IRA, and Rollover TSA:
20-85
QP: 20-75
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.
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10
Equitable Accumulator Select at a glance - key features
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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 annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
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11
Fee table
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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 under "Charges and
expenses" later in this prospectus.
The fixed maturity options are not covered by the fee table and examples. A
market value adjustment (up or down) may apply as a result of a withdrawal,
transfer, or surrender of amounts from a fixed maturity option.
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS
AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
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Mortality and expense risks(1) 1.10%
Administrative 0.25% current (0.35% maximum)
Distribution 0.25%
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Total annual expenses 1.60% current (1.70% maximum)
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST
CERTAIN TRANSACTIONS
Charge if you elect a Variable Immediate Annuity payout option $350
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
BASEBUILDER BENEFIT CHARGE (calculated as a percentage of the benefit base.
Deducted annually on each contract date anniversary)(2) 0.30%
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EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
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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%
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12
Fee table
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<TABLE>
<CAPTION>
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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>
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 Value 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
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</TABLE>
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Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) The benefit base is described under "Contract features and benefits -
Your guaranteed minimum income benefit under baseBUILDER."
(3) The management fees shown reflect revised management fees, effective or
abour 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 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
arrangement.
(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 entire
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; 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
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13
Fee table
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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. The expense
limitations for the BT Equity 500 Index, EQ/Putnam Growth & Income Value,
EQ/Putnam International 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 portfolio
reflects 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 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 Alliance
Premier Growth, Capital Guardian U.S. Equity and Capital Guardian Research
portfolios and will be invested on or about May 1, 2000 for 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>
14
Fee table
- --------------------------------------------------------------------------------
EXAMPLE
The example below shows the expenses that a hypothetical contract owner (who has
elected baseBUILDER) would pay in the situation illustrated. We assume that a
$1,000 contribution 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 example 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 example is not an estimate
or guarantee of future investment performance.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
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 $27.09 $ 89.34 $154.46 $330.67
Alliance Common Stock $25.62 $ 84.96 $147.21 $316.52
Alliance High Yield $27.20 $ 89.66 $154.98 $331.67
Alliance Money Market $24.46 $ 81.51 $141.48 $305.25
EQ/Alliance Premier Growth $30.98 $100.86 $173.42 $367.11
Alliance Small Cap Growth $28.98 $ 94.96 $163.72 $348.57
EQ/Alliance Technology $29.93 $ 97.76 $168.32 $357.40
BT Equity 500 Index $24.15 $ 80.56 $139.92 $302.16
BT International Equity Index $28.35 $ 93.09 $160.64 $342.64
BT Small Company Index $25.72 $ 85.27 $147.73 $317.53
Capital Guardian International $30.45 $ 99.31 $170.87 $362.26
Capital Guardian Research $27.82 $ 91.53 $158.07 $337.67
Capital Guardian U.S. Equity $27.82 $ 91.53 $158.07 $337.67
J.P. Morgan Core Bond $26.25 $ 86.84 $150.32 $322.61
Lazard Large Cap Value $27.82 $ 91.53 $158.07 $337.67
Lazard Small Cap Value $29.40 $ 96.20 $165.77 $352.50
MFS Emerging Growth Companies $28.35 $ 93.09 $160.64 $342.64
MFS Growth with Income $27.82 $ 91.53 $158.07 $337.67
MFS Research $27.82 $ 91.53 $158.07 $337.67
Morgan Stanley Emerging Markets Equity $36.23 $116.29 $198.55 $414.19
EQ/Putnam Growth & Income Value $27.82 $ 91.53 $158.07 $337.67
EQ/Putnam International Equity $30.98 $100.86 $173.42 $367.11
EQ/Putnam Investors Growth $28.88 $ 94.65 $163.21 $347.58
- -----------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution 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
payments under an annuity payout option. See "Accessing your money."
<PAGE>
15
Fee table
- --------------------------------------------------------------------------------
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
example 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>
16
Contract features and benefits
1
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
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 85 o After-tax money. o No additional contributions after
age 86.
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 85 o Rollovers from a qualified plan. o No rollover or direct transfer
contributions after age 86.
o Rollovers from a TSA.
o Contributions after age 70 1/2 must be
o Rollovers from another traditional net of required minimum distributions.
individual retirement arrangement.
o Regular IRA contributions limited to
o Direct custodian-to-custodian transfers $2,000 per year.
from another traditional individual
retirement arrangement. o Although we accept regular contributions under the
Rollover IRA contracts, we intend that this
o Regular IRA contributions 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>
17
Contract features and benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
<S> <C> <C> <C>
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA contributions after age 86.
o Conversion rollovers from a traditional
IRA. o Conversion rollovers after age 70 1/2
must be net of required minimum
o Direct transfers from another 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 85 o Rollovers from another TSA contract or o No additional rollover or direct transfer
arrangement. contributions after age 86.
o Rollovers from a traditional IRA which o Contributions after age 70 1/2 must be
was a "conduit" for TSA funds net of required minimum distributions.
previously rolled over. o Employer-remitted contributions are
o Direct transfers from another contract not permitted.
or arrangement under Section 403(b)
of the Internal Revenue Code,
complying with IRS Revenue Ruling
90-24.
QP 20 through 75 o Only transfer contributions from an o Regular ongoing payroll contributions
existing qualified plan trust as a are not permitted.
change of investment vehicle under the o Only one additional contribution may
plan. be made during a contract year.
o The plan must be qualified under o No additional transfer contributions
Section 401(a) of the Internal Revenue after age 76.
Code.
o For defined benefit plans, employee
o For 401(k) plans, transferred contributions are not permitted.
contributions may only include
employee pre-tax contributions. o Contributions after age 70 1/2 must be
net of any required minimum distributions.
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
<PAGE>
18
Contract features and benefits
- --------------------------------------------------------------------------------
annuitant would then total more than $1,500,000. We reserve the right to limit
aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable 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>
19
Contract features and benefits
-------------------------------------------------------------------------------
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
Select 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 INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
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>
20
Contract features and benefits
- --------------------------------------------------------------------------------
<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 Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Russell 2000 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
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>
21
Contract features and benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------
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 Capital growth, current income is a secondary Putnam Investment Management, Inc.
& Income Value objective
EQ/Putnam International Capital appreciation Putnam Investment Management, Inc.
Equity
EQ/Putnam Investors Long-term growth of capital and any increased Putnam Investment Management, Inc.
Growth 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.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in contracts issued in Maryland.
Fixed maturity options range from one to ten years to maturity.
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that
<PAGE>
22
Contract features and benefits
- --------------------------------------------------------------------------------
fixed maturity option plus interest, at the rate to maturity for that
contribution, to the date of the calculation. This is the fixed maturity
option's "maturity value." Before maturity, the current value we will report
for your fixed maturity amounts will reflect a market value adjustment. Your
current value will reflect the market value adjustment that we would make if
you were to withdraw all of your fixed maturity amounts on the date of the
report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity
option or into any of the variable investment options; or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
fixed maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the
amount being withdrawn and the rate to maturity in effect at that
time for new allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix III of this prospectus provides an example of how the
market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
<PAGE>
23
Contract features and benefits
- --------------------------------------------------------------------------------
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010,
since the rate to maturity was 5.98% on March 15, 2000, we would have allocated
$5,618.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP,
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70 1/2, you should consider whether
your value in the variable investment options, or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information."
You may not elect principal assurance if the special dollar cost averaging
program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program 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 other variable investment options you select. This will
cause you to purchase more units if the unit's value is low and fewer units if
the unit's value is high. Therefore, you may get a lower average cost per unit
over the long term. These plans of investing, however, do not guarantee that
you will earn a profit or be protected against losses.
-----------------------------------------------------------------------------
Units measure your value in each variable investment option.
----------------------------------------------------------------------------
SPECIAL DOLLAR COST AVERAGING PROGRAM. You may dollar cost average from the
Alliance Money Market option into any of the other variable investment options.
You must allocate your entire initial contribution into the Alliance Money
Market option. We will transfer your value in the Alliance Money Market option
into the other variable investment options that you select over the next 12
months or such other period we may offer. The transfer date will be the same
day of the month as the contract date, but not later than the 28th. All amounts
will be transferred out by the end of the first contract year or such other
period we may offer. Under this program we will not deduct the mortality and
expense risks, administrative, and distribution charges from assets in the
Alliance Money Market option. You may not allocate additional contributions to
the Alliance Money Market option under this program.
The only amounts that should be transferred from the Alliance Money Market
option are your regularly scheduled monthly transfers to the other variable
investment options. If you request to transfer or withdraw any other amounts,
we will transfer all of the value that you have remaining in the Alliance Money
Market option to the other investment options according to the allocation
percentages we have on
<PAGE>
24
Contract features and benefits
- --------------------------------------------------------------------------------
file for you. As a result, you will no longer be able to participate in the
special dollar cost averaging program. You may also ask us to cancel your
participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options. You can select to have
transfers made on a monthly, quarterly, or annual basis. The transfer date will
be the same calendar day of the month as the contract date, but not later than
the 28th 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 general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------------
You may not elect dollar cost averaging or special dollar cost averaging if you
are participating in the rebalancing program. See "Transferring your money
among investment options."
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% roll up to age 80 guaranteed minimum death benefit. See "Our baseBUILDER
option" and "Guaranteed minimum death benefit" below. The benefit base is equal
to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money"); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit; and less
o a deduction for any outstanding loan plus accrued interest on the date that
you exercise your guaranteed minimum income benefit (applies to Rollover TSA
only).
The effective annual interest rate credited to the benefit base is:
o 5% for the benefit base with respect to the variable investment options
(other than the Alliance Money Market option), and the account for special
dollar cost averaging; and
o 3% for the benefit base with respect to the Alliance Money Market option,
the fixed maturity options and the loan reserve account.
No interest is credited after the annuitant is age 80.
-----------------------------------------------------------------------------
Your benefit base is not an account value or a cash value.
-----------------------------------------------------------------------------
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed in "Our baseBUILDER
option" and annuity payout options are discussed in "Accessing your money"
later in this prospectus. The guaranteed annuity purchase factors are those
factors specified in your contract. The current annuity purchase factors are
those factors that are in effect at any given time. Annuity purchase factors
are based on interest
<PAGE>
25
Contract features and benefits
- --------------------------------------------------------------------------------
rates, mortality tables, frequency of payments, the form of annuity benefit,
and the annuitant's (and any joint annuitant's) age and sex in certain
instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses."
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit." baseBUILDER is currently
not available in some states. Please ask your registered representative if
baseBUILDER is available in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to
state availability (for contracts issued in Oregon, only the Income Manager
life with a period certain payout annuity contract is available). You choose
which of these payout options you want and whether you want the option to be
paid on a single or joint life basis at the time you exercise your guaranteed
minimum income benefit. The maximum period certain available under the Income
Manager payout option is 10 years. This period may be shorter, depending on the
annuitant's age when you exercise your guaranteed minimum income benefit and
the type of contract you own. We may also make other forms of payout options
available. For a description of payout options, see "Your annuity payout
options" in "Accessing your money" later in this prospectus.
-----------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
-----------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base at guaranteed annuity purchase factors, or (ii) the
income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the annuitant's (or joint annuitant's, if
applicable) death. There is no continuation of benefits following the
annuitant's (or joint annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
<PAGE>
26
Contract features and benefits
- --------------------------------------------------------------------------------
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT
The table below illustrates the guaranteed minimum income benefit amounts per
$100,000 of initial contribution, for a male annuitant age 60 (at issue) on the
contract date anniversaries indicated, who has elected the life annuity fixed
payout option, using the guaranteed annuity purchase factors as of March 1,
2000, assuming no additional contributions, withdrawals, or loans under
Rollover TSA contracts, and assuming there were no allocations to the Alliance
Money Market option or the fixed maturity options.
- -------------------------------------------------------------------
GUARANTEED MINIMUM
CONTRACT DATE INCOME BENEFIT - ANNUAL INCOME
ANNIVERSARY AT EXERCISE PAYABLE FOR LIFE
- -------------------------------------------------------------------
10 $10,816
15 $16,132
- -------------------------------------------------------------------
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise
the benefit. You will begin receiving payments one payment period after the
annuity payout contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 (age 53 in
Oregon) when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary after the annuitant is age 60.
o If the annuitant was at least age 50 (age 54 in Oregon) and no older than
age 75 when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary beginning with the 10th (7th in Oregon) contract date
anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income
benefit is the contract date anniversary following the annuitant's
85th (83rd in Oregon) birthday; and
(ii) if the annuitant was age 75 when the contract was issued, the only
time you may exercise the guaranteed minimum income benefit is
within 30 days following the first (in Oregon, the first and second
contract date anniversary) contract date anniversary that it becomes
available;
(iii) if the annuitant was older than age 60 (63 in Oregon) at the time an
IRA, QP or Rollover TSA contract was issued, the baseBUILDER may not
be an appropriate feature because the minimum distributions required
by tax law must begin before the guaranteed minimum income benefit
can be exercised; and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise
your guaranteed minimum income benefit, we will first roll over
amounts in such contract to a Rollover IRA contract. You will be the
owner of the Rollover IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you don't elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
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27
Contract features and benefits
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GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must 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. The guaranteed minimum death benefit is equal to the
benefit base described earlier in"Your benefit base."
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum
death benefit to equal your account value. On the other hand, if your account
value on the contract date anniversary is less than your guaranteed minimum
death benefit, we will not adjust your guaranteed minimum death benefit either
up or down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on
the date the contribution is allocated to your investment options.
If you take a withdrawal from your contract, we will reduce your guaranteed
minimum death benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" for information on
how withdrawals affect your guaranteed minimum death benefit.
See Appendix IV for an example of how we calculate the guaranteed minimum death
benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
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 of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), and (ii) any positive or negative market
value adjustments in the fixed maturity options through the date we receive
your contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) or (ii) above). 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
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28
Contract features and benefits
- --------------------------------------------------------------------------------
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>
29
Determining your contract's value
2
DETERMINING YOUR CONTRACT'S VALUE
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applicable to Rollover
TSA contracts only). These amounts are subject to certain fees and charges
discussed under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less 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;
(ii) administrative expenses; 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 or 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;
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan
reserve account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge, the number of units
credited to your contract will be reduced. A description of how unit values are
calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
<PAGE>
30
Transferring your money among investment options
3
TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing or by telephone using TOPS. (We
anticipate that transfers will be available online by using EQ Access 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.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. 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 in the variable investment options 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 registered representative 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.
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31
Transferring your money among investment options
- --------------------------------------------------------------------------------
You may not elect the rebalancing program if you are participating in the
dollar cost averaging or special dollar cost averaging program.
<PAGE>
32
Accessing your money
4
ACCESSING YOUR MONEY
- --------------------------------------------------------------------------------
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."
-------------------------------------------------------------------------------
METHOD OF WITHDRAWAL
-------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
-------------------------------------------------------------------------------
NQ Yes Yes No No
Rollover IRA Yes Yes Yes Yes
Roth
Conversion
IRA Yes Yes Yes No
QP Yes No No Yes
Rollover
TSA* Yes No No Yes
-------------------------------------------------------------------------------
* 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.
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.
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 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.
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Accessing your money
- --------------------------------------------------------------------------------
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. 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.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP, and Rollover TSA 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 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, QP, and Rollover TSA 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. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed
minimum death benefit, your benefit base will be reduced on a dollar-for-dollar
basis as long as the sum of your withdrawals in a contract year is 5% or less
of the guaranteed minimum death benefit on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the guaranteed minimum death benefit on the
most recent contract date anniversary, that withdrawal and any subsequent
withdrawals in that same contract year will reduce your benefit base on a pro
rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have significant impact on your guaranteed minimum income
benefit or 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
benefit base and current guaranteed minimum death benefit on a pro rata basis.
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Accessing your money
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Annuitant issue ages 80 through 85 - If your contract was issued when the
annuitant was between ages 80 and 85, 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 subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information" for
general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
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. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
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, 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.
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
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35
Accessing your money
- --------------------------------------------------------------------------------
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 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 can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 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 Select 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. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option").
---------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
Variable Immediate Annuity Life annuity
payout options Life annuity with period
certain
Income Manager payout Life annuity with period
options (available for certain
annuitants age 83 or less Period certain annuity
at contract issue)
---------------------------------------------------------------
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.
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
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Accessing your money
- --------------------------------------------------------------------------------
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 registered representative can provide 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 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).
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 Select contract to an Income Manager payout annuity. In this case,
we will consider any amounts applied as a withdrawal from your Equitable
Accumulator Select. For the tax consequences of withdrawals, see "Tax
information."
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Accessing your money
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Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your 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 market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
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
thirteen months from the Equitable Accumulator Select contract date. Except
with respect to the 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.
Before the last date 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 (subject to a market
value adjustment) if an Income Manager 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.
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.
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Charges and expenses
5
CHARGES AND EXPENSES
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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 if you elect the optional benefit a charge for the optional baseBUILDER
benefit.
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 financial
professional 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.
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.
baseBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85 (83 in Oregon),
whichever occurs first. The charge is equal to 0.30% of the benefit base in
effect on the contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
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Charges and expenses
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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 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 be applied 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 mortality and
expense risks charge or change the minimum initial contribution requirements.
We also may change the guaranteed minimum income benefit and 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 also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase
under such programs seek the advice of their own legal and benefits advisers.
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40
Payment of death benefit
6
PAYMENT OF DEATH BENEFIT
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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. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. 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 the
amount of the guaranteed minimum 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 this 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).
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Payment of death benefit
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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.
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 option according to the allocation percentages we have on file for
your contract. 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 guaranteed minimum income benefit and the death benefit (including the
guaranteed minimum death benefit) provisions 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 at 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.
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Payment of death benefit
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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 traditional 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 surviving spouse beneficiary who
elects to continue the contract in your name under the beneficiary continuation
option instead of electing successor owner/annuitant status may also choose to
delay beginning the minimum distributions until the 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.
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Tax information
7
TAX INFORMATION
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator Select 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 INVESTMENT OPTIONS
You can make transfers among 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
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Tax information
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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 Select 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
Select 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 carriers, and provision of cost basis
information may be required to process this type of an 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
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Tax information
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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 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 Select 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 Select 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 Select IRA contract by following the
directions under "Your right to cancel
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Tax information
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within a certain number of days" in "Contract features and benefits" earlier in
the prospectus. You can cancel an Equitable Accumulator Select Roth Conversion
IRA contract issued as a result of a full conversion of an Equitable
Accumulator Select 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; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs ("direct
transfers").
REGULAR CONTRIBUTION 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 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
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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
the AGI between $32,000 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 $52,000 and $62,000 in 2000. 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
--------------------- deductible
divided by $10,000 x income, if less) = 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
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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.
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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.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN 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 exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you are
age 70 1/2, you must have elected to recalculate life expectancies.
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
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options we offer do not cover every option permitted under federal income tax
rules, you may prefer to do your own required minimum distribution calculations
for one or more of your traditional IRAs.
WHAT IF 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
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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; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); 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 this option. Also, it is possible that the IRS could
view any additional withdrawal or payment you take from your contract as
changing your pattern of substantially equal withdrawals or Income Manager
payments for purposes of determining whether the penalty applies.
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 Select 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 Select 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
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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;
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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.
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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 of the prospectus 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 this Equitable Accumulator
Select 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 Equitable Accumulator Select 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 nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Equitable Accumulator Select 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 Select contract receiving the funds has provisions
at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator Select Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not
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need employer authorization. For example, the transferring TSA may be subject
to Title I of ERISA, if the employer makes matching contributions to salary
reduction contributions made by employees. In that case, the employer must
continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator Select TSA must be net of the
required minimum distribution for the tax year in which we issue the contract
if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Equitable
Accumulator Select 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 distributions from or with respect to
the TSA from which you are making your contribution to the Equitable
Accumulator Select 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 Equitable Accumulator Select 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 amounts that you invested in a 403(b)(7) custodial account,
such amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to
your TSA contract that represents your December 31, 1988 account balance
attributable to salary reduction contributions to a TSA annuity contract and
earnings. To take advantage of this grandfathering you must properly notify us
in writing at our processing office of your December 31, 1988 account balance
if you have qualifying amounts transferred to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occur:
(1) the requirements for minimum distribution (discussed under "Required
minimum distributions" below) are met; or
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(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an
employer's first-year matching contribution. We reserve the right to change
these provisions without your consent, but only to the extent necessary to
maintain compliance with applicable law. Loans are not permitted under Texas
Optional Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. 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 distributions during your lifetime. In some instances, distributions from a
TSA made to your surviving spouse may be rolled over to a traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (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
the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the
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plan is not subject to ERISA. For example, loans offered by TSAs are subject
to the following conditions:
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. Equitable Accumulator
Select Rollover TSA contracts have a term limit of 10 years for loans used
to acquire the participant's primary residence.
o all principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
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 distributions from their TSAs by a required date. Generally, you must
take the first required minimum distribution for the calendar year in which you
turn age 70 1/2. You may be able to delay 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 distributions is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distributions 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 Equitable Accumulator
Select Rollover TSA by direct Revenue Ruling 90-24 transfers. If you do not
give us the amount of your
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December 31, 1986 account balance that is being transferred to the Equitable
Accumulator Select Rollover TSA on the form used to establish the TSA, you
do not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator Select
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
distributions from a TSA before you reach age 59 1/2. This is in addition to
any income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; 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.
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o we are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or in
part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules
here. Certain states have indicated that state income tax withholding will also
apply to payments from the contracts made to residents. In some states, you may
elect out of state withholding, even if federal withholding applies. Generally,
an election out of federal withholding will also be considered an election out
of state withholding. If you need more information concerning a particular
state or any required forms, call our processing office at the toll-free
number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
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
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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.
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.
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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, 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.
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ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
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FIXED MATURITY
OPTIONS
WITH FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
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2001 4.20% $ 96.27
2002 4.91% $ 91.19
2003 5.43% $ 85.68
2004 5.51% $ 81.02
2005 5.62% $ 76.39
2006 5.70% $ 72.00
2007 5.77% $ 67.81
2008 5.83% $ 63.82
2009 5.92% $ 59.84
2010 5.98% $ 56.18
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) we determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) we determine the period remaining in your fixed maturity option
(based on the withdrawal date) and convert it to fractional years
based on a 365-day year. For example, three years and 12 days becomes
3.0329.
(c) we determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity option.
(d) we determine the present value of the fixed maturity amount payable
at the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market
value adjustment applicable to such fixed maturity option, which may be
positive or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. See Appendix III for an
example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to
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add up to 0.25% to the current rate in (1)(c) above for purposes of calculating
the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure 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" in "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.
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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, 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 and available fixed maturity 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 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 AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that 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.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
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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; or
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. Its shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of EQ
Advisors Trust 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 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 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 the
consolidated financial statements of Equitable Life,
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67
More information
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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 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, QP or Rollover TSA
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.
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 also acts as distributor
for other Equitable Life annuity products with different features, expenses,
and fees. EDI is registered with the SEC as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. EDI's principal business
address is 1290 Avenue of the Americas, New York, New York 10104. 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, including these
contracts, and as the principal underwriter of several Equitable Life separate
accounts, including Separate Account No. 49.
The contracts will be sold by registered representatives of EDI, as well as by
affiliated and unaffiliated broker-dealers with which EDI has entered into
selling agreements. We pay broker-dealer sales compensation that will not
exceed an amount equal to 1% 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>
68
Investment performance
9
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the
variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into
account all current fees and charges under the contract, including the optional
baseBUILDER benefits charge, 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
optional baseBUILDER benefits charge or the 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.
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 the contracts were not available. In those cases, we adjusted
the results of the portfolios to reflect the charges under the contracts that
would have applied had the investment options and/or contracts been available.
The contracts were first offered on October 1, 1997.
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
predecessors 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.
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
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed
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69
Investment performance
- --------------------------------------------------------------------------------
portfolio. Also, they do not reflect other contract charges such as the
mortality and expense risks charge, administrative charge, distribution charge,
or optional benefit charge. Comparisons with these benchmarks, therefore, may
be of limited use. We include them because they are widely known and may help
you to understand the universe of securities from which each portfolio is
likely to select its holdings. Benchmark data reflect the reinvestment of
dividend income. The benchmarks include:
- --------------------------------------------------------------------------------
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 Yield
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 SMALL COMPANY INDEX: Russell 2000 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital
International Europe, Australia, Far East 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, 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 Select performance
relative to other variable annuity products.
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Investment performance
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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 16.65% 7.48% 13.92% 14.33% 7.02% 15.51%
Alliance Common Stock 22.89% 25.37% 25.51% 16.16% 25.37% 14.41%
Alliance High Yield (5.13)% 0.70% 7.63% 7.96% 1.28% 7.08%
Alliance Money Market 3.05% 3.10% 3.16% 2.92% 3.02% 4.71%
Alliance Small Cap Growth 25.58% - - - 15.53% 15.53%
BT Equity 500 Index 18.38% - - - 20.58% 20.58%
BT Small Company Index 18.80% - - - 6.69% 6.69%
BT International Equity Index 25.43% - - - 21.58% 21.58%
J.P. Morgan Core Bond (3.17)% - - - 1.77% 1.77%
Lazard Large Cap Value 1.88% - - - 9.56% 9.56%
Lazard Small Cap Value 0.11% - - - (4.49)% (4.49)%
MFS Emerging Growth Companies 70.90% - - - 45.64% 45.64%
MFS Growth with Income 6.98% - - - 6.98% 6.98%
MFS Research 21.15% - - - 21.72% 21.72%
Morgan Stanley Emerging Markets Equity 92.62% - - - 17.35% 3.58%
EQ/Putnam Growth & Income Value (2.94)% - - - 8.14% 8.14%
EQ/Putnam International Equity 57.69% - - - 29.62% 29.62%
EQ/Putnam Investors Growth 28.18% - - - 32.29% 32.29%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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
Investors Growth, and EQ/Putnam International Equity (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 after December 31,
1998, and are therefore not shown in this table are: EQ/Alliance Premier
Growth, Capital Guardian U.S. Equity, Capital Guardian Research, Capital
Guardian International (April 30, 1999); and EQ/Alliance Technology (May
1, 2000).
** 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 Investors Growth, and EQ/Putnam International Equity (May 1,
1997); BT Equity 500 Index, BT Small Company Index, BT International
Equity Index, J.P. Morgan Core Bond, Lazard Large Cap Value, and Lazard
Small Cap Value (January 1, 1998); Morgan Stanley Emerging Markets Equity
(August 20, 1997); 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,
Capital Guardian International (April 30, 1999); and EQ/Alliance
Technology (May 1, 2000).
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TABLE 2
GROWTH OF $1,000 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 $1,166.50 $1,241.66 $1,918.59 $3,814.75 $ 7,446.18
Alliance Common Stock $1,228.90 $1,970.61 $3,115.05 $4,473.29 $25,180.87
Alliance High Yield $ 948.70 $1,021.10 $1,444.12 $2,150.45 $ 2,433.05
Alliance Money Market $1,030.50 $1,095.85 $1,168.38 $1,333.83 $ 2,338.07
Alliance Small Cap Growth $1,255.80 - - - $ 1,470.05
BT Equity 500 Index $1,183.80 - - - $ 1,453.88
BT Small Company Index $1,188.00 - - - $ 1,138.28
BT International Equity Index $1,254.30 - - - $ 1,478.26
J.P. Morgan Core Bond $ 968.30 - - - $ 1,035.74
Lazard Large Cap Value $1,018.80 - - - $ 1,200.40
Lazard Small Cap Value $1,001.10 - - - $ 912.25
MFS Emerging Growth Companies $1,709.00 - - - $ 2,726.97
MFS Growth with Income $1,069.80 - - - $ 1,069.80
MFS Research $1,211.50 - - - $ 1,689.78
Morgan Stanley Emerging Markets Equity $1,926.20 - - - $ 1,086.70
EQ/Putnam Growth & Income Value $ 970.60 - - - $ 1,232.16
EQ/Putnam International Equity $1,576.90 - - - $ 1,998.47
EQ/Putnam Investors Growth $1,281.80 - - - $ 2,110.24
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
72
Investment performance
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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 21.04% 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 Cap 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 SMALL COMPANY INDEX 18.80% - - - - 6.86%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 21.75%
Lipper International 43.24% - - - - 26.76%
Benchmark 26.96% - - - - 23.43%
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%
LAZARD SMALL CAP VALUE 0.11% - - - - (4.32)%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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Investment performance
- --------------------------------------------------------------------------------
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>
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 and 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 are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
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Investment performance
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS
<S> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 24.90% 93.56%
Lipper 51.65% 102.87% 158.98%
Benchmark 18.09% 62.12% 147.96%
ALLIANCE COMMON STOCK 22.89% 97.94% 213.88%
Lipper Growth 29.78% 106.30% 216.51%
Benchmark 21.04% 107.56% 251.12%
ALLIANCE HIGH YIELD (5.13)% 2.71% 45.81%
Lipper High Current Yield 3.65% 15.25% 51.19%
Benchmark #1 1.57% 18.80% 58.22%
Benchmark #2 3.28% 17.00% 54.39%
ALLIANCE MONEY MARKET 3.05% 10.26% 18.30%
Lipper Money Market 3.78% 12.64% 22.65%
Benchmark 4.74% 15.79% 28.88%
ALLIANCE SMALL CAP GROWTH 25.58% - -
Lipper Small Cap 34.26% - -
Benchmark 43.09% - -
BT EQUITY 500 INDEX 18.38% - -
Lipper S&P 500 Index 19.36% - -
Benchmark 21.03% - -
BT SMALL COMPANY INDEX 18.80% - -
Lipper Small Cap 34.26% - -
Benchmark 21.26% - -
BT INTERNATIONAL EQUITY INDEX 25.43% - -
Lipper International 43.24% - -
Benchmark 26.96% - -
J.P. MORGAN CORE BOND (3.17)% - -
Lipper Intermediate Investment Grade Debt (0.83)% - -
Benchmark (1.77)% - -
LAZARD LARGE CAP VALUE 1.88% - -
Lipper Capital Appreciation 43.66% - -
Benchmark 21.03% - -
LAZARD SMALL CAP VALUE 0.11% - -
Lipper Small Cap 34.26% - -
Benchmark 21.26% - -
MFS EMERGING GROWTH COMPANIES 70.90% - -
Lipper Mid-Cap 51.65% - -
Benchmark 21.26% - -
- --------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
10 YEARS 20 YEARS INCEPTION*
<S> <C> <C> <C>
EQ/AGGRESSIVE STOCK 287.60% - 658.94%
Lipper 311.69% - 683.45%
Benchmark 319.19% - 595.55%
ALLIANCE COMMON STOCK 356.81% 1,916.29% 2,513.58%
Lipper Growth 386.68% 1,816.52% 2,838.39%
Benchmark 432.78% 2,584.39% 3,555.48%
ALLIANCE HIGH YIELD 119.82% - 151.11%
Lipper High Current Yield 151.82% - 166.74%
Benchmark #1 178.72% - 245.03%
Benchmark #2 185.43% - 246.92%
ALLIANCE MONEY MARKET 37.39% - 146.07%
Lipper Money Market 47.52% - 178.18%
Benchmark 63.79% - 229.35%
ALLIANCE SMALL CAP GROWTH - - 47.80%
Lipper Small Cap - - 62.98%
Benchmark - - 84.91%
BT EQUITY 500 INDEX - - 45.76%
Lipper S&P 500 Index - - 51.69%
Benchmark - - 55.65%
BT SMALL COMPANY INDEX - - 14.20%
Lipper Small Cap - - 37.82%
Benchmark - - 18.17%
BT INTERNATIONAL EQUITY INDEX - - 48.22%
Lipper International - - 61.58%
Benchmark - - 52.35%
J.P. MORGAN CORE BOND - - 3.88%
Lipper Intermediate Investment Grade Debt - - 7.83%
Benchmark - - 5.96%
LAZARD LARGE CAP VALUE - - 20.36%
Lipper Capital Appreciation - - 79.44%
Benchmark - - 55.65%
LAZARD SMALL CAP VALUE - - (8.45)%
Lipper Small Cap - - 37.82%
Benchmark - - 18.17%
MFS EMERGING GROWTH COMPANIES - - 173.96%
Lipper Mid-Cap - - 120.85%
Benchmark - - 52.05%
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
75
Investment performance
- -------------------------------------------------------------------------------
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>
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
Lipper Growth and Income 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 "since portfolio inception" information are as month-end closest
to the actual date of portfolio inception.
<PAGE>
76
Investment performance
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1990 1991 1992 1993 1994
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 Small Company Index - - - - -
BT International Equity 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>
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995 1996 1997 1998 1999
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 Small Company Index - - - (3.87)% 18.80%
BT International Equity Index - - - 18.17% 25.43%
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>
77
Investment performance
- --------------------------------------------------------------------------------
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).
"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 optional baseBUILDER benefits charge, and any charge
designed to approximate certain taxes that may be imposed
<PAGE>
78
Investment performance
- --------------------------------------------------------------------------------
on us, such as premium taxes in your state. The yields and effective yields for
the Alliance Money Market option, when used for the special dollar cost
averaging program, assume that no contract charges are deducted. For more
information, see "Yield Information for the Alliance Money Market Option and
Alliance High Yield Option" in the SAI.
<PAGE>
79
Incorporation of certain documents by reference
10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
1999, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary
(telephone : (212) 554-1234).
<PAGE>
A-1
Appendix I: Condensed financial information
APPENDIX I: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 49 with the same daily asset 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
DECEMBER 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
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
---------------------------------------------------------------------
<PAGE>
- -----
A-2
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------
FOR THE YEAR ENDING
DECEMBER 31, 1999
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
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 & INCOME VALUE
Unit value $ 12.39
Number of units outstanding (000s) 978
EQ/PUTNAM INTERNATIONAL EQUITY
Unit value $ 20.10
Number of units outstanding (000s) 771
EQ/PUTNAM INVESTORS GROWTH
Unit value $ 16.54
Number of units outstanding (000s) 576
-----------------------------------------------------------------------
<PAGE>
B-1
Appendix II: Purchase considerations for QP contracts
APPENDIX II: PURCHASE CONSIDERATIONS FOR QP CONTRACTS
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator Select QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the 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 Select QP contract or another annuity.
Therefore, you should purchase an Equitable Accumulator 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 market value
adjustment 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:
o the QP contract may not be an appropriate purchase for annuitants approaching
or over age 70 1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60 1/2 (63 1/2 in
Oregon) when the contract is issued.
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>
C-1
Appendix III: Market value adjustment example
APPENDIX III: MARKET VALUE ADJUSTMENT EXAMPLE
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2001 to a fixed maturity option with a maturity date of February
15, 2010 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value of $183,846 on the maturity date. We further
assume that a withdrawal of $50,000 is made four years later on February 15,
2005.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2005
5.00% 9.00%
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
(1) Market adjusted amount $144,048 $ 119,487
(2) Fixed maturity amount $131,080 $ 131,080
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
(7) Maturity value $120,032 $ 106,915
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- --------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
D-1
Appendix IV: Guaranteed minimum death benefit example
APPENDIX IV: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option or the fixed maturity options),
no additional contributions, no transfers and 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
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR SELECT STATEMENT OF ADDITIONAL
INFORMATION FOR
SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator Select
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an Equitable Accumulator Select SAI for Separate Account No. 49
dated May 1, 2000:
- ------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City State Zip
(SAI 4ACS(5/00))
