LAZARD RETIREMENT SERIES INC
485APOS, 1999-02-26
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                                             Securities Act File No. 333-22309 
                                     Investment Company Act File No. 811-08071
==============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, d.C. 20549
                                   FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933             /X/

          Post-Effective Amendment No. 2
                    
                         and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940    /X/

          Amendment No. 2

               (Check appropirate box or boxes)

                         LAZARD RETIREMENT SERIES, INC.
               (Exact Name of Registrant as Specified in Charter)

30 Rockefeller Plaza, New York, New York                    10112
(Address of Principal Executive Offices)                  (Zip Code)  

Registrant's Telephone Number, including Area Code:   (212) 632-6000

                         William G. Butterly III, Esq.
                              30 Rockefeller Plaza
                            New York, New York 10112
                    (Name and Address of Agent for Service)

                                    copy to:

                            Stuart H. Coleman, Esq.
                         Stroock & Stroock & Lavan LLP
                                180 Maiden Lane
                         New York, New York 10038-4982

     It is proposed that this filing will become effective (check appropriate
box)


             immediately upon filing pursuant to paragraph (b)
     -----

             on    (date)    pursuant to paragraph (b)
     -----

             60 days after filing pursuant to paragraph (a)(i)
     -----

       X     on May 1, 1999 pursuant to paragraph (a)(i)
     -----

            75 days after filing pursuant to paragraph (a)(ii)
     -----

           on  (date)  pursuant to paragraph (a)(ii) of Rule 485.
     -----

     If appropriate, check the following box:

           this post-effective amendment designates a new effective
           date for a previously filed post-effective
           amendment.
<PAGE>


                            LAZARD RETIREMENT SERIES


                              PROSPECTUS




                              May 1, 1999


                              --------------------------------------
                              Lazard Retirement Equity Portfolio
                              Lazard Retirement Small Cap Portfolio
                              Lazard Retirement Bantam Value Portfolio
                              Lazard Retirement Global Equity Portfolio
                              Lazard Retirement International Equity Portfolio
                              Lazard Retirement International Small Cap
                                Portfolio
                              Lazard Retirement Emerging Markets Portfolio
                              Lazard Retirement International Fixed-Income
                                Portfolio
                              Lazard Retirement Strategic Yield Portfolio

                              --------------------------------------

                              30 Rockefeller Plaza
                              New York, New York  10112
                              (800) 823-6300







     THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THE SHARES
     DESCRIBED IN THIS PROSPECTUS OR DETERMINED WHETHER THIS PROSPECTUS IS
     ACCURATE OR COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.

<PAGE>
     Table of Contents

     CAREFULLY REVIEW THIS IMPORTANT SECTION, WHICH SUMMARIZES EACH PORTFOLIO'S
     INVESTMENTS, RISKS, PAST PERFORMANCE AND FEES.

                         RISK/RETURN SUMMARY AND PORTFOLIO EXPENSES

                              __ LAZARD RETIREMENT EQUITY PORTFOLIO

                              __ LAZARD RETIREMENT SMALL CAP PORTFOLIO

                              __ LAZARD RETIREMENT BANTAM VALUE PORTFOLIO

                              __ LAZARD RETIREMENT GLOBAL EQUITY PORTFOLIO

                              __ LAZARD RETIREMENT INTERNATIONAL EQUITY
                                 PORTFOLIO

                              __ LAZARD RETIREMENT INTERNATIONAL SMALL CAP
                                 PORTFOLIO

                              __ LAZARD RETIREMENT EMERGING MARKETS PORTFOLIO

                              __ LAZARD RETIREMENT INTERNATIONAL FIXED- INCOME
                                 PORTFOLIO

                              __ LAZARD RETIREMENT STRATEGIC YIELD PORTFOLIO



     REVIEW THIS SECTION FOR INFORMATION ON INVESTMENT STRATEGIES AND THEIR
     RISKS.

                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

                              __ LAZARD RETIREMENT EQUITY PORTFOLIO

                              __ LAZARD RETIREMENT SMALL CAP PORTFOLIO

                              __ LAZARD RETIREMENT BANTAM VALUE PORTFOLIO

                              __ LAZARD RETIREMENT GLOBAL EQUITY PORTFOLIO

                              __ LAZARD RETIREMENT INTERNATIONAL EQUITY
                                 PORTFOLIO

                              __ LAZARD RETIREMENT INTERNATIONAL SMALL CAP
                                 PORTFOLIO

                              __ LAZARD RETIREMENT EMERGING MARKETS PORTFOLIO

                              __ LAZARD RETIREMENT INTERNATIONAL FIXED-INCOME
                                 PORTFOLIO

                              __ LAZARD RETIREMENT STRATEGIC YIELD PORTFOLIO

<PAGE>
     REVIEW THIS SECTION FOR DETAILS ON THE PEOPLE AND ORGANIZATIONS WHO OVERSEE
     THE PORTFOLIOS.

                                 FUND MANAGEMENT

                              __ INVESTMENT MANAGER

                              __ PRINCIPAL PORTFOLIO MANAGERS

                              __ ADMINISTRATOR

                              __ DISTRIBUTOR

                              __ CUSTODIAN



     REVIEW THIS SECTION FOR DETAILS ON HOW SHARES ARE VALUED, HOW TO PURCHASE
     AND SELL SHARES, RELATED CHARGES AND PAYMENTS OF DIVIDENDS AND
     DISTRIBUTIONS.

                                ACCOUNT POLICIES

                              __ BUYING SHARES

                              __ SELLING SHARES

                              __ DIVIDENDS, DISTRIBUTIONS AND TAXES


     REVIEW THIS SECTION FOR RECENT FINANCIAL INFORMATION.

                              FINANCIAL HIGHLIGHTS


     WHERE TO LEARN MORE ABOUT THE PORTFOLIOS.

                                   BACK COVER


     The Portfolios are intended to be funding vehicles for variable annuity
     contracts ("VA contracts") and variable life insurance policies ("VLI
     policies" and, together with VA contracts, "Policies") offered by the
     separate accounts of Participating Insurance Companies. Individuals may not
     purchase shares directly from the Fund. The Policies are described in the
     separate prospectuses issued by the Participating Insurance Companies over
     which the Fund assumes no responsibility. Portfolio shares also are offered
     to qualified pension and retirement plans and accounts permitting
     accumulation of assets on a tax-deferred basis ("Eligible Plans"). The
     investment objective and policies of a Portfolio may be similar to other
     funds/portfolios managed or advised by Lazard Asset Management. However,
     the investment results of the Portfolio may be higher or lower than, and
     there is no guarantee that the investment results of the Portfolio will be
     comparable to, any other Lazard fund/portfolio.

<PAGE>
The Portfolios                Lazard Retirement Series, Inc. consists of nine
                              separate Portfolios, each with its own investment
                              objective, strategies and risk/return profile.
                              Each Portfolio invests in different securities,
                              depending on its investment objective. Each
                              Portfolio can be expected to have a different
                              degree of risk and yield or return. Because you
                              could lose money by investing in a Portfolio, be
                              sure to read all risk disclosures carefully before
                              investing.

                              You should be aware that the Portfolios:

                              o  Are not bank deposits

                              o  Are not guaranteed, endorsed or insured by any
                                 bank, financial institution or government
                                 entity, such as the Federal Deposit Insurance
                                 Corporation

                              o  Are not guaranteed to achieve their stated
                                 goals

                              INFORMATION ON EACH PORTFOLIO'S RECENT STRATEGIES
                              AND HOLDINGS CAN BE FOUND IN THE CURRENT
                              ANNUAL/SEMI-ANNUAL REPORT (SEE BACK COVER).

                              EQUITY PORTFOLIOS--These Portfolios will invest
                              primarily in equity securities, including common
                              stocks, preferred stocks and convertible
                              securities of both U.S. and non-U.S. issuers. The
                              Investment Manager seeks to identify undervalued
                              securities and focuses on individual stock
                              selection rather than on forecasting stock market
                              trends.

                              FIXED-INCOME PORTFOLIOS--These Portfolios will
                              invest in a variety of both U.S. and non-U.S.
                              fixed-income securities. The Investment Manager
                              focuses on individual security selection in
                              fixed-income markets. The risks associated with
                              each Portfolio will vary. Each investor should
                              review carefully the risks associated with each
                              Portfolio.


Investment Manager            Lazard Asset Management, a division of Lazard
                              Freres & Co. LLC ("Lazard Freres"), serves as each
                              Portfolio's investment manager.

<PAGE>
RISK/RETURN SUMMARY AND PORTFOLIO EXPENSES


LAZARD RETIREMENT
EQUITY PORTFOLIO

INVESTMENT OBJECTIVE          The Portfolio seeks long-term capital
                              appreciation.

PRINCIPAL INVESTMENT          The Portfolio invests primarily in equity
  STRATEGIES                  securities of relatively large U.S. companies that
                              the Investment Manager believes are undervalued
                              based on their return on total capital or equity.

PRINCIPAL INVESTMENT RISKS    While stocks have historically been a leading
                              choice of long-term investors, they do fluctuate
                              in price. The value of your investment in the
                              Portfolio will go up and down, which means that
                              you could lose money.


FEES AND EXPENSES 
                                             -----------------------------------
As an investor, you pay certain fees
and expenses in connection with                Annual Portfolio
buying and holding Portfolio shares.           Operating Expenses
The following table illustrates those          AS A % OF AVERAGE
fees and expenses.  Keep in mind               DAILY NET ASSETS
that the Portfolio has no sales charge
(load).  Annual Portfolio Operating
Expenses are paid out of Portfolio
assets, and are reflected in the share
price.  The information in the table
does not reflect account fees and
charges to separate accounts or
related insurance policies that may
be imposed by Participating
Insurance Companies.
                                             -----------------------------------
                                               Management fees           .75%
                                             -----------------------------------
                                               Distribution and          
                                               Servicing (12b-1) fees    .25%
                                             -----------------------------------

                                               Other expenses          20.32%
                                             -----------------------------------
                                               Total Portfolio
                                               Operating Expenses      21.32%
                                             -----------------------------------
                                               Fee Waiver and
                                               Expense
                                               Reimbursement*          20.07%
                                             -----------------------------------

                                               Net Expenses*            1.25%
                                             -----------------------------------
EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at the right to compare
the Portfolio's fees and expenses with
those of other funds. It illustrates the                             1      3       5       10
amount of fees and expenses you              LAZARD RETIREMENT     YEAR   YEARS   YEARS   YEARS
would pay, assuming the following:           EQUITY PORTFOLIO
<S>                                          <C>                   <C>    <C>     <C>     <C> 
                                                                   $127   $397    $686    $1,511
 o $10,000 initial investment
 o 5% annual return each year
 o redemption at the end of each
   period
 o no changes in expenses

Because this example is hypothetical
and for comparison only, your actual
costs will be different.
</TABLE>

- ------------------------
*    Reflects an agreement by the Investment Manager to reimburse the Portfolio
     through December 31, 2000 to the extent Total Portfolio Operating Expenses
     exceed in any fiscal year 1.25% of the Portfolio's average daily net
     assets.


<PAGE>
LAZARD RETIREMENT SMALL
CAP PORTFOLIO
- ------------------------------------------

INVESTMENT OBJECTIVE          The Portfolio seeks long-term capital
                              appreciation.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests primarily in equity
                              securities of relatively small U.S. companies in 
                              the range of the Russell 2000 Index that the 
                              Investment Manager believes are undervalued based 
                              on their return on total capital or equity.

PRINCIPAL INVESTMENT RISKS    While stocks have historically been a leading
                              choice of long-term investors, they do fluctuate
                              in price. Small companies carry additional risks
                              because their earnings tend to be less
                              predictable, their share prices more volatile and
                              their securities less liquid than larger, more
                              established companies. The value of your
                              investment in the Portfolio will go up and down,
                              which means that you could lose money.


The accompanying bar chart and             PERFORMANCE BAR CHART AND TABLE
table show the Lazard Retirement
Small Cap Portfolio's annual             YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31
returns and its long-term
performance.  The bar chart                      [To be provided]
shows how the performance of
the Portfolio's shares has varied
year to year.  The table compares        _______________________________________
the performance of the Portfolio's
shares over time to that of the          Best quarter:     12/31/98    12.15%
Russell 2000 Index, an                   Worst quarter:     9/30/98   (16.50)%
unmanaged index of smaller               _______________________________________
capitalization common stocks.
Both the bar chart and table
assume reinvestment of
dividends and distributions.  
Past performance does not indicate
how the Portfolio will perform in
the future.

<PAGE>
                          AVERAGE ANNUAL TOTAL RETURNS

                   (for the periods ending December 31, 1998)

                      Inception Date   Past Year   Past 5 Years  Since Inception

PORTFOLIO             11/4/97          (3.22)%     N/A           (3.99)%

RUSSELL 2000 INDEX                     (2.55)%     N/A           (2.74)%


FEES AND EXPENSES 

As an investor, you pay certain fees and
expenses in connection with buying and           Annual Portfolio
holding Portfolio shares.  The following         Operating Expenses
table illustrates those fees and expenses.       AS A % OF AVERAGE
Keep in mind that the Portfolio has no           DAILY NET ASSETS
sales charge (load).  Annual Portfolio
Operating Expenses are paid out of
Portfolio assets, and are reflected in the
share price. The information in the
table does not reflect account fees and
charges to separate accounts or related
insurance policies that may be imposed
by Participating Insurance Companies.
                                            ------------------------------------
                                              Management fees           .75%

                                            ------------------------------------
                                              Distribution and
                                              Servicing (12b-1) fees    .25%
                                            ------------------------------------

                                              Other expenses          15.20%
                                            ------------------------------------

                                              Total Portfolio
                                              Operating Expenses      16.20%
                                            ------------------------------------
                                              Fee Waiver and
                                              Expense
                                              Reimbursement*          14.95%
                                            ------------------------------------

                                              Net Expenses*            1.25%
                                            ------------------------------------

<PAGE>
EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the                                1      3       5       10    
Portfolio's fees and expenses with those     LAZARD RETIREMENT     YEAR   YEARS   YEARS   YEARS   
of other funds. It illustrates the amount    SMALL CAP PORTFOLIO                                  
<S>                                          <C>                   <C>    <C>     <C>     <C>     
of fees and expenses you would pay,
assuming the following:                                            $127   $397    $686    $1,511
 o $10,000 initial investment                
 o 5% annual return each year
 o redemption at the end of each
   period
 o no changes in expenses
Because this example is hypothetical
and for comparison only, your actual
costs will be different.
</TABLE>

- ------------------------
*    Reflects an agreement by the Investment Manager to reimburse the Portfolio
     through December 31, 2000 to the extent Total Portfolio Operating Expenses
     exceed in any fiscal year 1.25% of the Portfolio's average daily net
     assets.

<PAGE>

LAZARD RETIREMENT BANTAM
VALUE PORTFOLIO

INVESTMENT OBJECTIVE          The Portfolio seeks long-term capital 
                              appreciation.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests primarily in equity
                              securities of small U.S. companies with market
                              capitalizations under $500 million that the
                              Investment Manager believes are undervalued based
                              on their return on total capital or equity.

PRINCIPAL INVESTMENT RISKS    While stocks have historically been a leading
                              choice of long-term investors, they do fluctuate
                              in price. Small companies carry additional risks
                              because their earnings tend to be less
                              predictable, their share prices more volatile and
                              their securities less liquid than larger, more
                              established companies. The value of your
                              investment in the Portfolio will go up and down,
                              which means that you could lose money.


FEES AND EXPENSES 
                                                 -------------------------------
As an investor, you pay certain fees and
expenses in connection with buying and             Annual Portfolio
holding Portfolio shares.  The following           Operating Expenses
table illustrates those fees and expenses.         AS A % OF AVERAGE DAILY
Keep in mind that the Portfolio has no sales       NET ASSETS
charge (load).  Annual Portfolio Operating
Expenses are paid out of Portfolio assets,
and are reflected in the share price.  The
information in the table does not reflect
account fees and charges to separate
accounts or related insurance policies that
may be imposed by Participating Insurance
Companies.
                                                 -------------------------------
                                                   Management fees         .75%

                                                 -------------------------------
                                                   Distribution and
                                                   Servicing (12b-1) fees  .25%
                                                 -------------------------------

                                                   Other expenses*         .50%
                                                 -------------------------------

                                                   Total Portfolio
                                                   Operating Expenses     1.50%

                                                 -------------------------------


* "Other expenses" are based on estimated amounts for the current fiscal year.
  Actual expenses may be greater or less than the amount indicated above.

<PAGE>
EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the        LAZARD RETIREMENT       1      3        5      10
Portfolio's fees and expenses with those     BANTAN VALUE          YEAR   YEARS   YEARS   YEARS   
of other funds. It illustrates the amount    PORTFOLIO                                   
<S>                                          <C>                   <C>    <C>     <C>     <C>     
of fees and expenses you would pay,
assuming the following:                                            $153   $474    $818    $1,791  
 o $10,000 initial investment                
 o 5% annual return each year
 o redemption at the end of each
   period
o no changes in expenses
Because this example is hypothetical
and for comparison only, your actual
costs will be different.
</TABLE>

<PAGE>

- -----------------------------------------------
LAZARD RETIREMENT GLOBAL
EQUITY PORTFOLIO


INVESTMENT OBJECTIVE          The Portfolio seeks long-term capital
                              appreciation.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests primarily in equity
                              securities of relatively large companies, both
                              U.S. and non-U.S., that the Investment Manager
                              believes are undervalued based on their return on
                              total capital or equity.

PRINCIPAL INVESTMENT RISKS    While stocks have historically been a leading
                              choice of long-term investors, they do fluctuate
                              in price. Foreign securities include special
                              risks, such as exposure to currency fluctuations,
                              changing political climate and potentially less
                              liquidity. The value of your investment in the
                              Portfolio will go up and down, which means that
                              you could lose money.


FEES AND EXPENSES 
                                                --------------------------------
As an investor, you pay certain fees and
expenses in connection with buying and            Annual Portfolio
holding Portfolio shares.  The following          Operating Expenses
table illustrates those fees and expenses.        AS A % OF AVERAGE DAILY
Keep in mind that the Portfolio has no sales      NET ASSETS
charge (load).  Annual Portfolio Operating
Expenses are paid out of Portfolio assets,
and are reflected in the share price.  The
information in the table does not reflect
account fees and charges to separate
accounts or related insurance policies that
may be imposed by Participating Insurance
Companies.
                                                --------------------------------
                                                  Management fees          .75%
                                                --------------------------------
                                                  Distribution and
                                                  Servicing (12b-1) fees   .25%
                                                --------------------------------
                                                  Other expenses*          .60%
                                                --------------------------------

                                                  Total Portfolio
                                                  Operating Expenses      1.60%
                                                --------------------------------

- --------

*    "Other expenses" are based on estimated amounts for the current fiscal
     year. Actual expenses may be greater or less than the amount indicated
     above.

<PAGE>
EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the        LAZARD RETIREMENT       1      3       5      10
Portfolio's fees and expenses with those     GLOBAL EQUITY         YEAR   YEARS   YEARS   YEARS   
of other funds. It illustrates the amount    PORTFOLIO 
<S>                                          <C>                   <C>    <C>     <C>     <C>     
of fees and expenses you would pay,
assuming the following:                                            $163   $505    $871    $1,900  
 o $10,000 initial investment                
 o 5% annual return each year
 o redemption at the end of each
   period
o no changes in expenses
Because this example is hypothetical
and for comparison only, your actual
costs will be different.
</TABLE>

<PAGE>
- ---------------------------------------------------------
LAZARD RETIREMENT INTERNATIONAL
EQUITY PORTFOLIO
- ---------------------------------------------------------

INVESTMENT OBJECTIVE          The Portfolio seeks long-term capital
                              appreciation.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests primarily in equity
                              securities of relatively large non-U.S. companies
                              that the Investment Manager believes are
                              undervalued based on their return on total capital
                              or equity.

PRINCIPAL INVESTMENT RISKS    While stocks have historically been a leading
                              choice of long-term investors, they do fluctuate
                              in price. The Portfolio's performance will be
                              influenced by political, social and economic
                              factors affecting non-U.S. companies. These risks
                              include changes in currency exchange rates, a lack
                              of adequate company information, political
                              instability and differing auditing and legal
                              standards. The value of your investment in the
                              Portfolio will go up and down, which means that
                              you could lose money.


FEES AND EXPENSES 
                                                --------------------------------
As an investor, you pay certain fees and
expenses in connection with buying and            Annual Portfolio
holding Portfolio shares.  The following          Operating Expenses
table illustrates those fees and expenses.        AS A % OF AVERAGE DAILY
Keep in mind that the Portfolio has no sales      NET ASSETS
charge (load).  Annual Portfolio Operating
Expenses are paid out of Portfolio assets,
and are reflected in the share price.  The
information in the table does not reflect
account fees and charges to separate
accounts or related insurance policies that
may be imposed by Participating Insurance
Companies.
                                                --------------------------------
                                                  Management fees          .75%
                                                --------------------------------
                                                  Distribution and
                                                  Servicing (12b-1) fees   .25%
                                                --------------------------------
                                                  Other expenses         47.67%
                                                --------------------------------
                                                  Total Portfolio
                                                  Operating Expenses     48.67%
                                                --------------------------------
                                                  Fee Waiver and Expense
                                                  Reimbursement*         47.42%
                                                --------------------------------

                                                  Net Expenses*           1.25%
                                                --------------------------------

<PAGE>
EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the
Portfolio's fees and expenses with
those of other funds. It illustrates the
amount of fees and expenses you
would pay, assuming the following:
 o $10,000 initial investment           LAZARD RETIREMENT           1        3      5      10
 o 5% annual return each year           INTERNATIONAL EQUITY      YEAR     YEARS  YEARS   YEARS
 o redemption at the end of each        PORTFOLIO
   period
<S>                                                              <C>       <C>    <C>     <C>  
                                                                 $127      $397   $686    $1,511
o no changes in expenses
Because this example is hypothetical
and for comparison only, your actual
costs will be different.
</TABLE>


- ------------------------
*    Reflects an agreement by the Investment Manager to reimburse the Portfolio
     through December 31, 2000 to the extent Total Portfolio Operating Expenses
     exceed in any fiscal year 1.25% of the Portfolio's average daily net
     assets.


<PAGE>
- --------------------------------------------------------------
LAZARD RETIREMENT INTERNATIONAL SMALL
CAP PORTFOLIO
- --------------------------------------------------------------

Investment Objective          The Portfolio seeks long-term capital
                              appreciation.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests primarily in equity
                              securities of relatively small non-U.S. companies
                              in the range of the Morgan Stanley Capital
                              International Europe, Australia and Far East Small
                              Cap Index that the Investment Manager believes are
                              undervalued based on their return on total capital
                              or equity.

PRINCIPAL INVESTMENT RISKS    While stocks have historically been a leading
                              choice of long-term investors, they do fluctuate
                              in price. The Portfolio's performance will be
                              influenced by political, social and economic
                              factors affecting non- U.S. companies. These risks
                              include changes in currency exchange rates, a lack
                              of adequate company information, political
                              instability and differing auditing and legal
                              standards. Small companies carry additional risks
                              because their earnings tend to be less
                              predictable, their share prices more volatile and
                              their securities less liquid than larger, more
                              established companies. The value of your
                              investment in the Portfolio will go up and down,
                              which means that you could lose money.

FEES AND EXPENSES 
                                                  ------------------------------
As an investor, you pay certain fees and
expenses in connection with buying and              Annual Portfolio
holding Portfolio shares.  The following            Operating Expenses
table illustrates those fees and expenses.          AS A % OF AVERAGE
Keep in mind that the Portfolio has no sales        DAILY
charge (load).  Annual Portfolio Operating          NET ASSETS
Expenses are paid out of Portfolio assets,
and are reflected in the share price.  The
information in the table does not reflect
account fees and charges to separate
accounts or related insurance policies that
may be imposed by Participating Insurance
Companies.
                                                  ------------------------------
                                                    Management fees         .75%
                                                  ------------------------------
                                                    Distribution and
                                                    Servicing (12b-1) fees  .25%
                                                  ------------------------------
                                                    Other expenses*         .80%
                                                  ------------------------------
                                                    Total Portfolio
                                                    Operating Expenses     1.80%
                                                  ------------------------------
- ------------
*    "Other expenses" are based on estimated amounts for the current fiscal
     year. Actual expenses may be greater or less than the amount indicated
     above.


EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the
Portfolio's fees and expenses with those
of other funds. It illustrates the amount
of fees and expenses you would pay,
assuming the following:
 o $10,000 initial investment                LAZARD RETIREMENT             1         3         5        10
 o 5% annual return each year                INTERNATIONAL SMALL CAP     YEAR      YEARS     YEARS     YEARS
 o redemption at the end of each period      PORTFOLIO
<S>                                                                      <C>       <C>       <C>       <C>   
                                                                         $183      $566      $975      $2,116
 o no changes in expenses
Because this example is hypothetical and
for comparison only, your actual costs
will be different.
</TABLE>

<PAGE>
- ------------------------------------------------------
LAZARD RETIREMENT EMERGING
MARKETS PORTFOLIO
- ------------------------------------------------------

Investment Objective          The Portfolio seeks long-term capital
                              appreciation.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests primarily in equity
                              securities of non-U.S. companies whose principal
                              activities are in emerging market countries that
                              the Investment Manager believes are undervalued
                              based on their return on total capital or equity.

PRINCIPAL INVESTMENT RISKS    While stocks have historically been a leading
                              choice of long-term investors, they do fluctuate
                              in price. The Portfolio's performance will be
                              influenced by political, social and economic
                              factors affecting companies in emerging market
                              countries. These risks include changes in currency
                              exchange rates, a lack of adequate company
                              information, political instability, and differing
                              auditing and legal standards. In addition,
                              emerging market countries generally have economic
                              structures that are less diverse and mature and
                              political systems that are less stable, than those
                              of developed countries. The value of your
                              investment in the Portfolio will go up and down,
                              which means that you could lose money.


The accompanying bar chart and table         PERFORMANCE BAR CHART AND TABLE
show the Lazard Retirement Emerging
Markets Portfolio's annual returns and    YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31
its long-term performance.  The bar chart
shows how the performance of the                     [To be provided]
Portfolio's shares has varied from year to
year.  The table compares the performance       _______________________________
of the Portfolio's shares over time to that
of the Morgan Stanley Capital International    Best quarter:   12/31/98  11.78%
(MSCI) Emerging Markets Free Index and         Worst quarter:  9/30/98  (22.58)%
the International Finance Corp. (IFC)           _______________________________
Investable Total Return Index, each of
which is an unmanaged index of emerging
market securities.  Both the bar chart and
table assume reinvestment of dividends and
distributions.  Past performance does not 
indicate how the Portfolio will perform 
in the future.

<PAGE>
                        AVERAGE ANNUAL TOTAL RETURNS
                 (for the periods ending December 31, 1998)


                               Inception Date    Past Year    Since Inception
PORTFOLIO                      11/4/97           (22.85)%      (23.31)%

MSCI EMERGING
MARKETS FREE INDEX                               (25.34)%      (26.32)%

IFC INVESTABLE TOTAL
RETURN INDEX                                     (22.02)%      (21.69)%


FEES AND EXPENSES 
                                               ---------------------------------
As an investor, you pay certain fees and
expenses in connection with buying and           Annual Portfolio
holding Portfolio shares.  The following         Operating Expenses
table illustrates those fees and expenses.       AS A % OF AVERAGE DAILY
Keep in mind that the Portfolio has no           NET ASSETS
sales charge (load).  Annual Portfolio
Operating Expenses are paid out of
Portfolio assets, and are reflected in the
share price. The information in the
table does not reflect account fees and
charges to separate accounts or related
insurance policies that may be imposed
by Participating Insurance Companies.
                                               ---------------------------------
                                                 Management fees          1.00%

                                               ---------------------------------
                                                 Distribution and
                                                 Servicing (12b-1) fees    .25%
                                               ---------------------------------

                                                 Other expenses          13.12%
                                               ---------------------------------

                                                 Total Portfolio
                                                 Operating Expenses      14.37%
                                               ---------------------------------
                                                 Fee Waiver and Expense
                                                 Reimbursement*          12.77%
                                               ---------------------------------

                                                 Net Expenses*            1.60%
                                               ---------------------------------

<PAGE>
EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the
Portfolio's fees and expenses with
those of other funds. It illustrates the
amount of fees and expenses you
would pay, assuming the following:
 o $10,000 initial investment                LAZARD RETIREMENT          1         3         5         10
 o 5% annual return each year                EMERGING MARKETS         YEAR     YEARS      YEARS     YEARS
 o redemption at the end of each period      PORTFOLIO
<S>                                                                   <C>      <C>        <C>       <C>   
                                                                      $163     $505       $871      $1,800
 o no changes in expenses
Because this example is hypothetical
and for comparison only, your actual
costs will be different.
</TABLE>

- ------------------------
*    Reflects an agreement by the Investment Manager to reimburse the Portfolio
     through December 31, 2000 to the extent Total Portfolio Operating Expenses
     exceed in any fiscal year 1.60% of the Portfolio's average daily net
     assets.



<PAGE>
- -------------------------------------------------------------------
LAZARD RETIREMENT INTERNATIONAL FIXED-INCOME
PORTFOLIO
- -------------------------------------------------------------------

Investment Objective          The Portfolio seeks high total return from a
                              combination of current income and capital
                              appreciation.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests primarily in non-U.S. fixed-
                              income securities of varying maturities.

PRINCIPAL INVESTMENT RISKS    While bonds are designed to produce a stable
                              stream of income, their prices move inversely with
                              changes in interest rates. The Portfolio's
                              performance will be influenced by political,
                              social and economic factors affecting non-U.S.
                              countries. These risks include changes in currency
                              exchange rates, a lack of adequate company
                              information, political instability and differing
                              auditing and legal standards. The value of your
                              investment in the Portfolio will go up and down,
                              which means that you could lose money.


FEES AND EXPENSES 
                                                 -------------------------------
As an investor, you pay certain fees and
expenses in connection with buying and             Annual Portfolio
holding Portfolio shares.  The following           Operating Expenses
table illustrates those fees and expenses.         AS A % OF AVERAGE
Keep in mind that the Portfolio has no sales       DAILY NET ASSETS
charge (load).  Annual Portfolio Operating
Expenses are paid out of Portfolio assets,
and are reflected in the share price.  The
information in the table does not reflect
account fees or related insurance policies
that may be imposed by Participating
Insurance Companies.
                                                 -------------------------------
                                                   Management fees         .75%
                                                 -------------------------------
                                                   Distribution and
                                                   Servicing (12b-1) fees  .25%
                                                 -------------------------------
                                                   Other expenses*         .50%
                                                 -------------------------------
                                                   Total Portfolio
                                                   Operating Expenses     1.50%
                                                 -------------------------------

*    "Other expenses" are based on estimated amounts for the current fiscal
     year.  Actual expenses may be greater or less than the amount indicated
     above.
<PAGE>

EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the
Portfolio's fees and expenses with
those of other funds. It illustrates the
amount of fees and expenses you             LAZARD RETIREMENT         1         3         5         10
would pay, assuming the following:          INTERNATIONAL FIXED-    YEAR      YEARS     YEARS     YEARS
 o $10,000 initial investment               INCOME PORTFOLIO
<S>                                                                 <C>       <C>       <C>      <C>   
 o 5% annual return each year                                       $153      $474      $818     $1,791
 o redemption at the end of each
   period
 o no changes in expenses
Because this example is hypothetical
and for comparison only, your actual
costs will be different.
</TABLE>

<PAGE>
- --------------------------------------------------
LAZARD RETIREMENT STRATEGIC
YIELD PORTFOLIO
- --------------------------------------------------

Investment Objective          The Portfolio seeks total return from a
                              combination of capital appreciation and current
                              income.

PRINCIPAL INVESTMENT
 STRATEGIES                   The Portfolio invests in a wide variety of U.S.
                              and non-U.S. fixed-income securities, including
                              those of emerging markets and non-traditional
                              sectors, many of which are rated, at the time of
                              purchase, below investment grade.

PRINCIPAL INVESTMENT RISKS    While bonds are designed to produce a stable
                              stream of income, their prices move inversely with
                              changes in interest rates. The Portfolio's
                              performance will be influenced by political,
                              social and economic factors affecting non-U.S.
                              countries. These risks include changes in currency
                              exchange rates, a lack of adequate company
                              information, political instability and differing
                              auditing and legal standards. High yield bonds
                              involve greater credit risk than investment grade
                              bonds. They tend to be more volatile in price,
                              less liquid and are considered speculative. The
                              value of your investment in the Portfolio will go
                              up and down, which means that you could lose
                              money.


FEES AND EXPENSES 
                                               ---------------------------------
As an investor, you pay certain fees and
expenses in connection with buying and           Annual Portfolio
holding Portfolio shares.  The following         Operating Expenses
table illustrates those fees and expenses.       AS A % OF AVERAGE
Keep in mind that the Portfolio has no sales     DAILY NET ASSETS
charge (load).  Annual Portfolio Operating
Expenses are paid out of Portfolio assets,
and are reflected in the share price.  The
information in the table does not reflect
account fees and charges to separate
accounts or related insurance policies that
may be imposed by Participating Insurance
Companies.
                                               ---------------------------------
                                                 Management fees           .75%
                                               ---------------------------------
                                                 Distribution and
                                                 Servicing (12b-1) fees    .25%
                                               ---------------------------------
                                                 Other expenses*           .50%
                                               ---------------------------------
                                                 Total Portfolio
                                                 Operating Expenses       1.50%
                                               ---------------------------------
- --------

*    "Other expenses" are based on estimated amounts for the current fiscal
     year. Actual expenses may be greater or less than the amount indicated
     above.

<PAGE>


EXPENSE EXAMPLE

<TABLE>
<CAPTION>
Use the table at right to compare the
Portfolio's fees and expenses with those
of other funds. It illustrates the amount
of fees and expenses you would pay,
assuming the following:                           LAZARD RETIREMENT                1         3         5         10
 o $10,000 initial investment                     STRATEGIC YIELD PORTFOLIO      YEAR      YEARS     YEARS     YEARS
 o 5% annual return each year
<S>                                                                              <C>       <C>       <C>       <C>   
 o redemption at the end of each                                                 $153      $474      $818      $1,791
   period
 o no changes in expenses
Because this example is hypothetical and
for comparison only, your actual costs
will be different.
</TABLE>

<PAGE>
                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


                       LAZARD RETIREMENT EQUITY PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The Equity Portfolio seeks long-term capital appreciation. The Portfolio invests
primarily in equity securities of relatively large U.S. companies that the
Investment Manager believes are undervalued based on their return on total
capital or equity.

The Portfolio generally invests at least 80% of its total assets in equity
securities. The Portfolio may invest up to 20% of its total assets in U.S.
Government securities and investment grade debt obligations of U.S.
corporations. The Portfolio also may invest up to 15% of its total assets in
non-U.S. equity or debt securities that trade in U.S. markets.

The Portfolio may engage in various investment techniques, such as options and
futures transactions, and lending portfolio securities.

RISK FACTORS

While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the Portfolio will
go up and down, which means that you could lose money.

Because different types of stocks tend to shift in and out of favor depending on
market and economic conditions, the Portfolio's performance may sometimes be
lower or higher than that of other types of funds (such as those emphasizing
smaller companies). Under adverse market conditions, the Portfolio could invest
some or all of its assets in money market securities. The Portfolio would do
this only in seeking to avoid losses, but this could reduce the benefit from any
upswing in the market.

While the Portfolio may engage in options and futures transactions primarily to
hedge its portfolio, it may use these transactions to increase returns; however,
there is the risk that these transactions sometimes may reduce returns or
increase volatility. In addition, derivatives, such as options and futures, can
be illiquid and highly sensitive to changes in their underlying security,
interest rate or index, and as a result can be highly volatile. A small
investment in certain derivatives could have a potentially large impact on the
Portfolio's performance.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

<PAGE>
Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


                      LAZARD RETIREMENT SMALL CAP PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The Small Cap Portfolio seeks long-term capital appreciation. The Portfolio
invests primarily in equity securities of relatively small U.S. companies in the
range of the Russell 2000 Index that the Investment Manager believes are
undervalued based on their return on total capital or equity. The Russell 2000
Index is composed of selected common stocks of small, generally unseasoned U.S.
companies.

The Portfolio generally invests at least 65% of its total assets in equity
securities of small U.S. companies. These securities generally have one or more
of the following characteristics:

          o    are undervalued relative to their earnings, cash flow or asset
               values;

          o    have an attractive price/value relationship with expectations
               that some catalyst will cause the perception of value to change
               within two years;

          o    are out of favor due to circumstances which are unlikely to harm
               the company's franchise or earnings power;

          o    have low projected P/E or price-to-cash flow multiples;

          o    have the potential to become a larger factor in the company's
               business;

          o    have significant debt but have high levels of free cash flow; and

          o    have a relatively short corporate history with the expectation
               that the business may grow.

The Portfolio may invest up to 15% of its total assets in equity or debt
securities of non-U.S. companies. The Portfolio may engage in various investment
techniques, such as options and futures transactions and lending portfolio
securities.

<PAGE>
RISK FACTORS

While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the Portfolio will
go up and down, which means that you could lose money.

Because different types of stocks tend to shift in and out of favor depending on
market and economic conditions, the Portfolio's performance may sometimes be
lower or higher than that of other types of funds (such as those emphasizing
larger companies). Small companies carry additional risks because their earnings
tend to be less predictable, their share prices more volatile and their
securities less liquid than larger, more established companies. Some of the
Portfolio's investments will rise and fall based on investor perception only.
Investments in value stocks are subject to the risk that they may never reach
what the portfolio manager believes is their full value. They also may decline
in price, even though in theory they are already undervalued. And, while
investments in value stocks may limit downside risk over time, the Portfolio
may, as a trade-off, produce smaller gains than riskier stock funds.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the
market.

While the Portfolio may engage in options and futures transactions primarily to
hedge its portfolio, it may use these transactions to increase returns; however,
there is the risk that these transactions sometimes may reduce returns or
increase volatility. In addition, derivatives, such as options and futures, can
be illiquid and highly sensitive to changes in their underlying security,
interest rate or index, and as a result can be highly volatile. A small
investment in certain derivatives could have a potentially large impact on the
Portfolio's performance.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


                    LAZARD RETIREMENT BANTAM VALUE PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The Bantam Value Portfolio seeks long-term capital appreciation. The Portfolio
invests primarily in equity securities of small U.S. companies with market
capitalizations under $500 million that the Investment Manager believes are
undervalued based on their return on total capital or equity.

The Portfolio generally invests at least 65% of its total assets in equity
securities of small U.S. companies that have one or more of the characteristics
listed in the description of the Lazard Retirement Small Cap Portfolio on page
____. Assets not invested in equity securities of small U.S. companies may be
invested in equity or debt securities of large U.S. and non-U.S. companies.

The Portfolio may engage in various investment techniques, such as options and
futures transactions and lending portfolio securities.

RISK FACTORS

While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the Portfolio will
go up and down, which means that you could lose money.

Because different types of stocks tend to shift in and out of favor depending on
market and economic conditions, the Portfolio's performance may sometimes be
lower or higher than that of other types of funds (such as those emphasizing
larger companies). Small companies carry additional risks because their earnings
tend to be less predictable, their share prices more volatile and their
securities less liquid than larger, more established companies. Some of the
Portfolio's investments will rise and fall based on investor perception only.
Investments in value stocks are subject to the risk that they may never reach
what the portfolio manager believes is their full value. They also may decline
in price, even though in theory they are already undervalued. And, while
investments in value stocks may limit downside risk over time, the Portfolio
may, as a trade-off, produce smaller gains than riskier stock funds.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the
market.

While the Portfolio may engage in options and futures transactions primarily to
hedge its portfolio, it may use these transactions to increase returns; however,
there is the risk that these transactions sometimes may reduce returns or
increase volatility. In addition, derivatives, such as options and futures, can
be illiquid and highly sensitive to changes in their underlying security,
interest rate or index, and as a result can be highly volatile. A small
investment in certain derivatives could have a potentially large impact on the
Portfolio's performance.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                  INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


                    LAZARD RETIREMENT GLOBAL EQUITY PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The Global Equity Portfolio seeks long-term capital appreciation. The Portfolio
invests primarily in equity securities of relatively large companies, both U.S.
and non-U.S., that the Investment Manager believes are undervalued based on
their return on total capital or equity.

The Portfolio generally invests at least 65% of its total assets in equity
securities, including American and Global Depositary Receipts, of companies
located in at least four different countries, including the United States. The
allocation of the Portfolio's assets among geographic regions may shift from
time to time based on the Investment Manager's judgment. However, the Investment
Manager currently intends to invest at least 25% of the Portfolio's total assets
in securities of U.S. companies.

The Portfolio may invest up to 20% of its total assets in investment grade
fixed-income securities. The Portfolio may engage in various investment
techniques, such as options and futures transactions, foreign currency
transactions and lending portfolio securities.

RISK FACTORS

While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the Portfolio will
go up and down, which means that you could lose money.

The Portfolio's performance will be influenced by political, social and economic
factors affecting companies around the world. These risks include changes in
currency exchange rates, a lack of adequate company information, political
instability, and differing auditing and legal standards. To the extent the
Portfolio invests in companies in emerging market countries, these countries
generally have economic structures that are less diverse and mature and
political systems that are less stable, than those of developed countries.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the
market.

While the Portfolio may engage in options and futures transactions and foreign
currency transactions primarily to hedge its portfolio, it may use these
transactions to increase returns; however, there is the risk that these
transactions sometimes may reduce returns or increase volatility. In addition,
derivatives, such as options and futures, can be illiquid and highly sensitive
to changes in their underlying security, interest rate or index, and as a result
can be highly volatile. A small investment in certain derivatives could have a
potentially large impact on the Portfolio's performance.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

                LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The International Equity Portfolio seeks long-term capital appreciation. The
Portfolio invests primarily in equity securities of relatively large non-U.S.
companies that the Investment Manager believes are undervalued based on their
return on total capital or equity.

The Portfolio generally invests at least 80% of its total assets in equity
securities of companies located in at least three different non-U.S. countries.
The allocation of the Portfolio's assets among geographic sectors may shift from
time to time based on the Investment Manager's judgment. However, the Investment
Manager currently intends to invest the Portfolio's assets primarily in
companies based in developed markets.

The Portfolio may invest up to 20% of its total assets in investment grade
fixed-income securities and short-term money market instruments. The Portfolio
may engage in various investment techniques, such as options and futures
transactions, foreign currency transactions and lending portfolio securities.

RISK FACTORS

While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the Portfolio will
go up and down, which means that you could lose money.

The Portfolio's performance will be influenced by political, social and economic
factors affecting companies around the world. These risks include changes in
currency exchanges rates, a lack of adequate company information, political
instability, and differing auditing and legal standards.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the
market.

While the Portfolio may engage in options and futures transactions and foreign
currency transactions primarily to hedge its portfolio, it may use these
transactions to increase returns; however, there is the risk that these
transactions sometimes may reduce returns or increase volatility. In addition,
derivatives, such as options and futures, can be illiquid and highly sensitive
to changes in their underlying security, interest rate or index, and as a result
can be highly volatile. A small investment in certain derivatives could have a
potentially large impact on the Portfolio's performance.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


               LAZARD RETIREMENT INTERNATIONAL SMALL CAP PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The International Small Cap Portfolio seeks long-term capital appreciation. The
Portfolio invests primarily in equity securities of relatively small non-U.S.
companies in the range of the Morgan Stanley Capital International Europe,
Australia and Far East Small Cap Index (the "MSCI EAFE Small Cap Index") that
the Investment Manager believes are undervalued based on their return on total
capital or equity. The MSCI EAFE Small Cap Index is an unmanaged index of
securities listed on foreign stock exchanges.

The Portfolio generally invests at least 65% of its total assets in equity
securities, including American and Global Depositary Receipts, of small non-U.S.
companies that have one or more of the characteristics listed in the description
of the Lazard Retirement Small Cap Portfolio on page __. The Portfolio generally
invests at least 65% of its total assets in equity securities of companies
located in at least three different non-U.S. countries. The allocation of the
Portfolio's assets among geographic regions may shift from time to time based on
the Investment Manager's judgment. However, the Investment Manager currently
intends to invest the Portfolio's assets primarily in companies based in
Continental Europe, the United Kingdom, the Pacific Basin, Latin America and
Canada.

The Portfolio may invest up to 20% of its total assets in equity securities of
large companies or investment grade debt securities. The Portfolio may engage in
various investment techniques, such as options and futures transactions, foreign
currency transactions and lending portfolio securities.

RISK FACTORS

While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the Portfolio will
go up and down, which means that you could lose money.

The Portfolio's performance will be influenced by political, social and economic
factors affecting companies around the world. These risks include changes in
currency exchange rates, a lack of adequate company information, political
instability, and differing auditing and legal standards.

Small companies carry additional risks because their earnings tend to be less
predictable, their share prices more volatile and their securities less liquid
than larger, more established companies. Some of the Portfolio's investments
will rise and fall based on investor perception only. Investments in value
stocks are subject to the risk that they may never reach what the portfolio
manager believes is their full value. They also may decline in price, even
though in theory they are already undervalued. And, while investments in value
stocks may limit downside risk over time, the Portfolio may, as a trade-off,
produce smaller gains than riskier stock funds.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the
market.

While the Portfolio may engage in options and futures transactions and foreign
currency transactions primarily to hedge its portfolio, it may use these
transactions to increase returns; however, there is the risk that these
transactions sometimes may reduce returns or increase volatility. In addition,
derivatives, such as options and futures, can be illiquid and highly sensitive
to changes in their underlying security, interest rate or index, and as a result
can be highly volatile. A small investment in certain derivatives could have a
potentially large impact on the Portfolio's performance.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                  INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


                  LAZARD RETIREMENT EMERGING MARKETS PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The Emerging Markets Portfolio seeks long-term capital appreciation. The
Portfolio invests primarily in equity securities of non-U.S. companies whose
principal business activities are located in emerging market countries that the
Investment Manager believes are undervalued based on their return on total
capital or equity. Emerging markets include countries where political and
economic trends have produced or are producing a more stable economic
environment, developed or developing financial markets and investment liquidity.

The Portfolio generally invests at least 65% of its total assets in securities,
including American and Global Depositary Receipts, of companies whose principal
business activities are located in emerging market countries. The Portfolio
invests at least 65% of its total assets in securities of companies in at least
three different non-U.S. countries. The allocation of the Portfolio's assets
among emerging market countries may shift from time to time based on the
Investment Manager's judgment. However, the Portfolio is likely to focus on
companies in Latin America, the Pacific Basin and Europe.

The Portfolio may invest in closed-end investment companies that invest in
emerging market securities. When the Investment Manager believes it is
warranted, the Portfolio may invest, without limitation, in fixed-income
securities, or assume a temporary defensive position and invest in the equity
securities of U.S. companies or short-term money market instruments.

The Portfolio may engage in various investment techniques, such as options and
futures transactions, foreign currency transactions and lending portfolio
securities.

RISK FACTORS

The securities markets of emerging market countries can be extremely volatile.
The value of your investment in the Portfolio will go up and down, which means
that you could lose money.

The fund's performance will be influenced by political, social and economic
factors affecting companies in emerging market countries. These risks include
changes in currency exchange rates, a lack of adequate company information,
political instability, and differing auditing and legal standards. In addition,
emerging market countries generally have economic structures that are less
diverse and mature, and political systems that are less stable, than those of
developed countries. Emerging markets may be more volatile than the markets of
more mature economies; however, such markets may provide higher rates of return
to investors.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the
market.

While the Portfolio may engage in options and futures transactions and foreign
currency transactions primarily to hedge its portfolio, it may use these
transactions to increase returns; however, there is the risk that these
transactions sometimes may reduce returns or increase volatility. In addition,
derivatives, such as options and futures, can be illiquid and highly sensitive
to changes in their underlying security, interest rate or index, and as a result
can be highly volatile. A small investment in certain derivatives could have a
potentially large impact on the Portfolio's performance.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


             LAZARD RETIREMENT INTERNATIONAL FIXED-INCOME PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The International Fixed-Income Portfolio seeks high total return from a
combination of current income and capital appreciation. The Portfolio invests
primarily in non-U.S. fixed-income securities of varying maturities.

The Portfolio generally invests at least 65% of its total assets in fixed-income
securities of companies within, or governments, their agencies or
instrumentalities of, at least three different non-U.S. countries. The Portfolio
may invest in any region of the world, including emerging market countries.
However, the Investment Manager currently intends to invest the Portfolio's
assets primarily in companies within, or governments of, Continental Europe, the
United Kingdom, Canada and the Pacific Basin. The Portfolio also may invest in
American or Global Depositary Receipts issued in relation to a pool of
fixed-income securities in which the Portfolio could invest directly.

The Portfolio generally invests at least 85% of its total assets in investment
grade fixed-income securities or the unrated equivalent as determined by the
Investment Manager. The Portfolio may invest up to 15% of its total assets in
fixed-income securities rated, at the time of purchase, below investment grade
and as low as the lowest rating assigned by S&P and Moody's or the unrated
equivalent as determined by the Investment Manager.

The Investment Manager anticipates that, under normal market conditions, the
Portfolio's effective duration will range between two and eight years. Duration
is a measure of how sensitive the securities held by the Portfolio may be to
changes in interest rates.

The Portfolio may engage in various investment techniques, such as options and
futures transactions, foreign currency transactions and lending portfolio
securities.

RISK FACTORS

While bonds are designed to produce a stable stream of income, their prices move
inversely with changes in interest rates. The value of your investment in the
Portfolio will go up and down, which means that you could lose money.

The Portfolio is subject to credit risk, or the risk that an issuer of bonds
held by the Portfolio fails to make timely interest or principal payments,
potentially reducing the Portfolio's income or share price.

The Portfolio's performance will be influenced by political, social and economic
factors affecting companies around the world. These risks include changes in
currency exchange rates, a lack of adequate company information, political
instability, and differing auditing and legal standards.

The Portfolio's investments in lower-rated, higher-yielding bonds are subject to
greater credit risk than its higher-rated investments. Lower-rated bonds tend to
be more volatile, less liquid and are considered speculative.

While the Portfolio may engage in options and futures transactions and foreign
currency transactions primarily to hedge its portfolio, it may use these
transactions to increase returns; however, there is the risk that these
transactions sometimes may reduce returns or increase volatility. In addition,
derivatives, such as options and futures, can be illiquid and highly sensitive
to changes in their underlying security, interest rate or index, and as a result
can be highly volatile. A small investment in certain derivatives could have a
potentially large impact on the Portfolio's performance.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the bond
market.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                   INVESTMENT OBJECTIVES, STRATEGIES AND RISKS


                   LAZARD RETIREMENT STRATEGIC YIELD PORTFOLIO



                               Ticker Symbol: N/A

INVESTMENT OBJECTIVE AND STRATEGIES

The Strategic Yield Portfolio seeks total return from a combination of capital
appreciation and current income. The Portfolio invests primarily in a wide
variety of U.S. and non-U.S. fixed-income securities, including those of
emerging markets and non-traditional sectors, many of which are rated, at the
time of purchase, below investment grade.

The Portfolio generally invests at least 65% of its total assets in fixed-income
securities, such as bonds, debentures, notes, convertible securities, structured
notes, and mortgage-related and asset-backed securities, of U.S and non-U.S
issuers. At least 95% of these fixed-income securities will be rated, at the
time of purchase, at least CCC by S&P or Caa by Moody's, or the unrated
equivalent as determined by the Investment Manager. The remaining 5% may be
rated, at the time of purchase, as low as the lowest rating assigned by S&P and
Moody's. Consequently, the Portfolio may invest all of its assets in
fixed-income securities rated below investment grade.

The Portfolio may invest without limitation in U.S. dollar denominated
fixed-income securities of foreign issuers. The Portfolio also may invest in
American or Global Depositary Receipts issued in relation to a pool of
fixed-income securities in which the Portfolio could invest directly.

When, in the Investment Managers judgment, business or financial conditions
warrant, the Portfolio may assume a temporary defensive position and invest
without limit in investment grade fixed-income securities or short-term money
market instruments.

The Portfolio may engage in various investment techniques, such as options and
futures transactions, foreign currency transactions and lending portfolio
securities.

RISK FACTORS

While bonds are designed to produce a stable stream of income, their prices move
inversely with changes in interest rates. The value of your investment in the
Portfolio will go up and down, which means that you could lose money.

The Portfolio is subject to credit risk, or the risk that an issuer of bonds
held by the Portfolio fails to make timely interest or principal payments,
potentially reducing the Portfolio's income or share price.

The Portfolio's investments in lower-rated, higher-yielding bonds are subject to
greater credit risk than its higher-rated investments. Lower-rated bonds tend to
be more volatile, less liquid and are considered speculative.

The Portfolio's performance will be influenced by political, social and economic
factors affecting companies around the world. These risks include changes in
currency exchange rates, a lack of adequate company information, political
instability, and differing auditing and legal standards.

While the Portfolio may engage in options and futures transactions and foreign
currency transactions primarily to hedge its portfolio, it may use these
transactions to increase returns; however, there is the risk that these
transactions sometimes may reduce returns or increase volatility. In addition,
derivatives, such as options and futures, can be illiquid and highly sensitive
to changes in their underlying security, interest rate or index, and as a result
can be highly volatile. A small investment in certain derivatives could have a
potentially large impact on the Portfolio's performance.

Under adverse market conditions, the Portfolio could invest some or all of its
assets in money market securities. The Portfolio would do this only in seeking
to avoid losses, but this could reduce the benefit from any upswing in the bond
market.

The Portfolio is non-diversified and may invest a greater percentage of its
assets in a particular company compared with other funds. Accordingly, the
Portfolio's securities may be more sensitive to changes in the market value of a
single company or industry.

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. Differences in tax treatment or other
considerations may cause the interests of Policy owners and Eligible Plan
participants to conflict. Should any conflict arise that requires a substantial
amount of the Portfolio's assets be withdrawn, orderly portfolio management
could be disrupted to the potential detriment of Policy owners or Plan
participants.

<PAGE>
                                 FUND MANAGEMENT

INVESTMENT MANAGER

Lazard Asset Management, 30 Rockefeller Plaza, New York, New York 10112, serves
as the Investment Manager of the Portfolios. The Investment Manager is a
division of Lazard Freres, a New York limited liability company, which is
registered as an investment adviser with the Securities and Exchange Commission
(the "Commission") and is a member of the New York, American and Midwest Stock
Exchanges. Lazard Freres provides its clients with a wide variety of investment
banking, brokerage and related services. The Investment Manager provides
investment management services to client discretionary accounts with assets
totaling approximately $71 billion as of December 31, 1998. Its clients are both
individuals and institutions, some of whose accounts have investment policies
similar to those of several of the Portfolios.

The Fund has agreed to pay the Investment Manager an investment management fee
at the annual rate set forth below as a percentage of the relevant Portfolio's
average daily net asset value. The investment management fees are accrued daily
and paid monthly. For the fiscal year ended December 31, 1998, the Investment
Manager waived all of its management fees with respect to those Portfolios
indicated below.


<TABLE>
<CAPTION>
                                                                    EFFECTIVE ANNUAL RATE OF
                                           INVESTMENT MANAGEMENT     INVESTMENT MANAGEMENT
NAME OF PORTFOLIO                             FEE PAYABLE            FEE PAID AFTER WAIVER

<S>                                                <C>                         <C>
Equity Portfolio                                   .75%                        0%
Small Cap Portfolio                                .75%                        0%
Bantam Value Portfolio                             .75%                       N/A
Global Equity Portfolio                            .75%                       N/A
International Equity Portfolio                     .75%                        0%
International Small Cap Portfolio                  .75%                       N/A
Emerging Markets Portfolio                         1.00%                       0%
International Fixed-Income Portfolio               .75%                       N/A
Strategic Yield Portfolio                          .75%                       N/A
</TABLE>


The Bantam Value, Global Equity, International Small Cap, International
Fixed-Income and Strategic Yield Portfolios had not commenced operations.

<PAGE>
PRINCIPAL PORTFOLIO MANAGERS

All of the Portfolios are managed on a team basis. The names of the principal
persons who are primarily responsible for the day-to-day management of the
assets of each of the Portfolios are as follows:

EQUITY PORTFOLIO--Herbert W. Gullquist and Michael S. Rome (each since
inception)

SMALL CAP PORTFOLIO--Herbert W. Gullquist and Eileen Alexanderson (each since
inception)

BANTAM VALUE PORTFOLIO--Herbert W. Gullquist and Eileen Alexanderson

GLOBAL EQUITY PORTFOLIO--Herbert W. Gullquist, John R. Reinsberg and Michael S.
Rome

INTERNATIONAL EQUITY PORTFOLIO--Herbert W. Gullquist and John R. Reinsberg (each
since inception)

INTERNATIONAL SMALL CAP PORTFOLIO--Herbert W. Gullquist and John R. Reinsberg

EMERGING MARKETS PORTFOLIO--Herbert W. Gullquist and John R. Reinsberg (each
since inception)

INTERNATIONAL FIXED-INCOME PORTFOLIO--Thomas F. Dunn and Ira O. Handler

STRATEGIC YIELD PORTFOLIO--Thomas F. Dunn and Ira O. Handler

BIOGRAPHICAL INFORMATION OF PRINCIPAL PORTFOLIO MANAGERS

EILEEN ALEXANDERSON. Ms. Alexanderson has been a Managing Director of the
Investment Manager since January, 1997. Prior thereto, Ms. Alexanderson was a
Senior Vice President of the Investment Manager and has been a Small Cap/Mid Cap
Portfolio Manager since the inception of the Portfolios.

THOMAS F. DUNN. Mr. Dunn is a Managing Director of the Investment Manager and
has been a Fixed-Income Portfolio Manager of the Investment Manager since
January 1995. Prior thereto, he was a Senior Vice President of Goldman Sachs
Asset Management.

HERBERT W. GULLQUIST. Mr. Gullquist has been Vice Chairman of the Investment
Manager since 1997 and a Managing Director and Chief Investment Officer of the
Investment Manager since 1982.

IRA O. HANDLER. Mr. Handler has been a Managing Director of the Investment
Manager since January 1998 (a Senior Vice President from January 1994 to January
1998) and has been a Global and Emerging Fixed-Income Portfolio Manager of the
Investment Manager since 1992.

JOHN R. REINSBERG. Mr. Reinsberg is a Managing Director of the Investment
Manager and has been an International/Global Equity Portfolio Manager of the
Investment Manager since 1992.

MICHAEL S. ROME. Mr. Rome is a Managing Director of the Investment Manager and
has been a U.S./Global Equity Portfolio Manager of the Investment Manager since
1991.

ADMINISTRATOR

State Street Bank and Trust Company ("State Street"), located at 225 Franklin
Street, Boston, Massachusetts 02110, serves as each Portfolio's administrator.

DISTRIBUTOR

Lazard Freres acts as distributor for the Portfolios.

CUSTODIAN

State Street acts as custodian of the Portfolio's investments. State Street may
enter into subcustodial arrangements on behalf of the Portfolios for the holding
of foreign securities.

YEAR 2000 ISSUES

Each Portfolio could be adversely effected if the computer systems used by the
Investment Manager and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
While year 2000-related computer problems could have a negative effect on the
Portfolios, the Investment Manager is working to avoid such problems and to
obtain assurances from service providers that they are taking similar steps.

<PAGE>
                                ACCOUNT POLICIES

BUYING SHARES

Portfolio shares are offered only to separate accounts of Participating
Insurance Companies and Eligible Plans. INDIVIDUALS MAY NOT PURCHASE SHARES
DIRECTLY FROM THE FUND. Policy owners should consult the applicable prospectus
of the separate account of the Participating Insurance Company and Eligible Plan
participants should consult the Plan's administrator or trustee for more
information about buying Portfolio shares.

The price for Portfolio shares is the Portfolio's net asset value per share
(NAV), which is generally calculated as of the close of trading on the New York
Stock Exchange (normally 4:00 p.m. Eastern time) every day the exchange is open.
Purchase orders from separate accounts received in proper form by the
Participating Insurance Company on a given business day or from Eligible Plans
are priced at the NAV calculated on such day, provided that the order and
Federal Funds in the net amount of such order is received by the Fund in proper
form on the next business day. The Participating Insurance Company or Eligible
Plan administrator or trustee is responsible for properly transmitting purchase
orders and Federal Funds.

Each Portfolio's investments are generally valued based on market value, or
where market quotations are not readily available, based on fair value as
determined in good faith by the Fund's board.

SELLING SHARES

Portfolio shares may be sold at any time by the separate accounts of the
Participating Insurance Companies or by Eligible Plans. INDIVIDUALS MAY NOT
PLACE SELL ORDERS DIRECTLY WITH THE FUND. Redemption orders from separate
accounts received in proper form by the Participating Insurance Company on a
given business day or from Eligible Plans are priced at the NAV calculated on
such day, provided that the order is received by the Fund in proper form on the
next business day. The Participating Insurance Company or Eligible Plan
administrator or trustee is responsible for properly transmitting redemption
orders. Policy owners should consult the applicable prospectus of the separate
account of the Participating Insurance Company and Eligible Plan participants
should consult the Plan's administrator or trustee for more information about
selling Portfolio shares.



                       DIVIDENDS, DISTRIBUTIONS AND TAXES

EQUITY PORTFOLIOS -- Declare and pay dividends from net investment income
annually but may declare and pay dividends twice annually.

FIXED-INCOME PORTFOLIOS -- Declare dividends from net investment income each
business day and pay dividends monthly.

Each Portfolio generally will distribute any net capital gains that it has
realized once a year but it may distribute these gains twice annually.

Distributions will be reinvested in the relevant Portfolio unless instructed
otherwise by the relevant Participating Insurance Company or Eligible Plan.

Portfolio dividends and distributions are taxable to most investors. Since each
Portfolio's shareholders are the Participating Insurance Companies and their
separate accounts and Eligible Plans, no discussion is included as to the
Federal income tax consequences to Policy owners and Eligible Plan participants.
For this information, Policy owners should consult the applicable prospectus of
the separate account of the Participating Insurance Company and Eligible Plan
participants should consult the Plan's administrator or trustee.

Participating Insurance Companies and Eligible Plans should consult their tax
advisers about federal, state and local tax consequences.

<PAGE>
                              FINANCIAL HIGHLIGHTS

The tables below describe each Portfolio's performance for the fiscal periods
indicated. "Total return" shows how much your investment in a Portfolio would
have increased (or decreased) during each period, assuming you had reinvested
all dividends and distributions. The information in the tables has been
independently audited by ___________________________ whose report, along with
the Portfolios' financial statements, is included in the Fund's annual report.

<PAGE>
<TABLE>
<CAPTION>
LAZARD RETIREMENT SERIES, INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
- --------------------------------------------------------------------------------------------------------------------------------
                                                               LESS DISTRIBTUIONS FROM AND
                 INCOME (LOSS) FROM INVESTMENT OPERATIONS        IN EXCESS OF:               RATIOS TO AVERAGE NET ASSETS         
              -----------------------------------------------------------------              -----------------------------
              Net       Net       Net      Total
              Asset     Invest-   Real-    from      Net        Net      Net                  
              Value,    ment      ized     Invest-   Invest-    Real-    Asset    Total      Net     Gross   Net     Port-   Net
Period        Begin-    Income    and      ment      ment       ized     Value,   Returns    Expen-  Expen-  Invest- folio   Assets,
              ing of    (Loss)    Unreal-  Opera-    Income     Gains    End      (a)        ses     ses     ment    Turn-   End
              Period              ized     tions                         of                  (b)     (b)     Income  over    of
                                  Gain                                   Period                              (b)     Rate    Period
                                  (Loss)                                                                                     (000s)
- -----------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT EQUITY PORTFOLIO

Period from
<S>         <C>          <C>       <C>      <C>      <C>        <C>       <C>      <C>       <C>      <C>    <C>      <C>    <C>
3/19/98* to 
12/31/98... $10.00       $0.02     $1.06    $1.08    $(0.02)    $(0.01)   $11.05   10.9%     1.50%    21.32%  0.53%   40%    $2,513
- -----------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT SMALL CAP PORTFOLIO

Year ended 
12/31/98...   9.84        -       (0.32)    (0.32)      -          -        9.52   (3.2)     1.50     16.20  (0.18)   61      1,704
Period from
11/4/97* to 
12/31/97...  10.00       0.02     (0.16)    (0.14)    (0.02)       -        9.84   (1.4)     1.50     52.55   0.71    -         591

- -----------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO

Period from
9/1/98* to
12/31/98...  10.00      (0.04)     1.27      1.23        -         -       11.23   12.3      1.60     48.67  (0.58)     7       513

- -----------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT EMERGING MARKETS PORTFOLIO

Year ended 
12/31/98...   9.49       0.06     (2.23)    (2.17)    (0.06)        -       7.26  (22.9)     1.80    14.37    0.83     44     1,249
Period from
11/4/97* to 
12/31/97...  10.00       0.04     (0.51)    (0.47)    (0.04)        -       9.49   (4.7)     1.80    23.17    1.96     -      1,429
                                               
- -----------------------------------------------------------------------------------------------------------------------------------
                               

See footnotes to Financial Highlights.
</TABLE>

<PAGE>
Footnotes to Financial Highlights

*Commencement of operations.

(a)  Total Returns are historical and assume changes in share price,
     reinvestments of all dividends and distributions, and no sales charge. Had
     certain expenses not been reduced during the periods shown, total returns
     would have been lower. Periods of less than one year are not annualized.
(b)  Annualized for periods less than one year.

<PAGE>
For more information about the Portfolios, the following documents are available
free upon request:

ANNUAL/SEMIANNUAL REPORTS (REPORTS):
The Fund's annual and semi-annual reports to shareholders contain additional
information on each Portfolio's investments. In the annual report, you will find
a broad discussion of the market conditions and investment strategies that
significantly affected each Portfolio's performance during its last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Portfolios, including their
operations and investment policies. It is incorporated by reference and is
legally considered a part of this prospectus.


- --------------------------------------------------------------------------------
YOU CAN GET FREE COPIES OF REPORTS AND THE SAI, OR REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE PORTFOLIOS BY CONTACTING THE FUND AT:

                         LAZARD RETIREMENT SERIES, INC.
                              30 ROCKEFELLER PLAZA
                            NEW YORK, NEW YORK 10112
                            TELEPHONE: 1-800-823-6300
                           HTTP://WWW.LAZARDFUNDS.COM
- --------------------------------------------------------------------------------

You can review the Fund's Reports and the SAI at the Public Reference Room of
the Securities and Exchange Commission. You can get text-only copies:

o    For a fee, by writing the Public Reference Section of the Commission,
     Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
o    Free from the Commission's Website at http://www.sec.gov.

       Investment Company Act file no. 811-8071

<PAGE>
                         LAZARD RETIREMENT SERIES, INC.
                              30 Rockefeller Plaza
                            New York, New York 10112
                                 (800) 823-6300

   
                       STATEMENT OF ADDITIONAL INFORMATION
                                   MAY 1, 1999

          Lazard Retirement Series, Inc. (the "Fund") is a no-load, open-end
management investment company known as a mutual fund. This Statement of
Additional Information, which is not a prospectus, supplements and should be
read in conjunction with the current Prospectus of the Fund, dated May 1, 1999,
as it may be revised from time to time, relating to the following thirteen
portfolios (individually, a "Portfolio" and collectively, the "Portfolios"):
    

Lazard Retirement Equity Portfolio        Lazard Retirement International Small
  Portfolio                                 Cap Portfolio
Lazard Retirement Small Cap               Lazard Retirement Emerging Markets
  Portfolio                                 Portfolio
Lazard Retirement Bantam Value            Lazard Retirement International
  Portfolio                                 Fixed-Income Portfolio
Lazard Retirement Global Equity           Lazard Retirement Strategic Yield
  Portfolio                                 Portfolio
Lazard Retirement International Equity
  Portfolio



          SHARES OF THE PORTFOLIOS ARE OFFERED ONLY TO VARIABLE ANNUITY AND
VARIABLE LIFE INSURANCE SEPARATE ACCOUNTS ESTABLISHED BY INSURANCE COMPANIES
("PARTICIPATING INSURANCE COMPANIES") TO FUND VARIABLE ANNUITY CONTRACTS AND
VARIABLE LIFE INSURANCE POLICIES (COLLECTIVELY, "POLICIES") AND QUALIFIED
PENSION AND RETIREMENT PLANS AND ACCOUNTS PERMITTING ACCUMULATION OF ASSETS ON A
TAX-DEFERRED BASIS (COLLECTIVELY, "ELIGIBLE PLANS") OUTSIDE THE SEPARATE ACCOUNT
CONTEXT.

          To obtain a copy of the Fund's Prospectus, please write or call the
Fund at the address and telephone number given above.

   
          The Fund's most recent Annual Report and Semi-Annual Report to
Shareholders are separate documents supplied with this Statement of Additional
Information, and the financial statements, accompanying notes and report of
independent auditors appearing in the Annual Report are incorporated by
reference into this Statement of Additional Information.
    

<PAGE>
                                TABLE OF CONTENTS
                                                                          Page



   
Description of the Fund and Portfolios......................................3
Investment Restrictions....................................................24
Management.................................................................27
Determination of Net Asset Value...........................................32
Portfolio Transactions.....................................................33
Buying and Selling Shares..................................................35
Distribution and Servicing Plan............................................36
Dividends and Distributions................................................38
Taxation...................................................................38
Performance Information....................................................41
Information About the Fund and Portfolios..................................43
Counsel and Independent Auditors...........................................44
Appendix...................................................................45
    

<PAGE>
   
                     DESCRIPTION OF THE FUND AND PORTFOLIOS

          The Fund is a Maryland corporation organized on February 13,1997. Each
Portfolio is a separate portfolio of the Fund, an open-end management investment
company, known as a mutual fund. Each Portfolio is a non-diversified investment
company, which means that the proportion of the Portfolio's assets that may be
invested in the securities of a single issuer is not limited by the Investment
Company Act of 1940, as amended (the "1940 Act").

          Lazard Asset Management, a division of Lazard Freres & Co. LLC
("Lazard Freres"), serves as the investment manager (the "Investment Manager")
to each of the Portfolios.

          Lazard Freres is the distributor of each Portfolio's shares.

CERTAIN PORTFOLIO SECURITIES

          The following information supplements and should be read in
conjunction with the Fund's Prospectus.

          DEPOSITORY RECEIPTS. (All Portfolios) Each Portfolio may invest in the
securities of foreign issuers in the form of American Depositary Receipts
("ADRs") and Global Depositary Receipts ("GDRs"). These securities may not
necessarily be denominated in the same currency as the securities into which
they may be converted. ADRs are receipts typically issued by a United States
bank or trust company which evidence ownership of underlying securities issued
by a foreign corporation. GDRs are receipts issued outside the United States,
typically by nonUnited States banks and trust companies that evidence ownership
of either foreign or domestic securities. Generally, ADRs in registered form are
designed for use in the United States securities markets and GDRs in bearer form
are designed for use outside the United States.

          These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
underlying security and a depositary, whereas a depositary may establish an
unsponsored facility without participation by the issuer of the deposited
security. Holders of unsponsored depositary receipts generally bear all the
costs of such facilities and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.

          FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL ENTITIES.
(All Portfolios) Each Portfolio may invest in obligations issued or guaranteed
by one or more foreign governments or any of their political subdivisions,
agencies or instrumentalities that are determined by the Investment Manager to
be of comparable quality to the other obligations in which the Portfolio may
invest. Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank.

          CONVERTIBLE SECURITIES. (All Portfolios) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy seniority in
right of payment to all equity securities, and convertible preferred stock is
senior to common stock, of the same issuer. Because of the subordination
feature, however, convertible securities typically have lower ratings than
similar non-convertible securities.

          Although to a lesser extent than with fixed-income securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the underlying
common stock. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.
    

          Convertible securities are investments that provide for a stable
stream of income with generally higher yields than common stocks. There can be
no assurance of current income because the issuers of the convertible securities
may default on their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation through
the conversion feature, which enables the holder to benefit from increases in
the market price of the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices fluctuate. Convertible
securities, however, generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.

   
          WARRANTS. (All Portfolios) A warrant is an instrument issued by a
corporation which gives the holder the right to subscribe to a specified amount
of the corporation's capital stock at a set price for a specified period of
time. A Portfolio may invest up to 5% of its total assets in warrants, except
that this limitation does not apply to warrants purchased by the Portfolio that
are sold in units with, or attached to, other securities.

          PARTICIPATION INTERESTS. (All Portfolios) Each Portfolio may purchase
from financial institutions participation interests in securities in which the
Portfolio may invest. A participation interest gives the Portfolio an undivided
interest in the security in the proportion that the Portfolio's participation
interest bears to the total principal amount of the security. These instruments
may have fixed, floating or variable rates of interest with remaining maturities
of 13 months or less. If the participation interest is unrated, or has been
given a rating below that which is permissible for purchase by the Portfolio,
the participation interest will be collateralized by U.S. Government securities,
or, in the case of unrated participation interests, the Investment Manager must
have determined that the instrument is of comparable quality to those
instruments in which the Portfolio may invest.

          Each Portfolio may invest in corporate obligations denominated in U.S.
or foreign currencies that are originated, negotiated and structured by a
syndicate of lenders ("Co-Lenders") consisting of commercial banks, thrift
institutions, insurance companies, financial companies or other financial
institutions one or more of which administers the security on behalf of the
syndicate (the "Agent Bank"). Co-Lenders may sell such securities to third
parties called "Participants." Each Portfolio may invest in such securities
either by participating as a Co-Lender at origination or by acquiring an
interest in the security from a Co-Lender or a Participant (collectively,
"participation interests"). Co-Lenders and Participants interposed between the
Portfolio and the corporate borrower (the "Borrower"), together with Agent
Banks, are referred to herein as "Intermediate Participants." Each Portfolio
also may purchase a participation interest in a portion of the rights of an
Intermediate Participant, which would not establish any direct relationship
between the Fund, on behalf of the Portfolio, and the Borrower. In such cases,
the Portfolio would be required to rely on the Intermediate Participant that
sold the participation interest not only for the enforcement of the Portfolio's
rights against the Borrower, but also for the receipt and processing of payments
due to the Portfolio under the security. Because it may be necessary to assert
through an Intermediate Participant such rights as may exist against the
Borrower, if the Borrower fails to pay principal and interest when due, the
Portfolio may be subject to delays, expenses and risks that are greater than
those that would be involved if the Portfolio were to enforce its rights
directly against the Borrower. Moreover, under the terms of a participation
interest, the Portfolio may be regarded as a creditor of the Intermediate
Participant (rather than of the Borrower), so that the Portfolio also may be
subject to the risk that the Intermediate Participant may become insolvent.
Similar risks may arise with respect to the Agent Bank if, for example, assets
held by the Agent Bank for the benefit of the Portfolio were determined by the
appropriate regulatory authority or court to be subject to the claims of the
Agent Bank's creditors. In such case, the Portfolio might incur certain costs
and delays in realizing payment in connection with the participation interest or
suffer a loss of principal and/or interest. Further, in the event of the
bankruptcy or insolvency of the Borrower, the obligation of the Borrower to
repay the loan may be subject to certain defenses that can be asserted by such
Borrower as a result of improper conduct by the Agent Bank or Intermediate
Participant.
    

          VARIABLE AND FLOATING RATE SECURITIES. (All Portfolios) Variable and
floating rate securities provide for a periodic adjustment in the interest rate
paid on the obligations. The terms of such obligations must provide that
interest rates are adjusted periodically based upon an interest rate adjustment
index as provided in the respective obligations. The adjustment intervals may be
regular, and range from daily up to annually, or may be event based, such as
based on a change in the prime rate.

          Each Portfolio may invest in floating rate debt instruments
("floaters"). The interest rate on a floater is a variable rate which is tied to
another interest rate, such as a money-market index or Treasury bill rate. The
interest rate on a floater resets periodically, typically every six months.
Because of the interest rate reset feature, floaters provide the Portfolio with
a certain degree of protection against rises in interest rates, although the
Portfolio will participate in any declines in interest rates as well.

          Each Portfolio also may invest in inverse floating rate debt
instruments ("inverse floaters"). The interest rate on an inverse floater resets
in the opposite direction from the market rate of interest to which the inverse
floater is indexed. An inverse floating rate security may exhibit greater price
volatility than a fixed rate obligation of similar credit quality.

   
          MUNICIPAL OBLIGATIONS. (Strategic Yield Portfolio) In circumstances
where the Investment Manager determines that investment in municipal obligations
would facilitate the Portfolio's ability to accomplish its investment objective,
the Portfolio may invest its assets in such obligations, including municipal
obligations issued at a discount. Dividends on shares attributable to interest
on municipal obligations held by the Portfolio will not be exempt from federal
income taxes. Municipal obligations are susceptible to risks arising from the
financial condition of the states, public bodies or municipalities issuing the
securities. To the extent that state or local governmental entities are unable
to meet their financial obligations, the income derived by the Portfolio from
municipal obligations could be impaired.

          Municipal obligations are debt obligations issued by states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or multistate
agencies or authorities. Municipal obligations bear fixed, floating or variable
rates of interest. Certain municipal obligations are subject to redemption at a
date earlier than their stated maturity pursuant to call options, which may be
separated from the related municipal obligations and purchased and sold
separately. The Portfolio also may acquire call options on specific municipal
obligations. The Portfolio generally would purchase these call options to
protect the Portfolio from the issuer of the related municipal obligation
redeeming, or other holder of the call option from calling away, the municipal
obligation before maturity.
    

          Municipal obligations generally include debt obligations issued to
obtain funds for various public purposes as well as certain industrial
development bonds issued by or on behalf of public authorities. Municipal
obligations are classified as general obligation bonds, revenue bonds and notes.
General obligation bonds are secured by the issuer's pledge of its faith, credit
and taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Industrial
development bonds, in most cases, are revenue bonds and generally do not carry
the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal obligations include municipal
lease/purchase agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities.

          While, in general, municipal obligations are tax exempt securities
having relatively low yields as compared to taxable, non-municipal obligations
of similar quality, certain municipal obligations are taxable obligations,
offering yields comparable to, and in some cases greater than, the yields
available on other permissible Portfolio investments. Dividends received by
shareholders on Portfolio shares which are attributable to interest income
received by the Portfolio from municipal obligations generally will be subject
to federal income tax. The Portfolio will invest in municipal obligations, the
ratings of which correspond with the ratings of other permissible Portfolio
investments. The Portfolio currently intends to invest no more than 25% of its
assets in municipal obligations. However, this percentage may be varied from
time to time without shareholder approval.

   
          ZERO COUPON AND STRIPPED U.S. TREASURY SECURITIES. (Strategic Yield
Portfolio) The Portfolio may invest in zero coupon U.S. Treasury securities,
which are Treasury notes and Bonds that have been stripped of their unmatured
interest coupons, the coupons themselves and receipts or certificates
representing interests in such stripped debt obligations and coupons. Zero
coupon securities also are issued by corporations and financial institutions
which constitute a proportionate ownership of the issuer's pool of underlying
U.S. Treasury securities. A zero coupon security pays no interest to its holder
during its life and is sold at a discount to its face value at maturity. The
market prices of zero coupon securities generally are more volatile than the
market prices of securities that pay interest periodically and are likely to
respond to a greater degree to changes in interest rates than non-zero coupon
securities having similar maturities and credit qualities.

          MORTGAGE-RELATED SECURITIES. (International Fixed-Income Portfolio and
Strategic Yield Portfolio) Mortgage-related securities are secured, directly or
indirectly, by pools of mortgages, and may include complex instruments such as
collateralized mortgage obligations and stripped mortgage-backed securities.
These securities also may include mortgage pass-through securities, interests in
REMICs or other kinds of mortgage-backed securities. The mortgage-related
securities which may be purchased include those with fixed, floating and
variable interest rates, those with interest rates that change based on
multiples of changes in interest rates and those with interest rates that change
inversely to changes in interest rates.

RESIDENTIAL MORTGAGE-RELATED SECURITIES--Each of these Portfolios may invest in
mortgage-related securities representing participation interests in pools of
one- to four-family residential mortgage loans issued by governmental agencies
or instrumentalities, such as the GNMA, FNMA and FHLMC, or by private entities.
Residential mortgage-related securities issued by private entities are
structured to provide protection to the senior class investors against potential
losses on the underlying mortgage loans. This protection is generally provided
by having the holders of the subordinated class of securities ("Subordinated
Securities") take the first loss if there are defaults on the underlying
commercial mortgage loans. Other protection, which may benefit all of the
classes or particular classes, may include issuer guarantees, reserve funds,
additional Subordinated Securities, cross-collateralization and
over-collateralization.

COMMERCIAL MORTGAGE-RELATED SECURITIES--Each of these Portfolios may invest in
commercial mortgage-related securities, which generally are multi-class debt or
pass-through certificates secured by mortgage loans on commercial properties.
Similar to residential mortgage-related securities, commercial mortgage-related
securities have been issued using a variety of structures, including multi-class
structures featuring senior and subordinated classes.

SUBORDINATED SECURITIES--Each of these Portfolios may invest in Subordinated
Securities issued or sponsored by commercial banks, savings and loan
institutions, mortgage bankers, private mortgage insurance companies and other
non-governmental issuers. Subordinated Securities have no governmental
guarantee, and are subordinated in some manner as to the payment of principal
and/or interest to the holders of more senior mortgage-related securities
arising out of the same pool of mortgages. The holders of Subordinated
Securities typically are compensated with a higher stated yield than are the
holders of more senior mortgage-related securities. On the other hand,
Subordinated Securities typically subject the holder to greater risk than senior
mortgage-related securities and tend to be rated in a lower rating category, and
frequently a substantially lower rating category, than the senior
mortgage-related securities issued in respect of the same pool of mortgage.
Subordinated Securities generally are likely to be more sensitive to changes in
prepayment and interest rates and the market for such securities may be less
liquid than is the case for traditional fixed-income securities and senior
mortgage-related securities.

COLLATERALIZED MORTGAGE OBLIGATIONS AND MULTI-CLASS PASS-THROUGH
SECURITIES--Collateralized mortgage obligations or "CMOs" are multiclass bonds
backed by pools of mortgage pass-through certificates or mortgage loans. CMOs
may be collateralized by (a) pass-through certificates issued or guaranteed by
GNMA, FNMA or FHLMC, (b) unsecuritized mortgage loans insured by the Federal
Housing Administration or guaranteed by the Department of Veterans' Affairs, (c)
unsecuritized conventional mortgages, (d) other mortgage-related securities or
(e) any combination thereof. CMOs may be issued by agencies or instrumentalities
of the U.S. Government, or by private originators of, or investors in, mortgage
loans, including depository institutions, mortgage banks, investment banks and
special purpose subsidiaries of the foregoing. The issuer of CMOs or multi-class
pass-through securities may elect to be treated as a REMIC. The International
Fixed-Income Portfolio may invest, to a limited extent, in residual interests in
REMICs. See "Taxation."

          Each class of CMOs, often referred to as a "tranche," is issued at a
specific coupon rate and has a stated maturity or final distribution date; these
characteristics will vary from one tranche to another. Principal prepayments on
collateral underlying a CMO may cause it to be retired substantially earlier
than the stated maturities or final distribution dates. The principal and
interest on the underlying mortgages may be allocated among the several classes
of a series of a CMO in many ways. One or more tranches of a CMO may have coupon
rates which reset periodically at a specified increment over an index, such as
the London Interbank Offered Rate ("LIBOR") (or sometimes more than one index).
These floating rate CMOs typically are issued with lifetime caps on the coupon
rate thereon. Each of these Portfolios also may invest in inverse floating rate
CMOs. Inverse floating rate CMOs constitute a tranche of a CMO with a coupon
rate that moves in the reverse direction to an applicable index such as the
LIBOR. Accordingly, the coupon rate thereon will increase as interest rates
decrease. Inverse floating rate CMOs are typically more volatile than fixed or
floating rate tranches of CMOs.

          Many inverse floating rate CMOs have coupons that move inversely to a
multiple of the applicable indexes. The coupon varying inversely to a multiple
of an applicable index creates a leverage factor. The markets for inverse
floating rate CMOs with highly leveraged characteristics may at times be very
thin. The Portfolio's ability to dispose of its positions in such securities
will depend on the degree of liquidity in the markets for such securities. It is
impossible to predict the amount of trading interest that may exist in such
securities, and therefore the future degree of liquidity. It should be noted
that inverse floaters based on multiples of a stated index are designed to be
highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and loss of principal.

STRIPPED MORTGAGE-BACKED SECURITIES--Each of these Portfolios also may invest in
stripped mortgage-backed securities. Stripped mortgage-backed securities are
created by segregating the cash flows from underlying mortgage loans or mortgage
securities to create two or more new securities, each with a specified
percentage of the underlying security's principal or interest payments. Mortgage
securities may be partially stripped so that each investor class received some
interest and some principal. When securities are completely stripped, however,
all of the interest is distributed to holders of one type of security, known as
an interest-only security, or IO, and all of the principal is distributed to
holders of another type of security known as a principal- only security, or PO.
Strips can be created in a pass-through structure or as tranches of a CMO. The
yields to maturity on IOs and POs are very sensitive to the rate of principal
payments (including prepayments) on the related underlying mortgage assets. If
the underlying mortgage assets experience greater than anticipated prepayments
of principal, the Portfolio may not fully recoup its initial investment in IOs.
Conversely, if the underlying mortgage assets experience less than anticipated
prepayments of principal, the yield on POs could be materially and adversely
affected.
    

GOVERNMENT-AGENCY SECURITIES--Mortgage-related securities issued by the
Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as
to the timely payment of principal and interest by GNMA and such guarantee is
backed by the full faith and credit of the United States. GNMA is a wholly-owned
U.S. Government corporation within the Department of Housing and Urban
Development.

GOVERNMENT-RELATED SECURITIES--Mortgage-related securities issued by the Federal
National Mortgage Association ("FNMA") include FNMA Guaranteed Mortgage
Pass-Through Certificates (also known as "Fannie Maes") which are solely the
obligations of FNMA and are not backed by or entitled to the full faith and
credit of the United States Government. FNMA is a government-sponsored
organization owned entirely by private stockholders.

          Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates (also
known as "Freddie Macs" or "PCs"). FHLMC is a corporate instrumentality of the
United States Government created pursuant to an Act of Congress, which is owned
entirely by Federal Home Loan Banks.

PRIVATE ENTITY SECURITIES--These mortgage-related securities are issued by
commercial banks, savings and loan institutions, mortgage bankers, private
mortgage insurance companies and other non-governmental issuers. Timely payment
of principal and interest on mortgage-related securities backed by pools created
by non-governmental issuers often is supported partially by various forms of
insurance or guarantees, including individual loan, title, pool and hazard
insurance. The insurance and guarantees are issued by government entities,
private insurers and the mortgage poolers. There can be no assurance that the
private insurers or mortgage poolers can meet their obligations under the
policies, so that if the issuers default on their obligations the holders of the
security could sustain a loss. No insurance or guarantee covers the Portfolio or
the price of the Portfolio's shares. Mortgage-related securities issued by
non-governmental issuers generally offer a higher rate of interest than
government-agency and government-related securities because there are no direct
or indirect government guarantees of payment.

   
    


CMO RESIDUALS--CMO Residuals are derivative mortgage securities issued by
agencies or instrumentalities of the U.S. Government or by private originators
of, or investors in, mortgage loans, including savings and loan associations,
mortgage banks, commercial banks, investment banks and special purpose
subsidiaries of the foregoing.

          The cash flow generated by the Mortgage Assets underlying series of
CMOs is applied first to make required payments of principal of and interest on
the CMOs and second to pay the related administrative expenses of the issuer.
The residual in a CMO structure generally represents the interest in any excess
cash flow remaining after making the foregoing payments. Each payment of such
excess cash flow to a holder of the related CMO Residual represents dividend or
interest income and/or a return of capital. The amount of residual cash flow
resulting from a CMO will depend on, among other things, the characteristics of
the Mortgage Assets, the coupon rate of each class of CMOs, prevailing interest
rates, the amount of administrative expenses and the prepayment experience on
the Mortgage Assets. In particular, the yield to maturity on CMO Residuals is
extremely sensitive to prepayments on the related underlying Mortgage Assets in
the same manner as an IO class of SMBS. See "Stripped Mortgage-Backed
Securities" above. In addition, if a series of a CMO includes a class that bears
interest at an adjustable rate, the yield to maturity on the related CMO
residual will also be extremely sensitive to the level of the index upon which
interest rate adjustments are based. As described above with respect to SMBS, in
certain circumstances, the Portfolio may fail to fully recoup its initial
investment in a CMO Residual.

          CMO Residuals are generally purchased and sold by institutional
investors through several investment banking firms acting as brokers or dealers.
CMO Residuals may not have the liquidity of other more established securities
trading in other markets. Transactions in CMO Residuals are generally completed
only after careful review of the characteristics of the securities in question.
In addition, CMO Residuals may or, pursuant to an exemption therefrom, may not
have been registered under the Securities Act. CMO Residuals, whether or not
registered under the Securities Act, may be subject to certain restrictions of
transferability. Ownership of certain CMO Residuals imposes liability for
certain of the expenses of the related CMO issuer on the purchaser. The
Investment Manager will not purchase any CMO Residual that imposes such
liability on the Portfolio.

   
    


OTHER MORTGAGE-RELATED SECURITIES--Other mortgage-related securities include
securities other than those described above that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage loans
on real property. Other mortgage-related securities may be equity or debt
securities issued by agencies or instrumentalities of the U.S. Government or by
private originators of, or investors in, mortgage loans, including savings and
loan associations, homebuilders, mortgage banks, commercial banks, investment
banks, partnerships, trusts and special purpose entities of the foregoing.

          REAL ESTATE INVESTMENT TRUSTS. (Bantam Value Portfolio, Equity
Portfolio, Global Equity Portfolio and Small Cap Portfolio) Each of these
Portfolios may invest in Real Estate Investment Trusts ("REITS"). A REIT is a
corporation, or a business trust that would otherwise be taxed as a corporation,
which meets the definitional requirements of the Internal Revenue Code of 1986,
as amended (the "Code"). The Code permits a qualifying REIT to deduct dividends
paid, thereby effectively eliminating corporate level Federal income tax and
making the REIT a pass-through vehicle for Federal income tax purposes. To meet
the definitional requirements of the Code, a REIT must, among other things,
invest substantially all of its assets in interests in real estate (including
mortgages and other REITs) or cash and government securities, derive most of its
income from rents from real property or interest on loans secured by mortgages
on real property, and distribute to shareholders annually a substantial portion
of its otherwise taxable income.

          REITs are characterized as equity REITs, mortgage REITs and hybrid
REITs. Equity REITs, which may include operating or finance companies, own real
estate directly and the value of, and income earned by, the REITs depends upon
the income of the underlying properties and the rental income they earn. Equity
REITs also can realize capital gains (or losses) by selling properties that have
appreciated (or depreciated) in value. Mortgage REITs can make construction,
development or long-term mortgage loans and are sensitive to the credit quality
of the borrower. Mortgage REITs derive their income from interest payments on
such loans. Hybrid REITs combine the characteristics of both equity and mortgage
REITs, generally by holding both ownership interests and mortgage interests in
real estate. The value of securities issued by REITs are affected by tax and
regulatory requirements and by perceptions of management skill. They also are
subject to heavy cash flow dependency, defaults by borrowers or tenants,
self-liquidation and the possibility of failing to qualify for tax-free status
under the Code or to maintain exemption from the 1940 Act.

   
          ASSET-BACKED SECURITIES. (International Fixed-Income Portfolio and
Strategic Yield Portfolio) Each of these Portfolios may invest in asset-backed
securities, including interests in pools of receivables, such as motor vehicle
installment purchase obligations, credit card receivables, home equity loans,
home improvement loans and manufactured housing loans. These securities may be
in the form of pass-through instruments or asset-backed bonds. The securities,
all of which are issued by non-governmental entities and carry no direct or
indirect government guarantee, are structurally similar to the collateralized
mortgage obligations and mortgage pass-through securities described above. As
with mortgage-backed securities, asset-backed securities are often backed by a
pool of assets representing the obligations of a number of different parties and
use similar credit enhancement techniques.

          Asset-backed securities present certain risks that are not presented
by mortgage-related securities. Primarily, these securities may provide the
Portfolio with a less effective security interest in the related collateral than
do mortgage-related securities. Therefore, there is the possibility that
recoveries on the underlying collateral may not, in some cases, be available to
support payments on these securities. Credit card receivables are generally
unsecured and the debtors are entitled to the protection of a number of state
and federal consumer credit laws, many of which give such debtors the right to
set off certain amounts owed on the credit cards, thereby reducing the balance
due. Most organizations that issue asset-backed securities relating to motor
vehicle installment purchase obligations perfect their interests in their
respective obligations only by filing a financing statement and by having the
servicer of the obligations, which is usually the originator, take custody
thereof. In such circumstances, if the servicer were to sell the same
obligations to another party, in violation of its duty not to so do, there is a
risk that such party could acquire an interest in the obligations superior to
that of the holders of the securities. Also, although most such obligations
grant a security interest in the motor vehicle being financed, in most states
the security interest in a motor vehicle must be noted on the certificate of
title to perfect such security interest against competing claims of other
parties. Due to the large number of vehicles involved, however, the certificate
of title to each vehicle financed, pursuant to the obligations underlying the
securities, usually is not amended to reflect the assignment of the seller's
security interest for the benefit of the holders of the securities. Therefore,
there is the possibility that recoveries on repossessed collateral may not, in
some cases, be available to support payments on those securities. In addition,
various state and federal laws give the motor vehicle owner the right to assert
against the holder of the owner's obligation certain defenses such owner would
have against the seller of the motor vehicle. The assertion of such defenses
could reduce payments on the related securities.

          INVESTMENT COMPANIES. (All Portfolios) Each Portfolio may invest, to
the extent permitted under the 1940 Act, in securities issued by investment
companies which principally invest in securities of the type in which the
Portfolio invests. Investments in the securities of investment companies may
involve duplication of advisory fees and certain other expenses.

          ILLIQUID SECURITIES. (All Portfolios) Each Portfolio may invest up to
15% of the value of its net assets in securities as to which a liquid trading
market does not exist, provided such investments are consistent with the
Portfolio's investment objective. Such securities may include securities that
are not readily marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, certain mortgage-related
securities, and certain privately negotiated, non-exchange traded options and
securities used to cover such options. As to these securities, the Portfolio is
subject to a risk that should the Portfolio desire to sell them when a ready
buyer is not available at a price the Portfolio deems representative of their
value, the value of the Portfolio's net assets could be adversely affected.

          MONEY MARKET INSTRUMENTS. (All Portfolios) When the Investment Manager
determines that adverse market conditions exist, a Portfolio may adopt a
temporary defensive position and invest some or all of its assets in money
market instruments, including U.S. Government securities, repurchase agreements,
bank obligations and commercial paper.

INVESTMENT TECHNIQUES

          The following information supplements and should be read in
conjunction with the Fund's Prospectus.

          BORROWING MONEY. (All Portfolios) Each Portfolio is permitted to
borrow to the extent permitted under the 1940 Act, which permits an investment
company to borrow in an amount up to 33-1/3% of the value of its total assets.
Each Portfolio currently intends to borrow money only from banks for temporary
or emergency (not leveraging) purposes in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of a Portfolio's total assets, the
Portfolio will not make any additional investments.

          LENDING PORTFOLIO SECURITIES. (All Portfolios) Each Portfolio may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. The
Portfolio continues to be entitled to payments in amounts equal to the interest,
dividends or other distributions payable on the loaned securities which affords
the Portfolio an opportunity to earn interest on the amount of the loan and on
the loaned securities' collateral. Loans of portfolio securities may not exceed
33-1/3% of the value of the Portfolio's total assets, and the Portfolio will
receive collateral consisting of cash, U.S. Government securities or irrevocable
letters of credit which will be maintained at all times in an amount equal to al
least 100% of the current market value of the loaned securities. Such loans are
terminable by the Portfolio at any time upon specified notice. The Portfolio
might experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Portfolio. In
connection with its securities lending transactions, a Portfolio may return to
the borrower or a third party which is unaffiliated with the Portfolio, and
which is acting as a "placing broker," a part of the interest earned from the
investment of collateral received for securities loaned.

          DERIVATIVES. (All Portfolios) Each Portfolio may invest in, or enter
into, derivatives to the extent described in the Prospectus, for a variety of
reasons, including to hedge certain market risks, to provide a substitute for
purchasing or selling particular securities or to increase potential income
gain. Derivatives may provide a cheaper, quicker or more specifically focused
way for the Portfolio to invest than "traditional" securities would.

          Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular derivative and the
portfolio as a whole. Derivatives permit a Portfolio to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Portfolio can increase or decrease the level
of risk, or change the character of the risk, of its portfolio by making
investments in specific securities.

          Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in derivatives could
have a large potential impact on a Portfolio's performance.

          If a Portfolio invests in derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Portfolio's return
or result in a loss. A Portfolio also could experience losses if its derivatives
were poorly correlated with its other investments, or if the Portfolio were
unable to liquidate its position because of an illiquid secondary market. The
market for many derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for derivatives.

          Although neither the Fund nor any Portfolio will be a commodity pool,
certain derivatives subject the Portfolios to the rules of the Commodity Futures
Trading Commission which limit the extent to which a Portfolio can invest in
such derivatives. A Portfolio may invest in futures contracts and options with
respect thereto for hedging purposes without limit. However, no Portfolio may
invest in such contracts and options for other purposes if the sum of the amount
of initial margin deposits and premiums paid for unexpired options with respect
to such contracts, other than for bona fide hedging purposes, exceeds 5% of the
liquidation value of the Portfolio's assets, after taking into account
unrealized profits and unrealized losses on such contracts and options;
provided, however, that in the case of an option that is in-the-money at the
time of purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.

          When required by the Commission, a Portfolio will set aside
permissible liquid assets in a segregated account to cover its obligations
relating to its transactions in derivatives. To maintain this required cover,
the Portfolio may have to sell portfolio securities at disadvantageous prices or
times since it may not be possible to liquidate a derivative position at a
reasonable price.

          Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter derivatives.
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily payment system (i.e., variation margin requirements)
operated by the clearing agency in order to reduce overall credit risk. As a
result, unless the clearing agency defaults, there is relatively little
counterparty credit risk associated with derivatives purchased on an exchange.
By contrast, no clearing agency guarantees over-the-counter derivatives.
Therefore, each party to an over-the-counter derivative bears the risk that the
counterparty will default. Accordingly, the Investment Manager will consider the
credit worthiness of counterparties to over-the-counter derivatives in the same
manner as it would review the credit quality of a security to be purchased by
the Portfolio. Over-the-counter derivatives are less liquid than exchange-traded
derivatives since the other party to the transaction may be the only investor
with sufficient understanding of the derivative to be interested in bidding for
it.

FUTURES TRANSACTIONS--IN GENERAL. (All Portfolios) Each Portfolio may enter into
futures contracts in U.S. domestic markets, such as the Chicago Board of Trade
and the International Monetary Market of the Chicago Mercantile Exchange, or on
exchanges located outside the United States, such as the London International
Financial Futures Exchange, the Deutsche Termine Borse and the Sydney Futures
Exchange Limited. Foreign markets may offer advantages such as trading
opportunities or arbitrage possibilities not available in the United States.
Foreign markets, however, may have greater risk potential than domestic markets.
For example, some foreign exchanges are principal markets so that no common
clearing facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits a Portfolio might realize
in trading could be eliminated by adverse changes in the exchange rate, or the
Portfolio could incur losses as a result of those changes. Transactions on
foreign exchanges may include both commodities which are traded on domestic
exchanges and those which are not. Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not regulated by the
Commodity Futures Trading Commission.
    

          Engaging in these transactions involves risk of loss to the Portfolio
which could adversely affect the value of the Portfolio's net assets. Although
each of these Portfolios intends to purchase or sell futures contracts only if
there is an active market for such contracts, no assurance can be given that a
liquid market will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made that day
at a price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and potentially subjecting the Portfolio
to substantial losses.

          Successful use of futures by a Portfolio also is subject to the
Investment Manager's ability to predict correctly movements in the direction of
the relevant market, and, to the extent the transaction is entered into for
hedging purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures contract. For
example, if a Portfolio uses futures to hedge against the possibility of a
decline in the market value of securities held in its portfolio and the prices
of such securities instead increase, the Portfolio will lose part or all of the
benefit of the increased value of securities which it has hedged because it will
have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Portfolio has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. The Portfolio may have
to sell such securities at a time when it may be disadvantageous to do so.

          Pursuant to regulations and/or published positions of the Commission,
a Portfolio may be required to segregate permissible liquid assets in connection
with its commodities transactions in an amount generally equal to the value of
the underlying commodity. The segregation of such assets will have the effect of
limiting the Portfolio's ability otherwise to invest those assets.

SPECIFIC FUTURES TRANSACTIONS. Each Portfolio, except the International
Fixed-Income Portfolio, may purchase and sell stock index futures contracts. A
stock index future obligates the Portfolio to pay or receive an amount of cash
equal to a fixed dollar amount specified in the futures contract multiplied by
the difference between the settlement price of the contract on the contract's
last trading day and the value of the index based on the stock prices of the
securities that comprise it at the opening of trading in such securities on the
next business day.

          The International Fixed-Income Portfolio, Emerging Markets Portfolio,
Global Equity Portfolio, International Small Cap Portfolio and Strategic Yield
Portfolio may purchase and sell interest rate futures contracts. An interest
rate future obligates the Portfolio to purchase or sell an amount of a specific
debt security at a future date at a specific price.

          Each Portfolio, except the Bantam Value Portfolio, Equity Portfolio
and Small Cap Portfolio, may purchase and sell currency futures. A currency
future obligates the Portfolio to purchase or sell an amount of a specific
currency at a future date at a specific price.

   
OPTIONS--IN GENERAL. (All Portfolios) Each Portfolio may invest up to 5% of its
assets, represented by the premium paid, in the purchase of call and put
options. A Portfolio may write (i.e., sell) covered call and put option
contracts to the extent of 20% of the value of its net assets at the time such
option contracts are written. A call option gives the purchaser of the option
the right to buy, and obligates the writer to sell, the underlying security or
securities at the exercise price at any time during the option period, or at a
specific date. Conversely, a put option gives the purchaser of the option the
right to sell, and obligates the writer to buy, the underlying security or
securities at the exercise price at any time during the option period, or at a
specified date.
    

          A covered call option written by a Portfolio is a call option with
respect to which the Portfolio owns the underlying security or otherwise covers
the transaction by segregating cash or other securities. A put option written by
a Portfolio is covered when, among other things, cash or liquid securities
having a value equal to or greater than the exercise price of the option are
placed in a segregated account with the Fund's custodian to fulfill the
obligation undertaken. The principal reason for writing covered call and put
options is to realize, through the receipt of premiums, a greater return than
would be realized on the underlying securities alone. A Portfolio receives a
premium from writing covered call or put options which it retains whether or not
the option is exercised.

          There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times have rendered
certain of the clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, a Portfolio is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.

SPECIFIC OPTIONS TRANSACTIONS. Each Portfolio, except the International
Fixed-Income Portfolio, may purchase and sell call and put options in respect of
specific securities (or groups or "baskets" of specific securities) or indices
listed on national securities exchanges or traded in the over-the-counter
market. An option on an index is similar to an option in respect of specific
securities, except that settlement does not occur by delivery of the securities
comprising the index. Instead, the option holder receives an amount of cash if
the closing level of the index upon which the option is based is greater than,
in the case of a call, or less than, in the case of a put, the exercise price of
the option. Thus, the effectiveness of purchasing or writing index options will
depend upon price movements in the level of the index rather than the price of a
particular security.

          Each Portfolio, except the Bantam Value Portfolio, Equity Portfolio
and Small Cap Portfolio, may purchase and sell call and put options on foreign
currency. These options convey the right to buy or sell the underlying currency
at a price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.

          Each Portfolio may purchase cash-settled options on interest rate
swaps, interest rate swaps denominated in foreign currency (except in the case
of the Equity Portfolio) and (except in the case of the International
Fixed-Income Portfolio) equity index swaps in pursuit of its investment
objective. Interest rate swaps involve the exchange by a Portfolio with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments for fixed-rate payments) denominated in
U.S. dollars or foreign currency. Equity index swaps involve the exchange by the
Portfolio with another party of cash flows based upon the performance of an
index or a portion of an index of securities which usually includes dividends. A
cash-settled option on a swap gives the purchaser the right, but not the
obligation, in return for the premium paid, to receive an amount of cash equal
to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.

          Successful use by a Portfolio of options will be subject to the
Investment Manager's ability to predict correctly movements in the prices of
individual stocks, the stock market generally, foreign currencies or interest
rates. To the extent the Investment Manager's predictions are incorrect, the
Portfolio may incur losses.

          FUTURE DEVELOPMENTS. The Portfolios may take advantage of
opportunities in the area of options and futures contracts and options on
futures contracts and any other derivatives which are not presently contemplated
for use by the Portfolio or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Portfolio's investment objective and legally permissible for the Portfolio.
Before entering into such transactions or making any such investment, the
Portfolio will provide appropriate disclosure in the Prospectus or Statement of
Additional Information.

   
          FORWARD COMMITMENTS. (All Portfolios) A Portfolio may purchase or sell
securities on a forward commitment, when-issued or delayed delivery basis, which
means delivery and payment take place a number of days after the date of the
commitment to purchase or sell the securities at a predetermined price and/or
yield. Typically, no interest accrues to the purchaser until the security is
delivered. When purchasing a security on a forward commitment basis, the
Portfolio assumes the rights and risks of ownership of the security, including
the risk or price and yield fluctuations, and takes such fluctuations into
account when determining its net asset value. Because the Portfolio is not
required to pay for these securities until the delivery date, these risks are in
addition to the risks associated with the Portfolio's other investments. If the
Portfolio is fully or almost fully invested when forward commitment purchases
are outstanding, such purchases may result in a form of leverage. The Portfolio
intends to engage in forward commitments to increase its portfolio's financial
exposure to the types of securities in which it invests. Leveraging the
portfolio in this manner will increase the Portfolio's exposure to changes in
interest rates and will increase the volatility of its returns. The Portfolio
will set aside in a segregated account permissible liquid assets at least equal
at all times to the amount of the Portfolio's purchase commitments. At no time
will the Portfolio have more than 33-1/3% of its assets committed to purchase
securities on a forward commitment basis.

          Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest rates
rise) based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates. Securities
purchased on a forward commitment or when-issued basis may expose a Portfolio to
risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a forward commitment or when-issued basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. Purchasing securities on a forward commitment or when-issued
basis when the Portfolio is fully or almost fully invested may result in greater
potential fluctuation in the value of the Portfolio's net assets and its net
asset value per share.

          SWAP AGREEMENTS. (All Portfolios) To the extent consistent with the
Portfolio's investment objective and management policies as set forth herein,
each Portfolio may enter into equity, interest rate, index, total return and
currency rate swap agreements. These transactions are entered into in an attempt
to obtain a particular return when it is considered desirable to do so, possibly
at a lower cost to the Portfolio than if the Portfolio had invested directly in
the asset that yielded the desired return. Swap agreements are two-party
contracts entered into primarily by institutional investors for periods ranging
from a few weeks to more than a year. In a standard swap transaction, two
parties agree to exchange the returns (or differentials in rates of return)
earned or realized on particular predetermined investments or instruments, which
may be adjusted for an interest factor. The gross returns to be exchanged or
"swapped" between the parties are generally calculated with respect to a
"notional amount," i.e., the return on or increase in value of a particular
dollar amount invested at a particular interest rate, in a particular foreign
currency, or in a "basket" of securities representing a particular index. Forms
of swap agreements include interest rate caps, under which, in return for a
premium, one party agrees to make payments to the other to the extent interest
rates exceed a specified rate or "cap"; interest rate floors, under which, in
return for a premium, one party agrees to make payments to the other to the
extent interest rates fall below a specified level or "floor"; and interest rate
collars, under which a party sells a cap and purchases a floor or vice versa in
an attempt to protect itself against interest rate movements exceeding given
minimum or maximum levels.

          Most swap agreements entered into by a Portfolio would calculate the
obligations of the parties to the agreement on a "net basis." Consequently, the
Portfolio's current obligations (or rights) under a swap agreement generally
will be equal only to the net amount to be paid or received under the agreement
based on the relative values of the positions held by each party to the
agreement (the "net amount"). The risk of loss with respect to swaps is limited
to the net amount of payments that the Portfolio is contractually obligated to
make. If the other party to a swap defaults, the Portfolio's risk of loss
consists of the net amount of payments that the Portfolio contractually is
entitled to receive.

          FOREIGN CURRENCY TRANSACTIONS. (All Portfolios, except the Bantam
Value Portfolio, Equity Portfolio and Small Cap Portfolio) Foreign currency
transactions may be entered into for a variety of purposes, including: to fix in
U.S. dollars, between trade and settlement date, the value of a security the
Portfolio has agreed to buy or sell; to hedge the U.S. dollar value of
securities the Portfolio already owns, particularly if it expects a decrease in
the value of the currency in which the foreign security is denominated; or to
gain exposure to the foreign currency in an attempt to realize gains.

          Foreign currency transactions may involve, for example, the
Portfolio's purchase of foreign currencies for U.S. dollars or the maintenance
of short positions in foreign currencies, which would involve the Portfolio
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the value of
the currency sold relative to the currency the Portfolio contracted to receive
in the exchange. The Portfolio's success in these transactions will depend
principally on the Investment Manager's ability to predict accurately the future
exchange rates between foreign currencies and the U.S. dollar.
    

INVESTMENT CONSIDERATIONS AND RISKS

   
          EQUITY SECURITIES. (All Portfolios, except the International
Fixed-Income Portfolio and Strategic Yield Portfolio) Equity securities
fluctuate in value, often based on factors unrelated to the value of the issuer
of the securities, and such fluctuations can be pronounced. Changes in the value
of a Portfolio's investments will result in changes in the value of its shares
and thus the Portfolio's total return to investors.

          The securities of the smaller companies in which the Small Cap,
International Small Cap, Emerging Markets and Bantam Value Portfolios may invest
may be subject to more abrupt or erratic market movements than larger, more
established companies, because securities of smaller companies typically are
traded in lower volume and the issuers typically are more subject to changes in
earnings and prospects. Smaller capitalization companies often have limited
product lines, markets or financial resources. They may be dependent on
management for one or a few key persons, and can be more susceptible to losses
and the risk of bankruptcy. In addition, securities of the small capitalization
sector may be thinly traded (and therefore have to be sold at a discount from
current market prices or sold in small lots over an extended period of time),
may be followed by fewer investment research analysts and may be subject to
wider price swings, and thus may create a greater chance of loss than by
investing in securities of larger capitalization companies.

          FIXED-INCOME SECURITIES. (All Portfolios) Even though interest-bearing
securities are investments which promise a stable stream of income, the prices
of such securities generally are inversely affected by changes in interest rates
and, therefore, are subject to the risk of market price fluctuations. Certain
portfolio securities, such as those with interest rates that fluctuate directly
or indirectly based on multiples of a stated index, are designed to be highly
sensitive to changes in interest rates and can subject the holders thereof to
extreme reductions of yield and possibly loss of principal.

          The values of fixed-income securities also may be affected by changes
in the credit rating or financial condition of the issuer. Certain portfolio
securities, such as those rated below investment grade by Standard & Poor's
Ratings Group ("S&P") and Moody's Investors Service, Inc. ("Moody's" and
together with S&P, the "Rating Agencies"), may be subject to such risk with
respect to the issuing entity and to greater market fluctuations than certain
lower yielding, higher rated fixed-income securities. Once the rating of a
portfolio security has been changed, the Portfolio will consider all
circumstances deemed relevant in determining whether to continue to hold the
security.

          Federal income tax law requires the holder of a zero coupon security
or of certain pay-in-kind bonds to accrue income with respect to these
securities prior to the receipt of cash payments. A Portfolio investing in such
securities may be required to distribute such income accrued with respect to
these securities and may have to dispose of portfolio securities under
disadvantageous circumstances in order to generate cash to satisfy these
distribution requirements.

          MORTGAGE-RELATED SECURITIES. (International Fixed-Income Portfolio and
Strategic Yield Portfolio) As with other interest-bearing securities, the prices
of certain mortgage-related securities are inversely affected by changes in
interest rates. However, although the value of a mortgage-related security may
decline when interest rates rise, the converse is not necessarily true, since
during periods of declining interest rates the mortgages underlying the security
are more likely to be prepaid. For this and other reasons, a mortgage-related
security's stated maturity may be shortened by unscheduled prepayments on the
underlying mortgages, and, therefore, it is possible that the realized return of
the security may differ materially from the return originally expected by the
Investment Manager. Moreover, with respect to certain stripped mortgage-backed
securities, if the underlying mortgage securities experience greater than
anticipated prepayments of principal, the Portfolio may fail to fully recoup its
initial investment even if the securities are rated in the highest rating
category by a nationally recognized statistical rating organization. During
periods of rapidly rising interest rates, prepayments of mortgage-related
securities may occur at slower than expected rates. Slower prepayments
effectively may lengthen a mortgage-related security's expected maturity (but
not past its stated maturity), which generally would cause the value of such
security to fluctuate more widely in response to changes in interest rates. Were
the prepayments on the Portfolio's mortgage-related securities to decrease
broadly, the Portfolio's effective duration, and thus sensitivity to interest
rate fluctuations, would increase. Commercial real property loans, however,
often contain provisions that substantially reduce the likelihood that such
securities will be prepaid. The provisions generally impose significant
prepayment penalties on loans and in some cases there may be prohibitions on
principal prepayments for several years following origination.

          Certain mortgage-related securities are subject to credit risks
associated with the performance of the underlying mortgage properties. Adverse
changes in economic conditions and circumstances are more likely to have an
adverse impact on mortgage-related securities secured by loans on commercial
properties than on those secured by loans on residential properties. In
addition, as described above, these securities are subject to prepayment risk,
although commercial mortgages typically have shorter maturities than residential
mortgages and prepayment protection features. Some mortgage-related securities
have structures that make their reactions to interest rate changes and other
factors difficult to predict, making their values highly volatile.

          In certain instances, the credit risk associated with mortgage-related
securities can be reduced by third party guarantees or other forms of credit
support. Improved credit risk does not reduce prepayment risk which is unrelated
to the rating assigned to the mortgage-related security. Prepayment risk can
lead to fluctuations in value of the mortgage-related security which may be
pronounced. If a mortgage-related security is purchased at a premium, all or
part of the premium may be lost if the market value of the security declines
whether resulting from changes in interest rates or prepayments on the
underlying mortgage collateral. Certain mortgage-related securities that may be
purchased by these Portfolios, such as inverse floating rate collateralized
mortgage obligations, have coupons that move inversely to a multiple of a
specific index which may result in increased price volatility.

          FOREIGN SECURITIES. (All Portfolios) Foreign securities markets
generally are not as developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more volatile than
securities of comparable U.S. issuers. Similarly, volume and liquidity in most
foreign securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.

          Because evidences of ownership of such securities usually are held
outside the United States, the Portfolios will be subject to additional risks
which include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental restrictions,
which might adversely affect or restrict the payment of principal and interest
on the foreign securities to investors located outside the country of the
issuer, whether from currency blockage or otherwise.

          With respect to the Emerging Markets, International Fixed-Income and
Strategic Yield Portfolios, emerging market countries have economic structures
that generally are less diverse and mature, and political systems that are less
stable, than those of developed countries. Emerging markets may be more volatile
than the markets of more mature economies; however, such markets may provide
higher rates of return to investors. Many emerging market countries providing
investment opportunities for these Portfolios have experienced substantial, and
in some periods extremely high, rates of inflation for many years. Inflation and
rapid fluctuations in inflation rates have had and may continue to have adverse
effects on the economies and securities markets of certain of these countries.

          Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates
and exchange control regulations.

          FOREIGN CURRENCY TRANSACTION. (All Portfolios, except the Bantam Value
Portfolio, Equity Portfolio and Small Cap Portfolio) Currency exchange rates may
fluctuate significantly over short periods of time. They generally are
determined by the forces of supply and demand in the foreign exchange markets
and the relative merits of investments in different countries, actual or
perceived changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention of U.S. or foreign governments or central banks,
or the failure to intervene, or by currency controls or political developments
in the United States or abroad.

          LOWER RATED SECURITIES. (International Fixed-Income Portfolio and
Strategic Yield Portfolio). Each of these Portfolios may invest in securities
rated below investment grade such as those rated Ba by Moody's or BB by S&P, and
as low as the lowest rating assigned by the Rating Agencies (commonly known as
junk bonds). They may be subject to certain risks and to greater market
fluctuations than lower yielding investment grade securities. See "Appendix" for
a general description of the Rating Agencies' ratings. Although ratings may be
useful in evaluating the safety of interest and principal payments, they do not
evaluate the market value risk of these securities. The Portfolio will rely on
the Investment Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.

          You should be aware that the market values of many of these securities
tend to be more sensitive to economic conditions than are higher rated
securities and will fluctuate over time. These securities generally are
considered by the Rating Agencies to be, on balance, predominantly speculative
with respect to capacity to pay interest and repay principal in accordance with
the terms of the obligation and generally will involve more credit risk than
securities in the higher rating categories.
    

          Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of such
issuers generally is greater than is the case with the higher rated securities.
For example, during an economic downturn or a sustained period of rising
interest rates, highly leveraged issuers of these securities may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations also may be affected adversely by
specific corporate developments, forecasts, or the unavailability of additional
financing. The risk of loss because of default by the issuer is significantly
greater for the holders of these securities because such securities generally
are unsecured and often are subordinated to other creditors of the issuer.

          Because there is no established retail secondary market for many of
these securities, the Portfolio anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it generally is not as
liquid as the secondary market for higher rated securities. The lack of a liquid
secondary market may have an adverse impact on market price and yield and the
Portfolio's ability to dispose of particular issues when necessary to meet the
Portfolio's liquidity needs or in response to a specific economic event such as
a deterioration in the creditworthiness of the issuer. The lack of a liquid
secondary market for certain securities also may make it more difficult for the
Portfolio to obtain accurate market quotations for purposes of valuing its
portfolio and calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play a
greater role in valuation because less reliable, objective data may be
available.

          These securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely the
market for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.

          The Portfolio may acquire these securities during an initial offering.
Such securities may involve special risks because they are new issues. The
Portfolio has no arrangement with any persons concerning the acquisition of such
securities, and the Investment Manager will review carefully the credit and
other characteristics pertinent to such new issues.

          The credit risk factors pertaining to lower rated securities also
apply to lower rated zero coupon securities and pay-in-kind bonds, in which each
of these Portfolios may invest. Pay-in-kind bonds pay interest through the
issuance of additional securities. Zero coupon securities and pay-in-kind bonds
carry an additional risk in that, unlike bonds which pay interest throughout the
period to maturity, the Portfolio will realize no cash until the cash payment
date unless a portion of such securities are sold and, if the issuer defaults,
the Portfolio may obtain no return at all on its investment.

          SIMULTANEOUS INVESTMENTS BY OTHER PORTFOLIOS OR FUNDS. (All
Portfolios) Investment decisions for each Portfolio are made independently from
those of the other portfolios and accounts managed by the Investment Manager.
If, however, such other portfolios or accounts desire to invest in, or dispose
of, the same securities as the Portfolio, available investments or opportunities
for sales will be allocated equitably to each. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by a
Portfolio or the price paid or received by a Portfolio.


                             INVESTMENT RESTRICTIONS

   
          Each Portfolio's investment objective is a fundamental policy, which
cannot be changed without approval by the holders of a majority (as defined in
the 1940 Act) of the Portfolio's outstanding voting shares. In addition, each
Portfolio has adopted investment restrictions numbered 1 through 8 as
fundamental policies. However, the amendment of these restrictions to add an
additional Portfolio, which amendment does not substantively affect the
restrictions with respect to an existing Portfolio, will not require approval as
described in the first sentence. Investment restrictions numbered 9 through 12
are not fundamental policies and may be changed, as to a Portfolio, by vote of a
majority of the Fund's Board members at any time. None of the Portfolios may:
    


          1. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

          2. Invest in commodities, except that a Portfolio may purchase and
sell options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.

          3. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but a Portfolio may purchase and
sell securities that are secured by real estate or issued by companies that
invest or deal in real estate or real estate investment trusts.

          4. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to more than 33-1/3% of the value of the
Portfolio's total assets). For purposes of this Investment Restriction, the
entry into options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices shall not
constitute borrowing.

          5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, a Portfolio may
lend its portfolio securities in an amount not to exceed 33-1/3% of the value of
its total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the Fund's
Board.

          6. Act as an underwriter of securities of other issuers, except to the
extent a Portfolio may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.

          7. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent the activities permitted in Investment
Restrictions Nos. 2, 4, 10 and 11 may be deemed to give rise to a senior
security.

          8. Purchase securities on margin, but a Portfolio may make margin
deposits in connection with transactions on options, forward contracts, futures
contracts, including those relating to indices, and options on futures contracts
or indices.

          9. Invest in the securities of a company for the purpose of exercising
management or control, but the Portfolio will vote the securities it owns as a
shareholder in accordance with its views.

          10. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.

          11. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Prospectus and Statement of Additional Information.

          12. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 15% of the value of its net assets would be so
invested.

                                      * * *

          If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.

          In addition, each Portfolio has adopted the following policies as
non-fundamental policies. Each Portfolio intends (i) to comply with the
diversification requirements prescribed in regulations under Section 817(h) of
the Code and (ii) to comply in all material respects with insurance laws and
regulations that the Fund has been advised are applicable to investments of
separate accounts of Participating Insurance Companies. As non-fundamental
policies, these policies may be changed by vote of a majority of the Fund's
Board of Directors at any time.

<PAGE>
                                   MANAGEMENT

   
                  The Fund's Board is responsible for the management and
supervision of each Portfolio. The Board approves all significant agreements
with those companies that furnish services to the Portfolios. These companies
are as follows:

Lazard Asset Management                            Investment Manager
Lazard Freres & Co. LLC                            Distributor
Boston Financial Data Services, Inc.               Transfer Agent and
                                                   Dividend Disbursing Agent
State Street Bank and Trust Company                Custodian
    


          The Directors and officers of the Fund and their principal occupations
during the past five years are set forth below. Unless otherwise specified, the
address of each of the following persons is 30 Rockefeller Plaza, New York, New
York 10112.

<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE               Position with Fund                Principal Occupation During Past 5 Years

<S>                                 <C>                               <C>
Norman Eig* (57)                    Chairman of the Board             Vice Chairman and Managing Director (formerly
                                                                      General Partner), Lazard Freres.

Herbert W. Gullquist* (60)          President, Director               Vice Chairman and Managing Director (formerly
                                                                      General Partner), Lazard Freres; Chief Investment
                                                                      Officer of the Investment Manager.

John J. Burke (69)                  Director                          Retired; Former Vice Chairman, Director, Montana
50 Burning Tree Lane                                                  Power Company.
Butte, MT  59701

Kenneth S. Davidson (53)            Director                          Managing Partner, Davidson Capital Management
Davidson Capital Management                                           Corporation; Director, Blackthorn Fund N.V. and
Corporation                                                           Ottertail Valley Railroad.
635 Madison Avenue,
16th Floor
New York, NY  10022

Carl Frischling* (61)               Director                          Senior Partner, Kramer, Levin, Naftalis & Frankel;
Kramer, Levin, Naftalis &                                             from 1992 to 1994, Senior Partner, Reid & Priest.
Frankel
919 Third Avenue
New York, NY  10022

Lester Z. Lieberman (67)            Director                          Private Investor; Director of Dowel Associates;
1500 Mt. Kemble Avenue                                                Chairman of the Board of Trustees of Newark Beth
Morristown, NJ  07960                                                 Israel Medical Center and Irvington General Hospital;
                                                                      Member of the New Jersey State Investment Council;
                                                                      prior to 1994, Director of United Jersey Bank, N.A.
                                                                      and Clarkson University.

Richard Reiss, Jr. (54)             Director                          Managing Partner, Georgica Advisers LLC, an
Georgica Advisers LLC                                                 investment manager.
1114 Avenue of the Americas
New York, NY  10036

John Rutledge (49)                  Director                          President, Rutledge & Company, an economics and
Rutledge & Company                                                    investment advisory firm; Chairman, Claremont
One Greenwich Office Park                                             Economics Institute.
51 Weaver Street
Greenwich, CT  06831

William Katz (44)                   Director                          President and Chief Operating Officer of BBDO, an
BBDO Worldwide Network                                                advertising agency; from May 1994 to February 1996,
1285 Avenue of the Americas                                           General Manager of BBDO; prior thereto, Executive
New York, NY 10019                                                    Vice President and Senior Account Director of
                                                                      BBDO.

William G. Butterly, III (37)       Vice President, Secretary         Senior Vice President, Legal Affairs of the
                                                                      Investment Manager.

James Giallanza (32)                Treasurer                         Certified Public Accountant; Vice President of the
                                                                      Investment Manager; from August 1990 to July 1998,
                                                                      Manager, Price Waterhouse LLP.

- -----------
*    An "interested person" of the Fund as defined in the 1940 Act.
</TABLE>

          The Fund has adopted a Distribution and Servicing Plan with respect to
shares of the Portfolios. So long as the Plan remains in effect, the Directors
who are not "interested persons" of the Fund, as defined in the 1940 Act, will
be selected and nominated by the Directors who are not "interested persons" of
the Fund.

          The Fund pays its Directors its allocable share of the aggregate of a
fixed fee of $20,000 per annum and a per meeting fee of $1,000 for the Fund and
The Lazard Funds, Inc., and reimburses them for their expenses. The aggregate
amount of compensation paid to each Director by the Fund for the year ended
December 31, 1998, was as follows:

                                                         Total Compensation from
                          Aggregate Compensation               the Fund and
NAME OF DIRECTOR              FROM THE FUND               THE LAZARD FUNDS, INC.

John J. Burke                   $5,400                           $24,000
Kenneth S. Davidson             $5,400                           $24,000
Norman Eig                      N/A                              N/A
Carl Frischling                 $5,400                           $24,000
Herbert W. Gullquist            N/A                              N/A
William Katz                    $5,400                           $24,000
Lester Z. Lieberman             $5,400                           $24,000
Richard Reiss, Jr.              $5,400                           $24,000
John Rutledge                   $5,400                           $24,000


   
          The Fund does not compensate officers or Directors who are employees
or affiliated persons of the Investment Manager. As of __________, 1999, the
Fund's officers and Directors, as a group, owned less than 1% of the shares of
each Portfolio.
    

<PAGE>
INVESTMENT MANAGER AND INVESTMENT MANAGEMENT AGREEMENT

          Lazard Asset Management, 30 Rockefeller Plaza, New York, New York
10112, has entered into an investment management agreement (the "Management
Agreement") with the Fund on behalf of each Portfolio. Pursuant to the
Management Agreement, Lazard Asset Management regularly provides each Portfolio
with investment research, advice and supervision and furnishes continuously an
investment program for each Portfolio consistent with its investment objectives
and policies, including the purchase, retention and disposition of securities.

          Lazard Asset Management is a division of Lazard Freres, a New York
limited liability company, which is registered as an investment adviser with the
Commission and is a member of the New York, American and Midwest Stock
Exchanges. Lazard Freres provides its clients with a wide variety of investment
banking and related services, including investment management. It is a major
underwriter of corporate securities, conducts a broad range of trading and
brokerage activities in corporate and governmental bonds and stocks and acts as
a financial adviser to utilities. Lazard Asset Management provides investment
management services to client discretionary accounts with assets as of December
31, 1998 totaling approximately $___ billion. Its clients are both individuals
and institutions, some of whose accounts have investment policies similar to
those of several of the Portfolios. As of __________, 1999, Lazard Asset
Management held voting and dispositive power with respect to a sufficient number
of shares of each Portfolio held by client accounts as to be considered a
controlling person of such Portfolio.

          Under the terms of the Management Agreement, the Investment Manager
will pay the compensation of all personnel of the Fund, except the fees of
Directors of the Fund who are not employees or affiliated persons of the
Investment Manager. The Investment Manager will make available to the Portfolios
such of the Investment Manager's members, directors, officers and employees as
are reasonably necessary for the operations of each Portfolio, or as may be duly
elected officers or directors of the Fund. Under the Management Agreement, the
Investment Manager also pays each Portfolio's office rent and provides
investment advisory research and statistical facilities and all clerical
services relating to research, statistical and investment work. The Investment
Manager, including its employees who serve the Portfolios, may render investment
advice, management and other services to others.

          As compensation for its services, each of the Portfolios has agreed to
pay the Investment Manager an investment management fee, accrued daily and
payable monthly, at the annual rates set forth below as a percentage of the
average daily value of the net assets of the relevant Portfolio:

                                             Investment Management
NAME OF PORTFOLIO                                FEE PAYABLE

Equity Portfolio                                   .75%
Small Cap Portfolio                                .75%
Bantam Value Portfolio                             .75%
Global Equity Portfolio                            .75%
International Equity Portfolio                     .75%
International Small Cap Portfolio                  .75%
Emerging Markets Portfolio                        1.00%
International Fixed-Income Portfolio               .75%
Strategic Yield Portfolio                          .75%


          [Describe contractual expense caps] Pursuant to the terms of the
Management Agreement and these arrangements, the fees paid by each Portfolio
indicated below to the Investment Manager for the fiscal periods ended December
31, 1997 and 1998 were as follows:

   
                                      Fee Paid For Fiscal    Fee Paid For Fiscal
                                        Period Ended            Period Ended
NAME OF PORTFOLIO                      DECEMBER 31, 1997      DECEMBER 31, 1998
- -----------------                     -----------------      -----------------

Equity Portfolio1                           N/A                     0
Small Cap Portfolio2                          0                     0
International Equity Portfolio3             N/A                     0
Emerging Markets Portfolio4                   0                     0
    


- ------------------
1 Commenced operations on March 19, 1998.
2 Commenced operations on November 4, 1997.
3 Commenced operations on September 1, 1998.
4 Commenced operations on November 4, 1997.

          The Management Agreement provides that each Portfolio pays all of its
expenses that are not specifically assumed by the Investment Manager. Expenses
attributable to each Portfolio will be charged against the assets of that
Portfolio. Other expenses of the Fund will be allocated among the Portfolios in
a manner which may, but need not, be proportionate in relation to the net assets
of each Portfolio. Expenses payable by each of the Portfolios include, but are
not limited to, clerical salaries, brokerage and other expenses of executing
portfolio transactions; legal, auditing or accounting expenses; trade
association dues; taxes or governmental fees; the fees and expenses of any
person providing administrative services to the Fund; the fees and expenses of
the custodian and transfer agent of the Fund; clerical expenses of issue,
redemption or repurchase of shares of the Portfolio; the expenses and fees for
registering and qualifying securities for sale; the fees of Directors of the
Fund who are not employees or affiliated persons of the Investment Manager or
its affiliates; travel expenses of all Directors, officers and employees;
insurance premiums; and the cost of preparing and distributing reports and
notices to shareholders. In addition, shares of each Portfolio are subject to an
annual distribution and servicing fee. See "Distribution and Servicing Plan."

          As to each Portfolio, the Management Agreement is subject to annual
approval by (i) the Fund's Board or (ii) vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of such Portfolio, provided that
in either event the continuance also is approved by a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) of the Fund or the
Investment Manager, by vote cast in person at a meeting called for the purpose
of voting on such approval. The Management Agreement was approved by the sole
shareholder of each Portfolio on April 30, 1997. The Management Agreement was
last approved by the Fund's Board, including a majority of the Directors who are
not "interested persons" of any party to the Management Agreement, at a meeting
held on ____________, 1998. As to each Portfolio, the Management Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by vote
of the holders of a majority of the shares of such Portfolio, or, upon not less
than 90 days' notice, by the Investment Manager. The Management Agreement will
terminate automatically, as to the relevant Portfolio, in the event of its
assignment (as defined in the 1940 Act).

ADMINISTRATOR AND CUSTODIAN

          The Fund has engaged State Street Bank and Trust Company ("State
Street"), 225 Franklin Street, Boston, Massachusetts 02110, to provide certain
administrative services to the Portfolios.

          State Street also acts as the Fund's custodian. As the Fund's
custodian, State Street, among other things, maintains a custody account or
accounts in the name of each Portfolio; receives and delivers all assets for
each Portfolio upon purchase and upon sale or maturity; collects and receives
all income and other payments and distributions on account of the assets of each
Portfolio and disburses the Portfolio's assets in payment of its expenses. The
custodian does not determine the investment policies of any Portfolio or decide
which securities any Portfolio will buy or sell.

DISTRIBUTOR

          Lazard Freres serves as the distributor of each Portfolio's shares and
conducts a continuous offering pursuant to a "best efforts" arrangement. As the
distributor, it accepts purchase and redemption orders for Portfolio shares. In
addition, the distribution agreement obligates Lazard Freres to pay certain
expenses in connection with the offering of Portfolio shares. After the
prospectus and periodic reports have been prepared, set in type and mailed to
shareholders, Lazard Freres also will pay for the printing and distribution of
copies thereof used in connection with the offering to prospective investors.

<PAGE>
                        DETERMINATION OF NET ASSET VALUE

          Net asset value per share of each Portfolio is determined by State
Street for the Fund on each day the New York Stock Exchange is open for trading.
The New York Stock Exchange is ordinarily closed on the following national
holidays: New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Net asset value per share is determined by dividing the value of
the total assets of the Portfolio represented, less all liabilities, by the
total number of Portfolio shares outstanding.

          The value of securities, other than options listed on national
securities exchanges and debt securities maturing in 60 days or less, is
determined as of the close of regular trading on the New York Stock Exchange.
Options on stock and stock indices traded on national securities exchanges are
valued as of the close of options trading on such exchanges (which is currently
4:10 p.m., New York time). Debt securities maturing in 60 days or less are
valued at amortized cost, except where to do so would not reflect accurately
their fair value, in which case such securities would be valued at their fair
value as determined under the supervision of the Board of Directors. Each
security for which the primary market is on a national securities exchange is
valued at the last sale price on the principal exchange on which it is traded,
or, if no sales are reported on such exchange on that day, at the closing bid
price.

          Any security held by a Portfolio for which the primary market is the
Nasdaq National Market System is valued at the last sale price as quoted by such
system or, in the absence of any sale on the valuation date, at the closing bid
price. Any other unlisted security for which current over-the-counter market
quotations or bids are readily available is valued at its last quoted bid price
or, if available, the mean of two such prices.

          All other securities and other assets for which current market
quotations are not readily available are valued at fair value as determined in
good faith by the Fund's Board of Directors and in accordance with procedures
adopted by the Board of Directors. The portfolio securities of any of the
Portfolios also may be valued on the basis of prices provided by a pricing
service when such prices are believed by the Investment Manager to reflect the
fair market value of such securities.

          The Bantam Value Portfolio, International Small Cap Portfolio and
Small Cap Portfolio invest primarily in equity securities of companies with
relatively small market capitalizations. Because of the difference between the
bid and asked prices of over-the-counter securities, there may be an immediate
reduction in the net asset value of the shares of the Bantam Value Portfolio,
International Small Cap Portfolio or Small Cap Portfolio after such Portfolio
has completed a purchase of securities that will be valued by the relevant
Portfolio at their bid price, since those securities usually will have been
purchased at or near the asked price.

          Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets ordinarily is completed well before the close of
business on each business day in New York (i.e., a day on which the New York
Stock Exchange is open). In addition, European or Far Eastern securities trading
generally or in a particular country or countries may not take place on all
business days in New York. Furthermore, trading takes place in Japanese markets
on certain Saturdays and in various foreign markets on days which are not
business days in New York and on which the net asset value of a Portfolio is not
calculated. Each Portfolio calculates net asset value per share, and therefore
effects sales, redemptions and repurchases of its shares, as of the close of
regular trading on the New York Stock Exchange once on each day on which the New
York Stock Exchange is open. Such calculation may not take place
contemporaneously with the determination of the prices of the majority of the
portfolio securities used in such calculation. If events materially affecting
the value of such securities occur between the time when their price is
determined and the time when the Portfolio's net asset value is calculated, such
securities will be valued at fair value as determined in good faith by the Board
of Directors.


                             PORTFOLIO TRANSACTIONS

GENERAL

          Subject to the supervision of the Board of Directors, the Investment
Manager is primarily responsible for the investment decisions and the placing of
portfolio transactions for each Portfolio. In selecting brokers or dealers to
execute portfolio transactions on behalf of a Portfolio, the Investment Manager
seeks the best overall terms available, taking into account such factors as
price, size of order, difficulty of execution and skill required of the
executing broker. While the Investment Manager will generally seek reasonably
competitive spreads or commissions, the Portfolios will not necessarily be
paying the lowest spread or commission available.

          Purchases and sales of portfolio securities on a securities exchange
are effected by the Investment Manager through brokers who charge a negotiated
commission for their services based on the quality and quantity of execution
services provided by the broker in the light of generally prevailing rates.
Orders may be directed to any broker including, to the extent and in the manner
permitted by applicable law, Lazard Freres. In the over-the-counter market,
securities are generally traded on a "net" basis with dealers acting as
principal for their own accounts without a stated commission, although the price
of the security usually includes a profit to the dealer. In underwritten
offerings, securities are purchased at a fixed price that includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount.

          To the extent consistent with applicable provisions of the 1940 Act
and the rules adopted by the Commission thereunder, the Fund's Board has
determined that securities transactions for a Portfolio may be executed through
Lazard Freres if, in the judgment of the Investment Manager, the use of Lazard
Freres is likely to result in price and execution at least as favorable as those
of other qualified brokers or dealers, and if, in the transaction, Lazard Freres
charges the Portfolio a rate consistent with that charged to comparable
unaffiliated customers in similar transactions.

          Purchase and sale orders for securities held by a Portfolio may be
combined with those for other Portfolios in the interest of the most favorable
net results for all. When the Investment Manager determines that a particular
security should be bought for or sold by more than one Portfolio, the Investment
Manager undertakes to allocate those transactions between the participants
equitably.

RESEARCH AND STATISTICAL INFORMATION

          When it can be done consistently with the policy of obtaining the best
overall terms available, the Investment Manager may select brokers or dealers
who supply market quotations to the Fund's custodian for valuation purposes, or
who supply research, market and statistical information to the Investment
Manager. Although such research, market and statistical information may be
useful to the Investment Manager, it is only supplementary to the Investment
Manager's own research efforts, since the information must still be analyzed,
weighed and reviewed by the Investment Manager's staff. Information so received
will be in addition to, and not in lieu of, the services required to be
performed by the Investment Manager under the Management Agreement with the Fund
on behalf of the Portfolios. Such information may be useful to the Investment
Manager in providing services to both the Portfolios and clients other than the
Portfolios, and, conversely, supplemental information obtained by the placement
of business of other clients may be useful to the Investment Manager in carrying
out its obligations to the Portfolios. The total dollar amount of transactions
pursuant to which brokerage was directed in consideration of research services
provided during the year ended December 31, 1998, was $__________, and the
related commissions were $__________. In addition, when it can be done
consistently with the above stated policy, the Investment Manager may place
orders with brokers and dealers (i) who refer persons to the Investment Manager
for the purpose of purchasing shares of the Portfolios or (ii) who provide
services to the Fund at no fee or for a reduced fee.

BROKERAGE COMMISSIONS

   
          In connection with its portfolio securities transactions for the
fiscal periods ended December 31, 1997 and 1998, each Portfolio indicated below
paid brokerage commissions as follows:
    


<TABLE>
<CAPTION>
   
PERIOD ENDED DECEMBER 31, 1997
                                                                                                           Percentage of
                                                            Amount of               Percentage of          Total Brokerage
                                                            Brokerage               Total Brokerage        Transactions
                                    Brokerage               Commissions Paid        Commissions Paid       Effected Through
Name of Portfolio                   Commissions Paid        to Lazard Freres        to Lazard Freres       Lazard Freres
    

<S>                                 <C>                           <C>                   <C>                    <C>  
Small Cap Portfolio                 $  __________                -0-                    0.00%                  0.00%
Emerging Markets Portfolio          $  __________                -0-                    0.00%                  0.00%



   
PERIOD ENDED DECEMBER 31, 1998
                                                                                                           Percentage of
                                                            Amount of               Percentage of          Total Brokerage
                                                            Brokerage               Total Brokerage        Transactions
                                    Brokerage               Commissions Paid        Commissions Paid       Effected Through
Name of Portfolio                   Commissions Paid        to Lazard Freres        to Lazard Freres       Lazard Freres

Equity Portfolio                      $ _______              $  _______                _______%               _______%
Small Cap Portfolio                   $ _______              $  _______                _______%               _______%
International Equity Portfolio        $ _______              $  _______                _______%               _______%
Emerging Markets Portfolio            $ _______              $  _______                _______%               _______%
</TABLE>
    


          The Bantam Value, Global Equity, International Fixed-Income,
International Small Cap and Strategic Yield Portfolios had not commenced
operations.


                            BUYING AND SELLING SHARES

          GENERAL. INDIVIDUALS MAY NOT PURCHASE ORDERS DIRECTLY WITH THE FUND.
INDIVIDUALS SHOULD CONSULT A PARTICIPATING INSURANCE COMPANY, THE ADMINISTRATOR
OF AN ELIGIBLE PLAN OR A FINANCIAL INTERMEDIARY FOR INFORMATION ON THE PURCHASE
OF PORTFOLIO SHARES. THE FUND DOES NOT ISSUE SHARE CERTIFICATES.

          Fund shares are sold on a continuous basis. Net asset value ordinarily
is determined as of 4:00 p.m. (New York Time) on each day during which the New
York Stock Exchange is open for trading. For purposes of determining net asset
value, options and futures contracts will be valued 15 minutes after the close
of trading on the floor of the New York Stock Exchange. Net asset value per
share is computed by dividing the value of the net assets of each Portfolio
(i.e., the value of its assets less liabilities) by the total number of shares
outstanding. Equity securities typically are valued based on market value, or
where market quotations are not readily available, based on fair value as
determined in good faith by the Board. Debt securities having remaining
maturities of 60 days or less are valued on an amortized cost basis unless the
Board determines that such method does not represent fair value. Other debt
securities are valued using available market quotations or at fair value which
may be determined by one or more pricing services.

          Portfolio shares may be redeemed at any time by the separate accounts
of the Participating Insurance Companies or by Eligible Plans. INDIVIDUALS MAY
NOT PLACE REDEMPTION ORDERS DIRECTLY WITH THE FUND. The value of the shares
redeemed may be more or less than their original cost, depending on the
Portfolio's then-current net asset value.

          The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in proper
form, except as provided by the rules of the Commission.

          REDEMPTION COMMITMENT. The Fund has committed to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of a Portfolio's net
assets at the beginning of such period. Such commitment is irrevocable without
the prior approval of the Commission. In the case of requests for redemption in
excess of such amount, the Fund's Board reserves the rights to make payments in
whole or part in securities (which may include non-marketable securities) or
other assets of the Portfolio in case of an emergency or any time a cash
distribution would impair the liquidity of the Portfolio to the detriment of the
existing shareholders. In such event, the securities would be valued in the same
manner as the Portfolio's investments are valued. If the recipient sold such
securities, brokerage charges might be incurred.

          SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b) when
trading in the markets the Portfolio ordinarily utilizes is restricted, or when
an emergency exists as determined by the Commission so that disposal of the
Portfolio's investments or determination of its net asset value is not
reasonably practicable, or (c) for such other periods as the Commission by order
may permit to protect the Portfolio's shareholders.


                         DISTRIBUTION AND SERVICING PLAN

          Portfolio Shares are subject to a Distribution and Servicing Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. Under the Distribution and
Servicing Plan, the Fund pays Lazard Freres for advertising, marketing and
distributing each Portfolio's shares and for the provision of certain services
to the holders of shares a fee at an annual rate of .25% of the Portfolio's
average daily net assets. Lazard Freres may make payments to Participating
Insurance Companies for providing these services to Policy owners or to certain
financial institutions, securities dealers and other industry professionals
(collectively, "Service Agents") for providing these services to Eligible Plan
participants. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the Fund
and providing reports and other information, and services related to the
maintenance of shareholder accounts. The fee payable for such services is
intended to be a "service fee" as defined in Conduct Rules of the NASD.
Depending on a Participating Insurance Company's corporate structure and
applicable state law, Lazard Freres may make payments to the Participating
Insurance Company's affiliated broker-dealer or other affiliated company rather
than the Participating Insurance Company itself. From time to time, Lazard
Freres may defer or waive receipt of fees under the Distribution and Servicing
Plan while retaining the ability to be paid by the Fund under the Distribution
and Servicing Plan thereafter. The fees payable to Lazard Freres under the
Distribution and Servicing Plan for advertising, marketing and distributing
shares and for payments to Participating Insurance Companies and Service Agents
are payable without regard to actual expenses incurred.

          Rule 12b-1 (the "Rule") adopted by the Commission under the 1940 Act
provides, among other things, that an investment company may bear expenses of
distributing its shares only pursuant to a plan adopted in accordance with the
Rule. The Fund's Board has adopted such a plan (the "Distribution and Servicing
Plan"), pursuant to which the Fund pays Lazard Freres for advertising, marketing
and distributing shares of the Portfolios and for the provision of certain
services to the holders of shares of the Portfolios. Lazard Freres may make
payments to Service Agents for providing these services to Policy owners and
Eligible Plan participants. The Fund's Board determined, in the exercise of its
business judgment, that the Fund's Distribution and Servicing Plan is reasonably
likely to benefit the Fund, Policy owners and Eligible Plan participants.

          A quarterly report of the amounts expended under the Distribution
Servicing Plan, and the purposes for which such expenditures were incurred, must
be made to the Board for its review. In addition, the Distribution and Servicing
Plan provides that it may not be amended to increase materially the costs which
holders of shares of a Portfolio may bear for distribution pursuant to the
Distribution and Servicing Plan without such shareholders' approval and that
other material amendments of the Distribution and Servicing Plan must be
approved by the Board and by the Board members who are not "interested persons"
(as defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Distribution and Servicing Plan or in
any agreements entered into in connection with the Distribution and Servicing
Plan, by vote cast in person at a meeting called for the purpose of considering
such amendments. The Distribution and Servicing Plan is subject to annual
approval by such vote cast in person at a meeting called for the purpose of
voting on the Distribution and Servicing Plan. The Distribution and Servicing
Plan was last so approved on __________, 1998. As to each Portfolio, the
Distribution and Servicing Plan may be terminated at any time by vote of a
majority of the Board members who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Distribution and
Servicing Plan or in any agreements entered into in connection with the
Distribution and Servicing Plan or by vote of the holders of a majority of such
Portfolio's shares.

          For the fiscal period ended December 31, 1998, each Portfolio
indicated below paid the Distributor the amount set forth below under the
Distribution and Servicing Plan:

                                             Amount Paid to Distributor
                                          Under Distribution and Servicing
                                                Plan For Fiscal Period
NAME OF PORTFOLIO                              ENDED DECEMBER 31, 1998         
- -----------------                           --------------------------

Equity Portfolio                                  $________
Small Cap Portfolio                               $________
International Equity Portfolio                    $________
Emerging Markets Portfolio                        $________

<PAGE>
                           DIVIDENDS AND DISTRIBUTIONS

          The Fund intends to declare as a dividend on the outstanding shares of
each of the International Fixed-Income Portfolio and Strategic Yield Portfolio
substantially all of the Portfolio's net investment income at the close of each
business day to shareholders of record at 4:00 p.m. (New York time). Net
investment income for a Saturday, Sunday or holiday will be included in the
dividend declared on the previous business day. Dividends declared on the shares
of the International Fixed-Income Portfolio and Strategic Yield Portfolio
ordinarily will be paid on the last business day of each month. Shareholders who
redeem all their shares of any of these Portfolios prior to a dividend payment
date will receive, in addition to the redemption proceeds, any dividends that
are declared but unpaid. Shareholders of any of these Portfolios who redeem only
a portion of their shares will be entitled to all dividends that are declared by
unpaid on the redeemed shares on the next dividend payment date.

          Dividends from net investment income on the Equity Portfolio,
International Equity Portfolio, Small Cap Portfolio, International Small Cap
Portfolio, Emerging Markets Portfolio, Global Equity Portfolio and Bantam Value
Portfolio generally will be declared and paid at least annually and may be
declared and paid twice annually.

          Investment income for a Portfolio includes, among other things,
interest income, accretion of market and original issue discount and
amortization of premium and, in the case of the Equity Portfolio, International
Equity Portfolio, Small Cap Portfolio, International Small Cap Portfolio,
Emerging Markets Portfolio, Global Equity Portfolio and Bantam Value Portfolio,
also would include dividends.

          With respect to all of the Portfolios, net realized capital gains, if
any, will be distributed at least annually and may be declared and paid twice
annually. If a dividend check mailed to a shareholder who elected to receive
dividends and/or capital gain distributions in cash is returned as undeliverable
by the postal or other delivery service, such shareholder's distribution option
automatically will be converted to all dividends and other distributions
reinvested in additional shares. NO INTEREST WILL ACCRUE ON AMOUNTS REPRESENTED
BY UNCASHED DISTRIBUTION OR REDEMPTION CHECKS. Each Portfolio forwards to the
Fund's custodian the monies for dividends to be paid in cash on the payment
date.


                                    TAXATION

          Management believes that each of the Equity Portfolio, International
Equity Portfolio, Emerging Markets Portfolio and Small Cap Portfolio has
qualified for the fiscal year ended December 31, 1998 as a "regulated investment
company" under Subchapter M of the Code. It is intended that each such Portfolio
will continue to so qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders. Each Portfolio will
be treated as a separate entity for tax purposes and thus the provisions of the
Code applicable to regulated investment companies generally will be applied to
each Portfolio separately, rather than to the Fund as a whole. As a regulated
investment company, a Portfolio will pay no Federal income tax on net investment
income and net realized securities gains to the extent that such income and
gains are distributed to shareholders in accordance with applicable provisions
of the Code. To qualify as a regulated investment company, the Portfolio must
distribute at least 90% of its net income (consisting of net investment income
and net short-term capital gain) to its shareholders and meet certain asset
diversification and other requirements. If the Portfolio did not qualify as a
regulated investment company, it would be treated for tax purposes as an
ordinary corporation subject to Federal income tax. The term "regulated
investment company" does not imply the supervision of management of investment
practices or policies by any government agency.

          Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of the shares below the cost
of the investment. Such a dividend or distribution would be a return of
investment in an economic sense, although taxable as stated in the Prospectus.
In addition, the Code provides that if a shareholder holds shares of a Portfolio
for six months or less and has received a capital gain distribution with respect
to such shares, any loss incurred on the sale of such shares will be treated as
long-term capital loss to the extent of the capital gain distribution received.

          Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, all or a portion of the gain or
loss realized from the disposition of foreign currency, non-U.S. dollar
denominated debt instruments, and certain financial futures and options, may be
treated as ordinary income or loss under Section 988 of the Code. In addition,
all or a portion of the gain realized from the disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of the
Code. Finally, all or a portion of the gain realized from engaging in
"conversion transactions" may be treated as ordinary income under Section 1258
of the Code. "Conversion transactions" are defined to include certain forward,
futures, option and straddle transactions, transactions marketed or sold to
produce capital gains, or transactions described in Treasury regulations to be
issued in the future.

          Under Section 1256 of the Code, gain or loss realized by a Portfolio
from certain financial futures and options transactions (other than those taxed
under Section 988 of the Code) will be treated as 60% long-term capital gain or
loss and 40% short-term capital gain or loss. Gain or loss will arise upon the
exercise or lapse of such futures and options as well as from closing
transactions. In addition, any such futures or options remaining unexercised at
the end of the Portfolio's taxable year will be treated as sold for their then
fair market value, resulting in additional gain or loss to the Portfolio
characterized in the manner described above.

          Offsetting positions held by a Portfolio involving financial futures
and options may constitute "straddles." Straddles are defined to include
"offsetting positions" in actively traded personal property. The tax treatment
of straddles is governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Sections 988 and
1256 of the Code. As such, all or a portion of any short- or long-term capital
gain from certain "straddle" transactions may be recharacterized as ordinary
income.

          If a Portfolio were treated as entering into straddles by reason of
its future or options transactions, such straddles could be characterized as
"mixed straddles" if the futures or options transactions comprising such
straddles were governed by Section 1256 of the Code. The Portfolio may make one
or more elections with respect to "mixed straddles." Depending upon which
election is made, if any, the results to the Portfolio may differ. If no
election is made, to the extent the straddle rules apply to positions
established by the Portfolio, losses realized by the Portfolio will be deferred
to the extent of unrealized gain in any offsetting positions. Moreover, as a
result of the straddle and conversion transaction rules, short-term capital loss
on straddle positions may be recharacterized as long-term capital loss, and
long-term capital gain may be recharacterized as short-term capital gain or
ordinary income.

          The Taxpayer Relief Act of 1997 included constructive sale provisions
that generally apply if a Portfolio either (1) holds an appreciated financial
position with respect to stock, certain debt obligations, or partnership
interests ("appreciated financial position") and then enters into a short sale,
futures or forward contract, or offsetting notional principal contract
(collectively, a "Contract") with respect to the same or substantially identical
property or (2) holds an appreciated financial position that is a Contract and
then acquires property that is the same as, or substantially identical to, the
underlying property. In each instance, with certain exceptions, the Portfolio
generally will be taxed as if the appreciated financial position were sold at
its fair market value on the date the Portfolio enters into the financial
position or acquires the property, respectively. Transactions that are
identified hedging or straddle transactions under other provisions of the Code
can be subject to the constructive sale provisions.

          Income received by a Portfolio from sources within foreign countries
may be subject to withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine the effective rate of
foreign tax in advance since the amount of each Portfolio's assets to be
invested in various countries is not known.

          If a Portfolio invests in an entity that is classified as a "passive
foreign investment company" ("PFIC") for Federal income tax purposes, the
operation of certain provisions of the Code applying to PFICs could result in
the imposition of certain Federal income taxes on the Portfolio. In addition,
gain realized from the sale, other disposition or marking-to-market of PFIC
securities may be treated as ordinary income under Section 1291 or Section 1296
of the Code.

          Investment by a Portfolio in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount, timing
and character of distributions to shareholders by causing a Portfolio to
recognize income prior to the receipt of cash payments. For example, the
Portfolio could be required to recognize annually a portion of the discount (or
deemed discount) at which such securities were issued and to distribute an
amount equal to such income in order to maintain its qualification as a
regulated investment company. In such case, the Portfolio may have to dispose of
securities which it might otherwise have continued to hold in order to generate
cash to satisfy these distribution requirements.

          Shareholders of the Fund will be variable annuity and variable life
insurance separate accounts established by insurance companies to fund Policies
and Eligible Plans. The Secretary of the Treasury may in the future issue
additional regulations or revenue rulings that will prescribe the circumstances
in which a Policy owner's control of the investments of a separate account may
cause the Policy owner, rather than the insurance company, to be treated as the
owner of assets of the separate account. Failure to comply with Section 817(h)
of the Code or any regulation thereunder, or with any regulations or revenue
rulings on Policy owner control, if promulgated, would cause earnings regarding
a Policy owner's interest in the separate account to be includable in the Policy
owner's gross income in the year earned.

          The Fund will not report dividends paid to Eligible Plans to the
Internal Revenue Service ("IRS"). Generally, distributions from Eligible Plans,
except those representing returns of non-deductible contributions thereto, will
be taxable as ordinary income and, if made prior to the time the participant
reaches ages 59-1/2, generally will be subject to an additional tax equal to 10%
of the taxable portion of the distribution. If the distribution from an Eligible
Plan (other than certain governmental or church plans) for any taxable year
following the year in which the participant reaches age 70-1/2 is less than the
"minimum required distribution" for that taxable year, an excise tax equal to
50% of the deficiency may be imposed by the IRS. The administrator, trustee or
custodian of such a Plan will be responsible for reporting distributions from
the Plan to the IRS. Participants in Eligible Plans will receive a disclosure
statement describing the consequences of a distribution from the Plan from the
administrator, trustee or custodian of the Plan prior to receiving distribution.
Moreover, certain contributions to an Eligible Plan in excess of the amounts
permitted by law may be subject to an excise tax. For more information
concerning the Federal income tax consequences, Policy owners should refer to
the prospectus for their contracts or policies and Eligible Plan participants
should consult the Plan's administrator or trustee.


                             PERFORMANCE INFORMATION

          Current yield is computed pursuant to a formula which operates as
follows: The amount of the relevant Portfolio's expenses accrued for the 30-day
period (net of reimbursements) is subtracted from the amount of the dividends
and interest earned (computed in accordance with the regulatory requirements) by
such Portfolio during the period. That result is then divided by the product of:
(a) the average daily number of such Portfolio's shares outstanding during the
period that were entitled to receive dividends, and (b) the net asset value per
share on the last day of the period less any undistributed earned income per
share reasonably expected to be declared as a dividend shortly thereafter. The
quotient is then added to 1, and that sum is raised to the 6th power, after
which 1 is subtracted. The current yield is then arrived at by multiplying the
result by 2. A Portfolio's "actual distribution rate" is computed in the same
manner as yield, except that actual income dividends declared per share during
the period in question is substituted for net investment income per share.

          Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000 payment
made at the beginning of the period (assuming the reinvestment of dividends and
distributions), dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in the period) and
subtracting 1 from the result.

                  The average annual total return for the indicated Portfolio
and periods ended December 31, 1998 (the date listed in the footnote is the
beginning of the period for the indicated Portfolio) was as follows:

                                         Average Annual Total Returns
                                              For Periods Ended
                                              December 31, 1998


                                                              Since
NAME OF PORTFOLIO                         1-YEAR             INCEPTION

Equity                                        N/A               ____%(1)
International Equity                          N/A               ____%(2)
Small Cap                                   ____%               ____%(3)
Emerging Markets                            ____%               ____%(4)

- ------------------
(1)  Commenced operations on March 19, 1998.
(2)  Commenced operations on September 1, 1998.
(3)  Commenced operations on November 4, 1997.
(4)  Commenced operations on November 4, 1997.


          Total return is calculated by subtracting the amount of the relevant
Portfolio's net asset value per share at the beginning of a stated period from
the net asset value per share at the end of the period (after giving effect to
the reinvestment of dividends and distributions during the period), and dividing
the result by the net asset value per share at the beginning of the period.

          The total return for the indicated Portfolio from inception through
December 31, 1998 (the date listed in the footnote is the date operations
commenced) was as follows:

                                                Total Return Through
                                                  December 31, 1998

Name of Portfolio

Equity                                                ______%(1)
International Equity                                  ______%(2)
Small Cap                                             ______%(3)
Emerging Markets                                      ______%(4)

- -------------------

(1)  March 19, 1998.
(2)  September 1, 1998.
(3)  November 4, 1997.
(4)  November 4, 1997.


          A Portfolio's yield, actual distribution rate and total return are not
fixed and will fluctuate in response to prevailing market conditions or as a
function of the type and quality of the securities held by such Portfolio, its
average portfolio maturity and its expenses. Yield, actual distribution rate and
total return information is useful in reviewing a Portfolio's performance and
such information may provide a basis for comparison with other investments but
such information may not provide a basis for comparison with certificates of
deposit, which pay a fixed rate of return, or money market funds, which seek a
stable net asset value. Investment return and principal value of an investment
in a Portfolio will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.

          No performance data is provided for the Bantam Value, Global Equity,
International Fixed-Income, International Small Cap and Strategic Yield
Portfolios which had not commenced operations as of the date performance
information was calculated.

          From time to time, the Fund may compare a Portfolio's performance
against one or more broad-based indices or data from Lipper Analytical Services,
Inc., Money Magazine, Morningstar, Inc. and other industry publications. In
addition, the Fund may compare a Portfolio's performance against inflation with
the performance of other instruments against inflation, such as short-term
Treasury Bills (which are direct obligations of the U.S. Government) and
FDIC-insured bank money market accounts.

                    INFORMATION ABOUT THE FUND AND PORTFOLIOS

          As of __________, 1999, the following shareholders owned beneficially
or of record 5% or more of the indicated Portfolio's outstanding shares:

                                                  PERCENTAGE OF TOTAL
NAME AND ADDRESS                                   SHARES OUTSTANDING

[To be provided]


          A shareholder who beneficially owns, directly or indirectly, more than
25% of the Fund's voting securities may be deemed a "control person" (as defined
in the 1940 Act) of the Fund.

          Generally, all shares have equal voting rights and will be voted in
the aggregate. As used in this Statement of Additional Information, the vote of
a majority of the outstanding voting securities means, with respect to the Fund
or a Portfolio, the vote of the lesser of (i) 67% of the shares represented at a
meeting if the holders of more than 50% of the outstanding shares of the Fund or
Portfolio, as the case may be, are present in person or by proxy, or (ii) more
than 50% of the outstanding shares of the Fund or Portfolio, as the case may be.
Shareholders are entitled to one vote for each full share held, and fractional
votes for fractional shares held.

          Each share of a Portfolio is entitled to such dividends and
distributions out of the income earned on the assets belonging to that Portfolio
as are declared in the discretion of the Fund's Board of Directors. In the event
of the liquidation of a Portfolio, shares of the Portfolio are entitled to
receive the assets of that Portfolio that are available for distribution.

          Shareholders are not entitled to any preemptive rights. All shares,
when issued, will be fully paid and non-assessable by the Fund.


                        COUNSEL AND INDEPENDENT AUDITORS

          Legal matters in connection with the issuance of the shares of the
Fund offered hereby will be passed upon by Stroock & Stroock & Lavan LLP, 180
Maiden Lane, New York, New York 10038-4982.

          ___________________________________________________________________,
has been selected as the independent auditors for the Fund.

<PAGE>
                                    APPENDIX

          Description of certain ratings.

S&P

BOND RATINGS

                                       AAA

          Bonds rated AAA have the highest rating assigned to a debt obligation.
Capacity to pay interest and repay principal is extremely strong.

                                       AA

          Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.

                                        A

          Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.

                                       BBB

          Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.

                                       BB

          Bonds rated BB have less near-term vulnerability to default than other
speculative grade bonds. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payment.

                                        B

          Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.

                                      CCC

          Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions to meet timely payments of
interest and repayment of principal. In the event of adverse business, financial
or economic conditions, they are not likely to have the capacity to pay interest
and repay principal.

                                       CC

          The rating CC is typically applied to bonds subordinated to senior
debt which is assigned an actual or implied CCC rating.

                                        C

          The rating C is typically applied to bonds subordinated to senior debt
which is assigned an actual or implied CCC- rating.

                                        D

          Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.

          S&P's letter ratings may be modified by the additional of a plus or a
minus sign, which is used to show relative standing within the major ratings
categories, except in the AAA (Prime Grade) category.

COMMERCIAL PAPER RATINGS

          An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.

                                       A-1

          This designation indicates the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted within a plus sign (+)
designation.

                                       A-2

          Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.

Moody's

BOND RATINGS

                                       Aaa

          Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

                                       Aa

          Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities of fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

                                        A

          Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.

                                       Baa

          Bond which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

                                       Ba

          Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

                                        B

          Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

                                       Caa

          Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

                                       Ca

          Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.

                                        C

          Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

          Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
the categories below B. The modifier 1 indicates a rating for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.

COMMERCIAL PAPER RATINGS

          The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.

          Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
<PAGE>

                         LAZARD RETIREMENT SERIES, INC.

                            PART C. OTHER INFORMATION
   
Item 23. Exhibits
     
         (a)(1)  Articles of Incorporation1

         (a)(2)  Articles of Amendment1
     
         (b)     By-Laws, as amended1

         (d)     Investment Management Agreement1

         (e)     Distribution Agreement1
 
         (g)     Custody Agreement1

         (h)(1)  Administration Agreement1  

         (h)(2)  Form of Fund Participation Agreement1  

         (i)     Opinion, including consent, of Stroock & Stroock & Lavan
                 LLP1

         (j)     Consent of Independent Auditors2

         (m)     Distribution and Servicing Plan1

         (n)     Financial Data Schedules2

- ------------------------
   1    Incorporated by reference from Registrant's Pre-Effective Amendment
        No. 1 filed with the Securities and Exchange Commission on May 19, 1997.

   2    To be filed by amendment.
    

Item 24.  Persons Controlled by or under Common Control with Registrant.
          None.

   

Item 25.  Indemnification
    

          Reference is made to Article EIGHTH of the Registrant's Articles of
Incorporation filed as Exhibit 1 and to Section 2-418 of the Maryland General
Corporation Law. The application of these provisions is limited by Article VIII
of the Registrant's By-Laws filed as Exhibit 2 and by the following undertaking
set forth in the rules promulgated by the Securities and Exchange Commission:

          Insofar as indemnification for liabilities 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 such Act and is, therefore,
          unenforceable. In the event that a claim for indemnificaetion against
          such liabilities (other than the payment by the registrant of expenses
          incurred or paid by a director, officer or controlling person of the
          registrant in the successful defense of any action, suit or
          proceeding) is asserted by such director, officer or controlling
          person in connection with the securities being registered, the
          registrant will unless in the opinion of its counsel the matter has
          been settled by controlling precedent, submit to a court of
          appropriate jurisdiction the question whether such indemnification by
          it is against public policy as expressed in such Act and will be
          governed by the final adjudication of such issue.

          Reference also is made to the Investment Management Agreements and the
Distribution Agreement filed as Exhibits 5 and 6, respectively.

   
Item 26. Business and Other Connections of Investment Advisers.
    
         The description of the Investment Manager under the Captions
         "Management of the Fund and Portfolios" in the Prospectus and
         "Management" in the Statement of Additional Information consituting
         Parts A and B, respectively, of this Registration Statement is
         incorporated by reference herein. Following is a list of the General
         Members of Lazard Freres & Co. LLC, together with thier other business
         connections which are of substantial nature during the previous two
         years:

                          Name and Address of Company with
Name of General Member    which General Member is Connected         Capacity
- ----------------------    ---------------------------------         --------

Eileen D. Alexanderson    None

William Araskog           None

F. Harlan Batrus          Mutual of America Capital
                            Management Corp.                       Director
                          666 Fifth Avenue
                          New York, New York 10103

                          Ryan Labs, Inc.                          Director
                          350 Albany Street
                          New York, New York 10280

Gerardo Braggiotti        Lazard S.P.A.                        Managing Director
                          Via dell'Orso, 2
                          20121 Milano, Italia

                          Lazard Brothers & Co. Ltd.           Managing Director
                          21 Moorfields
                          London EC2P 2HT
                          England

                          Centrale of Mediobanca                   Director
                          S.P.A. (prior to 12/97)
                          Milano Italia

Patrick J. Callahan, Jr.  Berry Metal Co.                          Director
                          Route 68
                          Harmony, Pennsylvania 16307

                          Michigan Wheel Corp.                     Director
                          1501 Buchanan Avenue
                          Southwest Grand Rapids, Michigan 49507

                          Rotation Dynamics Corp.                  Director
                          15 Salt Creek Lane
                          Suite 316
                          Hinsdale, Illinois 60521

                          Somerset Technologies, Inc.              Director
                          P.O. Box 791
                          New Brunswick, New Jersey 08903

Michel David-Weill       The Dannon Company, Inc.                  Director
                         22-11 38th Avenue
                         Long Island City, New York 11101

                         Eurafrance                                President and
                         12 Avenue Percier                         Chairman of
                         75008 Paris, France                       the Board

                         Exor Group                                Director
                         19 Avenue Montaigne
                         75008 Paris, France

                         Euralux                                   Director
                         8 Rue Ste-Zithe
                         2763 Luxembourg

                         Group Danone                              Director
                         7 Rue de Teheran
                         75008 Paris, France

                         Instituto Finanziario                     Director
                         Industriale S.P.A.

                         ITT Industries, Inc.                      Director
                         320 Park Avenue
                         New York, New York 10022

                         La France S.A.                            Director
                         7 & 9 Boulevard Haussmann
                         75009 Paris, France

                         La France-Iard                            Director
                         7 & 9 Boulevard Haussmann
                         75009 Paris, France

                         La France-Vie                             Director
                         7 & 9 Boulevard Haussmann
                         75009 Paris, France

                         Lazard Asia Ltd.                          Director
                         80 Raffles Place
                         #22-20 VOB Plaza II
                         Singapore 048624

                         Lazard Brothers & Co., Limited            Director
                         21 Moorfields
                         London EC2P-2HT
                         England

                         Pearson plc                               Director
                         Millbank Tower
                         London SWI P4QZ

                         Publicis S.A.                             Director
                         133 Champs-Ezlysees
                         75008 Paris, France

                         S.A. de la Rue Imperiale de Lyo           Director
                         49, Rue de la Republique
                         Lyon (Rhone) 69002
                         France

John V. Doyle            None

Thomas F. Dunn           None

Norman Eig               Lazard Freres & Co. LLC                   Vice Chairman
                         30 Rockefeller Plaza
                         New York, New York 10020

                         The Lazard Funds, Inc.                    Director,
                         30 Rockefeller Plaza                      Chairman
                         New York, New York 10020

                         Lazard Retirement Series, Inc.            Director,
                         30 Rockefeller Plaza                      Chairman
                         New York, New York 10020

                         Lazard Investment Funds                   Director
                         Limited
                         20/22 Lower Hatch Street
                         Dublin 2
                         Ireland

                         Lazard Pension Management, Inc.           Director,
                         30 Rockefeller Plaza                   Chief Investment
                         New York, New York 10020                  Officer &
                                                                   Treasurer

                         Lazard Asset Management                   Director
                         Holdings Limited
                         21 Moorfields
                         London EC2P 2HT
                         England

                         Lazard Asset Management                   Director
                         Pacific Co.
                         Level 49, Governor Phillip Tower
                         1 Farrer Place
                         Sydney NSW 2000
                         Australia

                         Lazard Asset Management                   Director
                         Limited
                         21 Moorfields
                         London EC2P 2HT
                         England

                         Lazard Asset Management                   Member of the
                         (Deutschland) GmbH                        Supervisory
                         Ulmenstrasse 37-39                        Board
                         60325 Frankfurt am Main 
                         Federal Republic of Germany

                         Lazard Asset Management                   Managing
                         (Deutschland) Gesellschaft                Director
                         fur Beteiligungen mbH
                         Ulmenstrasse 37-39
                         60325 Frankfurt am Main
                         Federal Republic of Germany

Richard P. Emerson       None

Peter R. Ezersky         None

Eli H. Fink              Deloitte & Touche                         Partner,
                         (Prior to 4/98)                           Vice Chairman
                         1633 Broadway
                         New York, New York 10019

Jonathan F. Foster       None

Robert P. Freeman        The Fortress Group, Inc.                   Director
                         1650 Tyson Blvd. Suite 600
                         McLean, VA  22102

                         ARV Assisted Living, Inc.                  Director
                         245 Fischer Ave., Suite D-1
                         Costa Mesa, CA  92626

Albert H. Garner         None

James S. Gold            Smart & Final Inc.                        Director
                         4700 South Boyle Avenue
                         Los Angeles, California 90058

                         Hain Food Group                           Director
                         59 Charles Lindbergh Blvd.
                         Uniondale, NY  11553

Jeffrey A. Golman        None

Steven J. Golub          Mineral Technologies Inc.                 Director
                         405 Lexington Avenue
                         New York, New York 10174-1901

Herbert W. Gullquist     Lazard Freres & Co., LLC                  Vice Chairman
                         30 Rockefeller Plaza
                         New York, New York 10020

                         The Lazard Funds, Inc.                    Director,
                         30 Rockefeller Plaza                      President
                         New York, New York 10020

                         Lazard Retirement Series                  Director,
                         30 Rockefeller Plaza                      President
                         New York, New York 10020

                         Lazard Far East Investors                 Director
                         Limited
                         Lazard House, P.O. Box 108
                         2-6 Church Street, St. Helier
                         Jersey, JE4 8QD Channel Islands

                         Lazard Asset Management (Canada), Inc.    Director,
                         30 Rockefeller Plaza                      President
                         New York, New York 10020

                         Lazard Pension Management, Inc.           Director,
                         30 Rockefeller Plaza                      President
                         New York, New York 10020

                         Lazard Asset Management                   Director
                         Holdings Limited
                         21 Moorfields
                         London EC2P 2HT
                         England

                         Lazard Asset Management                   Director,
                         Pacific Co.                               Chairman
                         Level 49, Governor Phillip Tower
                         1 Farrer Place
                         Sydney NSW 2000
                         Australia

                         Lazard Asset Management                   Director
                         Limited
                         21 Moorfields
                         London EC2P 2HT
                         England

                         Lazard London International               Director
                         Investment Mgmt Limited
                         21 Moorfields
                         London EC2P 2HT
                         England

                         Lazard Asset Management                   Member of the
                         (Deutschland) GmbH                        Supervisory
                         Ulmenstrasse 37-39                        Board
                         60325 Frankfurt am Main
                         Federal Republic of Germany

                         Lazard Asset Management                   Managing
                         (Deutschland) Gesellschaft                Director
                         fur Beteiligungen mbH
                         Ulmenstrasse 37-39
                         60325 Frankfurt am Main
                         Federal Republic of Germany

Thomas R. Haack          None

Ira O. Handler           None

Yasushi Hatakeyama       None

Melvin L. Heineman       Lazard Freres & Co., Ltd                  Director
                         21 Moorfields
                         London EC2P 2HT
                         England

                         Lazard Asset Management Pacific Co.       Director
                         Level 49, Governor Phillip Tower
                         1 Farrer Place
                         Sydney NSW 2000
                         Australia

Robert E. Hougie         None

Kenneth M. Jacobs        National Imaging Associates, Inc.         Director

                         ARV Assisted Living, Inc.                 Director
                         245 Fischer Ave., Suite D-1
                         Costa Mesa, CA  92626

                         Patient Education Media, Inc.             Director
                         1271 Avenue of the Americas
                         New York, New York 10020
                         Tyco Toys, Inc.                           Director
                         6000 Midlantic Drive
                         Mount Laurel, New Jersey 08054

James L. Kempner         Lazard Capital Markets
                         21 Moorefields
                         London EC2P 2HT
                         England

Larry A. Kohn            None

Lee O. Kraus             None

Sandra A. Lamb           None

David C. Lee             Young Broadcasting Inc.                   Director
                         599 Lexington Ave.
                         New York, New York  10022

Michael S. Liss          Celebrity Sightings                       Director

William R. Loomis, Jr.   Englehard Hanovia Inc.                    Director
                         280 Park Avenue
                         3rd Floor - West Wing
                         New York, New York 10017

                         Minorco S.A.                              Director
                         Boite Postal 185
                         L-2011 Luxembourg

                         Minorco (U.S.A.) Inc.                     Director
                         30 Rockefeller Plaza
                         Suite 4212
                         New York, NY 10112

                         Terra Industries, Inc.                    Director
                         600 4th Street
                         Sioux City, Iowa 51101

J. Robert Lovejoy        Lazard Capital Markets
                         21 Moorefields
                         London EC2P 2HT
                         England

Matthew, J. Lustig       None

Thomas E. Lynch          None

Mark T. McMaster         None

Anthony E. Meyer         Lazard Freres Real                        Managing
                         Estate Investors, LLC                     Director
                         30 Rockefeller Plaza
                         New York, New York 10020

                         Atlas Industrial Corporation              Director

                         Dermody Properties                        Director

                         Alex Haagen Properties                    Director

                         Prometheus Realty Investors LLC          Director

Damon Mezzacappa         Corporate Property Investors              Director
                         30 Rockefeller Plaza
                         New York, New York 10020

Richard W. Moore Jr.    None

Robert P. Morgenthau     Lazard Asset Management                   Director,
                         (Canada), Inc.                            Vice
                         30 Rockefeller Plaza                      President
                         New York, New York 10020

                         Lazard Investment Funds Limited           Director
                         20/22 Lower Hatch Street
                         Dublin 2
                         Ireland

                         Lazard Fund Manager (CI) Limited          Director
                         Lazard House  P.O. Box 108
                         2-6 Church Street St. Helier
                         Jersey, JE4 8QD Channel Islands

                         Lazard Global Bond Fund plc               Director
                         20/22 Lower Hatch Street
                         Dublin 2
                         Ireland

                         Lazard Global Equity Fund plc             Director
                         20/22 Lower Hatch Street
                         Dublin 2
                         Ireland

                         Lazard Global Liquidity Fund plc          Director
                         20/22 Lower Hatch Street
                         Dublin 2
                         Ireland

                         Lazard Strategic Yield Fund plc           Director
                         20/22 Lower Hatch Street
                         Dublin 2
                         Ireland

                         Global Funds Management plc               Director
                         20/22 Lower Hatch Street
                         Dublin 2
                         Ireland

                         Lazard Asset Management (CI)              Director
                         Holdings Ltd.
                         Lazard House P.O. Box 108
                         2-6 Church Street St. Helier
                         Jersey, JE4 8QD Channel Islands

                         Lazard Asset Management (CI) Ltd          Director
                         Lazard House  P.O. Box 108
                         2-6 Church Street St. Helier
                         Jersey, JE4 8QD Channel Islands

                         Lazard Investment Funds (CI) Ltd          Director
                         Lazard House  P.O. Box 108
                         2-6 Church Street St. Helier
                         Jersey, JE4 8QD Channel Islands

                         Lazard Funds Administration Services      Director
                         (CI) Ltd.
                         Lazard House P.O. Box 108
                         2-6 Church Street St. Helier
                         Jersey, JE4 8QD Channel Islands

Steven J. Niemczyk       None

Hamish W. M. Norton      None

James A. Paduano         Donovan Data Systems, Inc.                Director
                         666 Fifth Avenue
                         New York, New York 10019

                         Secure Products Inc.                      Director
                         47 Maple Street
                         Summit, NJ 07901

                         Credit Agricole Lazard                    Director
                         Financial Products Bank Ltd.

Adam P. Parten           None

Louis Perlmutter         None

Russell E. Planitzer     Intersolv, Inc.                           Director
                         9420 Key West Ave.
                         Rockville, MD  20850

Steven L. Rattner        Falcon Holding Group L.P.                 Director
                         10900 Wilshire Boulevard
                         Los Angeles, California 90024

John R. Reinsberg        Lazard Asset Management                   Executive
                         Pacific Co.                             Vice President,
                         Level 49, Governor Phillip                Director
                         Tower
                         1 Farrer Place
                         Sydney NSW 2000
                         Australia

                         Lazard Asset Management                   Member of the
                         (Deutschland) GmbH                        Supervisory
                         Ulmenstrasse 37-39                        Board
                         60325 Frankfurt am Main
                         Federal Republic of Germany

Louis G. Rice            None

Luis E. Rinaldini        None

Bruno M. Roger           
                         AXA                                       Supervisory
                         21 Rue de Chateaudun                      Board
                         75441 Paris France                        Member

                         CAP Gemini Sogeti                         Director
                         6, Bid Jean Pain a Grenoble (38005)
                         France

                         Compagnie De Credit                       Director
                         121, Boulevard Haussmann a Paris Seme
                         France

                         Compagnie De Saint-Gobain                 Director
                         Les Miroirs
                         18 Avenue d'Alsace
                         Paris la Defense (92096)
                         France

                         Eurafrance                                Director
                         12, Avenue Percier a Paris Seme
                         France

                         Financiere Et Industrielle Gaz            Director
                         Et Eaux
                         3, Rue Jacques Bingen a Paris 17eme
                         France

                         Fonds Partenaires Gestion (F.P.G.)        Director
                         121, Boulevard Haussmann a Paris Seme
                         France

                         Lazard & Co. GmbH                         Director
                         Ulmenstrasse 37-39
                         60325 Frankfurt am Main
                         Federal Republic of Germany

                         LVMH-Moet Hennessy Louis Vuitton          Director
                         30, Avenue Hoche a Paris 8eme
                         France

                         Marine-Wendel                             Director
                         189, Rue Taitbout a Paris 9eme
                         France

                         Pinault-Printemps-Redoute                 Director
                         61, Rue Caumartin
                         75009 Paris

                         Sidel                                     Director
                         66, Rue de Miromesnil
                         75008 Paris

                         Societe Centrale Puour L'Industrie        Director
                         9, Avenue Hoche a Paris 8eme
                         France

                         Societe Financiere Generale               Director
                         Immobiliere (S.F.G.I.)
                         23, rue de I'Arcasde a Paris 8eme
                         France

                         Sofina (Belgique)                         Director
                         Rue de Naples, 38-B-1050 Bruzelles

                         Sovaclux S.A.                             Director
                         14 rue Aldringen - Luxembourg

                         Thomson S.A.                              Director
                         51 esplanade du General de Gaulle
                         La Defense 10-92800 Puteaux
                         France

                         Thomson CSF                               Director
                         51 Esplanade du General de Gaulle
                         La Defense 10-92800 Puteaux
                         France

                         U.A.P.                                    Director
                         9, place Vendome
                         75001 Paris

Michael S. Rome          None

Steven H. Sands          Isogen LLC                                Director

                         Skila, Inc.                               Director

                         National Imaging Associates, Inc.         Director

Gary S. Shedlin          None

Arthur P. Solomon        Alexander Haagaen                         Director
                         
                         FAC                                       Director

                         Berkshire Realty Trust                    Director
                         1 Beacon Street, Suite 1550
                         Boston, MA  02108

                         Cliveden                                  Director
                         Hill House
                         1 Little New Street
                         London EC4A 3TR
                         England

David A. Tanner          E.M. Warburg, Pincus                      Managing
                         & Co. LLC (prior to 12/97)                Director
                         466 Lexington Avenue
                         New York, New York 10017

                         Golden Books Family                       Director
                         Entertainment Inc.

                         Renaissance Re Holdings                   Director
                         Ltd. (prior to 7/98)

                         Poserdon Resources Inc.                   Director

                         Charter Financial Inc.                    Director

David L. Tashjian        None

J. Mikesell Thomas       None

Michael P. Triguboff     Lazard Asset Management Pacific Co.  Managing Director
                         Level 49, Governor Phillip Tower
                         1 Farrer Place
                         Sydney NSW 2000
                         Australia

                         Triguboff Management Pty Limited         Director

Donald A. Wagner         None

Ali E. Wambold           The Albert Fisher Group plc               Director
                         Fisher House
                         61 Thames Street
                         Windsor, Berkshire SO4 IQW
                         England

                         Lazard Freres & Co., Ltd.                 Director
                         21 Moorfields
                         London EC2P 2HT
                         England

                         Tomkins PLC                               Director
                         East Putney House
                         84 Upper Richmond Road
                         London SW15 2ST
                         England, UK

                         Corporate Advisors L.P.                   Member of
                         30 Rockefeller Plaza                      Investment
                         New York, NY 10020                        Advisory
                                                                   Board

Michael A. Weinstock     None

Antonio F. Weiss         None

Alexander E. Zagoneos    The Egypt Trust                           Director
                         11 Rue Aldringen
                         Luxembourg 1-2960

                         Lazard Emerging World Fund                Director
                         30 Rockefeller Plaza
                         New York, NY  10020

                         Flemings Continental European             Director
                         Investment Trust, plc
                         25 Copthall Avenue
                         London EC2R 7DR

                         Gartmore Emerging Pacific                 Director
                         Investment Trust plc
                         Gartmore House
                         16-18 Monument Street
                         London EC3R 8AJ

                         The Greek Progress Fund                   Director
                         Ergobank
                         5, Evripidou
                         40-44, Praxit, Elous
                         105-61 Athens
                         Greece

                         Jupiter International Green               Director
                         Investment Trust plc
                         Knightsbridge House
                         197 Knightsbridge
                         London SW7 1R8
                         England

                         Latin American Investment Trust plc       Director
                         Exchange House
                         Primrose Street
                         London EC2A 2NY

                         New Zealand Investment Trust plc          Director
                         23 Cathedral Yard
                         Exeter
                         Devon EX1 1HB

                         Taiwan Opportunities Fund Ltd.            Director
                         c/o Martin-Currie
                         20 Castle Terrace
                         Edinburgh EHI 2ES
                         U.K.

                         The World Trust Fund                      Director
                         Kredietrust
                         11 rue Aldringen
                         Luxembourg 1-2960

                         Lazard Select Fund                        Director
                         Lazard House P.O. Box 108
                         2-6 Church Street
                         St. Helier
                         Jersey, JE4 8QD
                         Channel Islands

                         Ermitage Selz Fund                        Director
                         Forum Bourse
                         17 Rue Des Bains
                         Boite Pastale 44
                         L-2010 Luxembourg

                         Lazard Asset Management Egypt             Director
                         3, Shagaret El Dor Street, Apt. 31
                         Zamalek, Cairo, Egypt

                         Taiwan American Fund Limited              Director
                         c/o Martin-Currie
                         20 Castle Terrace
                         Edinburgh EHI 2ES
                         U.K.


   
Item 27.  Principal Underwriters
    

   (a)   Lazard Freres & Co. LLC, through its division Lazard Asset Management,
         currently serves as an investment adviser or subadviser to the
         following investment companies: Lazard Retirement  Series, Inc.; ISG
         International Equity Fund; Fortis Series Fund, Inc. Lazard
         International Stock Series; EQ Advisors Trust Lazard Large Cap Value
         Portfolio and Lazard Small Cap Value Portfolio; JNL Series Trust
         Lazard/JNL Mid Cap Value Series and Lazard/JNL Small Cap Value Series;
         The Managers Funds Managers International Equity Fund; Members Mutual
         Funds  Members International Stock Fund; Nationwide Investing
         Foundation III Prestige Advisor Series Prestige International Fund;
         Nationwide Separate Account Trust Nationwide Small Company Fund; The
         Target Portfolio Trust Target International Equity Portfolio and
         Target Small Capitalization Value Portfolio; Prudential Diversified
         Funds Prudential Diversified Moderate Growth Fund and Prudential
         Diversified High Growth Fund; Style Select Series, Inc. Large-Cap
         Blend Portfolio and Small-Cap Value Portfolio;  TIFF Investment
         Program, Inc. TIFF Emerging Markets Fund; and Travelers Series Trust
         Lazard International Stock Portfolio.

   (b)   Eileen D. Alexanderson, William Araskog, F. Harlan Batrus, Gerardo
         Braggiotti, Patrick J. Callahan, Jr., Michel David-Weill, John V.
         Doyle, Thomas F. Dunn, Norman Eig, Richard P. Emerson, Peter R.
         Ezersky, Eli H. Fink, Jonathan F. Foster, Robert P. Freeman, Albert H.
         Garner, James S. Gold, Jeffrey A. Golman, Steven J. Golub, Herbert W.
         Gullquist, Thomas R. Haack, Ira O. Handler, Melvin L. Heineman, Robert
         E. Hougie, Kenneth M. Jacobs, Jonathan H. Kagan, James L. Kempner,
         Larry A. Kohn, Lee O. Kraus, Sandra A. Lamb, David C. Lee, Michael S.
         Liss, William R. Loomis, Jr., J. Robert Lovejoy, Matthew J. Lustig,
         Thomas E. Lynch, Mark T. McMaster, Anthony E. Meyer, Damon Mezzacappa,
         Robert P. Morgenthau, Steven J. Niemczyk, Hamish W. M. Norton, James
         A. Paduano, Adam P. Parten, Louis Perlmutter, Russell E. Planitzer,
         Lester Pollack, Steven L. Rattner, John R. Reinsberg, Louis G. Rice,
         Luis E. Rinaldini, Bruno M. Roger, Michael S. Rome, Steven H. Sands,
         Gary S. Shedlin, Arthur P. Solomon, David A. Tanner, David L.
         Tashjian, J. Mikesell Thomas, Michael P. Triguboff, Donald A. Wagner,
         Ali E. Wambold, Michael A. Weinstock and Alexander E. Zagoreos are the
         general members of Lazard Freres & Co. LLC. Mr. David-Weill is the
         senior member of Lazard Freres & Co. LLC. The address of all such
         members is 30 Rockefeller Plaza, New York, New York 10020.

   (c) Not applicable.

   
Item 28. Location of Accounts and Records
    

         The majority of the accounts, books and other documents required to be
         maintained by Section 31(a) of the Investment Company Act of 1940 and
         the Rules thereunder are maintained as follows: Journals, ledgers,
         securities records and other original records are maintained primarily
         at the offices of the Registrant's Custodian, State Street Bank & Trust
         Company. All other records so required to be maintained are maintained
         at the offices of Lazard Freres & Co. LLC, 30 Rockefeller Plaza, New
         York, New York 10020.

   
Item 29. Management Services
    

         Not Applicable

   
Item 30. Undertakings

         None
    
 
<PAGE>


                                   SIGNATURES

   
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, and State of New York, on the 26th day
of February, 1999.

                               LAZARD RETIREMENT SERIES, INC.
                                  (Registrant)

                               By:   /S/HERBERT W. GULLQUIST*
                                     Herbert W. Gullquist, President

     Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.


/S/Herbert W. Gullquist*      President (Principal          February 26, 1999
- -----------------------       Executive, Financial
Herbert W. Gullquist          and Accounting Officer)
                              and Director                  

/S/Norman Eig*                Director                      February 26, 1999
- --------------
Norman Eig

/s/ John J. Burke*            Director                      February 26, 1999
- ------------------
John J. Burke

/s/ Lester Z. Lieberman*      Director                      February 26, 1999
- ------------------------
 Lester Z. Lieberman

/s/ Richard Reiss, Jr.*       Director                      February 26, 1999
- -----------------------
 Richard Reiss, Jr.

/s/ John Rutledge*            Director                      February 26, 1999
- -----------------------
 John Rutledge

/s/ Kenneth S. Davidson*      Director                      February 26, 1999
- ------------------------
   Kenneth S. Davidson

/s/ Carl Frischling*          Director                      February 26, 1999
- ------------------------
   Carl Frischling

/s/ William Katz*             Director                      February 26, 1999
- ------------------------
   William Katz
    
*By:/s/ William G. Butterly, III
        ------------------------
 Attorney-in-fact, William G. Butterly, III


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