As filed with the Securities and Exchange Registration No. 33-75962*
Commission on November 13, 1997 Registration No. 811-2513
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
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POST-EFFECTIVE AMENDMENT NO. 13 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and Amendment To
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Variable Annuity Account C of Aetna Life Insurance and Annuity Company
(Exact Name of Registrant)
Aetna Life Insurance and Annuity Company
(Name of Depositor)
151 Farmington Avenue, RE4A, Hartford, Connecticut 06156
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: (860) 273-4686
Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06156
(Name and Address of Agent for Service)
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It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on November 28, 1997 pursuant to paragraph (b) of Rule 485
* Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has
included a combined prospectus under this Registration Statement which
includes all the information which would currently be required in a prospectus
relating to the securities covered by the following earlier Registration
Statement: 33-75978.
<PAGE>
VARIABLE ANNUITY ACCOUNT C
CROSS REFERENCE SHEET
FORM N-4
ITEM NO. PART A (PROSPECTUS) LOCATION - PROSPECTUS
1 Cover Page.............................. Cover Page, and as amended
2 Definitions............................. Definitions
3 Synopsis................................ Prospectus Summary; Fee Table,
and as amended
4 Condensed Financial Information......... Condensed Financial Information
5 General Description of Registrant,
Depositor, and Portfolio Companies...... The Company; Variable Annuity
Account C; The Funds, and
as amended
6 Deductions and Expenses................. Charges and Deductions;
Distribution
7 General Description of Variable Annuity
Contracts............................... Purchase; Miscellaneous
8 Annuity Period.......................... Annuity Period
9 Death Benefit........................... Death Benefit During Accumulation
Period; Death Benefit Payable
During the Annuity Period
10 Purchases and Contract Value............ Purchase; Contract Valuation
11 Redemptions............................. Right to Cancel; Withdrawals
12 Taxes................................... Tax Status
13 Legal Proceedings....................... Miscellaneous - Legal Matters
and Proceedings
14 Table of Contents of the Statement of
Additional Information.................. Contents of the Statement of
Additional Information
<PAGE>
LOCATION - STATEMENT OF
ADDITIONAL INFORMATION
DATED MAY 1, 1997 AND AS
FORM N-4 PART B (STATEMENT OF AMENDED BY SUPPLEMENT
ITEM NO. ADDITIONAL INFORMATION) DATED NOVEMBER 28, 1997
15 Cover Page............................. Cover page
16 Table of Contents...................... Table of Contents
17 General Information and History........ General Information and History
18 Services............................... General Information and History;
Independent Auditors
19 Purchase of Securities Being Offered... Offering and Purchase of
Contracts
20 Underwriters........................... Offering and Purchase of
Contracts
21 Calculation of Performance Data........ Performance Data, and
as amended; Average Annual
Total Return Quotations
22 Annuity Payments....................... Annuity Payments
23 Financial Statements................... Financial Statements
Part C (Other Information)
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.
<PAGE>
PARTS A AND B
The Prospectus is included in Part A of this Post-Effective Amendment No. 13.
The Statement of Additional Information is incorporated into Part B of this
Post-Effective Amendment No. 13 by reference to Post-Effective Amendment No. 11
to the Registration Statement on Form N-4 (File No. 33-75962), as filed
electronically on April 14, 1997 (Accession No. 0000950146-97-000590) and by
reference to a Supplement to the Statement of Additional Information dated
November 28, 1997, which is included in this filing.
<PAGE>
PROSPECTUS
================================================================================
The Contracts offered in connection with this Prospectus are two group deferred
variable annuity contracts ("Contracts") issued by Aetna Life Insurance and
Annuity Company (the "Company"). One allows lump sum payments ("Single Purchase
Payment Contracts") and the other allows installment payments ("Installment
Purchase Payment Contracts"). The Contracts are available through participation
in the "Opportunity Plus" retirement programs which receive favorable tax
deferred treatment under Federal income tax law. (See "Purchase.") Interests in
these Contracts are offered to employees of school boards and public
universities in the state of New York.
The Contracts provide that contributions may be allocated to one or more of the
Credited Interest Options or to one or more of the Subaccounts of Variable
Annuity Account C, a separate account of the Company. The Subaccounts invest
directly in shares of the following Funds:
[bullet] Aetna Variable Fund
[bullet] Aetna Income Shares
[bullet] Aetna Variable Encore Fund
[bullet] Aetna Investment Advisers Fund, Inc.
[bullet] Aetna Ascent Variable Portfolio
[bullet] Aetna Crossroads Variable Portfolio
[bullet] Aetna Legacy Variable Portfolio
[bullet] Aetna Variable Index Plus Portfolio
[bullet] Calvert Responsibly Invested Balanced Portfolio
[bullet] Fidelity VIP II Asset Manager Portfolio
[bullet] Fidelity VIP II Contrafund Portfolio Portfolio
[bullet] Fidelity VIP II Index 500 Portfolio
[bullet] Fidelity VIP Equity Income Portfolio Portfolio
[bullet] Janus Aspen Aggressive Growth Portfolio
[bullet] Janus Aspen Growth Portfolio
[bullet] Janus Aspen Worldwide Growth Portfolio
[bullet] Lexington Emerging Markets Fund, Inc.
[bullet] Lexington Natural Resources Trust*
[bullet] Portfolio Partners, Inc. MFS Emerging Equities
Portfolio
[bullet] Portfolio Partners, Inc. MFS Research Growth Portfolio
[bullet] Portfolio Partners, Inc. MFS Value Equity Portfolio
[bullet] Portfolio Partners, Inc. Scudder International Growth
[bullet] Portfolio Partners, Inc. T. Rowe Price Growth Equity
*This Fund will be removed from the list of Funds as of the close of business
of the New York Stock Exchange on November 26, 1997, or as soon thereafter as
all participants have redirected their allocations to other investment options,
since it will be closed to new investments after that date (except reinvested
dividends and capital gains earned on amounts already invested in the Fund
through the Separate Account and loan repayments automatically deposited into
the Fund pursuant to the Company's loan repayment procedures.)
The Credited Interest Options currently available under the Contract are the
Guaranteed Accumulation Account and the Fixed Account. Except as specifically
mentioned, this Prospectus describes only investments through the Separate
Account. A brief description of each of the Credited Interest Options is
contained in Appendices to this Prospectus. Additional information concerning
the Guaranteed Accumulation Account is contained in a separate prospectus.
The availability of the Funds and the Credited Interest Options is subject to
applicable regulatory authorization. Not all Funds or Credited Interest Options
may be available under all Contracts. Please check with your employer to
determine option availability. (See "Investment Options.")
This Prospectus provides investors with the information that they should know
about the Separate Account before investing in the Contract through the
Separate Account. Additional information about the Separate Account is
contained in a Statement of Additional Information ("SAI") which is available
at no charge. The SAI has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The Table of Contents for
the SAI is printed on page 17 in this Prospectus. An SAI may be obtained by
indicating the request on the enrollment form or on the prospectus receipt
contained in this Prospectus, or by calling the number listed under the
"Inquiries" section of the Prospectus Summary. You may also obtain an SAI for
any of the Funds by calling that phone number.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE FUNDS AND THE GUARANTEED ACCUMULATION ACCOUNT. ALL PROSPECTUSES SHOULD BE
READ AND RETAINED FOR FUTURE REFERENCE.
THIS PROSPECTUS, THE STATEMENT OF ADDITIONAL INFORMATION AND OTHER INFORMATION
ABOUT THE SEPARATE ACCOUNT REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (SEC) CAN BE FOUND IN THE SEC'S WEB SITE AT
http://www.sec.gov.
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.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION
ARE DATED NOVEMBER 28, 1997.
<PAGE>
TABLE OF CONTENTS
===============================================================================
DEFINITIONS ................................................ DEFINITIONS - 1
PROSPECTUS SUMMARY .......................................... SUMMARY - 1
FEE TABLE ................................................... FEE TABLE - 1
CONDENSED FINANCIAL INFORMATION ........................... AUV HISTORY - 1
THE COMPANY ............................................................. 1
VARIABLE ANNUITY ACCOUNT C .............................................. 1
INVESTMENT OPTIONS .................................................... 1
The Funds ............................................................. 1
Credited Interest Options ........................................... 4
PURCHASE ................................................................ 4
Contract Availability ................................................. 4
Purchasing Interests in the Contract .................................. 4
Right to Cancel ....................................................... 4
CHARGES AND DEDUCTIONS ................................................. 5
Daily Deductions from the Separate Account ............................ 5
Maintenance Fee ....................................................... 5
Deferred Sales Charge ................................................. 5
Fund Expenses ....................................................... 7
Premium and Other Taxes .............................................. 7
CONTRACT VALUATION .................................................... 7
Account Value ....................................................... 7
Accumulation Units .................................................... 7
Net Investment Factor ................................................. 7
TRANSFERS ............................................................. 8
WITHDRAWALS ............................................................. 8
Reinvestment Privilege .............................................. 8
CONTRACT LOANS .......................................................... 9
ADDITIONAL WITHDRAWAL OPTIONS ........................................... 9
DEATH BENEFIT DURING ACCUMULATION PERIOD ............................... 9
ANNUITY PERIOD .......................................................... 10
Annuity Period Elections .............................................. 10
Annuity Options ....................................................... 10
Annuity Payments .................................................... 11
Charges Deducted During the Annuity Period ............................ 11
Death Benefit Payable During the Annuity Period ...................... 11
TAX STATUS ............................................................. 12
Introduction .......................................................... 12
Taxation of the Company .............................................. 12
Contracts Used with Certain Retirement Plans ......................... 12
<PAGE>
MISCELLANEOUS ......................................................... 14
Opportunity Plus Processing Office .................................... 14
Distribution ......................................................... 14
Delay or Suspension of Payments ...................................... 15
Performance Reporting ............................................... 15
Voting Rights ......................................................... 15
Changes in Beneficiary Designations ................................. 16
Modification of the Contract .......................................... 16
Agreements with the Company .......................................... 16
Legal Matters and Proceedings ...................................... 16
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION ..................... 17
APPENDIX I--GUARANTEED ACCUMULATION ACCOUNT .............................. 18
APPENDIX II--FIXED ACCOUNT ............................................. 19
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. THE COMPANY DOES NOT AUTHORIZE ANY
PERSON TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THE OFFERING CONTAINED IN THIS PROSPECTUS EXCEPT AS OTHERWISE CONTAINED HEREIN.
<PAGE>
DEFINITIONS
===============================================================================
The following terms are defined as they are used in this Prospectus:
Account: A record established for each Participant to identify contract values
accumulated on each Participant's behalf during the Accumulation Period. For
any given Participant, the Account includes amounts held under an Installment
Purchase Payment Contract and a Single Purchase Payment Contract.
Account Value: The total dollar value of amounts held in an Account as of each
Valuation Date during the Accumulation Period.
Account Year: A period of twelve months measured from the date on which an
Account is established (the effective date) or from an anniversary of such
effective date.
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 each Subaccount before annuity
payments begin.
Annuitant: The person on whose life or life expectancy the annuity payments are
based.
Annuity: A series of payments for life, a definite period or a combination of
the two.
Annuity Date: The date on which annuity payments begin.
Annuity Period: The period during which Annuity payments are made.
Annuity Unit: A measure of the value of each Subaccount selected during the
Annuity Period.
Beneficiary(ies): The person or persons identified in the enrollment form who
are to receive any death benefit proceeds payable under the Contract.
Code: Internal Revenue Code of 1986, as amended.
Company (We, Us): Aetna Life Insurance and Annuity Company.
Contracts: The group deferred, variable annuity contracts offered by this
Prospectus.
Contract Holder: The person or entity to whom the Contract is issued. The
Contract Holder of the Contract is usually the employer.
Credited Interest Options: The fixed interest options under the Contract. The
Credited Interest Options currently consist of the Guaranteed Accumulation
Account and the Fixed Account, each of which is described in an Appendix to
this Prospectus. Amounts allocated to the Credited Interest Options are
included in the Account Value.
Fund(s): An open-end registered management investment company whose shares are
purchased by the Separate Account to fund the benefits provided by the
Contract.
Home Office: The Company's principal executive offices, located at 151
Farmington Avenue, Hartford, Connecticut 06156.
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 (You): A person participating in a Plan maintained by an eligible
organization.
Plan(s): Tax-deferred retirement plans under Section 403(b) of the Code for
employees of public school systems.
Purchase Payment(s): The gross payment(s) made to the Company under a Contract.
- --------------------------------------------------------------------------------
DEFINITIONS - 1
<PAGE>
Purchase Payment Periods: 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.
Separate Account: Variable Annuity Account C, a separate account established by
the Company for the purpose of funding variable annuity contracts issued by the
Company.
Subaccount(s): The portion of the assets of the Separate Account that is
allocated to a particular Fund. Each Subaccount invests in the shares of only
one corresponding Fund.
UUP: United University Professions.
Valuation Date: The date and time at which the Accumulation Unit Value and
Annuity Unit Value of a Subaccount is calculated. Currently, this calculation
occurs after the close of business of the New York Stock Exchange on any normal
business day, Monday through Friday, that the New York Stock Exchange is open.
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DEFINITIONS - 2
<PAGE>
PROSPECTUS SUMMARY
================================================================================
CONTRACTS OFFERED
The two Contracts offered in connection with this Prospectus are group
deferred variable annuity contracts issued by Aetna Life Insurance and Annuity
Company (the "Company"). One allows lump sum payments ("Single Purchase Payment
Contracts") and the other allows installment payments ("Installment Purchase
Payment Contracts"). The purpose of the Contract is to accumulate values and to
provide benefits upon retirement for retirement plans under Section 403(b) of
the Code. The Contracts are available for school boards and public universities
in the State of New York, specifically for Participants who are members of
NYSUT and UUP.
The Contracts are available to Plans that include a variable annuity
contract alone or in conjunction with retail mutual funds for which Systemized
Benefits Administrators, Inc. ("SBA"), an affiliate 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 or deducted from a
Participant's Account under the Contract.
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 the enrollment form and submitting it to the Opportunity
Plus Processing Office. Purchase Payments can be applied to the Contract either
through a lump-sum transfer from a pre-existing plan or through salary
reduction. (See "Purchase.")
FREE LOOK PERIOD
Contract Holders and Participants have the right to cancel their purchase
within 10 days after receiving the Contract or other document evidencing
interest in the Contract by returning it to the Opportunity Plus Processing
Office along with a written notice of cancellation. The amount received upon
cancellation will be the full value of Purchase Payments plus any increase or
minus any decrease in the Account Value allocated to the Subaccounts. (See
"Right to Cancel.")
INVESTMENT OPTIONS
The Company has established Variable Annuity Account C, a registered unit
investment trust, for the purpose of funding the variable portion of the
Contracts. The Separate Account is divided into Subaccounts which invest
directly in shares of the Funds described herein, as designated by the
Participant. The Contracts allow investment in any or all of the Subaccounts,
as well as in the Credited Interest Options described below. The total number
of investment options that may be selected during the Accumulation Period is
limited. For a complete list of the Funds available under the Contracts, a
description of the investment objectives of each of the Funds and their
investment advisers, and a description of the limitations on the number of
investment options, see "Investment Options--The Funds" in this Prospectus, as
well as the prospectuses for each of the Funds.
The Contracts also provide for investment in Credited Interest Options
which allow you to earn fixed rates of interest. The fixed options available
under the Contracts are the Guaranteed Accumulation Account ("GAA") and the
Fixed Account. (See the Appendices to this Prospectus.)
CHARGES AND DEDUCTIONS
Certain charges are associated with these Contracts. These charges include
daily deductions from the Separate Account (the mortality and expense risk
charges and an administrative charge), as well as any annual maintenance fee
and premium and other taxes. The Funds also incur certain fees and expenses
which are deducted directly from the Funds. A deferred sales charge may apply
upon a full or partial withdrawal of the Account Value. (See the Fee Table and
"Charges and Deductions.")
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SUMMARY - 1
<PAGE>
TRANSFERS
Prior to the Annuity Date, and subject to certain limitations, Account
Values may be transferred among the Subaccounts and the Credited Interest
Options without charge. Transfers can be requested in writing or by telephone
in accordance with the Company's transfer procedures. (See the Appendices for a
full description of the restrictions applicable to transfers made from the
Credited Interest Options.) (See "Transfers.")
WITHDRAWALS
All or a part of the Account Value may be withdrawn prior to the Annuity
Date by properly completing a disbursement form and sending it to the Company.
Certain charges may be assessed upon withdrawal. The withdrawal may also be
subject to income tax and a federal tax penalty. The Code restricts full and
partial withdrawals in some circumstances. (See "Withdrawals.")
The Contract also offers certain Additional Withdrawal Options during the
Accumulation Period to persons meeting certain criteria. Additional Withdrawal
Options may not be suitable in every situation. (See "Additional Withdrawal
Options.")
LOANS
Participants under Section 403(b) Plans may request a loan from their
Account Value at any time during the Accumulation Period. (See "Contract
Loans.")
DEATH BENEFIT
A death benefit is payable if the Participant dies before the Annuity
Date. Death benefit proceeds will be paid to the Beneficiary in an amount equal
to the Account Value. Until the election of a method of payment, the Account
Value will remain invested under the Contract. The Beneficiary may elect to
receive the proceeds in a lump sum or under any of the payment options
available under the Contract. However, the Code requires that distributions
begin within a certain time period. (See "Death Benefit During Accumulation
Period.")
After Annuity Payments have commenced, a death benefit may be payable to
the Beneficiary depending upon the terms of the Contract and the Annuity Option
selected. (See "Death Benefit Payable During the Annuity Period.")
THE ANNUITY PERIOD
On the Annuity Date, you may elect to begin receiving Annuity payments.
Annuity payments can be made on either a fixed, variable or combination fixed
and variable basis. If a variable payout is selected, the payments will
continue to vary with the investment performance of the Subaccount(s) selected.
The Company reserves the right to limit the number of Subaccounts that may be
available during the Annuity Period. (See "Annuity Period.")
TAXES
Contributions and earnings are not generally taxed until you or your
Beneficiary(ies) actually receive a distribution from the Contract. A 10%
federal tax penalty and a 20% withholding for income tax may be imposed on
certain withdrawals. (See "Tax Status.")
INQUIRIES
Questions, inquiries or requests for additional information can be
directed to your agent or local representative, or you may contact the Company
through the Opportunity Plus Processing Office by writing to P.O. Box 12894,
Albany, New York 12212-2894, or by calling 1-800-OPP-INFO (1-800-677-4636).
(See "Miscellaneous--Opportunity Plus Processing Office.")
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SUMMARY - 2
<PAGE>
FEE TABLE
===============================================================================
This Fee Table describes the various charges and expenses associated with the
Contracts during the Accumulation Period. For amounts deducted during the
Annuity Period, see "Annuity Period--Charges Deducted During the Annuity
Period." No sales charge is paid upon purchase of the Contracts. All costs that
are borne directly or indirectly under the Subaccounts and Funds are shown
below. For more information 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 the amount withdrawn).*
- --------------------------------------------------------------------------------
INSTALLMENT PURCHASE PAYMENT CONTRACTS:
Purchase Payment Deferred Sales
Periods Completed Charge Deduction
----------------- ----------------
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more but less than 10 2%
More than 10 0%
- --------------------------------------------------------------------------------
Annual Contract Maintenance Fee ............................... $5.00**
* The total amount deducted for the deferred sales charge will not exceed 8.5%
of the total Purchase Payments applied to the Account under the Installment
Purchase Payment Contract. For Single Purchase Payment Contracts, there is no
deduction for deferred sales charges. For Installment Purchase Payment
Contracts, the deferred sales charge is waived for amounts deposited in the
Subaccounts (or GAA) on or after April 1, 1995. (See "Charges and
Deductions--Deferred Sales Charge.")
** The maintenance fee will generally be deducted quarterly during the
Accumulation Period. Effective July 1, 1997 the quarterly maintenance fee
will be reduced from $3.75 per quarter to $1.25 per quarter, resulting in an
annual maintenance fee of $5.00 for the period from May 1, 1997 to May 1,
1998. Effective January 1, 1999 the quarterly maintenance fee will be reduced
to $0.00, thereby eliminating the maintenance fee charge.
SEPARATE ACCOUNT ANNUAL EXPENSES (Daily deductions, equal to the percentage
shown on an annual basis, made from amounts allocated to the variable options
under each Contract.) Separate Account Annual Expenses are:
Mortality and Expense Risk Charge ............................. 1.25%
Administrative Expense Charge ................................. 0.00%***
----
Total Separate Account Charges ............................... 1.25%
====
*** 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 Subaccounts.
- --------------------------------------------------------------------------------
FEE TABLE - 1
<PAGE>
ANNUAL EXPENSES OF THE FUNDS
The following table illustrates the advisory fees and other expenses applicable
to the Funds. Except as noted, these figures are a percentage of each Fund's
average net assets and are based on figures for the year ended December 31,
1996. A Fund's "Other Expenses" include operating costs of the Fund. These
expenses are reflected in the Fund's net asset value and are not deducted from
the Account Value under the Contract.
<TABLE>
<CAPTION>
Investment
Advisory Fees(1) Other Expenses
(after expense (after expense Total Fund
reimbursement) reimbursement) Annual Expenses
-------------- -------------- ---------------
<S> <C> <C> <C>
Aetna Variable Fund(2) 0.50% 0.06% 0.56%
Aetna Income Shares(2) 0.40% 0.08% 0.48%
Aetna Variable Encore Fund(2) 0.25% 0.10% 0.35%
Aetna Investment Advisers Fund, Inc.(2) 0.50% 0.08% 0.58%
Aetna Ascent Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Crossroads Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Legacy Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Variable Index Plus Portfolio(2) 0.35% 0.15% 0.50%
Calvert Responsibly Invested Balanced Portfolio(3) 0.71% 0.13% 0.84%
Fidelity VIP II Asset Manager Portfolio(4) 0.64% 0.10% 0.74%
Fidelity VIP II Contrafund Portfolio(4) 0.61% 0.13% 0.74%
Fidelity VIP II Index 500 Portfolio(5) 0.13% 0.15% 0.28%
Fidelity VIP Equity-Income Portfolio(4) 0.51% 0.07% 0.58%
Janus Aspen Aggressive Growth Portfolio(6) 0.72% 0.04% 0.76%
Janus Aspen Growth Portfolio(6) 0.65% 0.04% 0.69%
Janus Aspen Worldwide Growth Portfolio(6) 0.66% 0.14% 0.80%
Lexington Emerging Markets Fund, Inc.(7) 0.85% 1.38% 2.23%
Lexington Natural Resources Trust(7) 1.00% 0.42% 1.42%
Portfolio Partners, Inc. MFS Emerging Equities Portfolio 0.70%(8) 0.13% 0.83%(9)
Portfolio Partners, Inc. MFS Research Growth Portfolio 0.70%(8) 0.15% 0.85%(9)
Portfolio Partners, Inc. MFS Value Equity Portfolio 0.65% 0.25% 0.90%(9)
Portfolio Partners, Inc. Scudder International Growth Portfolio 0.80% 0.20% 1.00%(9)
Portfolio Partners, Inc. T. Rowe Price Growth Equity Portfolio 0.60% 0.15% 0.75%(9)
</TABLE>
- ------------------
(1) Certain of the unaffiliated Fund advisers reimburse the Company for
administrative costs incurred in connection with administering the Funds as
variable options under the Contract. These reimbursements are paid out of
the investment advisory fees and are not charged to investors.
(2) The Company provides administrative services to the Fund and assumes the
Fund's ordinary recurring direct costs under an Administrative Services
Agreement. The new Administrative Services Agreement became effective on May
1, 1996 for Aetna Variable Fund, Aetna Income Shares, Aetna Variable Encore
Fund, Aetna Investment Advisers Fund, Inc., Aetna Ascent Variable Portfolio,
Aetna Crossroads Variable Portfolio, and Aetna Legacy Variable Portfolio.
The "Other Expenses" shown for these Funds are not based on actual figures
for the year ended December 31, 1996, but reflect the fee payable under that
Agreement. The Administrative Services Agreement has been in effect for
Aetna Variable Index Plus Portfolio since its inception. Effective August 1,
1996, Investment Advisory Fees were increased for Aetna Variable Fund, Aetna
Income Shares, Aetna Investment Advisers Fund, Inc., Aetna Ascent Variable
Portfolio, Aetna Crossroads Variable Portfolio, and Aetna Legacy Variable
Portfolio. The Advisory Fees shown above are not based on actual figures for
the year ended December 31, 1996, but reflect the increased Advisory Fees.
(3) The figures above are based on expenses for fiscal year 1996, and have been
restated to reflect an increase in transfer agency expenses of 0.03%
expected to be incurred in 1997. "Investment Advisory Fees" include a
performance adjustment, which could cause the fee to be as high as 0.85% or
as low as 0.55%, depending on performance. "Other Expenses" reflect an
indirect fee of 0.03% (relating to an expense offset arrangement with the
Portfolio's custodian). Net fund operating expenses after reductions for
fees paid indirectly (again, restated) would be 0.81%.
(4) A portion of the brokerage commissions that certain funds pay was used to
reduce expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby interest earned on
uninvested cash balances was used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses would
have been 0.73% for Asset Manager Portfolio, and 0.71% for Contrafund
Portfolio, and 0.56% for Equity Income Portfolio.
- --------------------------------------------------------------------------------
FEE TABLE - 2
<PAGE>
(5) The Fund's investment adviser agreed to reimburse a portion of Index 500
Portfolio's expenses during the period. Without this reimbursement, the
Fund's management fee, other expenses and total expenses would have been
0.28%, 0.15% and 0.43%, respectively, for Index 500 Portfolio.
(6) The fees and expenses shown above are based on gross expenses of the Shares
before expense offset arrangements for the fiscal year ended December 31,
1996. The information for each Portfolio is net of fee waivers or reductions
from Janus Capital. Fee reductions for the Aggressive Growth, Growth, and
Worldwide Growth Portfolios reduce the management fee to the level of the
corresponding Janus retail fund. Other waivers, if applicable, are first
applied against the management fee and then against other expenses. Without
such waivers or reductions, the Management Fee, Other Expenses and Total
Fund Annual Expenses would have been 0.79%, 0.04% and 0.83% for Aggressive
Growth Portfolio; 0.79%, 0.04% and 0.83% for Growth Portfolio and 0.77%,
0.14% and 0.91% for Worldwide Growth Portfolio, respectively. Janus Capital
may modify or terminate the waivers or reductions at any time upon at least
90 days' notice to the Portfolio's Board of Trustees.
(7) The Fund's investment adviser has agreed to voluntarily limit the total
expenses of the Fund (excluding interest, taxes, brokerage commissions, and
extraordinary expenses, but including management fees and operating
expenses) to an annual rate of 1.75% of the Fund's average net assets from
May 1, 1996 through April 30, 1997. For the period ending December 31, 1996,
the Total Fund Annual Expenses, after reimbursement, was 1.64%. Effective
May 1, 1997, an expense limitation is no longer in effect. The Advisory Fee,
Other Expenses and Total Fund Annual Expenses shown above reflect the actual
expenses of the Fund before reimbursement, as if such arrangement had not
been in effect at any time during 1996. The example shown in the table above
should not be considered a representation of past or future expenses and
actual expenses may be greater or less than those shown.
(8) The advisory fee is .70% of the first $500 million in assets and .65% on the
excess.
(9) The Fund commenced investment operations on November 28, 1997. The fees and
expenses shown above are the contractual rates for the current period. The
Company has agreed to reimburse the Fund for expenses and/or waive its
fees so that the aggregate expenses will not exceed this amount through
April 30, 1999. Without such reimbursements or waivers, Total Fund Annual
Expenses are estimated to be as folllows: .87% for the MFS Emerging Equities
Portfolio; .92% for MFS Research Growth Portfolio; .90% for the MFS Value
Equity Portfolio; .79% for T. Rowe Price Growth Equity Portfolio; and 1.00%
for the Scudder International Growth Portfolio.
- --------------------------------------------------------------------------------
FEE TABLE - 3
<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.
The following Examples illustrate the expenses that would have been paid
assuming a $1,000 investment in the Contract and a 5% return on assets. For the
purposes of these Examples, the maintenance fee of $5.00 that is deducted under
the Contract has been converted to a percentage of assets equal to 0.013%.
<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
If you withdraw your entire Account If you do not withdraw your Account
Value at the end of the periods shown, Value, or if you annuitize at the end
you would pay the following expenses, of the periods shown, you would pay
including any applicable deferred the following expenses (no deferred
sales charge:* sales charge is reflected):**
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 $70 $112 $157 $214 $19 $ 57 $ 99 $214
Aetna Income Shares $69 $110 $153 $205 $18 $ 55 $ 95 $205
Aetna Variable Encore Fund $68 $106 $147 $191 $16 $ 51 $ 88 $191
Aetna Investment Advisers Fund, Inc. $70 $113 $158 $216 $19 $ 58 $100 $216
Aetna Ascent Variable Portfolio $72 $118 $166 $234 $20 $ 63 $108 $234
Aetna Crossroads Variable Portfolio $72 $118 $166 $234 $20 $ 63 $108 $234
Aetna Legacy Variable Portfolio $72 $118 $166 $234 $20 $ 63 $108 $234
Aetna Variable Index Plus Portfolio $70 $111 $154 $208 $18 $ 56 $ 96 $208
Calvert Responsibly Invested Balanced Portfolio $73 $120 $171 $243 $21 $ 66 $113 $243
Fidelity VIP II Asset Manager Portfolio $72 $117 $166 $233 $20 $ 63 $108 $233
Fidelity VIP II Contrafund Portfolio $72 $117 $166 $233 $20 $ 63 $108 $233
Fidelity VIP II Index 500 Portfolio $67 $104 $143 $184 $16 $ 49 $ 84 $184
Fidelity VIP Equity-Income Portfolio $70 $113 $158 $216 $19 $ 58 $100 $216
Janus Aspen Aggressive Growth Portfolio $72 $118 $167 $235 $21 $ 63 $109 $235
Janus Aspen Growth Portfolio $71 $116 $163 $228 $20 $ 61 $105 $228
Janus Aspen Worldwide Growth Portfolio $72 $119 $169 $239 $21 $ 65 $111 $239
Lexington Emerging Markets Fund, Inc. $86 $159 $235 $377 $35 $107 $181 $377
Lexington Natural Resources Trust $78 $137 $198 $302 $27 $ 83 $142 $302
Portfolio Partners, Inc. MFS Emerging Equities
Portfolio $73 $120 $170 $242 $21 $ 66 $113 $242
Portfolio Partners, Inc. MFS Research Growth
Portfolio $73 $121 $171 $244 $21 $ 66 $114 $244
Portfolio Partners, Inc. MFS Value Equity
Portfolio $73 $122 $174 $250 $22 $ 68 $116 $250
Portfolio Partners, Inc. Scudder International
Growth Portfolio $74 $125 $178 $260 $23 $ 71 $121 $260
Portfolio Partners, Inc. T. Rowe Price Growth
Equity Portfolio $72 $118 $166 $234 $20 $ 63 $108 $234
</TABLE>
- ------------------
* For Single Purchase Payment Accounts, there is no deduction for deferred
sales charges. For Installment Purchase Payment Accounts, the deferred sales
charge is waived for amounts deposited in the Subaccounts (or GAA) on or after
April 1, 1995.
** This Example would not apply if a nonlifetime variable annuity option is
selected, and a lump sum settlement is requested within three years after
annuity payments start since the lump sum payment will be treated as a
withdrawal during the Accumulation Period and will be subject to any deferred
sales charge that would then apply. (Refer to Example A.)
- --------------------------------------------------------------------------------
FEE TABLE - 4
<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, 1996 (as applicable), is derived from
the financial statements of the Account, which financial statements have been
audited by KPMG Peat Marwick LLP, independent auditors. It reflects investment
options available under the Contracts as of December 31, 1996; not all
investment options shown here are currently available. The financial statements
and the independent auditors' report thereon are included in the Statement of
Additional Information.
<TABLE>
<CAPTION>
1996 1995 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
AETNA VARIABLE FUND
Value at beginning of period $137.869 $105.558 $107.92 $102.383
Value at end of period $169.448 $137.869 $105.55 $107.925
Increase (decrease) in value of
accumulation unit(1) 22.91% 30.61% (2.19)% 5.41%
Number of accumulation units
outstanding at end of period 2,071,139 6,364,000 13,966,072 21,148,863
AETNA INCOME SHARES
Value at beginning of period $46.913 $40.173 $42.28 $39.038
Value at end of period $47.992 $46.913 $40.17 $42.283
Increase (decrease) in value of
accumulation unit(1) 2.30% 16.78% (4.99)% 8.31%
Number of accumulation units
outstanding at end of period 835,724 2,377,622 5,108,720 8,210,666
AETNA VARIABLE ENCORE FUND
Value at beginning of period $37.988 $36.271 $35.28 $34.619
Value at end of period $39.528 $37.988 $36.27 $35.282
Increase (decrease) in value of
accumulation unit(1) 4.05% 4.73% 2.80% 1.92%
Number of accumulation units
outstanding at end of period 597,656 1,836,260 3,679,802 5,086,515
AETNA INVESTMENT ADVISERS
FUND, INC
Value at beginning of period $17.954 $14.270 $14.51 $13.379
Value at end of period $20.419 $17.954 $14.27 $14.519
Increase (decrease) in value of
accumulation unit(1) 13.73% 25.82% (1.71)% 8.52%
Number of accumulation units
outstanding at end of period 2,716,641 9,193,181 21,990,186 30,784,750
ALGER AMERICAN GROWTH PORTFOLIO
Value at beginning of period $11.715 $10.000(14)
Value at end of period $13.113 $11.715
Increase (decrease) in value of
accumulation unit(1) 11.93% 17.15%
Number of accumulation units
outstanding at end of period 1,023,908 530,263
ALGER AMERICAN SMALL CAP PORTFOLIO
Value at beginning of period $13.558 $9.513 $10.07 $10.000(3)
Value at end of period $13.949 $13.558 $9.51 $10.072
Increase (decrease) in value of
accumulation unit(1) 2.88% 42.52% (5.55)% 0.72%
Number of accumulation units
outstanding at end of period 2,373,178 1,714,187 665,518 51,327
AMERICAN CENTURY VP
CAPITAL APPRECIATION*
Value at beginning of period $14.464 $11.172 $11.44 $10.495
Value at end of period $13.650 $14.464 $11.17 $11.443
Increase (decrease) in value of
accumulation unit(1) (5.63)% 29.47% (2.37)% 9.03%
Number of accumulation units
outstanding at end of period 1,566,276 1,784,552 1,608,362 1,016,894
<CAPTION>
1992 1991 1990 1989 1988 1987
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
AETNA VARIABLE FUND
Value at beginning of period $ 97.165 $77.845 $76.311 $59.871 $52.885 $50.760
Value at end of period $102.383 $97.165 $77.845 $76.311 $59.871 $52.885
Increase (decrease) in value of
accumulation unit(1) 5.37% 24.82% 2.01% 27.46% 13.21% 4.19%
Number of accumulation units
outstanding at end of period 24,201,565 20,948,226 18,362,906 17,142,820 16,455,396 16,497,406
AETNA INCOME SHARES
Value at beginning of period $36.789 $31.192 $28.943 $25.574 $24.061 $23.308
Value at end of period $39.038 $36.789 $31.192 $28.943 $25.574 $24.061
Increase (decrease) in value of
accumulation unit(1) 6.11% 17.94% 7.77% 13.17% 6.29% 3.23%
Number of accumulation units
outstanding at end of period 8,507,292 7,844,412 6,984,793 6,202,834 5,955,293 5,372,271
AETNA VARIABLE ENCORE FUND
Value at beginning of period $33.812 $32.138 $30.012 $27.783 $26.171 $24.812
Value at end of period $34.619 $33.812 $32.138 $30.012 $27.783 $26.171
Increase (decrease) in value of
accumulation unit(1) 2.39% 5.21% 7.08% 8.02% 6.16% 5.48%
Number of accumulation units
outstanding at end of period 7,534,662 8,430,082 10,220,110 8,286,033 8,154,644 7,326,151
AETNA INVESTMENT ADVISERS
FUND, INC.
Value at beginning of period $12.736 $10.896 $10.437 $10.000(2)
Value at end of period $13.379 $12.736 $10.896 $10.437
Increase (decrease) in value of
accumulation unit(1) 5.05% 16.89% 4.40% 4.37%
Number of accumulation units
outstanding at end of period 34,802,433 22,898,099 17,078,985 9,535,986
ALGER AMERICAN GROWTH PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
ALGER AMERICAN SMALL CAP PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
AMERICAN CENTURY VP
CAPITAL APPRECIATION*
Value at beginning of period $10.000(12)
Value at end of period $10.495
Increase (decrease) in value of
accumulation unit(1) 4.95%
Number of accumulation units
outstanding at end of period 232,832
</TABLE>
- --------------------------------------------------------------------------------
AUV HISTORY - 1
<PAGE>
CONDENSED FINANCIAL INFORMATION (continued)
===============================================================================
<TABLE>
<CAPTION>
1996 1995 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO**
Value at beginning of period $17.951 $13.990 $14.640 $13.726
Value at end of period $19.965 $17.951 $13.990 $14.640
Increase (decrease) in value of
accumulation unit(1) 11.22% 28.31% (4.44)% 6.66%
Number of accumulation units
outstanding at end of period 898,279 856,361 743,464 705,415
FIDELITY VIP II ASSET MANAGER
PORTFOLIO
Value at beginning of period $10.912 $ 9.447 $10.000(5)
Value at end of period $12.349 $10.912 $ 9.447
Increase (decrease) in value of
accumulation unit(1) $13.17% 15.51% (5.53%
Number of accumulation units
outstanding at end of period 1,384,927 1,316,916 1,254,504
FIDELITY VIP II CONTRAFUND
PORTFOLIO
Value at beginning of period $11.763 $10.000(14)
Value at end of period $14.092 $11.763
Increase (decrease) in value of
accumulation unit(1) 19.79% 17.63%
Number of accumulation units
outstanding at end of period 1,522,169 525,476
FIDELITY VIP EQUITY-INCOME
PORTFOLIO
Value at beginning of period $11.617 $10.000(14)
Value at end of period $13.110 $11,617
Increase (decrease) in value of
accumulation unit(1) 12.86% 16.17%
Number of accumulation units
outstanding at end of period 1,454,755 628,582
FIDELITY VIP II INDEX 500
PORTFOLIO
Value at beginning of period $11.740 $10.000(14)
Value at end of period $14.240 $11.740
Increase (decrease) in value of
accumulation unit(1) 21.29% 17.40%
Number of accumulation units
outstanding at end of period 1,490,937 290,547
FRANKLIN GOVERNMENT
SECURITIES TRUST
Value at beginning of period $16.495 $14.190 $14.929 $14.050
Value at end of period $16.952 $16.495 $14.109 $14.990
Increase (decrease) in value of
accumulation unit(1) 2.77% 16.24% (4.95)% 6.26%
Number of accumulation units
outstanding at end of period 767,910 809,414 804,457 960,629
JANUS ASPEN AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of period $15.323 $12.169 $10.000(7)
Value at end of period $16.334 $15.323 $12.169
Increase (decrease) in value of
accumulation unit(1) 6.60% 25.91% 21.69%
Number of accumulation units
outstanding at end of period 1,893,718 1,280,953 393,553
JANUS ASPEN GROWTH PORTFOLIO
Value at beginning of period $11.859 $10.000(13)
Value at end of period $13.872 $11.859
Increase (decrease) in value of
accumulation unit(1) 16.98% 18.59%
Number of accumulation units
outstanding at end of period 663,945 109,717
<CAPTION>
1992 1991 1990 1989
---- ---- ----- ----
<S> <C> <C> <C> <C>
CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO**
Value at beginning of period $12.913 $11.233 $10.568 $10.000(4)
Value at end of period $13.726 $12.913 $11.233 $10.568
Increase (decrease) in value of
accumulation unit(1) 6.30% 14.96% 6.29% 5.68%
Number of accumulation units
outstanding at end of period 503,006 355,851 148,576 20,710
FIDELITY VIP II ASSET MANAGER
PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
FIDELITY VIP II CONTRAFUND
PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
FIDELITY VIP EQUITY-INCOME
PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
FIDELITY VIP II INDEX 500
PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
FRANKLIN GOVERNMENT
SECURITIES TRUST
Value at beginning of period $13.219 $11.545 $10.581 $10.000(6)
Value at end of period $14.050 $13.219 $11.545 $10.581
Increase (decrease) in value of
accumulation unit(1) 6.29% 14.50% 9.11% 5.81%
Number of accumulation units
outstanding at end of period 810,155 627,552 178,761 25,258
JANUS ASPEN AGGRESSIVE
GROWTH PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
JANUS ASPEN GROWTH PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
</TABLE>
- --------------------------------------------------------------------------------
AUV HISTORY - 2
<PAGE>
CONDENSED FINANCIAL INFORMATION (continued)
===============================================================================
<TABLE>
<CAPTION>
1996 1995 1994 1993
---- ---- ----- ----
<S> <C> <C> <C> <C>
JANUS ASPEN SHORT-TERM
BOND PORTFOLIO
Value at beginning of period $10.393 $10.000(13)
Value at end of period $10.671 $10.393
Increase (decrease) in value of
accumulation unit(1) 2.68% 3.93%
Number of accumulation units
outstanding at end of period 54,215 18,473
JANUS ASPEN WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of period $12.158 $10.000(13)
Value at end of period $15.493 $12.158
Increase (decrease) in value of
accumulation unit(1) 27.43% 21.58%
Number of accumulation units
outstanding at end of period 2,090,908 314,653
LEXINGTON EMERGING
MARKETS FUND, INC.
Value at beginning of period $8.323 $8.772 $10.000(8)
Value at end of period $8.832 $8.323 $8.772
Increase (decrease) in value of
accumulation unit(1) 6.12% (5.12)% (12.28)%
Number of accumulation units
outstanding at end of period 548,618 371,156 144,750
LEXINGTON NATURAL
RESOURCES TRUST
Value at beginning of period $10.862 $9.412 $10.071 $9.193
Value at end of period $13.611 $10.862 $9.412 $10.071
Increase (decrease) in value of
accumulation unit(1) 25.31% 15.41% (6.54)% 9.55%
Number of accumulation units
outstanding at end of period 587,248 530,562 533,016 341,771
NEUBERGER & BERMAN
GROWTH PORTFOLIO
Value at beginning of period $17.430 $13.398 $14.278 $13.536
Value at end of period $18.786 $17.430 $13.398 $14.278
Increase (decrease) in value of
accumulation unit(1) 7.78% 30.09% (6.16)% 5.48%
Number of accumulation units
outstanding at end of period 2,169,362 2,359,090 2,107,525 1,927,674
SCUDDER INTERNATIONAL
PORTFOLIO CLASS A SHARES***
Value at beginning of period $14.515 $13.227 $13.508 $9.922
Value at end of period $16.453 $14.515 $13.227 $13.508
Increase (decrease) in value of
accumulation unit(1) 13.35% 9.74% (2.08)% 36.14%
Number of accumulation units
outstanding at end of period 3,684,698 3,823,292 4,240,412 2,371,037
<CAPTION>
1992 1991 1990 1989
---- ---- ---- -----
<S> <C> <C> <C> <C>
JANUS ASPEN SHORT-TERM
BOND PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
JANUS ASPEN WORLDWIDE
GROWTH PORTFOLIO
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
LEXINGTON EMERGING
MARKETS FUND, INC.
Value at beginning of period
Value at end of period
Increase (decrease) in value of
accumulation unit(1)
Number of accumulation units
outstanding at end of period
LEXINGTON NATURAL
RESOURCES TRUST
Value at beginning of period $9.018 $9.608 $11.441 $10.000(9)
Value at end of period $9.193 $9.018 $9.608 $11.441
Increase (decrease) in value of
accumulation unit(1) 1.94% (6.14)% (16.02)% 14.41%
Number of accumulation units
outstanding at end of period 198,338 144,139 75,052 11,481
NEUBERGER & BERMAN
GROWTH PORTFOLIO
Value at beginning of period $12.511 $9.769 $10.772 $10.000(10)
Value at end of period $13.536 $12.511 $9.769 $10.772
Increase (decrease) in value of
accumulation unit(1) 8.19% 28.07% (9.31)% 7.72%
Number of accumulation units
outstanding at end of period 1,346,898 971,985 482,220 68,885
SCUDDER INTERNATIONAL
PORTFOLIO CLASS A SHARES***
Value at beginning of period $10.239** $9.256 $10.306 $10.000(11)
Value at end of period $9.922 $10.239 $9.256 $10.306
Increase (decrease) in value of
accumulation unit(1) (3.10)% 10.62% (10.19)% 3.06%
Number of accumulation units
outstanding at end of period 1,161,007 779,667 317,829 32,902
</TABLE>
(1) The above figures are calculated by subtracting the beginning
Accumulation 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 dollar annual maintenance fee,
if any. Inclusion of these charges would reduce the investment
results shown.
(2) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 on
June 23, 1989, the date on which the Fund commenced operations.
(3) Reflects less than a full year of performance activity. 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) Reflects less than a full year of performance activity. 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) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 during
March 1994, when funds were first received under this option.
(6) Reflects less than a full year of performance activity. 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) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 during
June 1994, when funds were first received in this option.
- --------------------------------------------------------------------------------
AUV HISTORY - 3
<PAGE>
CONDENSED FINANCIAL INFORMATION (continued)
===============================================================================
(8) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 during
October 1994, when funds were first received in this option.
(9) Reflects less than a full year of performance activity. 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) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 on May
31, 1989, the date on which the Portfolio became available under
the Contract.
(11) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 on
July 5, 1989, the date on which the Portfolio became available
under the Contract.
(12) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 on
September 21, 1992, the date on which the Portfolio became
available under the Contract.
(13) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 during
July 1995, when the Fund became available under the Contract.
(14) Reflects less than a full year of performance activity. The
initial Accumulation Unit value was established at $10.000 during
May 1995, when the Fund became available under the Contract.
* Formerly TCI Portfolios, Inc.--TCI Growth.
** Formerly Calvert Socially Responsible Series.
*** 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.
- --------------------------------------------------------------------------------
AUV HISTORY - 4
<PAGE>
THE COMPANY
===============================================================================
Aetna Life Insurance and Annuity Company (the "Company") is the issuer of
the Contract, and as such, it is responsible for providing the insurance and
annuity benefits under the Contract. The Company is a stock life insurance
company organized under the insurance laws of the State of Connecticut in 1976.
Through a merger, it succeeded to the business of Aetna Variable Annuity Life
Insurance Company (formerly Participating Annuity Life Insurance Company, an
Arkansas life insurance company organized in 1954). The Company is engaged in
the business of issuing life insurance policies and variable annuity contracts
in all states of the United States. The Company's principal executive offices
are located at 151 Farmington Avenue, Hartford, Connecticut 06156.
The Company is a wholly owned subsidiary of Aetna Retirement Holdings, Inc.,
which is in turn a wholly owned subsidiary of Aetna Retirement Services, Inc.
and an indirect wholly owned subsidiary of Aetna Inc.
VARIABLE ANNUITY ACCOUNT C
===============================================================================
The Company established Variable Annuity Account C (the "Separate Account")
in 1976 as a segregated asset account for the purpose of funding its variable
annuity contracts. The Separate Account is registered as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act") and meets the
definition of "separate account" under federal securities laws. The Separate
Account is divided into "subaccounts" which do not invest directly in stocks,
bonds or other investments. Instead, each Subaccount buys and sells shares of a
corresponding Fund.
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 our other
income, gains or losses. All obligations arising under the Contracts are our
general corporate obligations.
INVESTMENT OPTIONS
===============================================================================
THE FUNDS
Purchase Payments may be allocated to one or more of the Subaccounts as
designated on the enrollment form. In turn, the Subaccounts invest in the
corresponding Funds at net asset value. The total number of investment options
that you may select during the Accumulation Period is limited to 18. Each
Subaccount selected, the Fixed Account and each guaranteed term of GAA counts as
one option, even if you no longer have amounts allocated to that option.
The Contract Holder may decide to offer only a select number of Funds under
its Plan. In addition, the Company may add, withdraw or substitute Funds,
subject to the conditions in the Contract and in compliance with regulatory
requirements. The availability of Funds may also be subject to applicable
regulatory authorization. Not all Funds may be available in all jurisdictions,
under all Contracts or in all Plans.
The investment results of the Funds described below are likely to differ
significantly and there is no assurance that any of the Funds will achieve their
respective investment objectives. Except where otherwise noted, all of the Funds
are diversified, as defined in the 1940 Act.
[bullet] Aetna Variable Fund seeks to maximize total return through investments
in a diversified portfolio of common stocks and securities convertible
into common stock.(1)
[bullet] Aetna Income Shares seeks to maximize total return, consistent with
reasonable risk, through investments in a diversified portfolio
consisting primarily of debt securities.(1)
[bullet] Aetna Variable Encore 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
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Fund is neither insured nor guaranteed by the U.S. Government.(1)
[bullet] Aetna Investment Advisers Fund, Inc. is a managed fund which 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.(1)
[bullet] Aetna Generation Portfolio, Inc.--Aetna Ascent Variable Portfolio
seeks to provide capital appreciation by allocating its investments
among equities and fixed income securities. The Portfolio is managed
for investors who generally have an investment horizon exceeding 15
years, and who have a high level of risk tolerance. (1)
[bullet] Aetna Generation Portfolios, Inc.--Aetna Crossroads Variable Portfolio
seeks to provide total return (i.e. income and capital appreciation,
both realized and unrealized) by allocating its investments among
equities and fixed income securities. The Portfolio is managed for
investors who generally have an investment horizon exceeding 10 years
and who have a moderate level of risk tolerance.(1)
[bullet] Aetna Generation Portfolios, Inc.--Aetna Legacy Variable Portfolio
seeks to provide total return consistent with preservation of capital
by allocating its investments among equities and fixed income
securities. The Portfolio is managed for investors who generally have
an investment horizon exceeding five years and who have a low level of
risk tolerance.(1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Variable Index Plus Portfolio
seeks to outperform the total return performance of publicly traded
common stocks represented by the S & P 500.(1)
[bullet] Calvert Responsibly Invested Balanced Portfolio is a nondiversified
portfolio that seeks to achieve a total return above the rate of
inflation through an actively managed, nondiversified portfolio of
common and preferred stocks, bonds and money market instruments which
offer income and capital growth opportunity and which satisfy the
social criteria established for the Portfolio.(2)
[bullet] Fidelity Investments Variable Insurance Products Fund II--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.(3)
[bullet] Fidelity Investments' Variable Insurance Products Fund II--Contrafund
Portfolio seeks maximum total return over the long term by investing
mainly in equity securities of companies that are undervalued or
out-of-favor.(3)
[bullet] Fidelity Investments Variable Insurance Products Fund II--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 Index of 500 stocks.(3)
[bullet] Fidelity Investments' Variable Insurance Products Fund--Equity-Income
Portfolio seeks reasonable income by investing primarily in
income-producing equity securities. In selecting investments, the Fund
also considers the potential for capital appreciation.(3)
[bullet] Janus Aspen Series--Aggressive Growth Portfolio is a nondiversified
portfolio that seeks long-term growth of capital in a manner
consistent with the preservation of capital. The Portfolio pursues its
investment objective by normally investing at least 50% of its equity
assets in securities issued by medium-sized companies. Medium-sized
companies are those whose market capitalizations fall within the range
of companies in the S&P MidCap 400 Index, which as of December 30,
1996 included companies with capitalizations between approximately
$192 million and $6.5 billion, but which is expected to change on a
regular basis.(4)
[bullet] Janus Aspen Series--Growth Portfolio seeks long-term growth of capital
in a manner consistent with the preservation of capital. The Portfolio
pursues its investment objective by investing in common stocks of
companies of any size.(4)
[bullet] Janus Aspen Series--Worldwide Growth Portfolio seeks long-term growth
of capital in a manner consistent with preservation of capital. The
Portfolio pursues its investment objective primarily through
investments in common stocks of foreign and domestic issuers.(4)
[bullet] Lexington Emerging Markets Fund, Inc seeks long-term growth of
capital primarily through investment in equity securities of companies
domiciled in, or
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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.(5)
[bullet] 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.*(5)
[bullet] Portfolio Partners, Inc. MFS Emerging Equities Portfolio seeks long
term growth of capital by investing primarily in common stocks issued
by companies that its subadviser believes are early in their life
cycle but which have the potential to become major enterprises
(emerging growth companies).(6)(a)
[bullet] Portfolio Partners, Inc. MFS Research Growth Portfolio seeks long term
growth of capital and future income by investing primarily in common
stocks or securities convertible into common stocks isued by companies
that the subadviser believes to possess better-than-average prospects
for long-term growth, and, to a lesser extent, in income-producing
securities including bonds and preferred stocks.(6)(a)
[bullet] Portfolio Partners, Inc. MFS Value Equity Portfolio seeks capital
appreciation by investing primarily in common stocks.(6)(a)
[bullet] Portfolio Partners, Inc. Scudder International Growth Portfolio seeks
long term growth of capital primarily through a diversified portfolio
of marketable foreign equity securities.(6)(b)
[bullet] Portfolio Partners, Inc. T. Rowe Price Growth Equity Portfolio seeks
long term growth of capital and, secondarily, seeks to increase
dividend income by investing primarily in common stocks issued by a
diversified group of well-established growth companies.(6)(c)
Investment Advisers for each of the Funds:
(1) Aetna Life Insurance and Annuity Company (adviser);
Aeltus Investment Management, Inc. (sub-adviser)
(2) Calvert Asset Management Company, Inc.
(3) Fidelity Management & Research Company
(4) Janus Capital Corporation
(5) Lexington Management Corporation (adviser); Market Systems Research
Advisors, Inc. (sub-adviser--Natural Resources Trust only)
(6) Aetna Life Insurance and Annuity Company (adviser):
(a) Massachusetts Financial Services Company (sub-adviser)
(b) Scudder, Stevens & Clark, Inc. (sub-adviser)
(c) T. Rowe Price Associates, Inc. (sub-adviser)
Risks Associated with Investment in the Funds. Some of the Funds may use
instruments known as derivatives as part of their investment strategies. The use
of certain derivatives may involve high risk of volatility to a Fund, and the
use of leverage in connection with such derivatives can also increase risk of
losses. Some of the Funds may also invest in foreign or international securities
which involve greater risks than U.S. investments.
More comprehensive information, including a discussion of potential risks,
is found in the current prospectus for each Fund which is distributed with and
accompanies this Prospectus. You should read the Fund prospectuses and consider
carefully, and on a continuing basis, which Fund or combination of Funds is best
suited to your long-term investment objectives. Additional prospectuses and
Statements of Additional Information for this Prospectus and for each of the
Funds can be obtained from the Company's Home Office at the address and
telephone number listed under the "Inquiries" section of the Prospectus Summary.
Conflicts of Interest (Mixed and Shared Funding). Shares of the Funds are
sold to each of the Subaccounts for funding the variable annuity contracts
issued by the Company. Shares of the Funds may also be sold to other insurance
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 contracts
issued by the Company or by third parties. This is referred to as "mixed
funding."
* This Fund will be removed from the list of Funds as of the close of business
of the New York Stock Exchange on November 26, 1997, or as soon thereafter as
all participants have redirected their allocations to other investment
options, since it will be closed to new investments after that date (except
reinvested dividends and capital gains earned on amounts already invested in
the Fund through the Separate Account and loan repayments automatically
deposited into the Fund pursuant to the Company's loan repayment
procedures.)
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Because the Funds available under the Contract are sold to fund variable
annuity contracts and variable life insurance policies issued by us or by other
companies, certain conflicts of interest could arise. If a conflict of interest
were to occur, one of the separate accounts might withdraw its investment in a
Fund, which might force that Fund to sell portfolio securities at
disadvantageous prices, causing its per share value to decrease. Each Fund's
Board of Directors or Trustees has agreed to monitor events in order to identify
any material irreconcilable conflicts which might arise and to determine what
action, if any, should be taken to address such conflict.
CREDITED INTEREST OPTIONS
Purchase Payments may be allocated to one or more of the Credited
Interest Options available under the Contracts as described below. The Contract
Holder may elect not to offer all Credited Interest Options under its Plan. The
Credited Interest Options currently available under the Contract include the
Guaranteed Accumulation Account and the Fixed Account.
[bullet] The Guaranteed Accumulation Account (GAA) is a credited interest
option through which we guarantee stipulated rates of interest for
stated periods of time. Amounts must remain in the GAA for the full
guaranteed term to received the quoted interest rates, or a market
value adjustment (which may be positive or negative) will be applied.
(See Appendix I.)
[bullet] The Fixed Account is a part of the Company's general account. The
Fixed Account guarantees a minimum interest rate, as specified in the
Contract. The Company may credit higher interest rates from time to
time. Transfers from the Fixed Account are limited. (See Appendix II.)
PURCHASE
===============================================================================
CONTRACT AVAILABILITY
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 or UUP.
Two group contracts may be issued to cover all present and future
Participants. The group Contracts are generally owned by the employer and
individual Accounts are established for each Participant. Single Purchase
Payment Contracts are issued for lump-sum transfers to us of amounts accumulated
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.
Under the Plans, the employer has no right, title or interest in the amounts
held under the Contract or in the Account; Participants make all elections under
the Contract.
PURCHASING INTERESTS IN THE CONTRACT
Eligible organizations may acquire Contracts by submitting an application to
the Opportunity Plus Processing Office at 18 Corporate Woods Boulevard, Fourth
Floor, Albany, New York 12211. Once we approve the forms, the Contract will be
issued to the employer as the group Contract Holder. Participants may purchase
interests in a group Contract by submitting enrollment materials to the
Opportunity Plus Processing Office.
The Company must accept or reject the application or enrollment forms within
two business days of receipt. If the forms are incomplete, the Company may hold
any forms and accompanying Purchase Payments for five days. Purchase Payments
may be held for longer periods pending acceptance of the forms only with the
consent of the Participant, or under limited circumstances, with the consent of
the Contract Holder. If we agree to hold Purchase Payments for longer than the
five business days based on the consent of the Contract Holder, the Purchase
Payments will be deposited in the Aetna Variable Encore Fund Subaccount until
the forms are completed.
Allocation of Purchase Payments. Purchase Payments will initially be
allocated to the Subaccounts or Credited Interest Options as specified by the
Participant on the enrollment form. Changes in such allocation may be made in
writing or by telephone transfer. Allocations must be in whole percentages.
RIGHT TO CANCEL
Contract Holders and Participants have the right to cancel their purchase
within 10 days of receiving the Contract (or other document evidencing your
interest) by returning it to the Opportunity Plus Processing Office with a
written notice of intent to cancel. When we receive your
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request for cancellation, we will return your Account Value. You bear the
entire investment risk for amounts allocated among the Subaccounts during the
free look period. Account Values will be determined as of the Valuation Date on
which we receive your request for cancellation at the Opportunity Plus
Processing Office.
CHARGES AND DEDUCTIONS
===============================================================================
DAILY DEDUCTIONS FROM THE SEPARATE ACCOUNT
Mortality and Expense Risk Charge. The Company makes a daily deduction from
each of the Subaccounts for the mortality and expense risk charge. The charge is
equal, on an annual basis, to 1.25% of the daily net assets of the Subaccounts
and compensates the Company for the assumption of the mortality and expense
risks under the Contract. The mortality risks are those assumed for our promise
to make lifetime payments according to annuity rates specified in the Contract.
The expense risk is the risk that the actual expenses for costs incurred under
the Contract will exceed the maximum costs that can be charged under the
Contract.
If the amount deducted for mortality and expense risks is not sufficient to
cover the mortality costs and expense shortfalls, the loss is borne by the
Company. If the deduction is more than sufficient, the excess may be used to
recover distribution expenses relating to the Contracts and as a source of
profit to the Company. The Company expects to make a profit from the mortality
and expense risk charge.
Administrative Expense Charge. The Company reserves the right to make a
deduction from each of the Subaccounts for an administrative expense charge. The
administrative expense charge compensates the Company for administrative
expenses that exceed revenues from the maintenance fee described below. The
charge is set at a level which does not exceed the average expected cost of the
administrative services to be provided while the Contract is in force. The
Company does not expect to make a profit from this charge.
Under the Contract, the amount of the administrative expense charge may be
of an amount equal, on an annual basis, to a maximum of 0.25% of the daily net
assets of the Subaccounts. There is currently no administrative expense charge
during the Accumulation Period or Annuity Period. Once an Annuity Option is
elected, the charge will be established and will be effective during the entire
Annuity Period.
MAINTENANCE FEE
During the Accumulation Period, the Company will deduct an annual
maintenance fee from the Account Value. The maintenance fee is to reimburse the
Company for some of its administrative expenses relating to the establishment
and maintenance of the Accounts.
For the period from May 1, 1997 to May 1, 1998, the maintenance fee will be
$5 on an annual basis, with one fourth of this fee ($1.25) deducted during the
first month after the end of each calendar quarter. Effective January 1, 1999,
the quarterly maintenance fee will be reduced to $0.00, thereby eliminating the
maintenance fee charge. The maintenance fee will be deducted on a pro rata basis
from each investment option in which you have an interest.
DEFERRED SALES CHARGE
Withdrawals of all or a portion of the Account Value may be subject to a
deferred sales charge. The deferred sales charge is a percentage of the amounts
withdrawn from the Subaccounts, the Fixed Account and the Guaranteed
Accumulation Account.
For Installment Purchase Payment Contracts, the deferred sales charge is
based on the number of completed Purchase Payment Periods. 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.
For Installment Purchase Payment Contracts, the amount of the deferred sales
charge is determined in accordance with the schedule set forth in the following
table:
INSTALLMENT PURCHASE PAYMENT CONTRACTS:
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Purchase Payment Deferred Sales
Periods Completed Charge Deduction
----------------- ----------------
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or more but less than 10 2%
More than 10 0%
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In addition, if a 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").
The deduction for the deferred sales charge will not exceed 8.5% of the
total Purchase Payments actually made to the Account. The Company does not
anticipate that the deferred sales charge will cover all sales and
administrative expenses which it incurs in connection with the Contract. The
difference will be covered by the general assets of the Company which are
attributable, in part, to mortality and expense risk charges under the Contract
described above.
Generally, if you transfer the total account value under another similar
annuity contract issued by the Company to an Account under this Contract, the
effective date of the new Account will be the same effective date as your former
contract for the purpose of calculating the applicable deferred sales charge
under this Contract.
A deferred sales charge will not be deducted from any portion of the Account
Value if the withdrawal is:
[bullet] applied to provide Annuity benefits;
[bullet] taken on or after the tenth anniversary of the effective date of the
Account;
[bullet] paid due to your death before Annuity payments begin;
[bullet] made due to the election of an Additional Withdrawal Option (see
"Additional Withdrawal Options");
[bullet] paid where the Account Value is $2,500 or less and no amount has been
withdrawn, taken as a loan, or used to purchase Annuity benefits
during the prior 12 months;
[bullet] taken from an Installment Purchase Payment Contract by a Participant
who is at least age 59-1/2 and who has completed nine Purchase Payment
Periods;
[bullet] withdrawn due to disability as specified in the Code;
[bullet] withdrawn due to financial hardship as specified in the Code;
[bullet] 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); or
[bullet] withdrawn from the portion of the Account Value invested in the
Subaccount(s) and/or GAA attributable to Purchase Payments made on or
after April 1, 1995. This waiver does not apply to amounts deposited
in the Fixed Account. If amounts are deposited in a Subaccount 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 Subaccount 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 Account. For any withdrawal, the Account Value of the Purchase
Payment(s) made on or after April 1, 1995 will be withdrawn first.
Then, the remaining Account Value will be used to satisfy the
disbursement request.
Free Withdrawals. For Participants between the ages of 59-1/2 and 70-1/2, up
to 10% of the current Account Value may be withdrawn during each calendar year
without imposition of a deferred sales charge. The free withdrawal applies only
to the first partial withdrawal in each calendar year. The 10% amount will be
based on the Account Value calculated on the Valuation Date next following our
receipt of your request for withdrawal. Any outstanding contract loans are
excluded from the Account Value when calculating the 10% free withdrawal amount.
This provision does not apply to a full withdrawal of the Account, or to partial
withdrawals due to a default on a contract loan (see "Contract Loans"). This
provision may not be exercised if ECO or SWO is elected. (See "Additional
Withdrawal Options.")
In the instances cited above, no deferred sales charge is deducted. However,
the amount withdrawn may be subject to the 10% federal penalty tax. (See "Tax
Status.")
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DEFERRED SALES CHARGE SCHEDULE FOR GAA FOR
CERTAIN NEW YORK CONTRACTS
The following deferred sales charge schedule applies for withdrawals from
the Guaranteed Accumulation Account, where available, for Installment Purchase
Payment Master Contracts which are issued after July 29, 1993 in the State of
New York. This schedule is based on the number of completed Account Years, as
follows:
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Completed Deferred Sales
Account Years Charge Deduction
-------------- ----------------
Less than 3 5%
3 or more but less than 4 4%
4 or more but less than 5 3%
5 or more but less than 6 2%
6 or more but less than 7 1%
7 or more 0%
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FUND EXPENSES
Each Fund incurs certain expenses which are paid out of its net assets.
These expenses include, among other things, the investment advisory or
"management" fee. The expenses of the Funds are set forth in the Fee Table in
this Prospectus and described more fully in the accompanying Fund prospectuses.
PREMIUM AND OTHER TAXES
Currently, there is no premium tax on annuities under New York regulations.
However, if the state does 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 Account Value
at any time, but no earlier than when we have a tax liability under state law.
(See "Tax Status.")
CONTRACT VALUATION
===============================================================================
ACCOUNT VALUE
Until the Annuity Date, the Account Value is the total dollar value of
amounts held in the Account as of any Valuation Date. The Account Value at any
given time is based on the value of the units held in each Subaccount, plus the
value of amounts held in any of the Credited Interest Options.
ACCUMULATION UNITS
The value of your interests in a Subaccount is expressed as the number of
"Accumulation Units" that you hold multiplied by an "Accumulation Unit Value"
(or "AUV") for each unit. The AUV on any Valuation Date is determined by
multiplying the value on the immediately preceding Valuation Date by the net
investment factor of that Subaccount for the period between the immediately
preceding Valuation Date and the current Valuation Date. (See "Net Investment
Factor" below.) The Accumulation Unit Value will be affected by the investment
performance, expenses and charges of the applicable Fund and is reduced each day
by a percentage that accounts for the daily assessment of mortality and expense
risk charges and the administrative expense charge (if any).
Initial Purchase Payments will be credited to your Contract at the AUV
computed on the next Valuation Date following our acceptance of the enrollment
materials, as described under "Purchase--Purchasing Interests in the Contract."
Each subsequent Purchase Payment (or amount transferred) received by the Company
by the close of business of the New York Stock Exchange will be credited to your
Contract at the AUV computed on the next Valuation Date following our receipt of
your payment or transfer request. The value of an Accumulation Unit may increase
or decrease.
NET INVESTMENT FACTOR
The net investment factor is used to measure the investment performance of a
Subaccount from one Valuation Date to the next. The net investment factor for a
Subaccount for any valuation period is equal to the sum of 1.0000 plus the net
investment rate. The net investment rate equals:
(a) the net assets of the Fund held by the Subaccount on the current
Valuation Date, minus
(b) the net assets of the Fund held by the Subaccount on the preceding
Valuation Date, plus or minus
(c) taxes or provisions for taxes, if any, attributable to the operation of
the Subaccount;
(d) divided by the total value of the Subaccounts' Accumulation and Annuity
Units the preceding Valuation Date;
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(e) minus a daily charge at the annual effective rate of 1.25% for mortality
and expense risks and up to 0.25% as an administrative expense charge
(currently 0%).
The net investment rate may be either positive or negative.
TRANSFERS
===============================================================================
At any time prior to the Annuity Date, you can transfer amounts held under
the Contracts from one Subaccount to another. Transfers between the Credited
Interest Options and the Subaccounts are subject to certain restrictions. (See
Appendices I and II.) A request for transfer can be made either in writing or by
telephone. The telephone transfer privilege is available automatically; no
special election is necessary. All transfers must be in accordance with the
terms of the Contracts and your Plan, as applicable.
The Company currently allows unlimited transfers of accumulated amounts to
available investment options without charge. The minimum transfer amount may not
be less than $500. The total number of investment options in which you may
invest during the Accumulation Period is limited. (See "Investment Options--The
Funds.") Any transfer will be based on the Accumulation Unit Value next
determined after the Company receives a valid transfer request at the
Opportunity Plus Processing Office. Transfers are not available during the
Annuity Period.
WITHDRAWALS
===============================================================================
Subject to the withdrawal restrictions under Section 403(b) Contracts
described below, all or a portion of the Account Value may be withdrawn at any
time during the Accumulation Period. To request a withdrawal, you must properly
complete a disbursement form and send it to the Opportunity Plus Processing
Office. Payments for withdrawal requests will be made in accordance with SEC
requirements, but normally not later than seven calendar days following our
receipt of a disbursement form.
Withdrawals may be requested as in one of the following forms:
[bullet] Full Withdrawal of an Account: The amount paid upon a full withdrawal
will be the full Account Value, minus any applicable deferred sales
charge and maintenance fee due.
[bullet] Partial Withdrawals (Percentage): The amount paid will be the
percentage of the Account Value requested minus any applicable
deferred sales charge.
[bullet] Partial Withdrawal (Specified Dollar Amount): The amount paid will be
the dollar amount requested. However, the amount withdrawn from the
Account will equal the amount requested plus any applicable deferred
sales charge.
For any partial withdrawal, amounts will be withdrawn proportionately from
each Subaccount or Credited Interest Option in which the Account is invested,
unless you request otherwise in writing. All amounts paid will be based on
Account Values as of the next Valuation Date after we receive a request for
withdrawal at our Home Office, or on such later date as the disbursement form
may specify. A 20% federal income tax may be withheld from amounts paid directly
to you. (See "Tax Status--Contracts Used with Certain Retirement Plans.")
Withdrawal Restrictions from 403(b) Plans. Under Section 403(b) Contracts, a
withdrawal of salary reduction contributions and earnings on such contributions
is generally prohibited prior to the Participant's death, disability, attainment
of age 59-1/2, separation from service or financial hardship. (See "Tax
Status.")
REINVESTMENT PRIVILEGE
You may elect to reinvest all or a portion of the proceeds received from a
full withdrawal of your Account within 30 days after such withdrawal has been
made. Accumulation Units will be credited to the Account for the amount
reinvested, as well as any maintenance fee and any deferred sales charge imposed
at the time of withdrawal. Any maintenance fee which
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<PAGE>
falls due after the withdrawal and before the reinvestment will be deducted
from the amounts reinvested. Reinvested amounts will be reallocated to the
applicable investment options in the same proportion as they were allocated at
the time of withdrawal. Accumulation Units will be credited to your Account
based on the Accumulation Unit Value next computed following our receipt of
your request along with the amount to be reinvested. The reinvestment privilege
may be used only once. See Appendix I for a discussion of amounts withdrawn
from GAA and then reinvested. 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, Participants may request a loan from their
Account Value. Loans can only be taken from those Account Values held in the
Subaccounts or from those Credited Interest Options that allow loans. (See
Appendices I and II.) A loan may be obtained by reviewing and reading the terms
of the loan agreement, properly completing a loan request form and submitting it
to the Opportunity Plus Processing Office.
ADDITIONAL WITHDRAWAL OPTIONS
===============================================================================
The Company offers certain withdrawal options under the Contract that are
not considered annuity options ("Additional Withdrawal Options"). To exercise
these options, your Account Value must meet the minimum dollar amounts and age
criteria applicable to that option.
The Additional Withdrawal Options currently available under the Contract
include the following:
[bullet] SWO--Systematic Withdrawal Option. SWO is a series of partial
withdrawals from your Account based on a payment method you select. It
is designed for those who want a periodic income while retaining
investment flexibility for amounts accumulated under a Contract. This
option may not be elected if you have an outstanding contract loan.
[bullet] ECO--Estate Conservation Option. ECO offers the same investment
flexibility as SWO but is designed for those who want to receive only
the minimum distribution that the Code requires each year. Under ECO,
the Company calculates the minimum distribution amount required by law
at the later of age 70-1/2 or retirement, or for 5% owners at age
70-1/2 and pays you that amount once a year. (See "Tax Status.")
Other Additional Withdrawal Options may be added from time to time.
Additional information relating to any of the Additional Withdrawal Options may
be obtained from your local representative or from the Company at the
Opportunity Plus Processing Office.
If you select one of the Additional Withdrawal Options, you will retain all
of the rights and flexibility permitted under the Contract during the
Accumulation Period. Your Account Value will continue to be subject to the
charges and deductions described in this Prospectus. Taking a withdrawal under
one of these Additional Withdrawal Options may have tax consequences. Any person
concerned about tax implications should consult a competent tax advisor prior to
electing an option.
Once you elect an Additional Withdrawal Option, you may revoke it any time
by submitting a written request to the Opportunity Plus Processing Office. Once
an option is revoked, it may not be elected again, nor may any other Additional
Withdrawal Options be elected unless permitted by the Code. The Company reserves
the right to discontinue the availability of one or all of these Additional
Withdrawal Options at any time, and/or to change the terms of future elections.
DEATH BENEFIT DURING ACCUMULATION PERIOD
===============================================================================
The Contract provides that a death benefit is payable to the
Beneficiary(ies) upon the death of the Participant before the Annuity Date. The
amount of the death benefit will be equal to the Account Value. Death benefit
proceeds may be paid to the Beneficiary:
[bullet] in a lump sum;
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[bullet] in accordance with any of the Annuity Options available under the
Contract; or
[bullet] under any Additional Withdrawal Options available under the Contract
(if the Beneficiary is your spouse).
The Beneficiary may instead elect one of the following two options; however,
the Code limits how long the death benefit proceeds may be left in these options
(see below):
[bullet] to leave the Account Value invested in the Contract; or
[bullet] to leave the Account Value on deposit in the Company's general
account, and to receive monthly, quarterly, semi-annual or annual
interest payments at the interest rate then being credited on such
deposits. The balance on deposit can be withdrawn at any time or
applied to an Annuity Option.
When paying the Beneficiary, we will determine the Account Value on the
Valuation Date following the date on which we receive proof of death acceptable
to the Company. Interest, if any, will be paid from the date of death at a rate
no less than required by law. We will mail payment to the Beneficiary within
seven days after we receive proof of death.
The Code requires that distribution of death proceeds begin within a certain
period of time. Generally, either annuity payments must begin by December 31 of
the year following the year of your death, or the entire value of your benefits
must be distributed by December 31 of the fifth year following the year of your
death. If your Beneficiary is your spouse, he or she is not required to begin
distributions until the year you would have attained age 70-1/2. In no event may
payments extend beyond the life expectancy of the Beneficiary or any period
certain greater than the Beneficiary's life expectancy.
If no elections are made, no distributions will be made. Failure to commence
distributions within the above time periods can result in tax penalties.
Regardless of the method of payment, death benefit proceeds will generally
be taxed to the Beneficiary in the same manner as if you had received those
payments. (See "Tax Status.")
ANNUITY PERIOD
===============================================================================
ANNUITY PERIOD ELECTIONS
The Code generally requires that minimum annual distributions of the Account
Value must begin by April 1st of the calendar year following the calendar year
in which a Participant attains age 70-1/2, or retires, if later. In addition,
distributions must be in a form and amount sufficient to satisfy the Code
requirements. These requirements may be satisfied by the election of certain
Annuity Options or Additional Withdrawal Options. (See "Tax Status.")
At least 30 days prior to the Annuity Date, you must notify us in writing of
the following:
[bullet] the date on which you would like to start receiving annuity payments;
[bullet] the Annuity Option under which you want your payments to be calculated
and paid;
[bullet] whether the payments are to be made monthly, quarterly, semi-annually
or annually; and
[bullet] the investment option(s) used to provide annuity payments (i.e., a
fixed annuity using the general account or any of the Subaccounts
available at the time of annuitization). As of the date of this
Prospectus, Aetna Variable Fund, Aetna Income Shares and Aetna
Investment Advisers Fund, Inc. are the only Subaccounts available.
Annuity payments will not begin until you have selected an Annuity Option.
Until a date and option are elected, the Account will continue in the
Accumulation Period. Once annuity payments begin, the Annuity Option may not be
changed, nor may transfers be made among the investment option(s) selected.
ANNUITY OPTIONS
You may choose one of the following Annuity Options:
Lifetime Annuity Options:
[bullet] Option 1--Life Annuity--An annuity with payments ending on the
Annuitant's death.
[bullet] Option 2--Life Annuity with Guaranteed Payments--An annuity with
payments guaranteed for 5, 10, 15 or 20 years, or such other periods
as the Company may offer at the time of annuitization.
[bullet] Option 3--Life Income based Upon the Lives of Two Payees--An annuity
will be paid during the lives of
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the Annuitant and a second Annuitant, with 100%, 66-2/3% or 50% of the
payment to continue after the first death, or 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.
[bullet] Option 4--Life Income based Upon the Lives of Two Payees--An annuity
with payments for a minimum of 120 months, with 100% of the payment to
continue after the first death.
If Option 1 or 3 is elected, it is possible that only one Annuity Payment
will be made if the Annuitant under Option 1, or the surviving Annuitant under
Option 3, 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 Annuity Options:
[bullet] Option 1--Payments for a Specified Period--payments will continue for
a specified period of time, as provided for under your Contract.
Under the Nonlifetime Option, an annuity may be selected on a fixed or
variable basis and payments may be made for 3-30 years. 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 "Charges and
Deductions--Deferred Sales Charge.")
We may also offer additional Annuity Options under the Contract from time to
time.
ANNUITY PAYMENTS
Date Payouts Start. When payments start, the age of the Annuitant plus the
number of years for which payments are guaranteed must not exceed 95. 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.
Amount of Each Annuity Payment. The amount of each payment depends on the
size of your Account Value, how you allocate it between fixed and variable
payouts, and the Annuity Option chosen. No election may be made that would
result in the first Annuity payment of less than $20, or total yearly Annuity
payments of less than $100. If your Account Value on the Annuity Date is
insufficient to elect an option for the minimum amount specified, a lump-sum
payment must be elected.
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
selected (3-1/2% or 5% per annum). 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. (See the
Statement of Additional Information for further information on the impact of
selecting a particular net investment rate.)
CHARGES DEDUCTED DURING THE ANNUITY PERIOD
We make a daily deduction for mortality and expense risks from any amounts
held on a variable basis. Therefore, electing the nonlifetime option on a
variable basis will result in a deduction being made even though we assume no
mortality risk. We may also deduct a daily administrative charge from amounts
held under the variable options. (See "Charges and Deductions.")
DEATH BENEFIT PAYABLE DURING THE ANNUITY PERIOD
If an Annuitant dies after Annuity Payments have begun, any death benefit
payable will depend on the terms of the Contract and the Annuity Option
selected. If Option 1 or Option 3 was elected, Annuity Payments will cease on
the death of the Annuitant under Option 1 or the death of the surviving
Annuitant under Option 3.
If Lifetime Option 2 or Option 4 was elected and the death of the Annuitant
under Option 2, or the surviving Annuitant under Option 4, occurs prior to the
end of the guaranteed minimum payment period, we will pay to the beneficiary in
a lump sum, unless otherwise requested, the present value of the guaranteed
annuity payments remaining.
If the nonlifetime option was elected, and the Annuitant dies before all
payments are made, the value of any remaining payments may be paid in a lump-sum
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to the beneficiary (unless otherwise requested), and no deferred sales charge
will be imposed.
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.
Any lump-sum payment paid under the applicable lifetime or nonlifetime
Annuity options will be made within seven calendar days after proof of death
acceptable to us, and a request for payment are received at our Home Office. The
value of any death benefit proceeds will be determined as of the next Valuation
Date after we receive acceptable proof of death and a request for payment. Under
Options 2 and 4, such value will be reduced by any payments made after the date
of death.
TAX STATUS
===============================================================================
INTRODUCTION
The following provides a general discussion and is not intended as tax
advice. This discussion reflects the Company's understanding of current federal
income tax law. Such laws may change in the future, and it is possible that any
change could be retroactive (i.e., effective prior to the date of the change).
The Company makes no guarantee regarding the tax treatment of any contract or
transaction involving a Contract. The ultimate effect of federal income taxes on
the amounts held under a Contract, on Annuity Payments, and on the economic
benefit to the Contract Holder, Participant or Beneficiary may depend upon the
tax status of the individual concerned. Any person concerned about these tax
implications should consult a competent tax adviser before initiating any
transaction.
TAXATION OF THE COMPANY
The Company is taxed as a life insurance company under the Code. Since the
Separate Account is not an entity separate from the Company, it will not be
taxed separately as a "regulated investment company" under the Code. Investment
income and realized capital gains are automatically applied to increase reserves
under the Contracts. Under existing federal income tax law, the Company believes
that the Separate Account investment income and realized net capital gains will
not be taxed to the extent that such income and gains are applied to increase
the reserves under the Contracts.
Accordingly, the Company does not anticipate that it will incur any federal
income tax liability attributable to the Separate Account and, therefore, the
Company does not intend to make provisions for any such taxes. However, if
changes in the federal tax laws or interpretation thereof result in the Company
being taxed on income or gains attributable to the Separate Account, then the
Company may impose a charge against the Separate Account (with respect to some
or all Contracts) in order to set aside provisions to pay such taxes.
CONTRACTS USED WITH CERTAIN RETIREMENT PLANS
In General. The Contract is designed for use with Section 403(b) plans. The
tax rules applicable to retirement plans vary according to the type of plan and
the terms and conditions of the plan.
The Company makes no attempt to provide more than general information about
use of the Contracts with the various types of retirement plans. Participants as
well as beneficiaries are cautioned that the rights of any person to any
benefits under the Contracts may be subject to the terms and conditions of the
plans themselves, in addition to the terms and conditions of the Contracts
issued in connection with such plans. Some retirement plans are subject to
limitations on distribution and other requirements that are not incorporated in
the Contracts. Purchasers are responsible for determining that contributions,
distributions and other transactions with respect to the Contracts satisfy
applicable laws, and should consult their legal counsel and tax adviser
regarding the suitability of the Contract.
Section 403(b) Plans. Under Section 403(b), contributions made by public
school systems to purchase annuity contracts for their employees are generally
excludable from the gross income of the employee.
In order to be excludable from taxable income, total annual contributions
made by you and your employer cannot exceed either of two limits set by the
Code. The first limit, under Section 415, is generally the lesser of 25% of your
includible compensation or $30,000. The second limit, which is the exclusion
allowance under Section 403(b), is usually calculated
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<PAGE>
according to a formula that takes into account your length of employment and
any pretax contributions to certain other retirement plans. These two limits
apply to your contributions as well as to any contributions made by your
employer on your behalf. There is an additional limit that specifically limits
your salary reduction contributions to generally no more than $9,500 annually
(subject to indexing); your own limit may be higher or lower, depending on
certain conditions. In addition Purchase Payments will be excluded from your
gross income only if the Plan meets certain non-discrimination requirements.
Section 403(b)(11) restricts the distribution under Section 403(b) contracts
of: (1) salary reduction contributions made after December 31, 1988; (2)
earnings on those contributions; and (3) earnings during such period on amounts
held as of December 31, 1988. Distribution of those amounts may only occur upon
death of the employee, attainment of age 59-1/2, separation from service,
disability, or financial hardship. In addition, income attributable to salary
reduction contributions may not be distributed in the case of hardship.
If, pursuant to Revenue Ruling 90-24, the Company agrees to accept, under
any of the Contracts covered by this Prospectus, amounts transferred from a Code
Section 403(b)(7) custodial account, such amounts will be subject to the
withdrawal restrictions set forth in Code Section 403(b)(7)(A)(ii).
Generally, no amounts accumulated under the Contract will be taxable prior
to the time of actual distribution. However, the IRS has stated in published
rulings that a variable contract owner, including participants under Section
403(b) Plans, will be considered the owner of separate account assets if the
owner possesses incidents of investment control over the assets. In these
circumstances, income and gains from the separate account assets would be
currently includible in the variable contract owner's gross income. The Treasury
announced that guidance would be issued in the future regarding the extent to
which owners could direct their investments among Subaccounts without being
treated as owners of the underlying assets of the Separate Account. It is
possible that the Treasury's position, when announced, may adversely affect the
tax treatment of existing contracts. The Company therefore reserves the right to
modify the Contract as necessary to attempt to prevent the owner from being
considered the federal tax owner of the assets of the Separate Account.
Minimum Distribution Requirements. The Code has required distribution rules
for Section 403(b) Plans. Under 403(b) Plans, distributions of amounts held as
of December 31, 1986 must generally begin by the end of the calendar year in
which you attain age 75 or retire, if later. However, special rules require that
some or all of that balance be distributed earlier if any distributions are
taken in excess of the minimum required amount. For Participants other than 5%
owners, distributions attributable to contributions under Section 403(b) Plans
on or after January 1, 1987 (including any earnings on the entire Account Value
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. For 5% owners, such distributions must begin April 1st of the calendar
year following the calendar year in which you attain age 70-1/2.
In general, annuity payments must be distributed over your life or the joint
lives of you and your beneficiary, or over a period not greater than your life
expectancy or the joint life expectancies of you and your beneficiary.
If you die after the required minimum distribution has commenced,
distributions to your beneficiary must be made at least as rapidly as under the
method of distribution in effect at the time of your death. However, if the
minimum required distribution is calculated each year based on your single life
expectancy or the joint life expectancies of you and your beneficiary, the
regulations for Code Section 401(a)(9) provide specific rules for calculating
the minimum required distributions at your death. For example, if you have
elected ECO with the calculation based on your single life expectancy, and the
life expectancy is recalculated each year, your recalculated life expectancy
becomes zero in the calendar year following your death and the entire remaining
interest must be distributed to your beneficiary by December 31 of the year
following your death. However, a spousal beneficiary has certain rollover rights
which can only be exercised in the year of your death. The rules are complex and
you should consult your tax adviser before electing the method of calculation to
satisfy the minimum requirements.
If you die before the required minimum distribution has commenced, your
entire interest must
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be distributed by December 31 of the calendar year containing the fifth
anniversary of the date of your death. Alternatively, payments may be made over
the life of the beneficiary or over a period not extending beyond the life
expectancy of the beneficiary provided the distribution begins by December 31
of the calendar year following the calendar year of your death, or December 31
of the calendar year in which you would have attained age 70-1/2.
If you fail to receive the minimum required distribution for any tax year, a
50% excise tax is imposed on the required amount that was not distributed.
Taxation of Distributions. All distributions will be taxed as they are
received unless you made a rollover contribution of the distribution to another
plan of the same type or to an individual retirement annuity/account ("IRA") in
accordance with the Code, or unless you have made after-tax contributions to the
plan, which are not taxed upon distribution. The Code has specific rules that
apply, depending on the type of distribution received, if after-tax
contributions were made.
In general, payments received by your beneficiaries after your death are
taxed in the same manner as if you had received those payments, except that a
limited death benefit exclusion may apply to payments made for deaths occurring
on or before August 20, 1996.
Pension and annuity distributions generally are subject to withholding for
the recipient's federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients may be provided
the opportunity to elect not to have tax withheld from distributions; however,
certain distributions from annuities are subject to mandatory federal income tax
withholding. 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 separated from service with the
plan sponsor at or after age 55, (e) the distribution amount is rolled over into
another plan of the same type in accordance with the terms of the Code, or (f)
the distribution amount is made in substantially equal periodic payments (at
least annually) over your life or life expectancy or the joint lives or joint
life expectancies of you and your plan beneficiary, provided you have separated
from service with the plan sponsor. In addition, the penalty tax does not apply
for the amount of a distribution equal to unreimbursed medical expenses incurred
by you that qualify for deduction as specified in the Code. The Code may impose
other penalty taxes in other circumstances.
MISCELLANEOUS
===============================================================================
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
DISTRIBUTION
The Company will serve as the Principal 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"), including at least
one affiliate of the Company, to offer and sell the Contracts. All persons
offering and selling the Contracts must be registered representatives of the
Distributors and must also be licensed as insurance agents to sell variable
annuity contracts. These registered representatives may also provide services to
Participants in connection with establishing their Accounts under the Contract.
Payment of Commissions. Persons offering and selling the Contracts may
receive commissions in connection with the sale of the Contracts. The maximum
percentage amount that the Company will ever pay as commission with respect to
any given Purchase Payment is with respect to those made during
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the first year of Purchase Payments under an Account. The percentage amount
will range from 1% to 4% of those Purchase Payments. The Company may also pay
renewal commissions on Purchase Payments made after the first year and
asset-based service fees. The average of all payments made by the Company is
estimated to equal approximately 3% of the total Purchase Payments made over
the life of an average Contract. In addition, some sales personnel may receive
various types of non-cash compensation as special sales incentives, including
trips and educational and/or business seminars. Supervisory and other
management personnel of the Company may receive compensation that will vary
based on the relative profitability to the Company of the funding options you
select. Funding options that invest in Funds advised by the Company or its
affiliates are generally more profitable to the Company. The Company may also
reimburse the Distributor for certain expenses. The name of the Distributor and
the registered representative responsible for your Account are set forth in
your enrollment materials. Commissions and sales related expenses are paid by
the Company and are not deducted from Purchase Payments. (See "Charges and
Deductions--Deferred Sales Charge.")
DELAY OR SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of payment
for any benefit or values (a) on any Valuation Date on which the New York Stock
Exchange ("Exchange") is closed (other than customary weekend and holiday
closings) or when trading on the Exchange is restricted; (b) when an emergency
exists, as determined by the SEC, so that disposal of securities held in the
Subaccounts is not reasonably practicable or it is not reasonably practicable
for the Company fairly to determine the value of the Subaccount's assets; or (c)
during such other periods as the SEC may by order permit for the protection of
investors. The conditions under which restricted trading or an emergency exists
shall be determined by the rules and regulations of the SEC.
PERFORMANCE REPORTING
From time to time, the Company may advertise different types of historical
performance for the Subaccounts of the Separate Account. The Company may
advertise the "standardized average annual total returns" of the Subaccounts,
calculated in a manner prescribed by the SEC, as well as the "non-standardized
returns." "Standardized average annual total returns" are computed according to
a formula in which a hypothetical investment of $1,000 is applied to the
Subaccount and then related to the ending redeemable values over the most recent
one, five and ten-year periods (or since inception, if less than ten years).
Standardized returns will reflect the reduction of all recurring charges during
each period (e.g., mortality and expense risk charges, annual maintenance fees,
administrative expense charge (if any) and any applicable deferred sales
charge). "Non-standardized returns" will be calculated in a similar manner,
except that non-standardized figures will not reflect the deduction of any
applicable deferred sales charge (which would decrease the level of performance
shown if reflected in these calculations). The non-standardized figures may also
include monthly, quarterly, year-to-date and three-year periods.
The Company may also advertise certain ratings, rankings or other
information related to the Company, the Subaccounts or the Funds. Further
details regarding performance reporting and advertising are described in the
Statement of Additional Information.
VOTING RIGHTS
In accordance with the Company's view of present applicable law, it will
vote the shares of each of the Funds held by the Separate Account at regular and
special meetings of Fund shareholders in accordance with instructions received
from each Contract Holder. Participants and Annuitants have a fully vested
(100%) interest in the benefits provided under the Contract and may instruct the
Contract Holder how to direct the Company to cast the votes for the portion of
the Account Value or valuation reserve attributable to their individual
Accounts. Currently, for group contracts used with Section 403(b) plans, the
Company obtains participant voting instructions directly from the participants,
subject to receipt of authorization from the Contract Holder to accept such
instructions. The Company will vote shares for which it has not received
instructions in the same proportion as it votes shares for which it has received
instructions.
Each person having a voting interest in the Separate Account will receive
periodic reports relating to the Fund(s) in which he or she has an interest, as
well as any proxy materials and a form on which to give voting instructions.
Voting instructions will be solicited by written communication at least 14 days
before such meeting. The number of votes to which each person may give direction
will be determined as of the record date set by the Fund.
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The number of votes each Contract Holder or Participant, as applicable, may
cast during the Accumulation Period is equal to the portion of the Account Value
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.
CHANGES IN BENEFICIARY DESIGNATIONS
The designated Beneficiary may be changed at any time. Such change will not
become effective until written notice of the change is received by the Company.
MODIFICATION OF THE CONTRACT
The Company may change the Contract as required by federal or state law. In
addition, the Company may, upon 30 days written notice to the Contract Holder,
make other changes to the Contracts that would apply only to individuals who
become Participants under that Contract after the effective date of such
changes. If the Contract Holder does not agree to a change, no new Participants
will be covered under the Contract. Certain changes will require the approval of
appropriate state or federal regulatory authorities.
AGREEMENTS WITH 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 $75,000 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.
The Company compensates UUP $48,000 per year for the use of on-site campus
facilities, the endorsement of the Opportunity Plus program and for the use of
UUP payroll slots.
LEGAL MATTERS AND PROCEEDINGS
The Company knows of no material legal proceedings pending to which the
Separate Account or the Company is a party or which would materially affect the
Separate Account. The validity of the securities offered by this Prospectus has
been passed upon by Counsel to the Company.
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CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
===============================================================================
The Statement of Additional Information contains more specific information
on the Separate Account and the Contract, as well as the financial statements of
the Separate Account and the Company. A list of the contents of the SAI is set
forth below:
General Information and History
Variable Annuity Account C
Offering and Purchase of Contracts
Performance Data
General
Average Annual Total Return Quotations
Annuity Payments
Sales Material and Advertising
Independent Auditors
Financial Statements of the Separate Account
Financial Statements of the Company
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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. Amounts allocated to Long-Term Classifications of GAA are held in a
noninsulated, nonunitized separate account. Amounts allocated to Short-Term
Classifications of GAA are held in the Company's general account. This Appendix
is a summary of GAA and is not intended to replace the GAA prospectus. You
should read the accompanying GAA prospectus carefully before investing.
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 for one year. This option guarantees the minimum interest
rate specified in the Contract.
During a specified period of time (the "deposit period"), amounts may be
applied to any or all available Guaranteed Terms within the Short-Term and
Long-Term classifications. Short-Term GAA has Guaranteed Terms from one to three
years, and Long-Term GAA has Guaranteed Terms from three to ten years.
Purchase Payments must remain in GAA for the full Guaranteed Term to receive
the quoted interest rates. 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 investments
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 the Participant receiving an amount
which 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 other available
investment options, or (c) withdrawn. Amounts withdrawn may be subject to a
deferred sales charge and/or federal tax penalties or mandatory income tax
withholding.
By notifying us at least 30 days prior to the Annuity Date, you may elect a
variable annuity and have amounts that have been accumulating under GAA
transferred to one or more of the Subaccounts available during the Annuity
Period. GAA cannot be used as an investment option 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
Transfers are permitted among Guaranteed Terms. However, amounts applied to
GAA may not be transferred to another Guaranteed Term of GAA, or to any other
Subaccount or Credited Interest Option available under the Contract, during the
deposit period or the 90 days after the close of the deposit period. We will
apply an MVA to transfers made before the end of a Guaranteed Term, unless such
transfer is due to the maturity of the Guaranteed Term.
CONTRACT LOANS
Loans may not be made against amounts held in GAA, although such value is
included in determining the Account Value against which a loan may be made.
REINVESTMENT PRIVILEGE
If amounts are withdrawn from GAA and reinvested, they 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.
- --------------------------------------------------------------------------------
18
<PAGE>
APPENDIX II
FIXED ACCOUNT
===============================================================================
The following summarizes material information concerning the Fixed Account.
Amounts allocated to the Fixed Account are held in the Company's general account
that supports general 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 the Prospectus regarding
the Fixed Account, may, however, be subject to certain generally applicable
provisions of the federal securities laws relating to the accuracy and
completeness of such statements. Disclosure in this Appendix regarding the Fixed
Account has not been reviewed by the SEC.
The Fixed Account guarantees the minimum interest rate specified in the
Contract. The Company may credit a higher interest rate from time to time. The
current rate is subject to change at any time, but will never fall below the
guaranteed minimum. 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 the Fixed
Account, the Company assumes the risk of investment gain or loss by guaranteeing
Account Values and promising a minimum interest rate and Annuity Payment. The
Fixed Account is available under Installment Purchase Payment Contracts only.
Under certain emergency conditions, we may defer payment of a Fixed Account
withdrawal value (a) for a period of up to six 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.
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.
If a withdrawal is made from the Fixed Account, a deferred sales charge may
apply. See "Charges and Deductions--Deferred Sales Charge."
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers from the Fixed Account to any other available investment
options(s) are allowed in each calendar year during the Accumulation Period.
There is no limit on the number of transfers that you can make out of the Fixed
Account in a calendar year; however, the amount you are allowed to transfer from
the Fixed Account is the current value of your Fixed Account multiplied by the
current maximum percentage of the transfer allowed (the "window") minus any
previous transfers made during the calendar year.
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 one or more of the
Subaccounts available during the Annuity Period to provide variable Annuity
Payments.
CONTRACT LOANS
Loans may be made from Account Values held in the Fixed Account.
- --------------------------------------------------------------------------------
19
<PAGE>
For Master Applications Only
I hereby acknowledge receipt of an Account C "Opportunity Plus" Group Deferred
Variable Annuity prospectus dated November 28, 1997, as well as all current
prospectuses pertaining to the variable investment options available under the
Contracts.
- --- Please send an Account C Statement of Additional Information (Form No.
SAI.75962-97) dated May 1, 1997.
- --------------------------------------------------------------------------------
CONTRACT HOLDER'S SIGNATURE
- --------------------------------------------------------------------------------
DATE
PROS.75962-97A
<PAGE>
- -------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT C
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
- -------------------------------------------------------------------------------
SUPPLEMENT DATED NOVEMBER 28, 1997
to the Statement of Additional Information dated May 1, 1997
for
OPPORTUNITY PLUS
Group Variable Multiple Option Annuity Contracts
The information in this supplement updates and amends the information contained
in the Statement of Additional Information dated May 1, 1997 for Opportunity
Plus - Group Variable Multiple Option Annuity Contracts (the "Statement") and
should be read with that Statement. Capitalized terms are defined in the
Statement or the Prospectus.
The following Funds are currently available under the Opportunity Plus - Group
Variable Multiple Option Annuity Contracts:
Aetna Variable Fund
Aetna Income Shares
Aetna Variable Encore Fund
Aetna Investment Advisers Fund, Inc.
Aetna Ascent Variable Portfolio
Aetna Crossroads Variable Portfolio
Aetna Legacy Variable Portfolio
Aetna Variable Index Plus Portfolio
Calvert Responsibly Invested Balanced Portfolio
Fidelity VIP II Asset Manager Portfolio
Fidelity VIP II Contrafund Portfolio
Fidelity VIP II Index 500 Portfolio
Fidelity VIP Equity Income Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Lexington Emerging Markets Fund, Inc.
Lexington Natural Resources Trust*
Portfolio Partners, Inc. MFS Emerging Equities Portfolio
Portfolio Partners, Inc. MFS Research Growth Portfolio
Portfolio Partners, Inc. MFS Value Equity Portfolio
Portfolio Partners, Inc. Scudder International Growth Portfolio
Portfolio Partners, Inc. T. Rowe Price Growth Equity Portfolio
Complete descriptions of each of the Funds, including their investment
objectives, policies, risks and fees and expenses, are contained in the
prospectuses and statements of additional information for each of the Funds.
*This Fund will be removed from the list of Funds as of the close of business of
the New York Stock Exchange on November 26, 1997, or as soon thereafter as all
participants have redirected their allocations to other investment options,
since it will be closed to new investments after that date (except reinvested
dividends and capital gains earned on amounts already invested in the Fund
through the Separate Account and loan repayments automatically deposited into
the Fund pursuant to the Company's loan repayment procedures.)
XSAI.75962-97
<PAGE>
The table shown below reflects the average annual standardized and
non-standardized total return quotation figures for the periods ended December
31, 1996 for the Subaccounts. For those Subaccounts where results are not
available for the full calendar period indicated, the percentage shown is an
average annual return since inception (denoted with an *).
The following is in addition to the chart found on page 5 of the Statement:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND
SINGLE PURCHASE PAYMENT CONTRACT INCEPTION
($0 MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED DATE
- ------------------------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Ascent Variable Portfolio 22.03% 21.64%* n/a 22.03% 21.64%* n/a n/a 07/05/95
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads Variable Portfolio 17.32% 17.64%* n/a 17.32% 17.64%* n/a n/a 07/05/95
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy Variable Portfolio 12.76% 13.84%* n/a 12.76% 13.84%* n/a n/a 07/05/95
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Variable Index Plus Portfolio 9.24%* n/a n/a 9.24%* n/a n/a n/a 09/16/96
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The following is in addition to the chart found on page 6 of the Statement:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND
INSTALLMENT PURCHASE PAYMENT CONTRACT INCEPTION
($5 MAINTENANCE FEE) STANDARDIZED NON-STANDARDIZED DATE
- ------------------------------------------------------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Ascent Variable Portfolio 15.92% 17.51%* n/a 22.02% 21.62%* n/a n/a 07/05/95
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Crossroads Variable Portfolio 11.44% 13.65%* n/a 17.31% 17.63%* n/a n/a 07/05/95
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Legacy Variable Portfolio 7.11% 9.98%* n/a 12.75% 13.82%* n/a n/a 07/05/95
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna Variable Index Plus Portfolio 3.77%* n/a n/a 9.23%* n/a n/a n/a 09/16/96
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
XSAI.75962-97
<PAGE>
VARIABLE ANNUITY ACCOUNT C
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Included in Part A:
Condensed Financial Information
(2) Included in Part B:*
Financial Statements of Variable Annuity Account C:
- Statement of Assets and Liabilities as of December 31,
1996
- Statements of Operations and Changes in Net Assets for the
years ended December 31, 1996 and 1995
- Notes to Financial Statements
- Independent Auditors' Report
Financial Statements of the Depositor:
- Independent Auditors' Report
- Consolidated Statements of Income for the years ended
December 31, 1996, 1995 and 1994
- Consolidated Balance Sheets as of December 31, 1996 and
1995
- Consolidated Statements of Changes in Shareholder's Equity
for the years ended December 31, 1996, 1995 and 1994
- Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994
- Notes to Consolidated Financial Statements
(b) Exhibits
(1) Resolution of the Board of Directors of Aetna Life Insurance
and Annuity Company establishing Variable Annuity Account C(1)
(2) Not applicable
(3.1) Broker-Dealer Agreement(2)
(3.2) Alternative Form of Wholesaling Agreement and Related Selling
Agreement(2)
(4.1) Variable Annuity Contract (G-TDA-HH(XC/M))(3)
(4.2) Variable Annuity Contract (G-TDA-HH(XC/S))(3)
(4.3) Endorsement EGET-IC(R) to Contracts G-TDA-HH(XC/M) and
G-TDA-HH(XC/S)(2)
(4.4) Endorsement (ENYSUTMF97) to Contract G-TDA-HH(XC/M)(4)
(4.5) Endorsement (ENYSUTMF97(S)) to Contract G-TDA-HH(XC/S)(4)
(4.6) Endorsement (ENYSTSDO97) to Contracts G-TDA-HH(XC/M) and
G-TDA-HH(SC/S)(4)
(5) Variable Annuity Contract Application (300-TDA-HH(XC))(5)
(6.1) Certification of Incorporation of Aetna Life Insurance and
Annuity Company(6)
*incorporated by reference
<PAGE>
(6.2) Amendment of Certificate of Incorporation of Aetna Life
Insurance and Annuity Company(7)
(6.3) By-Laws as amended September 17, 1997, of Aetna Life Insurance
and Annuity Company(8)
(7) Not applicable
(8.1) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company and Calvert Asset Management Company (Calvert
Responsibly Invested Balanced Portfolio, formerly Calvert
Socially Responsible Series) dated March 13, 1989 and amended
December 27, 1993(2)
(8.2) Second Amendment dated January 1, 1996 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company and
Calvert Asset Management Company (Calvert Responsibly Invested
Balanced Portfolio, formerly Calvert Socially Responsible
Series) dated March 13, 1989 and amended December 27, 1993(9)
(8.3) Third Amendment dated February 11, 1997 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company and
Calvert Asset Management Company (Calvert Responsibly Invested
Balanced Portfolio, formerly Calvert Socially Responsible
Series) dated March 13, 1989 and amended December 27, 1993 and
January 1, 1996(10)
(8.4) Fourth Amendment dated February 28, 1997 to Fund Participation
Agreement between Aetna Life Insurance and Annuity Company and
Calvert Asset Management Company (Calvert Responsibly Invested
Balanced Portfolio, formerly Calvert Socially Responsible
Series) dated March 13, 1989 and amended December 27, 1993,
January 1, 1996 and February 11, 1997(11)
(8.5) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1995, May 1, 1995, January 1,
1996 and March 1, 1996(7)
(8.6) Fifth Amendment, dated as of May 1, 1997, to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated February 1, 1994 and amended on
December 15, 1994, February 1, 1996, May 1, 1995, January 1,
1996 and March 1, 1996(12)
(8.7) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996 and March 1,1996(7)
(8.8) Fifth Amendment, dated as of May 1, 1997, to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1996, May 1, 1995,
January 1, 1996 and March 1, 1996(12)
<PAGE>
(8.9) Service Agreement between Aetna Life Insurance and Annuity
Company and Fidelity Investments Institutional Operations
Company dated as of November 1, 1995(8)
(8.10) Amendment dated January 1, 1997 to Service Agreement between
Aetna Life Insurance and Annuity Company and Fidelity
Investments Institutional Operations Company dated as of
November 1, 1995(12)
(8.11) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company and Janus Aspen Series dated April 19, 1994
and amended June 15, 1994, July 31, 1995 and March 1, 1996(12)
(8.12) Fund Participation Agreement between Aetna Life Insurance
Company and Lexington Management Corporation regarding Natural
Resources Trust dated December 1, 1988 and amended February
11, 1991(2)
(8.13) Fund Participation Agreement between Aetna Life Insurance and
Annuity Company, Lexington Emerging Markets Fund, Inc. and
Lexington Management Corporation (its investment advisor)
dated April 28, 1994(13)
(9) Opinion and Consent of Counsel
(10) Consent of Independent Auditors
(11) Not applicable
(12) Not applicable
(13) Schedule for Computation of Performance Data(14)
(14) Not applicable
(15.1) Powers of Attorney(12)
(15.2) Authorization for Signatures(2)
(27) Financial Data Schedule
1. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75986), as filed electronically on April
22, 1996 (Accession No. 0000950146-96-000563).
2. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-75986), as filed electronically on April
12, 1996 (Accession No. 0000912057-96-006383).
3. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75962), as filed electronically on April
17, 1996 (Accession No. 0000912057-96-006579).
4. Incorporated by reference to Post-Effective Amendment No. 11 to
Registration Statement on Form N-4 (File No. 33-75962), as filed
electronically on April 14, 1997 (Accession No. 0000950146-97-000590).
5. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75962), as filed
electronically on August 20, 1997 (Accession No. 0000950146-97-001318)
<PAGE>
6. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-60477), as filed electronically on April
15, 1996 (Accession No. 0000950146-96-000534).
7. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75964), as filed
electronically on February 11, 1997 (Accession No. 0000950146-97-000159).
8. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-91846), as filed
electronically on October 30, 1997 (Accession No. 0000950146-97-001589).
9. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-88720), as filed electronically on June
28, 1996 (Accession No. 0000928389-96-000136).
10. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form N-4 (File No. 333-01107), as filed electronically on
February 26, 1997 (Accession No. 0000950146-97-000241).
11. Incorporated by reference to Post-Effective Amendment No. 14 to
Registration Statement on Form N-4 (File No. 33-75964), as filed
electronically on July 29, 1997 (Accession No. 0000950146-97-001101).
12. Incorporated by reference to Post-Effective Amendment No. 30 to
Registration Statement on Form N-4 (File No. 33-34370), as filed
electronically on September 29, 1997 (Accession No. 0000950146-97-001485).
13. Incorporated by reference to Post-Effective Amendment No. 22 to
Registration Statement on Form N-4 (File No. 33-34370), as filed
electronically on April 22, 1996 (Accession No. 0000912057-96-006805).
14. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-75964), as filed on February 24, 1995.
<PAGE>
Item 25. Directors and Officers of the Depositor
Name and Principal
Business Address* Positions and Offices with Depositor
- ------------------ ------------------------------------
Thomas J. McInerney Director and President
Timothy A. Holt Director, Senior Vice President and Chief Financial
Officer
Christopher J. Burns Director and Senior Vice President
J. Scott Fox Director and Senior Vice President
John Y. Kim Director and Senior Vice President
Shaun P. Mathews Director and Senior Vice President
Deborah Koltenuk Vice President and Treasurer, Corporate Controller
Frederick D. Kelsven Vice President and Chief Compliance Officer
Kirk P. Wickman Vice President, General Counsel and Corporate Secretary
* The principal business address of all directors and officers listed is 151
Farmington Avenue, Hartford, Connecticut 06156.
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Incorporated herein by reference to Item 26 of Post-Effective Amendment No.
12 to the Registration Statement on Form N-4 (File No. 33-91846), as filed
electronically on October 30, 1997 (Accession No.0000950146-97-001589).
Item 27. Number of Contract Owners
As of September 30, 1997, there were 623,598 individuals holding interests
in variable annuity contracts funded through Variable Annuity Account C.
<PAGE>
Item 28. Indemnification
Reference is hereby made to Section 33-771(f) of the Connecticut General
Statutes ("C.G.S.") regarding indemnification of directors and Section 33-776(4)
regarding indemnification of officers, employees and agents of Connecticut
corporations. These statutes provide in general that Connecticut corporations
incorporated prior to January 1, 1997 shall indemnify their officers, directors,
employees and agents against "liability" (defined as the obligation to pay a
judgment, settlement, penalty, fine, excise tax in the case of an employee
benefit plan or reasonable expenses incurred with respect to a proceeding). In
the case of a proceeding by or in the right of the corporation, indemnification
is limited to reasonable expenses incurred in connection with the proceeding
against the corporation to which the individual was named a party. The
corporation's obligation to provide such indemnification does not apply unless
(1) the individual has met the standard of conduct set forth in Section 33-771;
and (2) a determination is made (by majority vote of a quorum of the board of
directors who were not parties to the proceeding, or if a quorum cannot be
obtained, by a committee of the board selected as described in Section
33-775(b)(2); by special legal counsel selected by the board of directors or
members thereof as described in Section 33-775(b)(3); by shareholders) that the
individual met the standard set forth in Section 33-771; or (3) the court, upon
application by the individual, determines in view of all the circumstances that
such person is reasonably entitled to be indemnified. Also, unless limited by
its Certificate of Incorporation, a corporation must indemnify an individual who
was wholly successful on the merits or otherwise against reasonable expenses
incurred by him in connection with a proceeding to which he was a party because
of his relationship as director, officer, employee or agent of the corporation.
The statute does specifically authorize a corporation to procure indemnification
insurance on behalf of an individual who is or was a director, officer, employer
or agent of the corporation. Consistent with the statute, Aetna Inc. has
procured insurance from Lloyd's of London and several major United States excess
insurers for its directors and officers and the directors and officers of its
subsidiaries, including the Depositor.
Item 29. Principal Underwriter
(a. In addition to serving as the principal underwriter and depositor for
the Registrant, Aetna Life Insurance and Annuity Company (Aetna) also
acts as the investment adviser, only, for Aetna Series Fund, Inc. and
the principal underwriter and investment adviser for Portfolio
Partners, Inc., Aetna Variable Encore Fund, Aetna Variable Fund, Aetna
Generation Portfolios, Inc., Aetna Income Shares, Aetna Investment
Advisers Fund, Inc., Aetna GET Fund, and Aetna Variable Portfolios,
Inc. (all management investment companies registered under the
Investment Company Act of 1940 (1940 Act)). Additionally, Aetna acts as
the principal underwriter and depositor for Variable Life Account B of
Aetna, Variable Annuity Account B of Aetna and Variable Annuity Account
G of Aetna (separate accounts of Aetna registered as unit investment
trusts under the 1940 Act). Aetna is also the principal underwriter for
Variable Annuity Account I of Aetna Insurance Company of America (AICA)
(a separate account of AICA registered as a unit investment trust under
the 1940 Act).
<PAGE>
(b. See Item 25 regarding the Depositor.
(c. Compensation as of December 31, 1996:
(1) (2) (3) (4) (5)
Name of Net Underwriting Compensation on
Principal Discounts and Redemption or Brokerage
Underwriter Commissions Annuitization Commissions Compensation*
- ----------- ----------- ------------- ----------- -------------
Aetna Life $1,325,661 $96,924,599
Insurance and
Annuity
Company
[bullet] Compensation shown in column 5 includes deductions for mortality and
expense risk guarantees and contract charges assessed to cover costs
incurred in the sales and administration of the contracts issued under
Variable Annuity Account C.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the rules under it relating to the securities
described in and issued under this Registration Statement are located at the
home office of the Depositor as follows:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
and
Opportunity Plus Processing Office
18 Corporate Woods Blvd., Fourth Floor
Albany, NY 12211
Item 31. Management Services
Not applicable
Item 32. Undertakings
Registrant hereby undertakes:
<PAGE>
(a. to file a post-effective amendment to this registration statement on
Form N-4 as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more than
sixteen months old for as long as payments under the variable annuity
contracts may be accepted;
(b. to include as part of any application to purchase a contract offered by
a prospectus which is part of this registration statement on Form N-4,
a space that an applicant can check to request a Statement of
Additional Information; and
(c. to deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly
upon written or oral request.
(d. The Company hereby represents that it is relying upon and complies with
the provisions of Paragraphs (1) through (4) of the SEC Staff's
No-Action Letter dated November 22, 1988 with respect to language
concerning withdrawal restrictions applicable to plans established
pursuant to Section 403(b) of the Internal Revenue Code. See American
Counsel of Life Insurance; SEC No-Action Letter, [1989 Transfer Binder]
Fed. SEC. L. Rep. (CCH) P. 78,904 at 78,523 (November 22, 1988).
(e. Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
(f. Aetna Life Insurance and Annuity Company represents that the fees and
charges deducted under the contracts covered by this registration
statement, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed
by the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, and the Investment Company Act of
1940, the Registrant, Variable Annuity Account C of Aetna Life Insurance and
Annuity Company, certifies that it meets the requirements of Securities Act Rule
485(b) for effectiveness of this Post-Effective Amendment to its Registration
Statement on Form N-4 (File No.33-75962) and has duly caused this Post-Effective
Amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on the 13 day of
November, 1997.
VARIABLE ANNUITY ACCOUNT C OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
(Registrant)
By: AETNA LIFE INSURANCE AND ANNUITY
COMPANY
(Depositor)
By: Thomas J. McInerney*
----------------------------------
Thomas J. McInerney
President
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 13 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- --------- ------ ----
Thomas J. McInerney* Director and President )
- --------------------- (principal executive officer) )
Thomas J. McInerney )
)
)
Timothy A. Holt* Director and Chief Financial Officer ) November
- --------------------- ) 13, 1997
Timothy A. Holt )
)
)
Christopher J. Burns* Director )
- --------------------- )
Christopher J. Burns )
)
)
J. Scott Fox* Director )
- --------------------- )
J. Scott Fox )
)
)
John Y. Kim* Director )
- --------------------- )
John Y. Kim )
<PAGE>
Shaun P. Mathews* Director )
- --------------------- )
Shaun P. Mathews )
)
)
Deborah Koltenuk* Vice President and Treasurer, )
- --------------------- Corporate Controller )
Deborah Koltenuk )
)
By: /s/ Julie E. Rockmore
-----------------------------
Julie E. Rockmore
*Attorney-in-Fact
<PAGE>
VARIABLE ANNUITY ACCOUNT C
EXHIBIT INDEX
Exhibit No. Exhibit Page
- ----------- ------- ----
99-B.1 Resolution of the Board of Directors of Aetna Life *
Insurance and Annuity Company establishing Variable
Annuity Account C
99-B.3.1 Broker-Dealer Agreement *
99-B.3.2 Alternative Form of Wholesaling Agreement and Related *
Selling Agreement
99-B.4.1 Variable Annuity Contract (G-TDA-HH(XC/M)) *
99-B.4.2 Variable Annuity Contract (G-TDA-HH(XC/S)) *
99-B.4.3 Endorsement EGET-IC(R) to Contracts G-TDA-HH (XC/M) and *
G-TDA-HH(XC/S)
99-B.4.4 Endorsement (ENYSUTMF97) to Contract G-TDA-HH(XC/M) *
99-B.4.5 Endorsement (ENYSUTMF97(S)) to Contract G-TDA-HH(XC/S) *
99-B.4.6 Endorsement (ENYSTSDO97) to Contracts G-TDA-HH(XC/M) and *
G-TDA-HH(SC/S)
99-B.5 Variable Annuity Contract Application (300-TDA-HH(XC)) *
99-B.6.1 Certification of Incorporation of Aetna Life Insurance and *
Annuity Company
99-B.6.2 Amendment of Certificate of Incorporation of Aetna Life *
Insurance and Annuity Company
99-B.6.3 By-Laws as amended September 17, 1997, of Aetna Life *
Insurance and Annuity Company
99-B.8.1 Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company and Calvert Asset Management Company
(Calvert Responsibly Invested Balanced Portfolio, formerly
Calvert Socially Responsible Series) dated March 13, 1989
and amended December 27, 1993
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
- ----------- ------- ----
99-B.8.2 Second Amendment dated January 1, 1996 to Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company and Calvert Asset Management Company
(Calvert Responsibly Invested Balanced Portfolio, formerly
Calvert Socially Responsible Series) dated March 13, 1989
and amended December 27, 1993
99-B.8.3 Third Amendment dated February 11, 1997 to Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company and Calvert Asset Management Company
(Calvert Responsibly Invested Balanced Portfolio, formerly
Calvert Socially Responsible Series) dated March 13, 1989
and amended December 27, 1993 and January 1, 1996
99-B.8.4 Fourth Amendment dated February 28, 1997 to Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company and Calvert Asset Management Company
(Calvert Responsibly Invested Balanced Portfolio, formerly
Calvert Socially Responsible Series) dated March 13, 1989
and amended December 27, 1993, January 1, 1996 and
February 11, 1997
99-B.8.5 Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996 and March 1, 1996
99-B.8.6 Fifth Amendment, dated as of May 1, 1997, to the Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1996, May 1,
1995, January 1, 1996 and March 1, 1996
99-B.8.7 Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company, Variable Insurance Products Fund II
and Fidelity Distributors Corporation dated February 1,
1994 and amended on December 15, 1994, February 1. 1995,
May 1, 1995, January 1, 1996 and March 1, 1996
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
- ----------- ------- ----
99-B.8.8 Fifth Amendment, dated as of May 1, 1997, to the Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1996, May 1,
1995, January 1, 1996 and March 1, 1996
99-B.8.9 Service Agreement between Aetna Life Insurance and Annuity *
Company and Fidelity Investments Institutional Operations
Company dated as of November 1, 1995
99-B.8.10 Amendment dated January 1, 1997 to Service Agreement *
between Aetna Life Insurance and Annuity Company and
Fidelity Investments Institutional Operations Company
dated as of November 1, 1995
99-B.8.11 Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company and Janus Aspen Series dated April 19,
1994 and amended June 15, 1994, July 31, 1995 and March 1,
1996
99-B.8.12 Fund Participation Agreement between Aetna Life Insurance *
Company and Lexington Management Corporation regarding
Natural Resources Trust dated December 1, 1988 and amended
February 11, 1991
99-B.8.13 Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company, Lexington Emerging Markets Fund, Inc.
and Lexington Management Corporation (its investment
advisor) dated April 28, 1994
99-B.9 Opinion and Consent of Counsel _____
99-B.10 Consent of Independent Auditors _____
99-B.13 Schedule for Computation of Performance Data *
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
- ----------- ------- ----
99-B.15.1 Powers of Attorney *
99-B.15.2 Authorization for Signatures *
27 Financial Data Schedule _____
*Incorporated by reference
[Aetna Letterhead] 151 Farmington Avenue
[Aetna Logo] Hartford, CT 06156
Julie E. Rockmore
Counsel
Law Division, RE4A
Investments & Financial Services
(860) 273-4686
Fax: (860) 273-8340
November 13, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Aetna Life Insurance and Annuity Company
and its Variable Annuity Account C
Post-Effective Amendment No. 13 to
Registration Statement on Form N-4
Prospectus Title: Opportunity Plus -
Group Variable Multiple Option
Annuity Contracts
File Nos. 33-75962* and 811-2513
Dear Sir or Madam:
The undersigned serves as counsel to Aetna Life Insurance and Annuity
Company, a Connecticut life insurance company (the "Company"). It is
my understanding that the Company, as depositor, has registered an
indefinite amount of securities (the "Securities") under the
Securities Act of 1933 (the "Securities Act") as provided in Rule
24f-2 under the Investment Company Act of 1940 (the "Investment
Company Act").
In connection with this opinion, I have reviewed the N-4 Registration
Statement, as amended to the date hereof, and this Post-Effective
Amendment No. 13. I have also examined originals or copies, certified
or otherwise identified to my satisfaction, of such documents, trust
records and other instruments I have deemed necessary or appropriate
for the purpose of rendering this opinion. For purposes of such
examination, I have assumed the genuineness of all signatures on
original documents and the conformity to the original of all copies.
I am admitted to practice law in Connecticut, and do not purport to be
an expert on the laws of any other state. My opinion herein as to any
other law is based upon a limited inquiry thereof which I have deemed
appropriate under the circumstances.
- --------
* Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant
has included a combined prospectus under this Registration Statement
which includes all the information which would currently be required
in a prospectus relating to the securities covered by the following
earlier Registration Statement: 33-75978.
<PAGE>
Based upon the foregoing, and, assuming the Securities are sold in
accordance with the provisions of the prospectus, I am of the opinion
that the Securities being registered will be legally issued and will
represent binding obligations of the Company.
I consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Julie E. Rockmore
Julie E. Rockmore
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors of Aetna Life Insurance and Annuity Company and
Contractholders of Aetna Variable Annuity Account C:
We consent to the use of our reports dated February 4, 1997 and February 14,
1997 incorporated by reference in registration statement (No. 33-75962) on Form
N-4 and to the reference to our firm under the caption "CONDENSED FINANCIAL
INFORMATION" in the Prospectus.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
November 13, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000103007
<NAME> Aetna Variable Annuity Account C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 7,952,811,278
<INVESTMENTS-AT-VALUE> 8,565,202,363
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,565,202,363
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 8,565,202,363
<DIVIDEND-INCOME> 712,854,599
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 93,446,331
<NET-INVESTMENT-INCOME> 619,408,268
<REALIZED-GAINS-CURRENT> 513,568,522
<APPREC-INCREASE-CURRENT> 18,307,901
<NET-CHANGE-FROM-OPS> 1,151,284,691
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
