Prospectus Supplement
Retirement Annuity Mutual Funds S-6466 P (10/98)
Retirement Annuity Mutual Funds -Symphony S-6550 H (10/98)
April 19, 1999
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SHAREHOLDER MEETINGS
At the regular meetings scheduled to be held on June 16, 1999, shareholders of
the funds listed above will vote on the following proposals:
1. Change the Fund Name from IDS to AXP. Shareholders of all funds will be asked
to approve a name change from IDS to AXP. AXP is an abbreviated form of the name
of the funds' investment manager, American Express Financial Corporation. For
example, IDS New Dimensions Fund would change to AXP New Dimensions Fund.
Annuity Funds will also add the words "Variable Portfolio" to their name. For
example, IDS Life Capital Resource Fund would change to AXP Variable Portfolio -
Capital Resource Fund.
2. Add a New Distribution Plan. For Class A, shareholders will vote on a
proposal to change the existing shareholder service agreement to a distribution
plan (also known as a 12b-1 plan) and increase the fee from 0.175% to 0.25% of
average daily net assets. For Class B, shareholders will vote on a proposal to
convert the existing shareholder service agreement to a distribution plan. In
combination with the existing distribution plan of 0.75%, this will increase the
combined fee from 0.925% to 1.0% of average daily net assets. Amounts paid under
the distribution plan will be used for service and education as well as for
advertising materials and programs designed to increase Fund sales. Annuity Fund
shareholders will vote on a new distribution plan of 0.125% of average daily net
assets that will provide additional services and education.
3. Change the Investment Management Services Agreement. As shown in the
following table, five funds will be voting on a fee increase. Four of those five
funds also will be voting on the addition of breakpoints that reduce fee rates
as the fund's assets grow. In addition, 11 funds will be voting on adding or
changing a performance incentive adjustment. Under a performance incentive
adjustment, the management fee is calculated as shown in the prospectus. The fee
is then adjusted for performance. The fund's performance is compared to the
performance of a Lipper Index of similar funds. If the fund performs better than
the index, the fee will increase. If the fund performs worse than the index, the
fee will decrease. The maximum increase or decrease is shown in the table.
<TABLE>
<CAPTION>
Proposed Management Fee Changes
<S> <C> <C> <C>
- -------------------------------- ----------------------- --------------------------- --------------------------
Type of Change Fee
Fund (Annual rate; in
billions)
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Current Proposed
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Blue Chip Increase of .10%, First $.25 - .44% First $.25 - .54%
breakpoints and next $.25 - .415% next $.25 - .515%
PIA (maximum next $.25 - .39% next $.25 - .49%
adjustment of .08%) next $.25 - .365% next $.25 - .465%
over $1 - .34% next $1 - .44%
next $1 - .41%
next $3 - .38%
over $6 - .35%
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Cash Management Increase of .05% First $1 - .31% First $1 - .36%
Tax-Free Money and breakpoints next $.5 - .293% next $.5 - .343%
next $.5 - .275% next $.5 - .325%
next $.5 - .258% next $.5 - .308%
over $2.5 - .24% next $1 - .29%
next $3 - .27%
over $6.5 - .25%
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Diversified Equity Income PIA (.08%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Emerging Markets PIA (.12%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Equity Select Increase of .08% First $.5 - .53% First $1 - .60%
and breakpoints next $.5 - .505% next $1 - .575%
next $1 - .48% next $1 - .55%
next $1 - .455% next $3 - .525%
next $3 - .43% next $6 - .50%
over $6 - .40% next $12 - .49%
over $24 - .48%
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Equity Value PIA (.08%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Global Balanced PIA (.12%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Global Growth PIA (.12%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Research Opportunities PIA (.12%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Small Company Index PIA (.12%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Strategy Aggressive PIA (.12%) *
- -------------------------------- ----------------------- --------------------------- --------------------------
- -------------------------------- ----------------------- --------------------------- --------------------------
Utilities Income Increase of .08% First $.5 - .53% First $0.5 - .61%
and PIA (.08%) next $.5 - .505% next $0.5 - .585%
next $1 - .48% next $1 - .56%
next $1 - .455% next $1 - .535%
next $3 - .43% next $3 - .51%
over $6 - .40% over $6 - .48%
- -------------------------------- ----------------------- --------------------------- --------------------------
* The fee schedule will not change.
</TABLE>
4. Change Fundamental Policies. Shareholders will be asked to eliminate or
modify a number of policies. Policies to be voted on include those regarding:
potential conflicts of interest; issuing senior securities; transactions with
affiliates; investing in other investment companies; pledging or mortgaging
assets; investing in issuers with less than 3 years of operating history;
investing in exploration or development programs; and investing for purposes of
exercising control or management. Eliminating or changing these policies is not
expected to have any impact on the funds' investment practices.
5. New Subadvisory Agreement. Shareholders of Managed Allocation and Strategy
Aggressive will be asked to approve a subadvisory agreement with Kenwood Capital
Management, LLC, a subsidiary of AEFC.
6. Change in Investment Objective. Shareholders of Equity Select will vote on a
proposal to change the fund's investment objective from "growth of capital and
income" to "growth of capital".
S-6231A (4/99)
*Destroy - June 17, 1999
