<PAGE>
Variable Annuity Account C
Opportunity Plus
Group Variable Multiple Option Annuity Contracts
Supplement Dated May 1, 1995
to Prospectuses Dated March 31, 1995
The following changes have been made to this Prospectus:
Funding Option Name Change:
Effective May 1, 1995, the name "Calvert Socially Responsible Series" has been
changed to "Calvert Responsibly Invested Balanced Portfolio."
Hypothetical Tables:
Due to a typographical error, the deferred sales charge as of December 31, 1986
listed on Table 1 for the Neuberger & Berman Growth Portfolio should be $59.38
instead of $19.38.
<PAGE>
[LOGO OF AETNA APPEARS HERE] VARIABLE ANNUITY
ACCOUNT C (ART)
AETNA LIFE INSURANCE AND Prospectus Dated:
ANNUITY COMPANY March 31, 1995
Opportunity Plus Processing Office
P.O. Box 12894
Albany, NY 12212-2894
1-800-677-4636 OPPORTUNITY PLUS
GROUP VARIABLE MULTIPLE OPTION ANNUITY CONTRACTS
This Prospectus describes the provisions of the group installment and single
Purchase Payment Contracts ("Contracts") issued by Aetna Life Insurance and
Annuity Company ("Company," "us" or "we"). The Contracts were developed for the
Opportunity Plus program. The Opportunity Plus program is designed to fund
retirement plans adopted under Section 403(b) of the Internal Revenue Code of
1986, as amended ("Code") by certain tax-exempt organizations.
Interests in these Contracts are offered to employees ("Participant" or "you")
of school boards and public universities in the state of New York. Amounts held
under the Contracts may be entitled to tax-deferred treatment under certain
sections of the Code.
The Contracts allow values to accumulate under (i) a credited interest option;
(ii) a fixed interest option; (iii) a separate account, Variable Annuity Account
C (the "Separate Account") which invests in one or more variable funding options
as selected by you; or variable options, or a combination of these options. They
also provide for the payment of annuity benefits on a fixed or variable basis,
or a combination thereof.
The variable funding options available through the Separate Account are:
. Aetna Variable Fund . Fidelity Index 500 Portfolio*
. Aetna Income Shares . Franklin Government Securities Trust
. Aetna Variable Encore Fund . Janus Aspen Aggressive Growth Portfolio
. Aetna Investment Advisers Fund, Inc.. Janus Aspen Growth Portfolio*
. Alger American Growth Portfolio* . Janus Aspen Short-Term Bond Portfolio*
. Alger American Small Cap Portfolio . Janus Aspen Worldwide Growth Portfolio*
. Calvert Socially Responsible Series . Lexington Emerging Markets Fund, Inc.
. Fidelity Asset Manager Portfolio . Lexington Natural Resources Trust
. Fidelity Contrafund Portfolio* . Neuberger & Berman Growth Portfolio
. Fidelity Equity-Income Portfolio* . Scudder International Portfolio
. TCI Growth (a Twentieth Century Fund)
- ------
* These Funds will be available on May 1, 1995 or as soon after that date as the
Company receives the appropriate regulatory authorizations.
The credited interest option available for the accumulation of values is the
Guaranteed Accumulation Account. The Fixed Account is available only under an
installment Purchase Payment Contract. Except as specifically mentioned, this
Prospectus describes only the variable options of the Contracts. Information
concerning the Guaranteed Accumulation Account and the Fixed Account is found in
Appendix I and Appendix II, respectively, to this Prospectus.
This Prospectus sets forth concisely the information about Variable Annuity
Account C (the "Separate Account") that a prospective investor should know
before investing. Additional information about the Separate Account is contained
in a Statement of Additional Information ("SAI") dated March 31, 1995, which has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. The Table of Contents for the SAI is found in this
Prospectus. An SAI may be obtained without charge by indicating your request on
the enrollment form or prospectus receipt contained in this Prospectus or by
calling 1-800-677-4636.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE FUNDS AND GUARANTEED ACCUMULATION ACCOUNT. ALL PROSPECTUSES SHOULD BE READ
AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERS CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
DEFINITIONS.............................. 3
PROSPECTUS SUMMARY....................... 5
FEE TABLE................................ 6
CONDENSED FINANCIAL
INFORMATION.............................. 9
PERFORMANCE DATA......................... 11
THE COMPANY.............................. 12
VARIABLE ANNUITY ACCOUNT C............... 12
THE FUNDS................................ 12
Fund Investment Advisers................ 14
Mixed and Shared Funding................ 15
Opportunity Plus Processing Office...... 15
PURCHASE OF CONTRACT
Purchase................................ 16
Net Purchase Payments................... 16
Distribution............................ 16
DETERMINING CONTRACT VALUE
Accumulation Units...................... 17
Net Investment Factor .................. 17
CONTRACT RIGHTS
Right to Cancel......................... 17
Rights Under the Contract............... 18
Allocation Changes and
Transfers............................... 18
Withdrawals............................. 18
Withdrawal Restrictions................. 19
Reinvestment Privilege.................. 19
Contract Loans.......................... 19
DEDUCTIONS AND CHARGES
Maintenance Fee......................... 21
Mortality and Expense Risk Charges...... 21
Administrative Expense
Charge.................................. 21
Fund Expenses........................... 21
<CAPTION>
Page
<S> <C>
Deferred Sales Charge................... 21
Premium Tax............................. 23
Commissions and Expenses................ 23
Loans................................... 24
ADDITIONAL WITHDRAWAL OPTIONS............ 24
Estate Conservation Option ............. 25
Systematic Withdrawal Option ........... 25
ANNUITY PERIOD........................... 26
Annuity Period Elections................ 26
Annuity Options......................... 27
Lifetime.............................. 27
Non lifetime.......................... 27
DEATH BENEFIT............................ 27
Accumulation Period..................... 28
Annuity Period.......................... 28
TAX STATUS
Federal Tax Status of the Company....... 28
Tax Status of the Contract.............. 29
Tax Status of Amounts Distributed....... 29
Accumulation Period................... 30
Annuity Period........................ 30
MISCELLANEOUS
Voting Rights........................... 30
Modification of the Contract............ 31
Contract Holder/Participant Inquiries... 31
Telephone Transfers..................... 31
Transfer of Ownership; Assignment....... 31
Agreement between NYSUT and the Company. 32
Legal Proceedings....................... 32
Legal Matters........................... 32
STATEMENT OF ADDITIONAL INFORMATION --
TABLE OF CONTENTS........................ 33
APPENDIX I -- Guaranteed Accumulation
Account.................................. 34
APPENDIX II -- Fixed Account............. 36
HYPOTHETICAL TABLES...................... 37
</TABLE>
2
<PAGE>
DEFINITIONS
As used in this Prospectus, the following terms have the meanings shown:
ACCUMULATION PERIOD: The period during which Purchase Payment(s) credited to an
Account are invested to fund future annuity payments..
ACCUMULATION UNIT: A measure of the value of the Separate Account assets
attributable to each Fund used as a variable funding option.
AGGREGATE PURCHASE PAYMENT(S): The sum of all Purchase Payment(s) made under an
Individual Account.
ANNUITANT: A natural person on whose life an Annuity payment is based.
ANNUITY: A series of payments for life, for a definite period or a combination
of the two.
ANNUITY PERIOD: The period during which Annuity payments are made.
ANNUITY UNIT: A measure of the value attributable to each Fund selected during
the Annuity Period.
CODE: Internal Revenue Code of 1986, as amended.
COMPANY: Aetna Life Insurance and Annuity Company, sometimes referred to as
"we" or "us."
CONTRACT: The group deferred, variable annuity contracts offered by this
Prospectus.
CONTRACT HOLDER: The entity to which the Contract is issued. The Contract
Holder is usually the employer.
CONTRACT YEAR: The period of 12 months measured from the Contract's effective
date or from any anniversary of such effective date.
DISTRIBUTOR(S): The registered broker-dealer(s) which have entered into selling
agreements with the Company to offer and sell the Contracts. The Company may
also serve as a Distributor.
EFFECTIVE DATE: The date the Company accepts and approves the Contract
application or enrollment form, as applicable.
FUNDS: The mutual funds offered as variable funding options for the investment
of assets of the Separate Account under the Contracts.
GAA: Guaranteed Accumulation Account, the credited interest option available in
certain jurisdictions for deposits under the Contract.
HOME OFFICE: The Company's principal executive offices located at 151
Farmington Avenue, Hartford, Connecticut 06156.
INDIVIDUAL ACCOUNT: A record established for each Participant to identify
Contract values accumulated on the Participant's behalf during the Accumulation
Period. The Individual Account includes amounts held under an installment
Purchase Payment Contract and a single Purchase Payment Contract for one
Participant.
INDIVIDUAL ACCOUNT VALUE: The dollar value of amounts held in an Individual
Account as of any Valuation Period, including the value of the Accumulation
Units in the Funds, the amounts held in GAA, and any amounts invested in the
Fixed Account, plus interest earned on those amounts, less any maintenance fees
due, but excluding amounts used for Annuity Options.
3
<PAGE>
INDIVIDUAL ACCOUNT YEAR: The period of 12 months measured from the Individual
Account's Effective Date or from an anniversary of such Effective Date.
NET PURCHASE PAYMENT(S): The Purchase Payment(s) less premium taxes, if
applicable.
NYSUT: New York State United Teachers Trust.
OPPORTUNITY PLUS PROCESSING OFFICE: The Opportunity Plus administrative
headquarters. The mailing address is P.O. Box 12894, Albany, New York 12212-
2894.
PARTICIPANT: An eligible person acquiring an interest in the Opportunity Plus
Contract under the person's employer's Plan. (Referred to in this Prospectus as
"you".)
PLAN: A retirement plan adopted by your employer under the provision of Section
403(b) for which the Contracts are offered.
PURCHASE PAYMENT(S): The gross payment(s) made to the Company under a Contract.
PURCHASE PAYMENT PERIOD: For installment Purchase Payment Contracts, the period
of time for completion of the agreed-upon annual number and amount of Purchase
Payments. For example, if it is determined that the Purchase Payment Period
will consist of 12 payments per year and only 11 payments are made, the
Purchase Payment Period is not completed until the twelfth Purchase Payment is
made. When a particular remittance is intended to include more than one regular
Purchase Payment, we will credit the number of Purchase Payments represented by
such remittance in determining the Purchase Payment Period. However, the number
of completed Purchase Payment Periods may never be greater than the number of
full calendar years since the date an Individual Account is established under
the Contract.
SBA: Systematized Benefits Administrators, Inc.
SEC: Securities and Exchange Commission.
SEPARATE ACCOUNT: Variable Annuity Account C, an account that segregates assets
from other assets of the Company. The Separate Account holds shares of the
Funds acquired for the Contracts. The Company holds title to the assets held in
the Separate Account.
UNDERWRITER: The registered broker-dealer which contracts with other registered
broker-dealers on behalf of the Separate Accounts to offer and sell the
Contracts.
VALUATION PERIOD: The period of time from when a Fund determines its net asset
value until the next time it determines its net asset value, usually from 4:15
p.m. Eastern time each day the New York Stock Exchange is open until 4:15 p.m.
the next such day.
VALUATION RESERVE: A reserve established pursuant to the insurance laws of
Connecticut to measure voting rights during the Annuity Period and the value of
a commutation right available under the "Payments for a Specified Period"
nonlifetime Annuity option when elected on a variable basis under the Contract.
VARIABLE ANNUITY CONTRACT: An Annuity Contract providing for the accumulation
of values and/or for Annuity payments which vary in dollar amount with
investment results.
4
<PAGE>
PROSPECTUS SUMMARY
CONTRACTS OFFERED
The two Contracts described in this prospectus are group, deferred, variable
annuity contracts. One allows lump-sum payments and the other allows
installment payments. The Contracts are designed to allow the accumulation of
assets and to provide retirement benefits under retirement plans under Section
403(b) of the Code by school boards and public universities in the state of
New York, for Participants who are members of NYSUT. See "Contract Rights" and
"Miscellaneous--Agreement Between NYSUT and the Company."
The Contracts are available to Plans that include a variable annuity contract
alone or in conjunction with retail mutual funds for which Systematized
Benefits Administrators, Inc. ("SBA"), a subsidiary of the Company, has agreed
to perform recordkeeping services and to provide consolidated statements. SBA
may receive compensation for these services, but such compensation will
generally not be charged to the Separate Account nor be deducted from a
Participant's Individual Account under the Contract.
PURCHASE
The Contracts may be purchased by eligible organizations on behalf of a group
made up of their employees. Eligible employees may participate in the Contract
by completing an enrollment form (and any other required forms) and submitting
it to our Opportunity Plus Processing Office with an initial Purchase Payment.
Purchase Payments are made by salary reduction or by lump sum payments from an
eligible, existing plan. See "Purchase of Contract."
REDEMPTION
You may redeem all or a portion of your Individual Account Value during the
Accumulation Period; however, the Code restricts full and partial withdrawals
in certain circumstances. Amounts withdrawn may be subject to a deferred sales
charge. The maximum deferred sales charge that could be assessed on a full or
partial withdrawal is 5% of the amount withdrawn. See "Deductions and
Charges -- Deferred Sales Charge." Amounts withdrawn from GAA may be subject
to a market value adjustment. See Appendix I.
TAXES AND WITHHOLDING
A 10% federal tax penalty and a 20% withholding for income tax may also be
imposed on certain withdrawals. See "Tax Status -- Tax Status of Amounts
Distributed."
CONTRACT CHARGES
Certain charges are associated with these Contracts, for example, mortality
and expense risk charges, administrative expense charges and maintenance fees.
The Funds are also subject to certain fees and expenses. See "Deductions and
Charges" for a complete explanation of these charges.
FREE LOOK PROVISION
Participants and Contract Holders have the right to cancel their purchase
within 10 days after receiving the Certificate or Contract by returning it to
us along with a written notice of cancellation within the ten days. See
"Contract Rights -- Right to Cancel."
5
<PAGE>
FEE TABLE
(Based on year ended December 31, 1994)
THE PURPOSE OF THE FEE TABLE IS TO ASSIST CONTRACT HOLDERS IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT WILL BE BORNE, DIRECTLY OR INDIRECTLY, UNDER
THE CONTRACTS. THE INFORMATION LISTED REFLECTS THE CHARGES DUE UNDER THE CON-
TRACTS AS WELL AS THE FEES AND EXPENSES DEDUCTED FROM THE FUNDS. ADDITIONAL IN-
FORMATION REGARDING THE CHARGES AND DEDUCTIONS ASSESSED UNDER THE CONTRACT CAN
BE FOUND UNDER "DEDUCTIONS AND CHARGES" IN THIS PROSPECTUS. FOR MORE INFORMA-
TION REGARDING EXPENSES PAID OUT OF THE ASSETS OF A PARTICULAR FUND, SEE THE
FUND'S PROSPECTUS.
CONTRACT HOLDER TRANSACTION EXPENSES
- ------------------------------------
DEFERRED SALES CHARGE (as a percentage of amount withdrawn)/(1)/:
INSTALLMENT PURCHASE PAYMENT CONTRACT
(based on Completed Purchase Deduction
Payment Periods) ---------
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or 10 2%
more than 10 0%
SINGLE PURCHASE PAYMENT CONTRACT None
ANNUAL CONTRACT MAINTENANCE FEE
- -------------------------------
Installment Purchase Payment Contract $15.00
Single Premium Purchase Payment Contract 0.00
SEPARATE ACCOUNT ANNUAL EXPENSES
- --------------------------------
(Daily deductions, equal to the percentage shown on an annual basis, made from
amounts allocated to the variable options)
Mortality and Expense Risk Fees 1.25%
Administrative Expense Charge/(2)/ 0%
-----
Total Separate Account Annual Expenses 1.25%
=====
/(1)/ The total amount deducted for the deferred sales charge will not exceed
8.5% of the total Purchase Payments actually made to the Individual
Account. The deferred sales charge may be referred to in the Contract as a
"surrender fee." See "Deductions and Charges -- Deferred Sales Charge" for
instances in which this charge may be waived. The deferred sales charge is
being waived for amounts deposited in the Funds or GAA on or after April
1, 1995.
/(2)/ We currently do not impose an administrative expense charge: however, we
reserve the right to deduct a daily charge of not more than 0.25% per year
from the portion of Individual Account Values held in the Separate
Account.
6
<PAGE>
MUTUAL FUND ANNUAL EXPENSES
(Except as noted, the following figures are a percentage of average net assets
and, except where otherwise indicated, are based on figures for the year ended
December 31, 1994)
<TABLE>
<CAPTION>
INVESTMENT OTHER TOTAL
ADVISORY FEES/(1)/ EXPENSES/(2)/ FUND
(AFTER EXPENSE (AFTER EXPENSE ANNUAL
REIMBURSEMENT) REIMBURSEMENT) EXPENSES
------------------ -------------- --------
<S> <C> <C> <C>
Aetna Variable Fund .25% .05% .30%
Aetna Income Shares .25% .08% .33%
Aetna Variable Encore Fund .25% .07% .32%
Aetna Investment Advisers Fund, Inc. .25% .07% .32%
Alger American Growth Portfolio .75% .11% .86%
Alger American Small Cap Portfolio .85% .11% .96%
Calvert Socially Responsible Series .70% .10% .80%
Fidelity Asset Manager Portfolio .72% .08% .80%
Fidelity Contrafund Portfolio/(3)/ .62% .27% .89%
Fidelity Equity-Income Portfolio .52% .06% .58%
Fidelity Index 500 Portfolio .28% .00% .28%
Franklin Government Securities Trust/(4)/ .472% .16% .632%
Janus Aspen Aggressive Growth Portfolio/(5)/ .77% .28% 1.05%
Janus Aspen Growth Portfolio/(5)/ .66% .22% .88%
Janus Aspen Short-Term Bond Portfolio/(5)/ .65% .00% .65%
Janus Aspen Worldwide Growth Portfolio/(5)/ .69% .49% 1.18%
Lexington Emerging Markets Fund, Inc./(6)/ .85% .45% 1.30%
Lexington Natural Resources Trust 1.00% .55% 1.55%
Neuberger & Berman Growth Portfolio/(7)/ .79% .12% .91%
Scudder International Portfolio .875% .205% 1.08%
TCI Growth/(8)/ 1.00% .00% 1.00%
</TABLE>
- -------
/(1)/ Certain of the unaffiliated Fund advisers reimburse us for administrative
costs incurred in connection with administering the Funds as variable
funding options. These reimbursements are paid out of the advisers'
investment advisory fees and are not charged to investors.
/(2)/ A mutual fund's "Other Expenses" include operating costs of the Fund. The
deductions of the above expenses are reflected in the Fund's net asset
value -- not deducted from the Contract Holder's or your Individual
Account Value.
/(3)/ This Fund has only limited operating history, and therefore the expenses
are estimated for the current fiscal year.
/(4)/ The investment adviser for the Franklin Government Securities Trust has
agreed to reduce the investment advisory fee and to reimburse the Fund for
certain expenses. Without this agreement, the Advisory Fee would be
0.472%, the Other Expenses would be 0.63% and Total Annual Expenses for
the Franklin Government Securities Trust would be 0.78%.
/(5)/ The expense figures shown are net of certain expense waivers from Janus
Capital Corporation. Without such waivers, Investment Advisory Fees, Other
Expenses and Total Mutual Fund Annual Expenses for the Portfolios for the
fiscal year ended December 31, 1994 were: 1.00%, 0.28% and 1.28%,
respectively, for Janus Aspen Aggressive Growth Portfolio; 1.00%, 0.22%
and 1.22%, respectively, for Janus Aspen Growth Portfolio; 0.65%, 0.75%
and 1.40%, respectively, for Short-Term Bond Portfolio; and 1.00%, 0.49%
and 1.49%, respectively, for Janus Aspen Worldwide Growth Portfolio.
/(6)/ The Fund's Adviser has agreed to reimburse the fund so that the total
expenses of the fund (excluding taxes, brokerage, and extraordinary
expenses) will not exceed an annual rate of 1.30% of the fund's average
net assets. Without this agreement, it is estimated that the fund's
Investment Advisory Fee, Total Other Expenses and Total Mutual Fund Annual
Expenses would have been .85%, 5.43% and 6.28%, respectively.
/(7)/ Until May 1, 1995, the Portfolio had a Distribution Plan pursuant to Rule
12b-1 which provided for the reimbursement by Neuberger & Berman
Management of certain distribution expenses, up to a maximum of 0.25% on
an annual basis of the Portfolio's average daily net assets. The "Total
Annual Expenses" shown above would be increased by 0.02% if the 12b-1 fees
for the months of January through April, 1995 were taken into account.
/(8)/ Certain other expenses are borne by TCI Growth's investment adviser and
are reflected in the management fee.
7
<PAGE>
HYPOTHETICAL ILLUSTRATION (EXAMPLE)
THIS EXAMPLE IS PURELY HYPOTHETICAL. IT SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR EXPECTED RETURN. ACTUAL EXPENSES
AND/OR RETURN MAY BE MORE OR LESS THAN THOSE SHOWN BELOW.
Assuming a 5% annual return on assets, you would have paid the following
expenses on a $1,000 investment:(/1/)
<TABLE>
<CAPTION>
If you withdraw your entire If you do not withdraw your
Individual Account Value at entire Individual Account Value
the end of the applicable or if you annuitize:
time period:
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund $68 $106 $146 $190 $16 $51 $ 87 $190
Aetna Income Shares $68 $107 $148 $194 $17 $52 $ 89 $194
Aetna Variable Encore
Fund $68 $106 $147 $193 $17 $51 $ 88 $193
Aetna Investment
Advisers Fund, Inc. $68 $106 $147 $193 $17 $51 $ 88 $193
Alger American Growth
Portfolio $73 $122 $174 $250 $22 $68 $116 $250
Alger American Small Cap
Portfolio $74 $125 $178 $260 $23 $71 $121 $260
Calvert Socially
Responsible Series $73 $120 $171 $243 $21 $66 $113 $243
Fidelity Asset Manager
Portfolio $73 $120 $171 $243 $21 $66 $113 $243
Fidelity Contrafund
Portfolio $74 $123 $175 $253 $22 $69 $118 $253
Fidelity Equity-Income
Portfolio $71 $114 $160 $220 $19 $59 $102 $220
Fidelity Index 500
Portfolio $68 $105 $145 $188 $16 $50 $ 86 $188
Franklin Government
Securities Trust $71 $116 $163 $226 $20 $61 $104 $226
Janus Aspen Aggressive
Growth Portfolio $75 $128 $183 $269 $24 $73 $126 $269
Janus Aspen Growth
Portfolio $74 $123 $175 $252 $22 $68 $117 $252
Janus Aspen Short-Term
Bond Portfolio $71 $116 $163 $228 $20 $61 $105 $228
Janus Aspen Worldwide
Growth Portfolio $76 $131 $189 $282 $25 $77 $132 $282
Lexington Emerging
Markets Fund, Inc. $78 $135 $194 $294 $26 $81 $138 $294
Lexington Natural
Resources Trust $80 $142 $206 $318 $29 $88 $151 $318
Neuberger & Berman
Growth Portfolio $74 $124 $176 $255 $22 $69 $119 $255
Scudder International
Portfolio $75 $128 $184 $272 $24 $74 $127 $272
TCI Growth $75 $126 $180 $264 $23 $72 $123 $264
</TABLE>
/(1)/ The illustration reflects the $15 annual maintenance fee as an annual
charge of 0.053% of assets.
8
<PAGE>
CONDENSED FINANCIAL INFORMATION
(SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD)
THE CONDENSED FINANCIAL INFORMATION PRESENTED BELOW FOR EACH OF THE YEARS IN
THE TEN-YEAR PERIOD ENDED DECEMBER 31, 1994 (AS APPLICABLE), IS DERIVED FROM
THE FINANCIAL STATEMENTS OF THE ACCOUNT, WHICH FINANCIAL STATEMENTS HAVE BEEN
AUDITED BY KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS. THE FINANCIAL
STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1994 AND THE INDEPENDENT
AUDITORS' REPORT THEREON, ARE INCLUDED IN THE STATEMENT OF ADDITIONAL
INFORMATION.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ----------
AETNA VARIABLE FUND
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of period $107.925 $102.383 $ 97.165 $77.845 $76.311 $59.871
Value at end of period $105.558 $107.925 $102.383 $97.165 $77.845 $76.311
Increase (decrease) in value of
accumulation unit/(1)/ (2.19)% 5.41% 5.37% 24.82% 2.01% 27.46%
Number of accumulation units
outstanding at end of period 13,966,072 21,148,863 24,201,565 20,948,226 18,362,906 17,142,820
<CAPTION>
AETNA INCOME SHARES
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of period $42.283 $39.038 $36.789 $31.192 $28.943 $25.574
Value at end of period $40.173 $42.283 $39.038 $36.789 $31.192 $28.943
Increase (decrease) in value of
accumulation unit/(1)/ (4.99)% 8.31% 6.11% 17.94% 7.77% 13.17%
Number of accumulation units
outstanding at end of period 5,108,720 8,210,666 8,507,292 7,844,412 6,984,793 6,202,834
<CAPTION>
AETNA VARIABLE ENCORE FUND
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of period $35.282 $34.619 $33.812 $32.138 $30.012 $27.783
Value at end of period $36.271 $35.282 $34.619 $33.812 $32.138 $30.012
Increase (decrease) in value of
accumulation unit/(1)/ 2.80% 1.92% 2.39% 5.21% 7.08% 8.02%
Number of accumulation units
outstanding at end of period 3,679,802 5,086,515 7,534,662 8,430,082 10,220,110 8,286,033
<CAPTION>
AETNA INVESTMENT ADVISERS FUND, INC.
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of period $14.519 $13.379 $12.736 $10.896 $10.437 $10.000/(2)/
Value at end of period $14.270 $14.519 $13.379 $12.736 $10.896 $10.437
Increase (decrease) in value of
accumulation unit/(1)/ (1.71)% 8.52% 5.05% 16.89% 4.40% 4.37%
Number of accumulation units
outstanding at end of period 21,990,186 30,784,750 34,802,433 22,898,099 17,078,985 9,535,986
<CAPTION>
ALGER AMERICAN SMALL CAP PORTFOLIO
<S> <C> <C>
Value at beginning of period $10.072 $10.000/(3)/
Value at end of period $ 9.513 $10.072
Increase (decrease) in value of
accumulation unit/(1)/ (5.55)% 0.72%
Number of accumulation units
outstanding at end of period 665,518 51,327
<CAPTION>
CALVERT SOCIALLY RESPONSIBLE SERIES INC.
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of period $14.640 $13.726 $12.913 $11.233 $10.568 $10.000/(4)/
Value at end of period $13.990 $14.640 $13.726 $12.913 $11.233 $10.568
Increase (decrease) in value of
accumulation unit/(1)/ (4.44)% 6.66% 6.30% 14.96% 6.29% 5.68%
Number of accumulation units
outstanding at end of period 743,464 705,415 503,006 355,851 148,576 20,710
<CAPTION>
FIDELITY ASSET MANAGER PORTFOLIO
<S> <C>
Value at beginning of period $10.000/(5)/
Value at end of period $ 9.447
Increase (decrease) in value of
accumulation unit/(1)/ (5.53)%
Number of accumulation units
outstanding at end of period 1,254,504
<CAPTION>
1988 1987 1986 1985
---------- ---------- ---------- ----------
AETNA VARIABLE FUND
<S> <C> <C> <C> <C>
Value at beginning of period $52.885 $50.760 $43.205 $33.323
Value at end of period $59.871 $52.885 $50.760 $43.205
Increase (decrease) in value of
accumulation unit/(1)/ 13.21% 4.19% 17.49% 29.66%
Number of accumulation units
outstanding at end of period 16,455,396 16,497,406 16,578,251 14,186,456
<CAPTION>
AETNA INCOME SHARES
<S> <C> <C> <C> <C>
Value at beginning of period $24.061 $23.308 $20.703 $17.145
Value at end of period $25.574 $24.061 $23.308 $20.703
Increase (decrease) in value of
accumulation unit/(1)/ 6.29% 3.23% 12.58% 20.75%
Number of accumulation units
outstanding at end of period 5,955,293 5,372,271 6,188,470 4,673,837
<CAPTION>
AETNA VARIABLE ENCORE FUND
<S> <C> <C> <C> <C>
Value at beginning of period $26.171 $24.812 $23.504 $21.942
Value at end of period $27.783 $26.171 $24.812 $23.504
Increase (decrease) in value of
accumulation unit/(1)/ 6.16% 5.48% 5.57% 7.12%
Number of accumulation units
outstanding at end of period 8,154,644 7,326,151 6,692,947 7,220,756
</TABLE>
9
<PAGE>
CONDENSED FINANCIAL INFORMATION (CONTINUED)
(SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989
--------- ---------- ---------- ---------- ---------- ----------
FRANKLIN GOVERNMENT SECURITIES TRUST
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of
period $14.929 $14.050 $13.219 $11.545 $10.581 $10.000/(6)/
Value at end of period $14.109 $14.990 $14.050 $13.219 $11.545 $10.581
Increase (decrease) in
value of accumulation
unit/(1)/ (4.95)% 6.26% 6.29% 14.50% 9.11% 5.81%
Number of accumulation
units outstanding at
end of period 804,457 960,629 810,155 627,552 178,761 25,258
<CAPTION>
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
<S> <C>
Value at beginning of
period $10.000/(7)/
Value at end of period $12.169
Increase (decrease) in
value of accumulation
unit(/1/) 21.69%
Number of accumulation
units outstanding at
end of period 393,553
<CAPTION>
LEXINGTON EMERGING MARKETS FUND, INC.
<S> <C>
Value at beginning of
period $10.000/(8)/
Value at end of period $ 8.772
Increase (decrease) in
value of accumulation
unit(/1/) (12.28)%
Number of accumulation
units outstanding at
end of period 144,750
<CAPTION>
LEXINGTON NATURAL RESOURCES TRUST
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of
period $10.071 $ 9.193 $ 9.018 $ 9.608 $11.441 $10.000/(9)/
Value at end of period $ 9.412 $10.071 $ 9.193 $ 9.018 $ 9.608 $11.441
Increase (decrease) in
value of accumulation
unit/(1)/ (6.54)% 9.55% 1.94% (6.14)% (16.02)% 14.41%
Number of accumulation
units outstanding at
end of period 533,016 341,771 198,338 144,139 75,052 11,481
<CAPTION>
NEUBERGER & BERMAN GROWTH PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of
period $14.278 $13.536 $12.511 $ 9.769 $10.772 $10.000/(10)/
Value at end of period $13.398 $14.278 $13.536 $12.511 $ 9.769 $10.772
Increase (decrease) in
value of accumulation
unit/(1)/ (6.16)% 5.48% 8.19% 28.07% (9.31)% 7.72%
Number of accumulation
units outstanding at
end of period 2,107,525 1,927,674 1,346,898 971,985 482,220 68,885
<CAPTION>
SCUDDER INTERNATIONAL PORTFOLIO*
<S> <C> <C> <C> <C> <C> <C>
Value at beginning of
period $13.508 $ 9.922 $10.239* $ 9.256 $10.306 $10.000/(11)/
Value at end of period $13.227 $13.508 $ 9.922 $10.239 $ 9.256 $10.306
Increase (decrease) in
value of accumulation
unit/(1)/ (2.08)% 36.14% (3.10)% 10.62% (10.19)% 3.06%
Number of accumulation
units outstanding at
end of period 4,240,412 2,371,037 1,161,007 779,667 317,829 32,902
<CAPTION>
TCI GROWTH
<S> <C> <C> <C>
Value at beginning of
period $11.443 $10.495 $10.000/(12)/
Value at end of period $11.172 $11.443 $10.495
Increase (decrease) in
value of accumulation
unit/(1)/ (2.37)% 9.03% 4.95%
Number of accumulation
units outstanding at
end of period 1,608,362 1,016,894 232,832
</TABLE>
/(1)/ The above figures are calculated by subtracting the beginning Accumula-
tion Unit value from the ending Accumulation Unit value during a calendar
year, and dividing the result by the beginning Accumulation Unit value.
These figures do not reflect the deferred sales charge or the fixed dol-
lar annual maintenance fee, if any. Inclusion of these charges would re-
duce the investment results shown.
/(2)/ The initial Accumulation Unit value was established at $10.000 on June
23, 1989, the date on which the Fund commenced operations.
/(3)/ The initial Accumulation Unit value was established at $10.000 on
September 17, 1993. The Portfolio became available under the Contract on
March 15, 1994.
/(4)/ The initial Accumulation Unit value was established at $10.000 on May 31,
1989, the date on which the Fund became available under the Contract.
/(5)/ The initial Accumulation Unit value was established at $10.000 during
March 1994, when funds were first received under this option.
/(6)/ The initial Accumulation Unit value was established at $10.000 on June 7,
1989, the date on which the Fund became available under the Contract.
/(7/) The initial Accumulation Unit value was established at $10.000 during
June 1994, when funds were first received in this option.
/(8/) The initial Accumulation Unit value was established at $10.000 during Oc-
tober 1994, when funds were first received in this option.
/(9/) The initial Accumulation Unit value was established at $10.000 on May 31,
1989, the date on which the Fund became available under the Contract.
/(10)/ The initial/Accumulation Unit value was established at $10.000 on May 31,
1989, the date on which the Portfolio became available under the Con-
tract.
/(11)/ The initial/Accumulation Unit value was established at $10.000 on July 5,
1989, the date on which the Portfolio became available under the Con-
tract.
/(12)/ The initial/Accumulation Unit value was established at $10.000 on Septem-
ber 21, 1992, the date on which the Portfolio became available under the
Contract.
* Formerly T. Rowe Price International Equity Fund. On April 27, 1992, the
Fund's assets were liquidated and merged into Scudder Variable Life
Investment Fund--Managed International Portfolio. The Accumulation Unit
value following the merger was $10.051.
10
<PAGE>
PERFORMANCE DATA
From time to time, performance data for the various investment options under
the Contracts may be advertised by us. Such data will show the percentage
change in the value of an Accumulation Unit based on the performance of a
variable option over a period of time, usually a calendar year. It is
determined by dividing the increase (decrease) in value for that unit by the
Accumulation Unit value at the beginning of the period. This percentage figure
will reflect the deduction of the maintenance fee and any asset based charges
under the Contracts but will not reflect the deduction of any applicable
deferred sales charge. The deduction of any applicable deferred sales charge
would reduce any percentage increase or make greater any percentage decrease.
For Funds that were in existence prior to the date that the Fund became
available under the Contract, the performance data will show the investment
performance that such Fund would have achieved (reduced by the applicable
charges) had it been available under the Contract for the period quoted.
Sales literature which compares the percentage change in Accumulation Unit
values for any of the Funds against established market indexes such as the
Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average or to
the percentage change in values of other management investment companies which
have investment objectives similar to the Fund being compared may be
distributed by us.
Any advertisement will also include total return figures calculated as
described in the Statement of Additional Information. The total return figures
do reflect the deduction of any applicable maintenance fees and deferred sales
charge, as well as any asset based charges.
We may publish in advertisements and reports to Contract Holders and
Participants, the ratings and other information assigned to us by one or more
independent rating organizations such as A.M. Best Company, Standard & Poor's
and Moody's Investors Service, Inc. The purpose of the ratings is to reflect
the financial strength and/or claims-paying ability of the Company. We may
also quote ranking services, such as Morningstar's Annuity/Life Performance
Report, and Lipper's Variable Insurance Products Performance Analysis Service
(VIPPAS), which rank variable annuity or life subaccounts by performance
and/or investment objective. From time to time, we will quote articles from
newspapers and magazines or other publications or reports, including, but not
limited to The Wall Street Journal, Money magazine, USA Today and The VARDS
Report.
11
<PAGE>
THE COMPANY
Aetna Life Insurance and Annuity Company is a stock life insurance company
organized in 1976 under the insurance laws of Connecticut; it is the depositor
for Variable Annuity Account C. As of December 31, 1994, the Company managed
over $19.9 billion of assets. It is a wholly owned subsidiary of Aetna Life and
Casualty Company which, with its subsidiaries, constitutes one of the nation's
largest diversified financial services organizations. The Company's Home Office
is located at 151 Farmington Avenue, Hartford, Connecticut 06156.
VARIABLE ANNUITY ACCOUNT C
Variable Annuity Account C is a separate account established by us in 1976
pursuant to the insurance laws of the state of Connecticut. The Separate
Account was formed for the purpose of segregating assets attributable to the
variable portions of Contracts from the Company's other assets. The Separate
Account is registered as a unit investment trust under the Investment Company
Act of 1940.
Although the Company holds title to the assets of the Separate Account, such
assets are not chargeable with liabilities arising out of any other business we
may conduct. Income, gains or losses of the Separate Account are credited to or
charged against the assets of the Separate Account without regard to the
Company's other income, gains or losses. All obligations arising under the
Contracts are the Company's general corporate obligations.
THE FUNDS
The Contract Holder will designate some or all of the mutual funds described
below as variable funding options under the Contract. You may select one or
more of the Funds for investment of your Purchase Payments. Except where noted,
all of the Funds are diversified as defined in the Investment Company Act of
1940.
. Aetna Variable Fund (sometimes called the "Growth and Income Fund") seeks
to maximize total return through investments in a diversified portfolio
of common stocks and securities convertible into common stock.
. Aetna Income Shares (sometimes called the "Bond Fund") seeks to maximize
total return, consistent with reasonable risk, through investments in a
diversified portfolio consisting primarily of debt securities.
. Aetna Variable Encore Fund (sometimes called the "Money Market Fund")
seeks to provide high current return, consistent with preservation of
capital and liquidity, through investment in high-quality money market
instruments. An investment in the Fund is neither insured nor guaranteed
by the U.S. Government.
. Aetna Investment Advisers Fund, Inc. (sometimes called the "Managed
Fund") seeks to maximize investment return consistent with reasonable
safety of principal by investing in one or more of the following asset
classes: stocks, bonds and cash equivalents, based on the Company's
judgment of which of those sectors or mix thereof offers the best
investment prospects.
. Alger American Fund--Alger American Growth Portfolio ("Alger American
Growth Portfolio") seeks long-term capital appreciation by investing in a
diversified, actively managed portfolio of equity securities, primarily
of companies with total market capitalization -- present market value per
share multiplied by the total number of shares outstanding -- of $1
billion or greater. Income is a consideration in the selection of
investments but is not an investment objective.
. Alger American Fund--Alger American Small Capitalization Portfolio
("Alger American Small Cap Portfolio") seeks capital return through
investment in the common stock of smaller companies offering the
potential for significant price gain. It invests at least 85% of its net
assets in equity securities and at least 65% of its net assets in equity
securities of companies that, at the time of
12
<PAGE>
purchase, have "total market capitalization"-- present market value per
share multiplied by the total number of shares outstanding--of less than
$1 billion. Investing in smaller companies may present risks not present
in investments in larger companies. See the fund's prospectus for a
discussion of these risks.
. Calvert Socially Responsible Series is a nondiversified portfolio that
seeks growth of capital through investment in enterprises that make a
significant contribution to society through their products and services
and through the way they do business.
. Fidelity Investments Variable Insurance Products Fund II -- Asset Manager
Portfolio ("Fidelity Asset Manager Portfolio") seeks high total return
with reduced risk over the long-term by allocating its assets among
stocks, bonds and short-term fixed-income instruments.
. Fidelity Investments Variable Insurance Products Fund II -- Contrafund
Portfolio ("Fidelity Contrafund Portfolio")* seeks maximum total return
over the long term by investing its assets mainly in equity securities of
companies that are undervalued or out-of-favor.
. Fidelity Investments Variable Insurance Products Fund -- Equity-Income
Portfolio ("Fidelity Equity - Income Portfolio")* seeks reasonable income
by investing primarily in income-producing equity securities. In choosing
these securities, the Fund will also consider the potential for capital
appreciation.
. Fidelity Investments Variable Insurance Products Fund II -- Index 500
Portfolio ("Fidelity Index 500 Portfolio")* seeks to provide investment
results that correspond to the total return of common stocks publicly
traded in the United States by duplicating the composition and total
return of the Standard & Poor's 500 Composite Stock Price Index.
. Franklin Government Securities Trust seeks income through investments in
obligations of the U.S. Government or its agencies or instrumentalities,
primarily GNMA obligations.
. Janus Aspen Series--Aggressive Growth Portfolio ("Janus Aspen Aggressive
Growth Portfolio") is a nondiversified portfolio that seeks long-term
growth of capital by emphasizing investments in common stocks of
companies with a market capitalization between $1 billion and $5 billion.
. Janus Aspen Series--Growth Portfolio ("Janus Aspen Growth Portfolio")*
seeks long-term growth of capital by investing primarily in a diversified
portfolio of common stocks of a large number of issuers of any size. The
Portfolio generally emphasizes issuers with large market capitalizations.
. Janus Aspen Series--Short-Term Bond Portfolio ("Janus Aspen Short-Term
Bond Portfolio")* seeks as high a level of current income as is
consistent with preservation of capital by investing primarily in short-
and intermediate-term fixed income securities. The Portfolio will
normally maintain a dollar-weighted average portfolio maturity of less
than three years, but not to exceed five years depending upon its
portfolio manager's opinion of prevailing market, financial and economic
conditions.
. Janus Aspen Series-- Worldwide Growth Portfolio ("Janus Aspen Worldwide
Growth Portfolio")* seeks long-term growth of capital by investing
primarily in common stocks of companies of foreign and domestic issuers
of any size. The portfolio normally invests in issuers from at least five
different countries including the United States. International
investments involve risks not present in U.S. Securities.
. Lexington Emerging Markets Fund, Inc. seeks long-term growth of capital
primarily through investment in equity securities of companies domiciled
in, or doing business in emerging countries and emerging markets.
Investments in emerging markets involve risks not present in domestic
markets. See the Fund's prospectus for information on risks inherent in
this investment.
. Lexington Natural Resources Trust is a nondiversified portfolio that
seeks long-term growth of capital through investment primarily in common
stocks of companies which own, or develop natural resources and other
basic commodities or supply goods and services to such companies. Current
income will not be a factor. Total return will consist primarily of
capital appreciation. The
13
<PAGE>
fund may invest up to 25% of its total assets in foreign securities.
Foreign investing involves risks that differ from those involved in
domestic investing. See the fund's prospectus for a discussion of these
risks.
. Neuberger & Berman Advisers Management Trust--Growth Portfolio
("Neuberger & Berman Growth Portfolio") seeks capital growth through
investments in common stocks of companies that the investment adviser
believes will have above-average earnings or otherwise provide investors
with above-average potential for capital appreciation.
. Scudder Variable Life Investment Fund--International Portfolio ("Scudder
International Portfolio") seeks long-term growth of capital primarily
through diversified holdings of marketable foreign equity investments.
Investing in foreign securities may involve a greater degree of risk than
investing in domestic securities. See the Fund's prospectus for a
discussion of the risks involved.
. TCI Portfolios, Inc.--TCI Growth (a Twentieth Century Fund) ("TCI
Growth") seeks capital growth by investing in common stocks (including
securities convertible into common stocks) and other securities that meet
certain fundamental and technical standards of selection and, in the
opinion of TCI Growth's management, have better than average potential
for appreciation. TCI Growth tries to stay fully invested in such
securities, regardless of the movement of prices generally. The fund may
invest in foreign securities. Foreign investing involves risks that
differ from those involved in domestic investing. See the fund's
prospectus for a discussion of these risks.
- --------
* These Funds will be available on May 1, 1995 or as soon after that date as
the Company receives the appropriate regulatory authorizations.
There is no assurance that the Funds will achieve their investment objectives.
Participants bear the full investment risk of investments in the Funds
selected.
Additionally, some of the Funds may invest in instruments known as derivatives.
Certain derivatives create a higher risk of volatility in certain markets. More
comprehensive information, including a discussion of potential risks, is found
in the current prospectus for each Fund which is distributed with and must
accompany this Prospectus. Contract Holders and Participants should read the
accompanying prospectuses carefully before investing. Additional prospectuses
and the Statements of Additional Information for this Prospectus and each of
the Funds can be obtained from the Company's Home Office at the address and
telephone number listed on the cover of this Prospectus.
FUND INVESTMENT ADVISERS
The following identifies the investment adviser and the subadviser, if any, for
each Fund.
<TABLE>
<CAPTION>
FUND INVESTMENT ADVISER SUBADVISER
---- ------------------ ----------
<S> <C> <C>
Aetna Variable Fund Aetna Life Insurance --
and Annuity Company (ALIAC)
Aetna Income Shares ALIAC --
Aetna Variable Encore ALIAC --
Fund
Aetna Investment ALIAC --
Advisers Fund, Inc.
Alger American Growth Fred Alger Management, Inc. --
Portfolio
Alger American Small Cap Fred Alger Management, Inc. --
Portfolio
Calvert Socially Calvert Asset Management NCM Capital Management
Responsible Series Company, Inc. Group, Inc.
Fidelity Asset Manager Fidelity Management & --
Portfolio Research Company
</TABLE>
14
<PAGE>
FUND INVESTMENT ADVISERS (CONTINUED)
<TABLE>
<CAPTION>
FUND INVESTMENT ADVISER SUBADVISER
---- ------------------ ----------
<S> <C> <C>
Fidelity Contrafund Fidelity Management & --
Portfolio Research Company
Fidelity Equity-Income Fidelity Management & --
Portfolio Research Company
Fidelity Index 500 Portfolio Fidelity Management & --
Research Company
Franklin Government Franklin Advisers, Inc. --
Securities Trust
Janus Aspen Aggressive Janus Capital Corporation --
Growth Portfolio
Janus Aspen Growth Portfolio Janus Capital Corporation --
Janus Aspen Short-Term Bond Janus Capital Corporation --
Portfolio
Janus Aspen Worldwide Growth Janus Capital Corporation --
Portfolio
Lexington Emerging Lexington Management --
Markets Fund, Inc. Corporation
Lexington Natural Lexington Management Market Systems Research
Resources Trust Corporation Advisors, Inc.
Neuberger & Berman Growth Neuberger & Berman Neuberger & Berman
Portfolio Management Incorporated
Scudder International Scudder, Stevens & Clark, --
Portfolio Inc.
TCI Growth Investors Research --
Corporation
</TABLE>
MIXED AND SHARED FUNDING
Shares of all the Funds are sold to us for funding variable annuity contracts.
The Funds may be sold to other companies for the same purpose. This is
referred to as "shared funding." Shares of the Funds may also be used for
funding variable life insurance policies through variable life separate
accounts sponsored by us or by third parties. This is referred to as "mixed
funding."
It is conceivable that, in the future, it may be disadvantageous for variable
annuity separate accounts and variable life separate accounts of the same or
of an unaffiliated insurance company to invest in these Funds simultaneously,
since the interests of the contract holders or policy owners or insurance
companies may differ. Each Fund's Board of Trustees or Directors has agreed to
monitor events in order to identify any material irreconcilable conflicts
which may possibly arise and to determine what action, if any, should be taken
in response thereto. If such a conflict were to occur, one of the separate
accounts might withdraw its investment in a Fund. This might force that Fund
to sell portfolio securities at disadvantageous prices.
OPPORTUNITY PLUS PROCESSING OFFICE
We have established the Opportunity Plus Processing Office to provide
administrative support to Participants of the Opportunity Plus program. This
office will handle enrollments, billing, transfers, redemptions and inquiries
for all Opportunity Plus Participants. All forms and correspondence should be
sent to:
Aetna Life Insurance and Annuity Company
Opportunity Plus Processing Office
P.O. Box 12894
Albany, New York 12212-2894
Telephone number: 1-800-677-4636
15
<PAGE>
PURCHASE OF CONTRACT
PURCHASE
Two group Contracts may be issued to each school board to cover all present and
future Participants. Contracts are issued in allocated form which provides for
the establishment of an Individual Account for each Participant. Single Pur-
chase Payment Contracts are issued for lump-sum transfers to us of amounts ac-
cumulated under a pre-existing Plan. Installment Purchase Payment Contracts are
established to accept continuing periodic payments. We reserve the right to set
a minimum Purchase Payment on single Purchase Payment Contracts. Lump-sum
transfers below this minimum will be applied to an installment Purchase Payment
Contract. Once a Contract is issued, Participants may establish an Individual
Account by filling out an enrollment form.
The Contract application form, completed by the prospective Contract Holder, is
forwarded, together with the initial Purchase Payment, if any, to the
Opportunity Plus Processing Office, 18 Corporate Woods Boulevard, Fourth Floor,
Albany, NY 12211 for review acceptance or rejection. You may establish an
Individual Account by completing an enrollment form (and any other required
forms) and forwarding it to the Opportunity Plus Processing Office. The Company
must accept or reject an application or enrollment form within two business
days of its receipt. If the application or enrollment form is incomplete, the
Opportunity Plus Processing Office may hold it and any accompanying Purchase
Payment for five days. Purchase Payments may be held for longer periods only
with the consent of the Contract Holder or you, pending acceptance of the
application or enrollment form. Initial payments held for longer than the five
business days will be deposited in the Aetna Variable Encore Fund until the
forms are completed. If the application is accepted, a Contract will be issued
to the Contract Holder. Any Purchase Payment accompanying the application or
enrollment form or received prior to acceptance of the application, will be
invested as of the date of acceptance. If the application or enrollment form is
rejected, the application and any Purchase Payments will be returned to the
Contract Holder.
The Code imposes a maximum limit on annual Purchase Payments that may be
excluded from your gross income. Such limit must be calculated in accordance
with Sections 403(b), 415 and 402(g) of the Code. In addition, Purchase
Payments will be excluded from your gross income only if the 403(b) Plan meets
certain Code nondiscrimination requirements.
NET PURCHASE PAYMENTS
Each Purchase Payment is forwarded to the Opportunity Plus Processing Office
and, to the extent it is to be accumulated on a variable basis, is placed in
the Separate Account and credited to the Contract.
You may elect to have the Net Purchase Payment(s) accumulate (a) on a variable
basis by allocation to one or more of the available Funds; (b) on a fixed basis
under GAA or the Fixed Account; or (c) in a combination of any of the available
investment options. The Net Purchase Payment(s) must be allocated to the
respective options in increments of whole percentage amounts.
Under an installment Purchase Payment Contract, you may elect to change the
allocation of future Net Purchase Payments to any accumulation option described
above.
DISTRIBUTION
The Company will serve as Underwriter for the securities sold by this
Prospectus. The Company is registered as a broker-dealer with the Securities
and Exchange Commission and is a member of the National Association of
Securities Dealers, Inc. (NASD). As Underwriter, the Company will contract with
one or more registered broker-dealers ("Distributors") to offer and sell the
Contracts. The Company and one or more affiliates may also sell the Contracts
directly. All registered representatives of the Distributors must also be
licensed as insurance agents to sell Variable Annuity Contracts.
16
<PAGE>
DETERMINING CONTRACT VALUE
ACCUMULATION UNITS
A Purchase Payment that is directed to one or more of the Funds is deposited in
the Separate Account and credited to the Individual Account in the form of
Accumulation Units for each Fund selected. The number of Accumulation Units
credited is determined by dividing the applicable portion of the Purchase
Payment by that Contract's Accumulation Unit value of the appropriate Fund. The
Accumulation Unit value used is that next-computed following the date on which
a Purchase Payment is received, unless the application has not been accepted.
In that event, Purchase Payments will be credited at the Accumulation Unit
Value next determined after acceptance of the application. Shares of the Funds
are purchased by the Separate Account at the net asset value next determined by
the Fund following receipt of Purchase Payments by the Separate Account. The
value of Accumulation Units attributable to the Funds will be affected by the
investment performance, expenses and charges of those Funds.
Accumulation Units are valued separately for each Fund. Therefore, if you elect
to have a Purchase Payment invested in a combination of Funds, you will have
Accumulation Units credited from more than one source. The value of your
Individual Account as of the most recent Valuation Period, is determined by
adding the value of any Accumulation Units attributed to the Fund(s) you have
selected to the value of any amounts invested in a credited interest option.
NET INVESTMENT FACTOR
The value of an Accumulation Unit for any Valuation Period is calculated by
multiplying the Accumulation Unit value for the immediately preceding Valuation
Period by the net investment factor of the appropriate investment option for
the current period.
The net investment factor is calculated separately for each Fund in which
assets of Account C are invested. It is determined by adding 1.0000000 to the
net investment rate.
The net investment rate equals (a) the net assets of the Fund held by Account C
at the end of a Valuation Period, minus (b) the net assets of the Fund held by
Account C at the beginning of a Valuation Period, plus or minus (c) taxes or
provision for taxes, if any, attributable to the operation of Account C,
divided by (d) the value of the Fund's Accumulation and Annuity Units held by
Account C at the beginning of the Valuation Period, minus (e) a daily charge at
an annual rate of 1.25% for the Annuity mortality and expense risks, and a
daily administrative expense charge which will not exceed 0.25% (zero through
April 30, 1996) on an annual basis. The net investment rate may be more or less
than zero.
CONTRACT RIGHTS
RIGHT TO CANCEL
You may cancel your participation under the Contract no later than ten days
after receiving the certificate (or as otherwise allowed by state law) by
returning it, along with a written notice of cancellation, to the Opportunity
Plus Processing Office. The Opportunity Plus Processing Office will produce a
refund not later than seven days after it receives the certificate and the
written notice. Unless the applicable state law requires a refund of Purchase
Payment(s) only, we will refund the Purchase Payment(s) plus any increase or
minus any decrease in the value attributable to any Purchase Payment(s)
allocated to the variable option(s).
17
<PAGE>
RIGHTS UNDER THE CONTRACT
The Contract Holder has no right or interest in the amounts held under the
Contracts or Individual Accounts. The Contracts and Individual Accounts are not
subject to the claims of any creditors of the Contract Holder. You may make all
elections under the Contracts.
ALLOCATION CHANGES AND TRANSFERS
During each calendar year, you may change the allocation of future Net Purchase
Payments among the allowable investment options. Unlimited allocation changes
are allowed.
We also allow unlimited transfers without charge of accumulated values to
available investment options during the Accumulation Period. Transfers of not
less than $500 may be made among the available Funds or from any of the Funds
to a credited interest option. Any transfer will be based on the Accumulation
Unit value next determined after we receive a valid request at our Home Office.
See Appendices I and II for information on transfers from GAA and the Fixed
Account.
During the Annuity Period, no transfers of accumulated value are allowed.
WITHDRAWALS
You may withdraw all or a portion of the Individual Account value during the
Accumulation Period. To do so, you must properly complete a disbursement form
and send it to the Processing Office. Disbursement forms are available from the
Opportunity Plus Processing Office. Withdrawals may be requested in one of the
following ways:
. Full withdrawal of an Individual Account: The amount paid will be the
full value of the Individual Account minus any applicable deferred sales
charge and maintenance fee due.*
. Partial withdrawal (percentage): The amount paid will be the percentage
of the Individual Account value requested minus any applicable deferred
sales charge.*
. Partial withdrawal (specific dollar amount): The amount paid will be the
dollar amount requested. However, the amount withdrawn from the
Individual Account will equal the dollar amount requested plus any
applicable deferred sales charge.*
* An income tax of 20% may be withheld from amounts paid directly to you. See
"Tax Status of Amounts Distributed."
All amounts paid will be based on Individual Account values as of the end of
the Valuation Period in which the request is received in the Opportunity Plus
Processing Office or such later date as the disbursement form may specify. For
any partial withdrawal, unless requested otherwise by you, the value of the
Accumulation Units cancelled will be withdrawn proportionately from each
investment option used under the Individual Account.
Payments for withdrawal requests will be made in accordance with SEC
requirements, but normally not later than seven calendar days after a properly
completed withdrawal form is received at the Opportunity Plus Processing Office
or within seven calendar days of the date the disbursement form may specify.
Payments may be delayed for: (a) any period in which the New York Stock
Exchange ("Exchange") is closed (other than customary weekend and holiday
closings) or in which trading on the Exchange is restricted; (b) any period in
which an emergency exists where disposal of securities held by the funds is not
reasonably practicable or is not reasonably practicable for the value of the
assets of the Funds to be fairly determined; or (c) such other periods as the
SEC may by order permit for the protection of you and the Contract Holder. The
conditions under which restricted trading or an emergency exists shall be
determined by the rules and regulations of the SEC.
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WITHDRAWAL RESTRICTIONS
The Code imposes restrictions on full or partial withdrawals from 403(b)
Individual Accounts attributable to Purchase Payments made on or after January
1, 1989 under a salary reduction agreement, and to any earnings on the entire
403(b) Individual Account credited on and after January 1, 1989. Withdrawals of
these amounts are allowed only if you (a) have died, (b) have become disabled,
as defined in the Code, (c) have attained age 59 1/2, or (d) have separated
from service. Withdrawals are also allowed if you can show "hardship," as
defined by the IRS, but the withdrawal is limited to the lesser of Purchase
Payments attributable to your salary reduction contributions made on or after
January 1, 1989 or the amount necessary to relieve the hardship. Even if a
withdrawal is permitted under these provisions, a 10% federal penalty tax may
be assessed on the amount paid to you if it does not otherwise meet the
exceptions to the penalty tax provisions (see "Tax Status of Amounts
Distributed"). The Contract Holder must certify in writing that one of these
conditions has been met before a payment will be made.
You may request a full or partial withdrawal of an amount equal to the
Individual Account cash value as of December 31, 1988 (the "grandfathered"
amount), subject to the terms of the 403(b) Plan. Although the Code withdrawal
restrictions do not apply to this amount, a 10% federal penalty tax may be
assessed on the amount paid to you if it does not otherwise meet the exceptions
to the penalty tax provisions (see "Tax Status of Amounts Distributed").
We believe that the Code withdrawal restrictions do not apply to tax-free
transfers pursuant to Revenue Ruling 90-24. We further believe that the
withdrawal restrictions will not apply to any "grandfathered" amount which is
transferred pursuant to Revenue Ruling 90-24 into another 403(b) Contract.
Revenue Ruling 90-24 provides that a direct transfer from one 403(b) investment
to another 403(b) investment is not a distribution and is not taxable if, after
the transfer, the transferred funds continue to be subject to the same or more
stringent distribution requirements.
REINVESTMENT PRIVILEGE
You may elect to reinvest all or a portion of the proceeds received from the
full withdrawal of an Individual Account within 30 days after such withdrawal.
Accumulation Units will be credited to the Individual Account for the amount
reinvested, as well as any applicable maintenance fee and any applicable
portion of any deferred sales charge imposed at the time of withdrawal. Any
maintenance fee which falls due after the withdrawal and before the
reinvestment will be deducted from the amount reinvested. Reinvested amounts
will be reallocated to the applicable investment options in the same proportion
as they were allocated at the time of withdrawal.
The number of Accumulation Units credited will be based upon the Accumulation
Unit value(s) next computed after the Opportunity Plus Processing Office
receives the reinvestment request along with the amount to be reinvested. The
reinvestment privilege may be used only once. If you are contemplating
reinvestment, you should seek competent advice regarding the tax consequences
associated with such a transaction.
CONTRACT LOANS
During the Accumulation Period, you may request a loan in lieu of a partial
withdrawal. To do this, you must properly complete a loan request form provided
by the Opportunity Plus Processing Office and submit it to the Processing
Office. A loan may not be requested within 12 months from the date of any prior
loan request. If the loan meets the requirements described below, it will not
be reported to the Internal Revenue Service ("IRS") by the Company as a taxable
distribution.
Loans can be made only from Individual Account values held in the variable or
credited interest options that allow loans (see "Appendix I" and "Appendix
II"). However, the entire Contract value may be used to determine the value
against which a loan may be made.
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<PAGE>
We do not permit Participants to receive Systematic Withdrawal Option ("SWO")
payments while they have outstanding loan balances; therefore, if you borrow
while receiving payments under SWO, we will automatically cancel future SWO
payments. (See "Additional Withdrawal Options.")
The loan amount must be at least $3,500 with a minimum Individual Account value
of $5,000. The loan amount may not exceed the lesser of: (a) 50% of the
Individual Account value reduced by any outstanding loan balance on the date on
which the loan is made, or (b) $50,000 reduced by the highest outstanding
balance of loans within the preceding 12 months ending on the day before the
current loan is made. However, if your Individual Account value is between
$5,000 and $20,000, the loan maximum is the lesser of (a) 75% of the Individual
Account value or (b) $10,000.
When a loan is made, the number of Accumulation Units equal to the loan amount
will be withdrawn on a pro rata basis from the allowable investment options
under which values are accumulating. Accumulation Units taken from the
Individual Account to provide a loan do not participate in the investment
experience of the investment options from which they were withdrawn.
Loan interest payable to us will accrue from day to day at the rate of 1%
annually unless a higher rate is required by law. Principal and interest will
be amortized over a five-year term. However, loans taken for the acquisition of
your principal residence may be amortized over a period of 1 to 20 whole years,
as you elect, but the projected final repayment can be no later than the end of
the calendar year in which you attain age 70. Whether or not the loan has been
used to acquire a principal residence, interest paid on this loan is "personal
interest" as defined in Code Section 163 and is not tax deductible.
A bill in the amount of the quarterly principal and interest repayments will be
mailed to you in advance of the repayment due date. The initial repayment due
date will be three months from the loan date. The loan date will be the date
the Opportunity Plus Processing Office receives the loan request form in good
order. Payment is due within 30 calendar days after the due date. Subsequent
quarterly installments are based on the first due date. The repayment will be
in default if it is not received by the Opportunity Plus Processing Office
before the end of the month in which the due date falls.
If a quarterly repayment is in default, a partial withdrawal equal to the
quarterly amount of principal and interest due, and deferred sales charge, if
applicable, will be made from the Individual Account. In addition, this amount
may be subject to the 10% federal penalty tax. (See "Tax Status of Amounts
Distributed.") The date of any withdrawal due to nonpayment of a billed
quarterly installment will be the first business day following the last day of
the month in which repayment was due.
When repayment of principal is made, Accumulation Units will be reallocated on
a current basis among the same investment options and in the same proportion as
when the loan was initially made.
If a repayment in excess of a billed amount is received, the excess will be
applied towards the principal portion of the outstanding loan. Payments
received which are less than the billed amount will be returned to you,
therefore, the repayment will be in default and the above will apply.
We may require that all outstanding loans be paid if the Individual Account
value falls below an amount equal to 25% of total loans outstanding.
Prepayment of the entire loan is allowed. At the time of prepayment, we will
bill you for any accrued interest. We will consider the loan paid when this
accrued interest is paid.
If the Individual Account is withdrawn with an outstanding loan balance,
accrued interest and any applicable deferred sales charge will be deducted from
the amount paid to you. If there is an outstanding loan balance, upon
withdrawal of the Individual Account due to your death or the election of an
Annuity option, accrued interest will be deducted from the amount paid to the
beneficiary or annuitant.
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<PAGE>
The Code requires the aggregation of all loans made to an individual employee
under a single employer-sponsored 403(b) Plan. However, since we have no
information concerning the outstanding loans that you may have with other
companies, we will use only the information available under contracts issued
by us.
DEDUCTIONS AND CHARGES
MAINTENANCE FEE
A $15 annual maintenance fee is deducted from each Individual Account under an
installment Purchase Payment Contract during the Accumulation Period. One
fourth of this fee ($3.75) is deducted during the first month after the end of
each calendar quarter. We deduct this fee from each investment option in the
same proportion as the values held under each option have to the total value
of the Individual Account you have established. This fee is to reimburse us
for some of our administrative expenses relating to the establishment and
maintenance of the Individual Account(s).
MORTALITY AND EXPENSE RISK CHARGES
We make a daily deduction from the variable portion of Contract values for
mortality and expense risks. The deduction, made as part of the calculation of
Accumulation and Annuity Unit value(s), is equivalent to 1.25% per year. The
mortality risk charge is to compensate us for the risk we assume when we
promise to continue making payments to individual Annuitants for their
lifetimes according to Annuity rates specified in the Contract at issue. The
expense risk charge is to compensate us for the risk that actual expenses for
costs incurred under the Contract will exceed the maximum costs that can be
charged under the Contract. For 1994, we received $59,320,898 for mortality
and expense risks from Contracts funded through Account C.
ADMINISTRATIVE EXPENSE CHARGE
We reserve the right to deduct a daily charge of not more than 0.25% per year
from the variable portion of Contract values to reimburse us for some of the
expenses we incur by administering the Contract. This charge will be
established by us on an annual basis effective each May 1 and continue until
April 30 of the following year. During the Accumulation Period, the charge may
fluctuate annually. Once an Annuity option is elected, the charge will be
established and will be effective during the Annuity Period.
Through April 30, 1996, we have established the charge to be zero. Since the
administrative expense charge is a percentage of the variable portion of
Contract values, there may be no relationship between the amount so deducted
and the amount of expenses attributable to the Contract.
FUND EXPENSES
Each Fund has an investment adviser. An investment advisory fee, based on the
Fund's average net assets, is deducted from the assets of each Fund and paid
to the investment adviser.
Most expenses incurred in the operations of each Fund are borne by that Fund.
Fund advisers may reimburse the Funds they advise for some or all of these
expenses. For further details on each Fund's expenses, Contract Holders and
Participants should read the accompanying prospectus for each Fund and refer
to the Fee Table in this Prospectus.
DEFERRED SALES CHARGE
There are no deductions from Purchase Payment(s) for sales or administrative
expenses and no deferred sales charge deduction(s) from amounts withdrawn from
a single Purchase Payment Contract.
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However, if all or any portion of an Individual Account value is withdrawn
during the Accumulation Period from an installment Purchase Payment Contract,
a percentage of the amount withdrawn may be deducted from that amount for a
deferred sales charge, so that we may recover sales and administration-related
expenses. In addition, if the nonlifetime Annuity option is elected on a
variable basis and the remaining value is withdrawn before three years of
Annuity payments have been completed, the applicable deferred sales charge
will be assessed. (See "Annuity Options.") For a further explanation of a
deferred sales charge calculation, see "Withdrawals."
The following table reflects the deferred sales charge deduction as a
percentage of the amount withdrawn:
<TABLE>
<CAPTION>
PURCHASE PAYMENT DEFERRED SALES
PERIODS COMPLETED CHARGE DEDUCTION
----------------- ----------------
<S> <C>
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or 10 2%
More than 10 0%
</TABLE>
The deduction for the deferred sales charge will not exceed 8.5% of the total
Purchase Payments actually made to the Individual Account.
No deferred sales charge is deducted from any Individual Account value which
is:
(a) applied to provide Annuity benefits,
(b) withdrawn on or after the tenth anniversary of the effective date of
the Individual Account,
(c) withdrawn from an installment Purchase Payment Contract providing you
are at least age 59 1/2 and nine Purchase Payment Periods have been
completed to your Individual Account,
(d) paid due to your death,
(e) withdrawn due to the election of the Estate Conservation Option or the
Systematic Withdrawal Option,
(f) withdrawn due to disability as specified in the Code,
(g) withdrawn due to financial hardship as specified in the Code,
(h) withdrawn due to separation from service while meeting the age and
service requirements to receive benefits under the New York State
Teachers' or Employees' Retirement Systems (even if you are not a
member of either system),
(i) paid where the Individual Account value is less than $2,500 and no
withdrawals have been made from that Individual Account within the
prior 12 months, or
(j) paid in an amount of up to 10% of the current Individual Account. This
applies only to the first partial withdrawal in each calendar year. The
10% amount will be calculated using the Individual Account value on the
date the request is received, in good order, at the Opportunity Plus
Processing Office. This provision is available if you are between age
59 1/2 and 70 1/2. Any loans outstanding on an Individual Account are
excluded from the Individual Account value when calculating the 10%
amount. This provision does not apply to a full withdrawal of the
Individual Account, or to partial withdrawals due to loan defaults.
(See "Contract Loans.") This provision may not be exercised if ECO or
SWO is elected.
(k) withdrawn from the portion of the Individual Account Value invested in
the Fund(s) and/or GAA attributable to Purchase Payments made on or
after April 1, 1995. The waiver does not apply to amounts deposited in
the Fixed Account. If amounts are deposited in a fund or GAA and then
transferred to the Fixed Account, the waiver would no longer apply. If
amounts are deposited in the Fixed Account and then transferred to a
Fund or GAA, the waiver would not apply to amounts that came from the
Fixed Account. No deferred sales charge would be assessed unless and
until these amounts are withdrawn from the Individual Account. For any
withdrawal, the Individual Account Value of the Purchase Payment(s)
made on or after April 1, 1995 will be withdrawn first. Then, the
remaining Individual Account Value will be used to satisfy the
disbursement request.
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In the instances cited in the above paragraphs, no deferred sales charge is
deducted. However the amount withdrawn may be subject to the 10% federal
penalty tax. (See "Tax Status of Amounts Distributed.")
There is no deferred sales charge provision on single Purchase Payment
Contracts. However, if amounts are transferred from a single Purchase Payment
Contract to an installment Purchase Payment Contract, the applicable deferred
sales charge provisions apply to all amounts in the installment Purchase
Payment Contract.
If you transfer the total account value from another of our tax-deferred
Annuity Contracts to an Opportunity Plus Individual Account, the effective date
of the new Individual Account, for purposes of calculating the deferred sales
charge, will be the effective date of your original Individual Account under
the Tax-Deferred Annuity Contract. You will also receive credit for the number
of completed Purchase Payment Periods from that Individual Account plus the
number of completed Purchase Payment Periods of the Opportunity Plus Individual
Account when calculating the total number of completed Purchase Payment Periods
to determine the deferred sales charge.
Based on our actuarial determination, we do not anticipate that the deferred
sales charge will cover all sales and administrative expenses which we will
incur in connection with the Contract. Also, we do not intend to profit from
either the annual maintenance fee or the administrative expense charge, if
imposed. We do hope to profit from the daily deduction for mortality and
expense risks. Any such profit, as well as any other profit realized by us and
held in the general account (which supports insurance and Annuity obligations),
would be available for any proper corporate purpose, including, but not limited
to, payment of sales and distribution expenses.
PREMIUM TAX
Currently, there is no premium tax on Annuities under New York regulations.
However, in states that do impose a premium tax, it would be deducted from the
amount applied to an Annuity option. We reserve the right to deduct a state
premium tax at any time from the Purchase Payment(s) or from the Individual
Account value based upon our determination of when such tax is due.
COMMISSIONS AND EXPENSES
In addition to buying the features and benefits available under the Contracts,
Purchase Payments compensate one or more sales professionals for their
services. These sales professionals are available to install and service
contracts by providing product explanations and to periodically review
Participants' retirement needs and the investment options available under the
Contract. We pay these professionals commissions and service fees. In limited
circumstances, we also pay certain of these professionals compensation,
overrides or reimbursement for expenses associated with the installation of the
Contract. In total, the compensation amounts are considered equivalent to
approximately 3% of the Purchase Payments credited to the Contract over the
Contract's estimated life.
We pay these commissions, fees and related expenses out of our general assets,
including our investment income and any profits we may derive from investment
advisory fees and mortality and expense risk charges. No additional deductions
are imposed for commissions and related expenses.
The sales professional and the name of any firm that he or she may be
associated with or compensated by are indicated on the enrollment form. More
detailed information is available from these sales professionals.
Other than the mortality and expense risk charge and any administrative expense
charge, all expenses incurred in the operations of Account C are borne by the
Company.
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LOANS
If a loan is elected under the Individual Account, the number of Accumulation
Units equal to the loan amount will be withdrawn from the Individual Account.
The withdrawal will be made on a pro rata basis from all investment options
accumulating values under the Individual Account. Accumulation Units taken from
an Account to provide a loan do not participate in the investment experience of
the investment options from which they were withdrawn.
If a quarterly loan repayment is not received by the due date, it will be
deemed a partial withdrawal. In this case, the amount due, plus any applicable
deferred sales charge will be deducted from the Individual Account. The values
used for the partial withdrawal will be those calculated as of the first
business day after the last day of the month the payment was due. For more
information about loans see "Contract Loans."
ADDITIONAL WITHDRAWAL OPTIONS
We offer two withdrawal options that are not considered Annuity options: the
Estate Conservation Option ("ECO") and the Systematic Withdrawal Option
("SWO"). These options are available for Participants whose Individual Account
value is at least $25,000 at the time of election.
Amounts withdrawn for ECO and SWO will be deducted from the Contract in the
same manner as for any other withdrawals during the Accumulation Period except
that no deferred sales charge will be applied. (See "Contract Rights--
Withdrawals" and "Deductions and Charges--Deferred Sales Charge.")
Since ECO and SWO are not Annuity options, the Individual Account remains in
the Accumulation Period, retains all the rights and flexibility described in
this prospectus, and is subject to all other Contract charges. The value of the
Accumulation Units cancelled will be withdrawn proportionately from the
investment options used under the Individual Account. We reserve the right to
discontinue the availability of these distribution options and to change the
terms for future elections.
Once you elect a distribution option, you may revoke it at any time by
submitting a written request to the Opportunity Plus Processing Office. Any
revocation will apply only to the amounts not yet paid. Once ECO or SWO is
revoked, you may not elect it again.
SWO is different from ECO in the following ways: (1) SWO payments are made for
a fixed dollar amount, fixed time period or fixed percentage whereas ECO
payments vary in dollar amount and can continue indefinitely during your
lifetime, and (2) generally, SWO payments will be higher than expected ECO
payments. You should carefully assess your future income needs when considering
the election of these distribution options.
We do not allow simultaneous Contract loans and SWO payments, therefore, SWO
cannot be elected if a loan is outstanding under an Individual Account. If you
elect a loan while receiving payments under SWO, we will automatically cancel
future SWO payments.
You should consult your tax advisor before requesting the election of these
options due to the potential for adverse tax consequences.
In the event of your death, payments may be continued if allowed by the Plan.
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<PAGE>
ESTATE CONSERVATION OPTION
ECO payments may not be made until the calendar year in which you attain age
70 1/2. We will calculate and distribute an annual amount using the method
contained in the Code's minimum distribution regulations. The annual
distribution is determined by dividing the value of the Individual Account by
a life expectancy factor. The factor will be based on either your life
expectancy or the joint life expectancies of you and your designated
beneficiary, as directed by you, and based on tables in IRS regulations. If
ECO is based on your life expectancy, the full Individual or Participant's
portion of the Plan Account must be distributed in the year following your
death as required by current IRS regulations. Factors will be redetermined for
each year's distribution. The value of the Individual Account to be used in
this calculation is the value on the December 31st prior to the year for which
payment is being made. This calculation will be changed, if necessary, to
conform to changes in the Code or applicable regulations.
An exception is made if we maintain a separate record of your Individual
Account value as of December 31, 1986. In this instance, payments made in or
after the year you attain age 70 1/2 but before the year you attain age 75
will only be calculated on amounts contributed after December 31, 1986 and any
earnings after that date. If you attain 70 1/2 prior to 1988, or if you are in
a governmental or church plan, you must be retired in order to qualify for
this exception.
SYSTEMATIC WITHDRAWAL OPTION
SWO payments may not be made until you attain age 59 1/2 (55, if separated
from service with the Contract Holder). SWO payments are available monthly,
quarterly, semiannually or annually. No election may be made that would result
in a payment of less than $250.
One of the following distribution methods may be elected:
(a) Specified Payment -- payments of a designated amount. The annual dollar
amount chosen cannot be greater than 10% of the cash value applied to
SWO. The specified payment minimum distribution is determined by
dividing the value of the Individual Account by the life expectancy
factor. The value of the Individual Account to be used in this
calculation is the value on the December 31st prior to the year for
which the payment is being made. The specified payment amount will
remain constant unless a higher amount is required under Code
distribution requirements. If the dollar amount chosen is less than the
Code's minimum distribution, we will calculate and pay the minimum
distribution amount.
(b) Specified Period -- payments for a designated time period. The
specified period must be at least 10 years but not greater than your
life expectancy factor. Each annual distribution is determined by
dividing the Individual Account value by the number of years remaining
in the elected period. The value to be used in this calculation is the
value on the December 31st prior to the year for which the payment is
being made. For payments made more often than annually, the annual
payment result (calculated above) is divided by the number of payments
due each year.
(c) Specified Percentage -- payments of a designated percentage. The
specified percentage chosen cannot be greater than 10% of the amount
applied to SWO. You may change the specified percentage elected every
six months. Each annual distribution is determined by multiplying the
Individual Account or total portions of the Plan Account's value by the
percentage chosen. The value to be used in this calculation is the
value on the December 31st prior to the year for which the payment is
being made. For payments made more often than annually, the annual
payment result (calculated above) is divided by the number of the
payments due each year. Payments will be made each year until the year
you attain age 70 1/2.
A life expectancy factor from tables designated by the IRS will be used to
determine the minimum distribution amounts required. The factor will be based
on either your life expectancy or the joint life expectancies of you and your
designated beneficiary, as you direct. Factors will be reduced by 1 (one) for
each distribution year.
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<PAGE>
ANNUITY PERIOD
ANNUITY PERIOD ELECTIONS
You must notify the Opportunity Plus Processing Office in writing of the
Annuity start date and Annuity option elected (for details, see the SAI). Until
a date and option are elected, the Individual Account will continue in the
Accumulation Period.
You must give written notice to the Opportunity Plus Processing Office at least
30 days before Annuity payments begin electing or changing (a) the date on
which Annuity payments are to begin, (b) the Annuity option, (c) whether the
payments are to be made monthly, quarterly, semiannually or annually, and (d)
the investment option(s) used to provide Annuity payments (i.e., an available
credited interest option, Aetna Variable Fund, Aetna Income Shares, Aetna
Investment Advisers Fund, Inc., or any combination thereof). No other variable
Funds may currently be used as investment options during the Annuity Period.
If Annuity payments are to be made on a variable basis, the first and
subsequent payments will vary depending on the assumed net investment rate (3
1/2% per annum, unless a 5% annual rate is elected). Selection of a 5% rate
causes a higher first payment, but Annuity payments will increase thereafter
only to the extent that the net investment rate exceeds 5% on an annualized
basis. Annuity payments would decline if the rate were below 5%. Use of the 3
1/2% assumed rate causes a lower first payment, but subsequent payments would
increase more rapidly or decline more slowly as changes occur in the net
investment rate.
No election may be made that would result in a first Annuity payment of less
than $20 or total yearly Annuity payments of less than $100. If the value of
the Individual Account is insufficient to elect an option for the minimum
amount specified, a lump-sum payment must be elected.
When payments start, the age of the Annuitant plus the number of years for
which payments are guaranteed must not exceed 95.
You will be subject to a 50% federal penalty tax on the amount of distribution
required each year which is not distributed under the Code's minimum
distribution rules.
Distributions of the Individual Account value as of December 31, 1986 must
generally begin by age 75. Distributions of the Individual Account value
attributable to contributions made on and after January 1, 1987 and any
earnings on the entire Individual Account after that date must generally begin
by April 1 of the calendar year following the calendar year in which you attain
age 70 1/2 or retire, whichever occurs later. These distribution dates may be
further deferred if allowed under federal law or regulations.
In determining the amount of benefit payments, the minimum distribution
incidental death benefit rule described in IRS regulations* must be satisfied.
This distribution rule does not apply to certain 403(b) Plans if any of the
Annuity Options under (b) below are elected with the spouse as the sole
beneficiary.
Annuity payments may not extend beyond (a) the life of the Annuitant, (b) the
joint lives of the Annuitant and beneficiary, (c) a period certain greater than
the Annuitant's life expectancy, or (d) a period certain greater than the joint
life expectancies of the Annuitant and beneficiary.
*This rule assures that any death benefits payable under the Plan are inciden-
tal to the primary purpose of the Plan which is to provide retirement benefits
or deferred compensation to the Participant. The amount to be distributed under
this rule is determined based on your age and tables contained in the IRS regu-
lations.
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ANNUITY OPTIONS
LIFETIME:
(a) Life Annuity -- an Annuity with payments guaranteed to the date of the
Annuitant's death. This option may be elected with payments guaranteed
for 5, 10, 15 or 20 years. Because it provides a specified minimum
number of Annuity payments, the election of a guaranteed payment period
results in somewhat lower payments.
(b) Life income Based Upon the Lives of Two Payees--An annuity will be paid
during the lives of the Annuitant and a second Annuitant. Payments will
continue until both Annuitants have died. When this option is chosen, a
choice must be made of:
(i) 100% of the payment to continue after the first death;
(ii)66 2/3% of the payment to continue after the first death;
(iii)50% of the payment to continue after the first death;
(iv) Payments for a minimum of 120 months, with 100% of the payment to
continue after the first death; or
(v) 100% of the payment to continue at the death of the second Annuitant
and 50% of the payment to continue at the death of the Annuitant;
Because (iv) provides a specified minimum number of Annuity payments,
the election of the guaranteed payment period results in somewhat lower
payments.
Payments under any lifetime Annuity option will be determined without regard to
the sex of the Annuitant(s). Such Annuity payments will be based solely on the
age of the Annuitant(s).
If a lifetime option is elected without a guaranteed minimum payment period, it
is possible that only one Annuity payment will be made if the Annuitant under
(a), or the surviving Annuitant under (b), should die prior to the due date of
the second Annuity payment.
Once lifetime Annuity payments begin, the Annuitant cannot elect to receive a
lump-sum settlement.
NONLIFETIME:
Payments for a Specified Period -- an Annuity with payments to be made for
three to thirty years, as selected. If this option is elected on a variable
basis, the Annuitant may request at any time during the payment period that
the present value of all or any portion of the remaining variable payments
be paid in one sum. However, under an installment Purchase Payment
Contract, any lump-sum elected before three years of payments have been
completed will be treated as a withdrawal during the Accumulation Period
and any applicable deferred sales charge will be assessed. (See "Deferred
Sales Charge.") This option is not available on a variable basis under a
Contract which provides for immediate Annuity benefits.
We make a daily deduction for mortality and expense risks from any Contract
values held on a variable basis. (See "Mortality and Expense Risk Charges.")
Therefore, electing the nonlifetime option on a variable basis will result in a
deduction being made even though we assume no mortality risk.
In addition to the Annuity options described, we may make optional methods of
payment available to you and other payees.
DEATH BENEFIT
A portion or all of any death proceeds may be (a) paid to the beneficiary in a
lump sum; (b) applied under any of the Annuity Options; (c) subject to
applicable provisions of the Code, left in the variable investment options; (d)
if the beneficiary is your spouse, paid under SWO or ECO; or (e) subject to
27
<PAGE>
applicable provisions of the Code, left on deposit in our general account with
the beneficiary electing to receive monthly, quarterly, semiannual or annual
interest payments at the interest rate then currently being credited on such
deposits (the balance on deposit can be withdrawn at any time or applied under
any "Annuity Options"). Any lump-sum payment paid during the Accumulation
Period or allowed under the applicable lifetime or nonlifetime Annuity options
will normally be made within seven calendar days after proof of death
acceptable to us and a request for payment are received at the Opportunity
Plus Processing Office.
ACCUMULATION PERIOD
If a lump-sum distribution is elected, the beneficiary will receive the value
of the Individual Account determined as of the Valuation Period in which proof
of death acceptable to us and request for payment are received at the
Opportunity Plus Processing Office.
If the designated beneficiary is your surviving spouse, he or she has until
you would have attained age 70 1/2 to begin Annuity payments, to receive a
lump-sum distribution or to begin receiving distributions under ECO or SWO.
If your beneficiary is not your surviving spouse, either Annuity payments must
begin within one year of your death, or the entire value must be distributed
within five years of your death.
In no event may payments to any beneficiary extend beyond the life of the
beneficiary or any period certain greater than the beneficiary's life
expectancy.
ANNUITY PERIOD
If an Annuitant dies after Annuity payments have begun, any death benefit
payable will depend upon the terms of the Contract and the Annuity option
selected.
If lifetime option (a) or (b) was elected without a guaranteed minimum payment
period under the Contract, Annuity payments will cease upon the death of the
Annuitant under a Life Annuity or the death of the surviving Annuitant under
options (b)(i), (ii), (iii) or (v).
Under the Contract, if lifetime options (a) or (b) were elected with a
guaranteed minimum payment period and the death of the Annuitant under option
(a) or the surviving Annuitant under option (b)(iv) occurs prior to the end of
that period, we will pay to your beneficiary in a lump sum, unless otherwise
requested, the present value of the guaranteed Annuity payments remaining.
Such value will be determined as of the Valuation Period in which proof of
death acceptable to us and a request for payment are received at the
Opportunity Plus Processing Office. The value will be reduced by any payments
made after the date of death.
If the nonlifetime option was elected under the Contract and the Annuitant
dies before all payments are made, the value of any remaining payments may be
paid in a lump sum to the beneficiary and no deferred sales charge will be
imposed. Such value will be determined as of the Valuation Period in which
proof of death acceptable to us and a request for payment are received at the
Opportunity Plus Processing Office.
If the Annuitant dies after Annuity payments have begun and if there is a
death benefit payable under the Annuity option elected, the remaining value
must be distributed to the beneficiary at least as rapidly as under the
original method of distribution.
TAX STATUS
FEDERAL TAX STATUS OF THE COMPANY
We are taxed as a life insurance company in accordance with the Internal
Revenue Code of 1986, as amended ("Code"). For federal income tax purposes,
the operations of the Separate Account form a part of our total operations and
are not taxed independently, although operations of the Separate Account are
treated separately for accounting and financial statement purposes. Under the
current provisions of the Code, the investment income and realized capital
gains of the Separate Account (i.e., income and capital gains distributed to
the Separate Account by the Funds) will not be taxable to us to
28
<PAGE>
the extent such amounts are credited to the Contracts. Based on this, no charge
is being made currently to the Separate Account for federal income taxes.
However, we reserve the right to make a deduction for federal income taxes
attributable to the Contracts should such taxes be imposed in the future.
TAX STATUS OF THE CONTRACT
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includible in the
variable contract owner's gross income. The IRS has stated in published rulings
that a variable contract owner will be considered the owner of separate account
assets if the contract owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The
Treasury Department has also announced, in connection with the issuance of
regulations concerning diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control for the
investments of a segregated asset account may cause the investor (i.e., the
Owner), rather than the insurance company, to be treated as the owner of the
assets in the account." This announcement also stated that guidance would be
issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular Funds without being treated as
owners of the underlying assets." As of the date of this Prospectus, no
guidance has been issued.
The ownership rights under the Contract are similar to, but different in
certain respects from those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, an Owner has additional flexibility in allocating premium payments and
account values. These differences could result in an Owner being treated as the
owner of a pro rata portion of the assets of the Separate Account. In addition,
the Company does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. The Company therefore reserves the right to modify the Contract as
necessary to attempt to prevent an Owner from being considered the owner of a
pro rata share of the assets of the Separate Account.
TAX STATUS OF AMOUNTS DISTRIBUTED
The following description of the federal income tax status of amounts
distributed under the Contracts is not exhaustive and is not intended to cover
all situations. You should seek advice from your tax advisor as to the
application of federal (and where applicable, state and local) tax laws to
amounts received by you and by your beneficiaries under the Contracts.
Whether you elect a lump sum or Annuity payments, if you have made after-tax
contributions to an Opportunity Plus Individual Account, you will have a cost
basis (equal to such contributions) which can be recovered tax-free from
distributions from the Opportunity Plus program.
A federal income tax of 20% may be withheld from any amount paid directly to
you (see below). Any state income tax due will be withheld unless we are
notified otherwise. We will report to the IRS the taxable portion of all
distributions.
The Code imposes a 10% penalty tax on the taxable portion of any distribution
unless made when (a) you have attained age 59 1/2, (b) you have become
disabled, (c) you have died, (d) you have attained age 55 and have separated
from service with the school board, (e) the distribution amount is rolled over
into a 403(b) plan or to an Individual Retirement Account ("IRA") in accordance
with terms of the Code, or (f) the distribution amount is annuitized over the
life or life expectancy of you or the joint lives or life expectancies of you
and your beneficiary, provided you have separated from service with the school
board. In addition, the penalty tax is abated for the amount of a distribution
equal to unreimbursed medical expenses incurred by you that qualify for
deduction as specified in the Code.
29
<PAGE>
ACCUMULATION PERIOD
The Purchase Payments and investment results of Account C credited to the value
of the Individual Account are not taxable to you until distributed. Lump-sum
payments will generally be taxed to you as ordinary income in the year
received.
Certain payees (a Participant, surviving spouse, and former spouse, if entitled
to benefits under certain divorce orders) entitled to a distribution under this
Contract on or after January 1, 1993, may elect a direct rollover of an
eligible rollover distribution. A direct rollover is the payment by us to
another eligible retirement plan. The election of a direct rollover must be
made in accordance with our procedures.
An eligible rollover distribution is a distribution of all or any portion of an
amount payable except for any distribution: (1) that is one of a series of
equal payments (made at least once a year) for the life/life expectancy of the
payee or payee and beneficiary, or for a period of ten years or more; (2) that
is a required minimum distribution under Code Section 401(a)(9); and (3) any
distribution or portion thereof that is not taxable. For you as a Participant
in a 403(b) plan, an eligible retirement plan is another 403(b) plan or an
individual retirement annuity/account. For a surviving spouse, an eligible
retirement plan is an individual retirement annuity/account.
If a direct rollover of an eligible rollover distribution is made, we must
report the amount of the distribution to the IRS and to you, but we are not
required to withhold any federal or state income tax. If an eligible rollover
distribution is paid to the payee (as defined above), we must withhold 20%
federal income tax and any required state income tax. For taxable amounts that
are not eligible rollover distributions, if payable to the payee, he or she has
the right to choose not to have federal income tax withheld.
If you receive a payment prior to reaching age 59 1/2, and do not roll the
payment over, in addition to the withholding tax, a 10% penalty tax on the
taxable portion of the payment may apply (unless the payment is subject to an
exception listed above).
ANNUITY PERIOD
Annuity payments will generally be fully taxable to you as ordinary income when
received.
MISCELLANEOUS
VOTING RIGHTS
Each Contract Holder may direct us in the voting of shares at meetings of
shareholders of the appropriate Fund(s). The number of votes to which each
Contract Holder may give direction will be determined as of the record date.
The number of votes each Contract Holder is entitled to direct with respect to
a particular Fund during the Accumulation Period is equal to the portion of the
current value of the Contract attributable to that Fund, divided by the net
asset value of one share of that Fund. During the Annuity Period, the number of
votes is equal to the Valuation Reserve applicable to the portion of the
Contract attributable to that Fund, divided by the net asset value of one share
of that Fund. In determining the number of votes, fractional votes will be
recognized. Where the value of the Contract or Valuation Reserve relates to
more than one Fund, the calculation of votes will be performed separately for
each Fund.
Participants and Annuitants have a fully vested (100%) interest in the benefits
provided under the Contract. Therefore, Participants and Annuitants may
instruct the Contract Holder how to direct us to cast the votes for the portion
of the Contract value or Valuation Reserve attributable to their Individual
Accounts. Votes attributable to those Participants and Annuitants who do not
instruct the Contract Holder will be cast by us in the same proportion as votes
for which instructions have been received by the Contract Holder. Votes
attributable to Contract Holders who do not direct us will be cast by us in the
same proportion as the votes for which directions have been received by us.
30
<PAGE>
Participants and Annuitants entitled to instruct the casting of votes for a
particular Fund will receive a notice of each meeting of shareholders of that
Fund, together with any proxy solicitation materials, and a statement of the
number of votes attributable to their participation under the Contract and
stating the right to instruct the Contract Holder how such votes shall be
cast.
MODIFICATION OF THE CONTRACT
Changes to the following Contract provisions may be considered material by us
and cannot be changed without the approval of appropriate state or federal
regulatory authorities: transfers among investment options; notification to
the Contract Holder; conditions governing payments of surrender values; terms
of Annuity options; death benefit payments; and maintenance fee provisions.
We may modify the Contract by giving written notice to the Contract Holder 30
days before the effective date of the change. However, changes to the items
listed below will apply only to new Participants enrolled under a Contract
after the effective date of the modification:
(a) the Annuity options,
(b) the contractual promise that no deduction will be made from Purchase
Payment(s) for sales or administrative expenses,
(c) the deferred sales charges, if applicable,
(d) the mortality and expense risk charges,
(e) the administrative expense charge provision, and
(f) the annual maintenance fee.
If the Contract Holder has not accepted the proposed modification at the time
of its effective date, no new Participants may be enrolled under the Contract.
However, additional Purchase Payments may continue to be made on behalf of
Participants already enrolled under the Contract.
No change may affect any Annuity beginning before the effective date of such
modification unless deemed necessary for the Opportunity Plus program or
Contract to comply with the requirements of the Code or other laws and
regulations affecting the Opportunity Plus program or Contract.
Modification of items (b) through (f) above will also require approval by the
SEC.
CONTRACT HOLDER/PARTICIPANT INQUIRIES
A Contract Holder or Participant may direct inquiries to the Opportunity Plus
Processing Office at the address shown on the cover page of this prospectus.
TELEPHONE TRANSFERS
You may elect to make transfers among Funds by telephone. If you want this
option, indicate on your enrollment form or contact the Opportunity Plus
Processing Office. We have enacted procedures to prevent abuses of Individual
Account transactions by telephone. The procedures include requiring the use of
a personal identification number (PIN) to execute transactions. You are
responsible for safeguarding your PIN and for keeping account information
confidential. If the Company fails to follow its procedures it would be liable
for any losses to your Individual Account resulting from the failure. To
ensure authenticity, we record all Individual Account transactions on the 800
line. Note: All Individual Account information and transactions permitted are
subject to the terms of the Plans.
TRANSFER OF OWNERSHIP; ASSIGNMENT
Unless contrary to applicable law, assignment of the Contract or Individual
Account is prohibited.
31
<PAGE>
AGREEMENT BETWEEN NYSUT AND THE COMPANY
In 1994, NYSUT and the Company entered into an arrangement which calls for
NYSUT to exclusively endorse the Opportunity Plus program and for the Company
to provide educational programs focusing on financial planning for retirement.
The educational program is provided to all NYSUT members including Agency fee
payors. Trained personnel have been hired by the Company to conduct these
programs exclusively for NYSUT members. NYSUT is reimbursed for direct out-of-
pocket expenses incurred in the promotion of the Opportunity Plus program up
to a maximum of $40,000 per year. In addition, the Company will pay NYSUT
between $30,000-$42,000 per month from 1994 through 1998. NYSUT has indicated
to the Company that it intends to use these amounts to enhance benefits to the
membership.
LEGAL PROCEEDINGS
We know of no material legal proceedings pending to which the Separate Account
is a party or which would materially affect the Separate Account.
LEGAL MATTERS
The validity of the securities offered by this Prospectus has been passed upon
by Susan E. Bryant, Esq., Counsel to the Company.
32
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION -- TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information and History............................................. 2
Variable Annuity Account C.................................................. 2
Offering and Purchase of Contracts.......................................... 3
Performance Data............................................................ 3
General.................................................................... 3
Average Annual Total Return Quotations..................................... 4
Annuity Payments............................................................ 5
Dollar-Cost Averaging....................................................... 7
Sales Material.............................................................. 7
Independent Auditors........................................................ 7
Financial Statements........................................................ F-1
</TABLE>
33
<PAGE>
APPENDIX I
GUARANTEED ACCUMULATION ACCOUNT
THE GUARANTEED ACCUMULATION ACCOUNT ("GAA") IS A CREDITED INTEREST OPTION
AVAILABLE DURING THE ACCUMULATION PERIOD UNDER THE CONTRACTS DESCRIBED IN THIS
PROSPECTUS. YOU AND THE CONTRACT HOLDER SHOULD READ THE ACCOMPANYING GAA
PROSPECTUS CAREFULLY BEFORE INVESTING. THIS APPENDIX IS A SUMMARY OF GAA AND IS
NOT INTENDED TO REPLACE THE GAA PROSPECTUS. AMOUNTS ALLOCATED TO GAA ARE HELD
IN A NONINSULATED, NONUNITIZED SEPARATE ACCOUNT.
GAA is a credited interest option in which we guarantee stipulated rates of
interest for stated periods of time on amounts directed to GAA. The interest
rate stipulated is an annual effective yield; that is, it reflects a full
year's interest. Interest is credited daily at a rate that will provide the
guaranteed annual effective yield over the period of one year. This option
guarantees the minimum interest rate specified in the Contract.
During a specified period of time, amounts may be applied to any or all
available Guaranteed Terms within the Short-Term and Long-Term Classifications.
The Short-Term Classification consists of all Guaranteed Terms of 3 years or
less and the Long-Term Classification consists of all Guaranteed Terms of 10
years or less, but greater than 3 years.
Withdrawals or transfers from a Guaranteed Term before the end of that
Guaranteed Term may be subject to a Market Value Adjustment ("MVA"). An MVA
reflects the change in the value of the investment due to changes in interest
rates since the date of deposit. When interest rates increase after the date of
deposit, the value of the investment decreases, and the MVA is negative.
Conversely, when interest rates decrease after the date of deposit, the value
of the investment increases, and the MVA is positive. It is possible that a
negative MVA could result in you receiving an amount that is less than the
amount paid into GAA.
As a Guaranteed Term matures, assets accumulating under GAA may be (a)
transferred to a new Guaranteed Term, (b) transferred to the other available
investment options, or (c) withdrawn. Amounts withdrawn may be subject to a
deferred sales charge and/or tax penalties and/or withholding.
By notifying us at the Opportunity Plus Processing Office at least 30 days
before the Annuity payments begin, you may elect to have amounts that have been
accumulating under GAA transferred to one or more of the Funds available during
the Annuity Period to provide variable Annuity payments. GAA cannot be used as
an investment during the Annuity Period.
MORTALITY AND EXPENSE RISK CHARGES
We make no deductions from the credited interest rate for mortality and expense
risks; these risks are considered in determining the credited rate.
TRANSFERS
Amounts applied to a Guaranteed Term during a deposit period may not be
transferred to any other funding option or to another Guaranteed Term during
that deposit period or for 90 days after the close of that deposit period.
Transfers are permitted from Guaranteed Terms of one Classification to
available Guaranteed Terms of another Classification. We will apply an MVA to
GAA transfers made before the end of a Guaranteed Term. Transfers of GAA values
due to a maturity are not subject to an MVA.
34
<PAGE>
CONTRACT LOANS
Loans may not be made against amounts held in GAA, although such value is
included in determining the value of the Individual Account against which a
loan may be made.
REINVESTMENT PRIVILEGE
Any amounts reinvested in GAA will be applied to the current deposit period.
Amounts are proportionately reinvested to the Classifications in the same
manner as they were allocated before the withdrawal. Any negative MVA amount
applied to a withdrawal is not included in the reinvestment.
35
<PAGE>
APPENDIX II
THE FIXED ACCOUNT
THE FIXED ACCOUNT IS AN INVESTMENT OPTION AVAILABLE DURING THE ACCUMULATION
PERIOD UNDER THE CONTRACTS. THE FOLLOWING SUMMARIZES MATERIAL INFORMATION
CONCERNING THE FIXED ACCOUNT THAT IS OFFERED AS AN OPTION UNDER THE CONTRACT.
ADDITIONAL INFORMATION MAY BE FOUND IN YOUR CERTIFICATE. AMOUNTS ALLOCATED TO
THE FIXED ACCOUNT ARE HELD IN THE COMPANY'S GENERAL ACCOUNT AND THE FIXED
ACCOUNT THAT SUPPORTS INSURANCE AND ANNUITY OBLIGATIONS. INTERESTS IN THE FIXED
ACCOUNT HAVE NOT BEEN REGISTERED WITH THE SEC IN RELIANCE ON EXEMPTIONS UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. DISCLOSURE IN THIS PROSPECTUS REGARDING
THE FIXED ACCOUNT, HOWEVER, MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND
COMPLETENESS OF THE STATEMENTS. DISCLOSURE IN THIS APPENDIX REGARDING THE FIXED
ACCOUNT HAS NOT BEEN REVIEWED BY THE COMMISSION.
This option guarantees that amounts allocated to this option will earn the
minimum interest rate specified in the Contract. We may credit a higher
interest rate from time to time. The Company's determination of interest rates
reflects the investment income earned on invested assets and the amortization
of any capital gains and/or losses realized on the sale of invested assets.
Under this option, we assume the risk of investment gain or loss by
guaranteeing Net Purchase Payment values and promising a minimum interest rate
and Annuity payment. This option is only available under installment Purchase
Payment Contracts.
We, under certain emergency conditions, may defer payment of a Fixed Account
surrender value (a) for a period of up to 6 months or (b) as provided by
federal law.
Amounts applied to the Fixed Account will earn the interest rate in effect when
actually applied to the Fixed Account.
MORTALITY AND EXPENSE RISK CHARGES
The Fixed Account will reflect a compound interest rate credited by us. The
interest rate quoted is an annual effective yield. We make no deductions from
the credited interest rate for mortality and expense risks; these risks are
considered in determining the credited rate.
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers from the Fixed Account to any other available investment option are
allowed in each calendar year during the Accumulation Period. The amount which
may be transferred may vary at our discretion; however, it will never be less
than 10% of the amount held under the Fixed Account.
By notifying us at the Opportunity Plus Processing Office at least 30 days
before Annuity payments begin, you may elect to have amounts which have been
accumulating under the Fixed Account transferred to those funds then available
for variable Annuity payments. Currently the available funds are Aetna Variable
Fund, Aetna Income Shares and Aetna Investment Advisers Fund, Inc.
CONTRACT LOANS
Loans may be made from those Individual Account values held in the Fixed
Account.
36
<PAGE>
HYPOTHETICAL TABLES
The tables shown below represent hypothetical periodic accumulation values that
would have resulted under a Contract described in this prospectus. Each set of
tables exhibits hypothetical results based exclusively on the investment
performance of a particular Fund during the periods shown. Generally, the first
table for each Fund shows the accumulation period value at each anniversary of
the Contract. The second table shows quarterly accumulation values for a $100
contribution.The third table for each Fund reflects the quarterly values of the
annuity payment, assuming an initial annuity payment of $100 and an interest
rate of 3 1/2% per year. Currently, Aetna Variable Fund, Aetna Income Shares
and Aetna Investment Advisers Fund, Inc. are the only variable investment
options available during the Annuity Period; therefore, Annuity Period charts
are given only for those Funds.
Since the Contracts are designed to fund variable retirement benefits through
long-term investments, Contracts kept active will, on the average, involve a
long relationship between the Company and the Contract Holder or Participant
during both the Accumulation and Annuity Periods. Accordingly, the tables show,
for Aetna Variable Fund, Aetna Income Shares and Aetna Variable Encore Fund,
10-year history. For the other Funds, the histories since each Fund became
available are shown.
DEDUCTIONS TAKEN INTO ACCOUNT
Each table's results reflect the provisions of the Contracts described in this
prospectus. The tables assume that deductions under the Contracts have been
made at an annual rate of 1.25% for mortality and expense risks and the
applicable percentage for investment advisory services for each Fund. For all
Funds, the applicable "Other Expenses" are also reflected. For illustrative
purposes, the maintenance fee is assumed to be deducted on the last day of each
Contract Year.
NOTE
These hypothetical charts reflect actual historical performance, but are not
indicative of future results. A program of the type illustrated in the tables
does not assure a profit or protect against depreciation in declining markets.
37
<PAGE>
AETNA VARIABLE FUND
HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $ 1,200.00 $ 15.00 $ 1,370.50 $ 68.53 $ 1,301.97
- ----------------------------------------------------------------------------
December 1986 2,400.00 30.00 2,855.45 142.77 2,712.68
- ----------------------------------------------------------------------------
December 1987 3,600.00 45.00 4,054.94 202.75 3,852.19
- ----------------------------------------------------------------------------
December 1988 4,800.00 60.00 5,833.82 291.69 5,542.13
- ----------------------------------------------------------------------------
December 1989 6,000.00 75.00 8,763.72 350.55 8,413.17
- ----------------------------------------------------------------------------
December 1990 7,200.00 90.00 10,167.67 406.71 9,760.96
- ----------------------------------------------------------------------------
December 1991 8,400.00 105.00 14,023.07 420.69 13,602.38
- ----------------------------------------------------------------------------
December 1992 9,600.00 120.00 16,021.97 480.66 15,541.31
- ----------------------------------------------------------------------------
December 1993 10,800.00 135.00 18,120.78 362.42 17,758.36
- ----------------------------------------------------------------------------
December 1994 12,000.00 150.00 18,897.03 0.00 18,897.03
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $107.70 September 1988 $176.76 March 1992 $284.68
- ----------------------------------------------------------------------------------------
June 1985 116.79 December 1988 179.67 June 1992 286.43
- ----------------------------------------------------------------------------------------
September 1985 112.94 March 1989 191.77 September 1992 296.11
- ----------------------------------------------------------------------------------------
December 1985 129.66 June 1989 204.95 December 1992 307.24
- ----------------------------------------------------------------------------------------
March 1986 145.11 September 1989 222.25 March 1993 312.71
- ----------------------------------------------------------------------------------------
June 1986 153.04 December 1989 229.00 June 1993 309.99
- ----------------------------------------------------------------------------------------
September 1986 144.06 March 1990 223.82 September 1993 316.15
- ----------------------------------------------------------------------------------------
December 1986 152.32 June 1990 240.28 Decfember 1993 323.87
- ----------------------------------------------------------------------------------------
March 1987 179.56 September 1990 215.93 March 1994 313.24
- ----------------------------------------------------------------------------------------
June 1987 184.52 December 1990 233.61 June 1994 311.16
- ----------------------------------------------------------------------------------------
September 1987 193.77 March 1991 261.74 September 1994 317.76
- ----------------------------------------------------------------------------------------
December 1987 158.70 June 1991 258.45 December 1994 316.77
- ----------------------------------------------------------------------------------------
March 1988 168.39 September 1991 268.21
- ----------------------------------------------------------------------------------------
June 1988 176.03 December 1991 291.58
</TABLE>
38
<PAGE>
TABLE 3 - ANNUITY PERIOD
VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY
VARIABLE ANNUITY PAYMENTS
(Assumes Initial Annuity Payment of $100 beginning on December 31, 1984)
<TABLE>
<CAPTION>
PAYMENT PAYMENT PAYMENT
MONTH FOR MONTH MONTH FOR MONTH MONTH FOR MONTH
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $106.78 September 1988 $155.37 March 1992 $221.84
- -----------------------------------------------------------------------------
June 1985 114.80 December 1988 156.57 June 1992 221.29
- -----------------------------------------------------------------------------
September 1985 110.07 March 1989 165.69 September 1992 226.82
- -----------------------------------------------------------------------------
December 1985 125.27 June 1989 175.55 December 1992 233.32
- -----------------------------------------------------------------------------
March 1986 139.00 September 1989 188.74 March 1993 235.44
- -----------------------------------------------------------------------------
June 1986 145.34 December 1989 192.81 June 1993 231.40
- -----------------------------------------------------------------------------
September 1986 135.64 March 1990 186.84 September 1993 233.97
- -----------------------------------------------------------------------------
December 1986 142.20 June 1990 198.86 December 1993 237.64
- -----------------------------------------------------------------------------
March 1987 166.19 September 1990 177.18 March 1994 227.87
- -----------------------------------------------------------------------------
June 1987 169.31 December 1990 190.04 June 1994 224.41
- -----------------------------------------------------------------------------
September 1987 176.28 March 1991 211.10 September 1994 227.21
- -----------------------------------------------------------------------------
December 1987 143.14 June 1991 206.66 December 1994 224.56
- -----------------------------------------------------------------------------
March 1988 150.58 September 1991 212.63
- -----------------------------------------------------------------------------
June 1988 156.06 December 1991 229.18
</TABLE>
AETNA INCOME SHARES
HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $ 1,200.00 $ 15.00 $ 1,330.38 $ 66.52 $ 1,263.86
- ----------------------------------------------------------------------------
December 1986 2,400.00 30.00 2,752.14 137.61 2,614.53
- ----------------------------------------------------------------------------
December 1987 3,600.00 45.00 4,062.13 203.11 3,859.02
- ----------------------------------------------------------------------------
December 1988 4,800.00 60.00 5,523.22 276.16 5,247.06
- ----------------------------------------------------------------------------
December 1989 6,000.00 75.00 7,514.33 300.57 7,213.76
- ----------------------------------------------------------------------------
December 1990 7,200.00 90.00 9,355.61 374.22 8,981.39
- ----------------------------------------------------------------------------
December 1991 8,400.00 105.00 12,354.80 370.64 11,984.16
- ----------------------------------------------------------------------------
December 1992 9,600.00 120.00 14,343.90 430.32 13,913.58
- ----------------------------------------------------------------------------
December 1993 10,800.00 135.00 16,763.97 335.28 16,428.69
- ----------------------------------------------------------------------------
December 1994 12,000.00 150.00 17,095.11 0.00 17,095.11
</TABLE>
39
<PAGE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT
VALUE AT END ACCUMULATION END OF ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $101.98 September 1988 $150.13 March 1992 $212.59
- ---------------------------------------------------------------------------------------
June 1985 110.57 December 1988 149.16 June 1992 219.50
- ---------------------------------------------------------------------------------------
September 1985 112.83 March 1989 151.53 September 1992 226.46
- ---------------------------------------------------------------------------------------
December 1985 120.75 June 1989 161.56 December 1992 227.69
- ---------------------------------------------------------------------------------------
March 1986 128.07 September 1989 164.21 March 1993 234.13
- ---------------------------------------------------------------------------------------
June 1986 129.28 December 1989 168.81 June 1993 239.72
- ---------------------------------------------------------------------------------------
September 1986 131.86 March 1990 167.74 September 1993 245.09
- ---------------------------------------------------------------------------------------
December 1986 135.95 June 1990 173.10 December 1993 246.62
- ---------------------------------------------------------------------------------------
March 1987 138.44 September 1990 174.39 March 1994 237.69
- ---------------------------------------------------------------------------------------
June 1987 135.48 December 1990 181.93 June 1994 232.55
- ---------------------------------------------------------------------------------------
September 1987 133.97 March 1991 187.56 September 1994 234.67
- ---------------------------------------------------------------------------------------
December 1987 140.34 June 1991 191.12 December 1994 234.31
- ---------------------------------------------------------------------------------------
March 1988 145.12 September 1991 202.49
- ---------------------------------------------------------------------------------------
June 1988 147.55 December 1991 214.57
</TABLE>
TABLE 3 - ANNUITY PERIOD
VALUE AT VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY
VARIABLE ANNUITY PAYMENTS
(Assumes Initial Annuity Payment of $100 beginning on December 31, 1984)
<TABLE>
<CAPTION>
PAYMENT PAYMENT PAYMENT
MONTH FOR MONTH MONTH FOR MONTH MONTH FOR MONTH
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $101.10 September 1988 $131.96 March 1992 $165.66
- -----------------------------------------------------------------------------
June 1985 108.68 December 1988 129.99 June 1992 169.58
- -----------------------------------------------------------------------------
September 1985 109.95 March 1989 130.92 September 1992 173.46
- -----------------------------------------------------------------------------
December 1985 116.67 June 1989 138.39 December 1992 172.91
- -----------------------------------------------------------------------------
March 1986 122.68 September 1989 139.45 March 1993 176.28
- -----------------------------------------------------------------------------
June 1986 122.77 December 1989 142.14 June 1993 178.94
- -----------------------------------------------------------------------------
September 1986 124.16 March 1990 140.02 September 1993 181.39
- -----------------------------------------------------------------------------
December 1986 126.91 June 1990 143.26 December 1993 180.95
- -----------------------------------------------------------------------------
March 1987 128.13 September 1990 143.09 March 1994 172.91
- -----------------------------------------------------------------------------
June 1987 124.32 December 1990 148.00 June 1994 167.72
- -----------------------------------------------------------------------------
September 1987 121.87 March 1991 151.28 September 1994 167.80
- -----------------------------------------------------------------------------
December 1987 126.58 June 1991 152.82 December 1994 166.11
- -----------------------------------------------------------------------------
March 1988 129.77 September 1991 160.53
- -----------------------------------------------------------------------------
June 1988 130.81 December 1991 168.65
</TABLE>
40
<PAGE>
AETNA VARIABLE ENCORE FUND
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $ 1,200.00 $ 15.00 $ 1,230.06 $ 61.50 $ 1,168.56
- ----------------------------------------------------------------------------
December 1986 2,400.00 30.00 2,516.76 125.84 2,390.92
- ----------------------------------------------------------------------------
December 1987 3,600.00 45.00 3,876.39 193.82 3,682.57
- ----------------------------------------------------------------------------
December 1988 4,800.00 60.00 5,340.92 267.05 5,073.87
- ----------------------------------------------------------------------------
December 1989 6,000.00 75.00 7,004.44 280.18 6,724.26
- ----------------------------------------------------------------------------
December 1990 7,200.00 90.00 8,730.53 349.22 8,381.31
- ----------------------------------------------------------------------------
December 1991 8,400.00 105.00 10,402.27 312.07 10,090.20
- ----------------------------------------------------------------------------
December 1992 9,600.00 120.00 11,849.55 355.49 11,494.06
- ----------------------------------------------------------------------------
December 1993 10,800.00 135.00 13,273.64 265.47 13,008.17
- ----------------------------------------------------------------------------
December 1994 12,000.00 150.00 14,851.26 0.00 14,851.26
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $101.71 September 1988 $124.54 March 1992 $155.16
- ----------------------------------------------------------------------------------------
June 1985 103.59 December 1988 126.62 June 1992 156.20
- ----------------------------------------------------------------------------------------
September 1985 105.29 March 1989 129.10 September 1992 157.11
- ----------------------------------------------------------------------------------------
December 1985 107.12 June 1989 131.82 December 1992 157.77
- ----------------------------------------------------------------------------------------
March 1986 108.88 September 1989 134.34 March 1993 158.56
- ----------------------------------------------------------------------------------------
June 1986 110.34 December 1989 136.78 June 1993 159.30
- ----------------------------------------------------------------------------------------
September 1986 111.79 March 1990 139.10 September 1993 160.10
- ----------------------------------------------------------------------------------------
December 1986 113.08 June 1990 141.55 December 1993 160.80
- ----------------------------------------------------------------------------------------
March 1987 114.44 September 1990 143.96 March 1994 161.48
- ----------------------------------------------------------------------------------------
June 1987 115.90 December 1990 146.46 June 1994 162.48
- ----------------------------------------------------------------------------------------
September 1987 117.45 March 1991 148.53 September 1994 163.73
- ----------------------------------------------------------------------------------------
December 1987 119.27 June 1991 150.40 December 1994 165.30
- ----------------------------------------------------------------------------------------
March 1988 121.00 September 1991 152.32
- ----------------------------------------------------------------------------------------
June 1988 122.63 December 1991 154.09
</TABLE>
41
<PAGE>
AETNA INVESTMENT ADVISERS FUND, INC.
HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,200.00 $15.00 $1,226.96 $ 61.35 $1,165.61
- ----------------------------------------------------------------------------
December 1991 2,400.00 30.00 2,731.85 136.59 2,595.26
- ----------------------------------------------------------------------------
December 1992 3,600.00 45.00 4,095.04 204.75 3,890.29
- ----------------------------------------------------------------------------
December 1993 4,800.00 60.00 5,690.03 284.50 5,405.53
- ----------------------------------------------------------------------------
December 1994 6,000.00 75.00 6,779.97 271.20 6,508.77
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE OF MONTH VALUE OF MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1990 $100.50 December 1991 $122.03 September 1993 $135.87
- --------------------------------------------------------------------------------------
June 1990 104.24 March 1992 121.57 December 1993 139.11
- --------------------------------------------------------------------------------------
September 1990 98.48 June 1992 124.32 March 1994 135.05
- --------------------------------------------------------------------------------------
December 1990 104.40 September 1992 126.08 June 1994 133.48
- --------------------------------------------------------------------------------------
March 1991 110.45 December 1992 128.19 September 1994 137.27
- --------------------------------------------------------------------------------------
June 1991 110.48 March 1993 131.17 December 1994 136.90
- --------------------------------------------------------------------------------------
September 1991 115.28 June 1993 132.20
</TABLE>
TABLE 3 - ANNUITY PERIOD
VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY VARIABLE ANNUITY PAYMENTS
(Assumes Initial Annuity Payment of $100 beginning on December 31, 1990)
<TABLE>
<CAPTION>
PAYMENT PAYMENT PAYMENT
MONTH FOR MONTH MONTH FOR MONTH MONTH FOR MONTH
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1991 $104.89 September 1992 $113.71 March 1994 $115.67
- -----------------------------------------------------------------------------
June 1991 104.02 December 1992 114.62 June 1994 113.35
- -----------------------------------------------------------------------------
September 1991 107.61 March 1993 116.28 September 1994 115.57
- -----------------------------------------------------------------------------
December 1991 112.93 June 1993 116.19 December 1994 114.27
- -----------------------------------------------------------------------------
March 1992 111.54 September 1993 118.39
- -----------------------------------------------------------------------------
June 1992 113.10 December 1993 120.18
</TABLE>
42
<PAGE>
ALGER AMERICAN GROWTH PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,200.00 $15.00 $1,251.73 $ 62.59 $1,189.14
- ----------------------------------------------------------------------------
December 1991 2,400.00 30.00 3,134.50 156.73 2,977.77
- ----------------------------------------------------------------------------
December 1992 3,600.00 45.00 4,818.29 240.91 4,577.38
- ----------------------------------------------------------------------------
December 1993 4,800.00 60.00 7,186.34 359.32 6,827.02
- ----------------------------------------------------------------------------
December 1994 6,000.00 75.00 8,413.09 336.52 8,076.57
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END VALUE AT END
VALUE AT END ACCUMULATION OF ACCUMULATION OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1990 $ 94.31 December 1991 $142.59 September 1993 $181.33
- --------------------------------------------------------------------------------------
June 1990 109.69 March 1992 138.75 December 1993 191.39
- --------------------------------------------------------------------------------------
September 1990 91.62 June 1992 130.58 March 1994 182.84
- --------------------------------------------------------------------------------------
December 1990 102.84 September 1992 138.99 June 1994 172.52
- --------------------------------------------------------------------------------------
March 1991 122.22 December 1992 158.25 September 1994 186.62
- --------------------------------------------------------------------------------------
June 1991 116.94 March 1993 161.04 December 1994 191.75
- --------------------------------------------------------------------------------------
September 1991 131.83 June 1993 165.51
</TABLE>
43
<PAGE>
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1988
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1989 $1,200.00 $15.00 $ 1,439.20 $ 71.96 $1,367.24
- ----------------------------------------------------------------------------
December 1990 2,400.00 30.00 2,816.61 140.83 2,675.78
- ----------------------------------------------------------------------------
December 1991 3,600.00 45.00 5,900.08 295.00 5,605.08
- ----------------------------------------------------------------------------
December 1992 4,800.00 60.00 7,389.54 369.48 7,020.06
- ----------------------------------------------------------------------------
December 1993 6,000.00 75.00 9,617.06 384.68 9,232.38
- ----------------------------------------------------------------------------
December 1994 7,200.00 90.00 10,295.92 411.84 9,884.08
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1988
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END VALUE AT END
VALUE AT END ACCUMULATION OF ACCUMULATION OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1989 $121.70 March 1991 $218.56 March 1993 $253.23
- --------------------------------------------------------------------------------------
June 1989 135.80 June 1991 205.53 June 1993 270.26
- --------------------------------------------------------------------------------------
September 1989 167.68 September 1991 230.08 September 1993 304.19
- --------------------------------------------------------------------------------------
December 1989 162.44 December 1991 271.28 December 1993 310.44
- --------------------------------------------------------------------------------------
March 1990 164.48 March 1992 244.58 March 1994 281.73
- --------------------------------------------------------------------------------------
June 1990 188.05 June 1992 217.20 June 1994 262.42
- --------------------------------------------------------------------------------------
September 1990 148.59 September 1992 233.48 September 1994 285.62
- --------------------------------------------------------------------------------------
December 1990 174.35 December 1992 277.41 December 1994 293.21
</TABLE>
44
<PAGE>
CALVERT SOCIALLY RESPONSIBLE SERIES
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1987 $1,200.00 $ 15.00 $ 1,118.80 $ 55.94 $ 1,062.86
- ----------------------------------------------------------------------------
December 1988 2,400.00 30.00 2,456.40 122.82 2,333.58
- ----------------------------------------------------------------------------
December 1989 3,600.00 45.00 4,089.93 204.50 3,885.43
- ----------------------------------------------------------------------------
December 1990 4,800.00 60.00 5,588.51 279.43 5,309.08
- ----------------------------------------------------------------------------
December 1991 6,000.00 75.00 7,716.02 308.64 7,407.38
- ----------------------------------------------------------------------------
December 1992 7,200.00 90.00 9,460.51 378.42 9,082.09
- ----------------------------------------------------------------------------
December 1993 8,400.00 105.00 11,316.53 339.50 10,977.03
- ----------------------------------------------------------------------------
December 1994 9,600.00 120.00 11,979.74 359.39 11,620.35
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1987 $112.57 December 1989 $132.97 September 1992 $167.05
- ----------------------------------------------------------------------------------------
June 1987 115.51 March 1990 134.18 December 1992 172.69
- ----------------------------------------------------------------------------------------
September 1987 120.87 June 1990 139.46 March 1993 177.45
- ----------------------------------------------------------------------------------------
December 1987 104.36 September 1990 133.13 June 1993 177.60
- ----------------------------------------------------------------------------------------
March 1988 111.30 December 1990 141.34 September 1993 183.58
- ----------------------------------------------------------------------------------------
June 1988 114.04 March 1991 148.25 December 1993 184.20
- ----------------------------------------------------------------------------------------
September 1988 114.50 June 1991 148.45 March 1994 177.54
- ----------------------------------------------------------------------------------------
December 1988 115.06 September 1991 153.35 June 1994 174.37
- ----------------------------------------------------------------------------------------
March 1989 118.57 December 1991 162.47 September 1994 177.74
- ----------------------------------------------------------------------------------------
June 1989 127.85 March 1992 158.05 December 1994 176.03
- ----------------------------------------------------------------------------------------
September 1989 134.65 June 1992 159.75
</TABLE>
45
<PAGE>
FIDELITY ASSET MANAGER PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,200.00 $15.00 $1,249.31 $ 62.47 $1,186.84
- ----------------------------------------------------------------------------
December 1991 2,400.00 30.00 2,794.46 139.72 2,654.74
- ----------------------------------------------------------------------------
December 1992 3,600.00 45.00 4,333.95 216.70 4,117.25
- ----------------------------------------------------------------------------
December 1993 4,800.00 60.00 6,505.86 325.29 6,180.57
- ----------------------------------------------------------------------------
December 1994 6,000.00 75.00 7,171.35 286.85 6,884.50
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE OF MONTH VALUE OF MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1990 $ 99.29 December 1991 $127.55 September 1993 $158.40
- --------------------------------------------------------------------------------------
June 1990 103.47 March 1992 130.95 December 1993 168.51
- --------------------------------------------------------------------------------------
September 1990 97.48 June 1992 133.74 March 1994 159.96
- --------------------------------------------------------------------------------------
December 1990 105.39 September 1992 135.97 June 1994 157.88
- --------------------------------------------------------------------------------------
March 1991 116.25 December 1992 140.74 September 1994 161.94
- --------------------------------------------------------------------------------------
June 1991 118.13 March 1993 148.25 December 1994 156.33
- --------------------------------------------------------------------------------------
September 1991 123.88 June 1993 152.41
</TABLE>
46
<PAGE>
FIDELITY EQUITY - INCOME PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1987 $1,200.00 $ 15.00 $ 1,042.60 $ 52.13 $ 990.47
- ----------------------------------------------------------------------------
December 1988 2,400.00 30.00 2,523.34 126.17 2,397.17
- ----------------------------------------------------------------------------
December 1989 3,600.00 45.00 4,144.84 207.24 3,937.60
- ----------------------------------------------------------------------------
December 1990 4,800.00 60.00 4,578.91 228.95 4,349.96
- ----------------------------------------------------------------------------
December 1991 6,000.00 75.00 7,266.61 290.66 6,975.95
- ----------------------------------------------------------------------------
December 1992 7,200.00 90.00 9,680.58 387.22 9,293.36
- ----------------------------------------------------------------------------
December 1993 8,400.00 105.00 12,573.87 377.22 12,196.65
- ----------------------------------------------------------------------------
December 1994 9,600.00 120.00 14,509.00 435.27 14,073.73
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END VALUE AT END
VALUE AT END ACCUMULATION OF ACCUMULATION OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1987 $116.62 December 1989 $137.18 September 1992 $160.07
- --------------------------------------------------------------------------------------
June 1987 116.44 March 1990 128.48 December 1992 171.94
- --------------------------------------------------------------------------------------
September 1987 121.21 June 1990 130.51 March 1993 185.89
- --------------------------------------------------------------------------------------
December 1987 97.65 September 1990 107.71 June 1993 190.09
- --------------------------------------------------------------------------------------
March 1988 107.54 December 1990 114.75 September 1993 198.67
- --------------------------------------------------------------------------------------
June 1988 116.73 March 1991 131.50 December 1993 200.88
- --------------------------------------------------------------------------------------
September 1988 117.55 June 1991 133.25 March 1994 195.17
- --------------------------------------------------------------------------------------
December 1988 118.35 September 1991 142.34 June 1994 201.93
- --------------------------------------------------------------------------------------
March 1989 127.35 December 1991 148.95 September 1994 215.14
- --------------------------------------------------------------------------------------
June 1989 135.87 March 1992 153.48 December 1994 212.40
- --------------------------------------------------------------------------------------
September 1989 144.01 June 1992 157.65
</TABLE>
47
<PAGE>
FIDELITY INDEX 500 PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1992
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1993 $1,200.00 $15.00 $1,235.28 $ 61.76 $1,273.52
- ----------------------------------------------------------------------------
December 1994 2,400.00 30.00 2,422.22 121.11 2,301.11
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1992
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1993 $104.05 December 1993 $108.37 September 1994 $108.54
- ---------------------------------------------------------------------------------------
June 1993 104.07 March 1994 103.94 December 1994 108.14
- ---------------------------------------------------------------------------------------
September 1993 106.31 June 1994 103.89
</TABLE>
FRANKLIN GOVERNMENT SECURITIES TRUST
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,200.00 $15.00 $1,263.31 $ 63.17 $1,200.14
- ----------------------------------------------------------------------------
December 1991 2,400.00 30.00 2,737.57 136.88 2,600.69
- ----------------------------------------------------------------------------
December 1992 3,600.00 45.00 4,146.00 207.30 3,938.70
- ----------------------------------------------------------------------------
December 1993 4,800.00 60.00 5,614.97 280.75 5,334.22
- ----------------------------------------------------------------------------
December 1994 6,000.00 75.00 6,505.65 260.23 6,245.42
</TABLE>
48
<PAGE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END VALUE AT END
VALUE AT END ACCUMULATION OF ACCUMULATION OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1990 $ 99.93 December 1991 $124.93 September 1993 $140.77
- --------------------------------------------------------------------------------------
June 1990 103.18 March 1992 123.11 December 1993 141.09
- --------------------------------------------------------------------------------------
September 1990 104.50 June 1992 128.13 March 1994 135.36
- --------------------------------------------------------------------------------------
December 1990 109.10 September 1992 132.42 June 1994 133.38
- --------------------------------------------------------------------------------------
March 1991 111.86 December 1992 132.78 September 1994 133.63
- --------------------------------------------------------------------------------------
June 1991 113.83 March 1993 136.91 December 1994 134.11
- --------------------------------------------------------------------------------------
September 1991 119.43 June 1993 139.64
</TABLE>
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1984 $1,200.00 $15.00 $1,349.59 $67.48 $1,282.11
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE
--------------------------------------------------------
<S> <C> <C> <C>
March 1994 $95.38 September 1994 $109.21
--------------------------------------------------------
June 1994 93.78 December 1994 114.91
</TABLE>
49
<PAGE>
JANUS ASPEN GROWTH PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1994 $1,200.00 $15.00 $1,181.03 $59.05 $1,121.98
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE
--------------------------------------------------------
<S> <C> <C> <C>
March 1994 $100.85 September 1994 $101.74
--------------------------------------------------------
June 1994 99.05 December 1994 101.62
</TABLE>
JANUS ASPEN SHORT-TERM BOND PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1994 $1,200.00 $15.00 $1,188.50 $59.43 $1,129.07
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE
--------------------------------------------------------
<S> <C> <C> <C>
March 1994 $99.19 September 1994 $99.39
--------------------------------------------------------
June 1994 98.49 December 1994 99.67
</TABLE>
50
<PAGE>
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PEROID
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1994 $1,200.00 $15.00 $1,171.58 $58.58 $1,113.00
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATOIN VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE
--------------------------------------------------------
<S> <C> <C> <C>
March 1994 $99.69 September 1994 $101.58
--------------------------------------------------------
June 1994 97.48 December 1994 100.26
</TABLE>
51
<PAGE>
LEXINGTON NATURAL RESOURCES TRUST
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,200.00 $15.00 $1,085.73 $ 54.29 $1,031.44
- ----------------------------------------------------------------------------
December 1991 2,400.00 30.00 2,212.64 110.63 2,102.01
- ----------------------------------------------------------------------------
December 1992 3,600.00 45.00 3,452.79 172.64 3,280.15
- ----------------------------------------------------------------------------
December 1993 4,800.00 60.00 4,965.32 248.27 4,717.05
- ----------------------------------------------------------------------------
December 1994 6,000.00 75.00 5,762.38 230.50 5,531.88
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE AT DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE OF MONTH VALUE OF MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1990 $94.55 December 1991 $78.82 September 1993 $91.85
- --------------------------------------------------------------------------------------
June 1990 85.87 March 1992 78.05 December 1993 88.03
- --------------------------------------------------------------------------------------
September 1990 94.91 June 1992 77.73 March 1994 85.80
- --------------------------------------------------------------------------------------
December 1990 83.98 September 1992 80.95 June 1994 83.66
- --------------------------------------------------------------------------------------
March 1991 77.84 December 1992 80.35 September 1994 88.82
- --------------------------------------------------------------------------------------
June 1991 81.45 March 1993 89.06 December 1994 82.26
- --------------------------------------------------------------------------------------
September 1991 76.72 June 1993 90.59
</TABLE>
52
<PAGE>
NEUBERGER & BERMAN GROWTH PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1985
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1986 $ 1,200.00 $ 15.00 $ 1,187.66 $ 19.38 $ 1,128.28
- ----------------------------------------------------------------------------
December 1987 2,400.00 30.00 2,101.69 105.08 1,996.61
- ----------------------------------------------------------------------------
December 1988 3,600.00 45.00 3,907.31 195.37 3,711.94
- ----------------------------------------------------------------------------
December 1989 4,800.00 60.00 6,362.99 318.15 6,044.84
- ----------------------------------------------------------------------------
December 1990 6,000.00 75.00 6,927.47 277.10 6,650.37
- ----------------------------------------------------------------------------
December 1991 7,200.00 90.00 10,201.12 408.04 9,793.08
- ----------------------------------------------------------------------------
December 1992 8,400.00 105.00 12,323.31 369.70 11,953.61
- ----------------------------------------------------------------------------
December 1993 9,600.00 120.00 14,236.42 427.09 13,809.33
- ----------------------------------------------------------------------------
December 1994 10,800.00 135.00 14,513.39 290.27 14,223.12
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1985
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE OF MONTH VALUE OF MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1986 $117.52 March 1989 $144.66 March 1992 $196.43
- --------------------------------------------------------------------------------------
June 1986 120.84 June 1989 159.49 June 1992 192.09
- --------------------------------------------------------------------------------------
September 1986 109.37 September 1989 178.13 September 1992 198.85
- --------------------------------------------------------------------------------------
December 1986 113.51 December 1989 171.94 December 1992 216.05
- --------------------------------------------------------------------------------------
March 1987 135.03 March 1990 163.27 March 1993 216.27
- --------------------------------------------------------------------------------------
June 1987 138.75 June 1990 173.51 June 1993 216.45
- --------------------------------------------------------------------------------------
September 1987 143.88 September 1990 145.25 September 1993 231.03
- --------------------------------------------------------------------------------------
December 1987 106.60 December 1990 155.92 December 1993 227.89
- --------------------------------------------------------------------------------------
March 1988 120.81 March 1991 178.87 March 1994 218.30
- --------------------------------------------------------------------------------------
June 1988 126.61 June 1991 176.05 June 1994 203.97
- --------------------------------------------------------------------------------------
September 1988 127.35 September 1991 185.94 September 1994 217.80
- --------------------------------------------------------------------------------------
December 1988 132.61 December 1991 199.68 December 1994 213.86
</TABLE>
53
<PAGE>
SCUDDER INTERNATIONAL PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1988 $1,200.00 $ 15.00 $ 1,276.91 $ 63.85 $ 1,213.06
- ----------------------------------------------------------------------------
December 1989 2,400.00 30.00 3,141.46 157.07 2,984.39
- ----------------------------------------------------------------------------
December 1990 3,600.00 45.00 3,956.19 197.81 3,758.38
- ----------------------------------------------------------------------------
December 1991 4,800.00 60.00 5,579.75 278.99 5,300.76
- ----------------------------------------------------------------------------
December 1992 6,000.00 75.00 6,488.62 259.54 6,229.08
- ----------------------------------------------------------------------------
December 1993 7,200.00 90.00 10,249.39 409.98 9,839.41
- ----------------------------------------------------------------------------
December 1994 8,400.00 105.00 11,178.16 335.34 10,842.82
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END OF ACCUMULATION VALUE AT END OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1988 $108.22 September 1990 $137.61 March 1993 $164.50
- ----------------------------------------------------------------------------------------
June 1988 110.15 December 1990 143.07 June 1993 171.60
- ----------------------------------------------------------------------------------------
September 1988 104.91 March 1991 154.45 September 1993 190.22
- ----------------------------------------------------------------------------------------
December 1988 115.28 June 1991 148.17 December 1993 205.15
- ----------------------------------------------------------------------------------------
March 1989 125.78 September 1991 156.84 March 1994 203.36
- ----------------------------------------------------------------------------------------
June 1989 130.06 December 1991 157.46 June 1994 205.38
- ----------------------------------------------------------------------------------------
September 1989 147.69 March 1992 150.63 September 1994 209.63
- ----------------------------------------------------------------------------------------
December 1989 156.87 June 1992 159.33 December 1994 200.90
- ----------------------------------------------------------------------------------------
March 1990 158.34 September 1992 156.40
- ----------------------------------------------------------------------------------------
June 1990 166.92 December 1992 150.70
</TABLE>
54
<PAGE>
TCI GROWTH
HYPOTHETICAL PERIODIC ACCUMULATION
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE SALES CHARGE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1988 $1,200.00 $ 15.00 $ 1,205.94 $ 60.30 $ 1,145.64
- ----------------------------------------------------------------------------
December 1989 2,400.00 30.00 2,824.71 141.24 2,683.47
- ----------------------------------------------------------------------------
December 1990 3,600.00 45.00 3,928.71 196.44 3,732.27
- ----------------------------------------------------------------------------
December 1991 4,800.00 60.00 6,900.94 345.05 6,555.89
- ----------------------------------------------------------------------------
December 1992 6,000.00 75.00 7,957.83 318.31 7,639.52
- ----------------------------------------------------------------------------
December 1993 7,200.00 90.00 9,920.78 396.83 9,523.95
- ----------------------------------------------------------------------------
December 1994 8,400.00 105.00 10,863.62 325.91 10,537.71
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END VALUE AT END
VALUE AT END ACCUMULATION OF ACCUMULATION OF ACCUMULATION
OF MONTH VALUE MONTH VALUE MONTH VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1988 $ 91.40 September 1990 $113.00 March 1993 $166.75
- --------------------------------------------------------------------------------------
June 1988 100.13 December 1990 119.63 June 1993 170.26
- --------------------------------------------------------------------------------------
September 1988 94.39 March 1991 145.88 September 1993 179.10
- --------------------------------------------------------------------------------------
December 1988 96.51 June 1991 136.27 December 1993 178.15
- --------------------------------------------------------------------------------------
March 1989 104.63 September 1991 151.98 March 1994 173.61
- --------------------------------------------------------------------------------------
June 1989 110.48 December 1991 167.60 June 1994 164.58
- --------------------------------------------------------------------------------------
September 1989 124.71 March 1992 159.19 September 1994 172.21
- --------------------------------------------------------------------------------------
December 1989 122.65 June 1992 148.65 December 1994 173.94
- --------------------------------------------------------------------------------------
March 1990 123.51 September 1992 152.80
- --------------------------------------------------------------------------------------
June 1990 134.26 December 1992 163.40
</TABLE>
55
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT C
- --------------------------------------------------------------------------------
OPPORTUNITY PLUS
GROUP VARIABLE MULTIPLE OPTION
ANNUITY CONTRACTS
DATED March 31, 1995
[ART]
For Master Applications Only
I hereby acknowledge receipt of the Account C Opportunity Plus prospectus dated
March 31, 1995 and all current prospectuses pertaining to the variable
investment options within the Opportunity Plus Tax Deferred Annuity Plan.
- --------------------------------------------------------------------------------
CONTRACT HOLDER'S SIGNATURE
- --------------------------------------------------------------------------------
DATE
75962-1
[LOGO OF AETNA APPEARS HERE]
AETNA LIFE INSURANCE AND ANNUITY COMPANY
Opportunity Plus Processing Office
P.O. Box 12894
Albany, NY 12212-2894
75962-1
