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Previous: MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1, NSAR-U, 2000-02-24 |
Next: MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1, N-30D, 2000-02-24 |
Massachusetts Mutual Variable Annuity Separate Account 1-
Variable Annuity Fund 4 and Flex-Annuity IV (Qualified)
Part 11
Part 11 was not included with the Annual Report (N30-D filing) sent to the contract owners in February, 2000. The contract owners did receive the accompanying Separate Account financial statements and the respective underlying Fund report that the Massachusetts Mutual Variable Annuity Separate Account 1-Variable Annuity Fund and Flex-Annuity IV (Qualified) invest in.
The following underlying Fund that was sent to the contract owners is incorporated by reference in this filing to the SEC as part of the Edgarization filing:
| 1. | The MML Series Investment Fund was edgarized and filed with the SEC in February, 2000 under File number 811-0224. |
| MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
|
| Robert J. O
’Connell
|
| President and Chief
Executive Officer
|
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
|||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Investment in the MML Series Investment Fund | ||||||||
| Number of shares (Note 2) | 3,142,750 | 9,687,162 | 844,626 | 8,427,003 | ||||
| Identified cost (Note 3B) | $ 79,524,533 | $ 9,687,162 | $ 10,233,033 | $170,160,432 | ||||
| Value (Note 3A) | $114,884,438 | $ 9,687,162 | $ 9,806,416 | $198,091,215 | ||||
| Dividends receivable | 3,600,017 | 41,817 | 149,195 | 5,459,232 | ||||
| Receivable from Massachusetts Mutual Life Insurance Company | - | - | - | - | ||||
| Other assets | 1,361 | 281 | 61 | 2,033 | ||||
| Total assets | 118,485,816 | 9,729,260 | 9,955,672 | 203,552,480 | ||||
| LIABILITIES | ||||||||
| Annuitant mortality fluctuation reserve (Note 3D) | 14,096 | 1,710 | 1,150 | 14,035 | ||||
| Payable to Massachusetts Mutual Life Insurance Company | 325,059 | 26,409 | 30,197 | 668,477 | ||||
| Total liabilities | 339,155 | 28,119 | 31,347 | 682,512 | ||||
| NET ASSETS | $118,146,661 | $ 9,701,141 | $ 9,924,325 | $202,869,968 | ||||
| Net Assets: | ||||||||
| Accumulation units value | $117,676,819 | $ 9,644,139 | $ 9,885,979 | $202,402,151 | ||||
| Annuity reserves (Note 3E) | 469,842 | 57,002 | 38,346 | 467,817 | ||||
| Net assets | $118,146,661 | $ 9,701,141 | $ 9,924,325 | $202,869,968 | ||||
| Contractowners accumulation units (Note 8) | 10,653,725 | 3,992,145 | 2,562,737 | 36,940,327 | ||||
| NET ASSET VALUE PER ACCUMULATION UNIT | ||||||||
| Variable Annuity Fund 4 Contracts | ||||||||
| December 31, 1999 | $ 11.96 | $ 2.77 | $ 4.49 | $ 5.93 | ||||
| December 31, 1998 | 12.53 | 2.67 | 4.61 | 6.05 | ||||
| December 31, 1997 | 10.86 | 2.55 | 4.29 | 5.36 | ||||
| December 31, 1996 | 8.51 | 2.45 | 3.93 | 4.47 | ||||
| December 31, 1995 | 7.12 | 2.34 | 3.84 | 3.95 | ||||
| Flex-Annuity IV Contracts | ||||||||
| December 31, 1999 | $ 10.96 | $ 2.36 | $ 3.78 | $ 5.46 | ||||
| December 31, 1998 | 11.54 | 2.28 | 3.90 | 5.60 | ||||
| December 31, 1997 | 10.05 | 2.20 | 3.65 | 4.99 | ||||
| December 31, 1996 | 7.91 | 2.11 | 3.37 | 4.18 | ||||
| December 31, 1995 | 6.66 | 2.04 | 3.30 | 3.71 | ||||
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Investment Income | |||||||||||
| Dividends (Note 3B) | $ 3,601,163 | $ 450,302 | $ 665,655 | $ 11,274,598 | |||||||
| Expenses | |||||||||||
| Mortality and expense risk fees (Note 4) | 1,632,696 | 111,321 | 129,527 | 2,822,975 | |||||||
| Net investment income (loss) (Note 3C) | 1,968,467 | 338,981 | 536,128 | 8,451,623 | |||||||
| Net realized and unrealized gain (loss) on investments | |||||||||||
| Net realized gain (loss) on investments (Notes 3B, 3C and 7) | 14,151,073 | - | (74,160 | ) | 18,200,773 | ||||||
| Change in net unrealized appreciation of investments | (22,450,375 | ) | - | (801,012 | ) | (31,719,795 | ) | ||||
| Net gain (loss) on investments | (8,299,302 | ) | - | (875,172 | ) | (13,519,022 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | $ (6,330,835) | $ 338,981 | $ (339,044 | ) | $ (5,067,399 | ) | |||||
| 1999 |
1998 |
|||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
|||||||||||||||||
| Increase (decrease) in net assets | ||||||||||||||||||||||||
| Operations: | ||||||||||||||||||||||||
| Net investment income (loss) | $ 1,968,467 | $ 338,981 | $ 536,128 | $ 8,451,623 | $ 5,281,854 | $ 446,710 | $ 678,717 | $ 18,159,176 | ||||||||||||||||
| Net realized gain (loss) on investments | 14,151,073 | - | (74,160 | ) | 18,200,773 | 14,210,634 | - | 108,221 | 15,752,768 | |||||||||||||||
| Change in net
unrealized appreciation/of
investments |
(22,450,375 | ) | - | (801,012 | ) | (31,719,795 | ) | 231,274 | - | 106,881 | (4,964,364 | ) | ||||||||||||
| Net increase (decrease) in net
assets resulting from
operations |
(6,330,835 | ) | 338,981 | (339,044 | ) | (5,067,399 | ) | 19,723,762 | 446,710 | 893,819 | 28,947,580 | |||||||||||||
| Capital transactions: (Note 8) | ||||||||||||||||||||||||
| Net contract payments (Note 6) | 1,554,576 | 342,553 | 245,304 | 5,458,397 | 2,466,721 | 175,530 | 206,834 | 5,220,296 | ||||||||||||||||
| Withdrawal of funds | (23,092,555) | (3,677,844 | ) | (1,740,918 | ) | (45,212,887 | ) | (22,108,471 | ) | (2,478,180 | ) | (2,165,098 | ) | (35,159,415 | ) | |||||||||
| Reimbursement
(payment) of accumulation unit value
fluctuation |
26,319 | (1,352 | ) | (1,444 | ) | (22,946 | ) | (12,533 | ) | (894 | ) | 109,281 | (44,524 | ) | ||||||||||
| Net charge (credit) to
annuitant mortality fluctuation
reserve (Note 3D) |
(62,752) | (13,749 | ) | 1,286 | 27,684 | (10,142 | ) | 1,142 | (182,559 | ) | (66,546 | ) | ||||||||||||
| Annuity benefit payments | (42,173) | (7,206 | ) | (4,392 | ) | (55,938 | ) | (47,641 | ) | (8,709 | ) | (9,378 | ) | (47,457 | ) | |||||||||
| Withdrawal due to
administrative charges and
contingent deferred sales charges (Note 6) |
(142,812) | (15,512 | ) | (14,845 | ) | (299,824 | ) | (154,800 | ) | (15,832 | ) | (18,209 | ) | (337,671 | ) | |||||||||
| Divisional transfers | 1,214,644 | 1,556,582 | (512,636 | ) | (2,258,590 | ) | 1,529,256 | 1,133,039 | 51,073 | (2,713,368 | ) | |||||||||||||
| Net decrease in net assets
resulting from capital
transactions |
(20,544,753) | (1,816,528 | ) | (2,027,645 | ) | (42,364,104 | ) | (18,337,610 | ) | (1,193,904 | ) | (2,008,056 | ) | (33,148,685 | ) | |||||||||
| Total increase (decrease) | (26,875,588) | (1,477,547 | ) | (2,366,689 | ) | (47,431,503 | ) | 1,386,152 | (747,194 | ) | (1,114,237 | ) | (4,201,105 | ) | ||||||||||
| NET ASSETS, at beginning of the year | 145,022,249 | 11,178,688 | 12,291,014 | 250,301,471 | 143,636,097 | 11,925,882 | 13,405,251 | 254,502,576 | ||||||||||||||||
| NET ASSETS, at end of the year | $118,146,661 | $ 9,701,141 | $ 9,924,325 | $202,869,968 | $145,022,249 | $ 11,178,688 | $ 12,291,014 | $250,301,471 | ||||||||||||||||
1.
|
HISTORY
|
| Massachusetts Mutual
Variable Annuity Separate Account 1 (“Separate Account 1”) is a
separate investment account established on April 8, 1981 by Massachusetts
Mutual Life Insurance Company (“MassMutual”). Separate Account 1
operates as a registered unit investment trust pursuant to the Investment
Company Act of 1940 (“the 1940 Act”) and the rules promulgated
thereunder.
|
| MassMutual maintains three
segments within Separate Account 1. The segments are Variable Annuity Fund
4, Flex-Annuity IV (Qualified) and Flex Extra (Qualified). These notes and
the financial statements presented herein, with the exception of Note 9,
describe and consist only of the Variable Annuity Fund 4 and Flex-Annuity
IV (Qualified) segments (the “Segment”).
|
2.
|
INVESTMENT OF THE SEGMENT’S
ASSETS
|
| The Variable Annuity Fund
4 and the Flex-Annuity IV (Qualified) segments each have four divisions.
The MML Equity Division invests in shares of MML Equity Fund, the MML
Money Market Division invests in shares of MML Money Market Fund, the MML
Managed Bond Division invests in shares of MML Managed Bond Fund and the
MML Blend Division invests in shares of MML Blend Fund.
|
| MML Equity Fund, MML Money
Market Fund, MML Managed Bond Fund and MML Blend Fund are four of the
eight separate series of shares of the MML Series Investment Fund (the
“MML Trust”). The MML Trust is an open-end, management
investment company registered under the 1940 Act. MassMutual serves as the
investment manager to the MML Trust. David L. Babson & Company, Inc. (
“Babson”), a controlled subsidiary of MassMutual, served as the
investment sub-adviser to MML Equity Fund and the Equity Sector of the MML
Blend Fund (effective January 1, 2000, Babson will continue to serve as
the sub-adviser to the MML Equity Fund and will become the sub-adviser to
the MML Money Market Fund, MML Managed Bond Fund and the entire MML Blend
Fund) .
|
3.
|
SIGNIFICANT ACCOUNTING
POLICIES
|
| The following is a summary
of significant accounting policies followed consistently by the Segment in
preparation of the financial statements in conformity with generally
accepted accounting principles.
|
| A.
Investment Valuation
|
| Investments in MML Equity
Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend Fund are
each stated at market value which is the net asset value of each of the
respective funds.
|
| B.
Accounting For Investments
|
| Investment transactions
are accounted for on trade date and identified cost is the basis followed
in determining the cost of investments sold for financial statement
purposes. Dividend income is recorded on the ex-dividend date.
|
| C.
Federal Income Taxes
|
| Operations of the Segment
form a part of the total operations of MassMutual, and the Segment is not
taxed separately. MassMutual is taxed as a life insurance company under
the provisions of the 1986 Internal Revenue Code, as amended. The Segment
will not be taxed as a “regulated investment company” under
Subchapter M of the Internal Revenue Code. Under existing federal law, no
taxes are payable on investment income and realized capital gains
attributable to contracts which depend on the Segment’s investment
performance. Accordingly, no provision for federal income tax has been
made. MassMutual may, however, make such a charge in the future if an
unanticipated change of current law results in a company tax liability
attributable to the Segment.
|
| D.
Annuitant Mortality Fluctuation Reserve
|
| The Segment maintains a
reserve as required by regulatory authorities to provide for mortality
losses incurred. The reserve is increased quarterly for mortality gains
and its proportionate share of any increases in value. The reserve is
charged quarterly for mortality losses and its proportionate share of any
decreases in value. Transfers to or from MassMutual are then made
quarterly to adjust the Segments. Net transfers from the Segments to
MassMutual totaled $52,683 for the year ended December 31, 1999. The
reserve is subject to a maximum of 3% of the Segment’s annuity
reserves. Any mortality losses in excess of this reserve will be assumed
by MassMutual. The reserve is not available to owners of contracts except
to the extent necessary to cover mortality losses under the
contracts.
|
| E.
Annuity Reserves
|
| Annuity reserves are
developed by using accepted actuarial methods and are computed using the
1971 Individual Annuity Mortality Table, as modified.
|
| F.
Estimates
|
| The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
|
4.
|
CHARGES FOR MORTALITY AND EXPENSE
RISKS
|
| A.
Variable Annuity Fund 4 Contracts
|
| Currently, daily charges
for mortality and expense risks assumed by MassMutual are made which are
equivalent on an annual basis to 0.73% of the value of the Variable
Annuity Fund 4 Contracts. Effective on January 1 of any year after the
first Contract year, the daily charge made for the assumption of mortality
and expense risks will be as determined by MassMutual, but in no event
will such charge be at an annual rate of more than 1.2045% of the value of
the Variable Annuity Fund 4 Contracts.
|
| B.
Flex-Annuity IV (Qualified) Contracts
|
| Daily charges for
mortality and expense risks assumed by MassMutual are made which are
equivalent on an annual basis to 1.25% of the value of the Flex-Annuity IV
Contracts.
|
5.
|
DISTRIBUTION AGREEMENT
|
| MML Investors Services,
Inc. (“MMLISI”), a wholly-owned subsidiary of MassMutual, serves
as the principal underwriter for the contracts. MMLISI is registered as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers, Inc. The contracts are no
longer offered for sale to the public. However, contract owners may
continue to make purchase payments under existing contracts.
|
| Pursuant to the
underwriting and servicing agreements, commissions or other fees due to
registered representatives for selling and servicing the contracts are
paid by MassMutual on behalf of MMLISI. MMLISI also receives compensation
for its activities as underwriter of the contracts.
|
6.
|
CHARGES/DEDUCTIONS FOR ADMINISTRATIVE CHARGES,
CONTINGENT DEFERRED SALES CHARGES AND PREMIUM TAXES
|
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Year Ended
December 31, 1999 |
|||||||||||||||||||||||||
| Gross contract payments | $ 1,557,106 | $ 345,344 | $ 246,021 | $ 5,464,064 | |||||||||||||||||||||
| Less deductions for administrative
and sales expenses and premium taxes under Variable Annuity
Fund 4 Contracts |
1,976 | 2,681 | 632 | 3,703 | |||||||||||||||||||||
| Less deductions for premium taxes under Flex-Annuity IV Contracts | 554 | 110 | 85 | 1,964 | |||||||||||||||||||||
| Net contract payments | $ 1,554,576 | $ 342,553 | $ 245,304 | $ 5,458,397 | |||||||||||||||||||||
| Administrative and contingent deferred sales charges under Flex-Annuity IV Contracts | $ 142,812 | $ 15,512 | $ 14,845 | $ 299,824 | |||||||||||||||||||||
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
||||||||||||||||||||||
| For the Year Ended
December 31, 1998 |
|||||||||||||||||||||||||
| Gross contract payments | $ 2,471,970 | $ 177,304 | $ 208,328 | $ 5,230,590 | |||||||||||||||||||||
| Less deductions for administrative
and sales expenses and premium taxes under Variable Annuity
Fund 4 Contracts |
2,790 | 1,615 | 1,300 | 5,081 | |||||||||||||||||||||
| Less deductions for premium taxes under Flex-Annuity IV Contracts | 2,459 | 159 | 194 | 5,213 | |||||||||||||||||||||
| Net contract payments | $ 2,466,721 | $ 175,530 | $ 206,834 | $ 5,220,296 | |||||||||||||||||||||
| Administrative and contingent deffered sales charges under Flex-Annuity IV Contracts | $ 154,800 | $ 15,832 | $ 18,209 | $ 337,671 | |||||||||||||||||||||
| 7. PURCHASES AND SALES OF INVESTMENTS | |||||||||||||||||||||||||
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
||||||||||||||||||||||
| For The Year Ended
December 31, 1999 |
|||||||||||||||||||||||||
| Cost of purchases | $ 9,681,241 | $ 3,808,403 | $ 1,207,271 | $ 22,630,103 | |||||||||||||||||||||
| Proceeds from sales | (25,087,489 | ) | (5,274,976 | ) | (2,684,994 | ) | (47,582,135) | ||||||||||||||||||
8.
|
NET
DECREASE IN ACCUMULATION UNITS
|
| Variable Annuity Fund
4 Contracts
|
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For The Year Ended
December 31, 1999 |
||||||||||||
| Units purchased | 2,379 | 14,634 | 2,063 | 9,141 | ||||||||
| Units withdrawn | (232,287 | ) | (345,250 | ) | (70,604 | ) | (488,274 | ) | ||||
| Units transferred between divisions | 11,973 | (15,457 | ) | (9,967 | ) | (11,232 | ) | |||||
| |
|
|
|
|||||||||
| Net decrease | (217,935 | ) | (348,073 | ) | (78,508 | ) | (490,365 | ) | ||||
| Units, at beginning of the year | 1,118,097 | 887,174 | 345,859 | 2,028,815 | ||||||||
| |
|
|
|
|||||||||
| Units, at end of the year | 900,162 | 541,101 | 267,351 | 1,538,450 | ||||||||
| |
|
|
|
|||||||||
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For The Year Ended
December 31, 1998 |
||||||||||||
| Units purchased | 2,737 | 6,988 | 3,319 | 10,065 | ||||||||
| Units withdrawn | (133,465 | ) | (121,212 | ) | (65,222 | ) | (625,196 | ) | ||||
| Units transferred between divisions | (24,366 | ) | 28,034 | (24,385 | ) | 58,259 | ||||||
| Net decrease | (155,094 | ) | (86,190 | ) | (86,288 | ) | (556,872 | ) | ||||
| Units, at beginning of the year | 1,273,191 | 973,364 | 432,147 | 2,585,687 | ||||||||
| Units, at end of the year | 1,118,097 | 887,174 | 345,859 | 2,028,815 | ||||||||
| Flex-Annuity IV
Contracts
|
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For The Year Ended
December 31, 1999 |
||||||||||||
| Units purchased | 133,334 | 131,009 | 61,806 | 967,346 | ||||||||
| Units withdrawn | (1,767,916 | ) | (1,194,227 | ) | (374,737 | ) | (7,599,719 | ) | ||||
| Units transferred between divisions | 86,305 | 682,047 | (121,392 | ) | (395,726 | ) | ||||||
| Units transferred to annuity reserves | - | - | - | (6,667 | ) | |||||||
| Net decrease | (1,548,277 | ) | (381,171 | ) | (434,323 | ) | (7,034,766 | ) | ||||
| Units, at beginning of the year | 11,301,840 | 3,832,215 | 2,729,709 | 42,436,643 | ||||||||
| Units, at end of the year | 9,753,563 | 3,451,044 | 2,295,386 | 35,401,877 | ||||||||
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For The Year Ended
December 31, 1998 |
||||||||||||
| Units purchased | 227,165 | 70,451 | 51,088 | 980,036 | ||||||||
| Units withdrawn | (1,947,848 | ) | (974,158 | ) | (501,659 | ) | (6,071,251 | ) | ||||
| Units transferred between divisions | 168,200 | 471,847 | 50,647 | (593,683 | ) | |||||||
| Units transferred to annuity reserves | (19,393 | ) | - | - | - | |||||||
| Net decrease | (1,571,876 | ) | (431,860 | ) | (399,924 | ) | (5,684,898 | ) | ||||
| Units, at beginning of the year | 12,873,716 | 4,264,075 | 3,129,633 | 48,121,541 | ||||||||
| Units, at end of the year | 11,301,840 | 3,832,215 | 2,729,709 | 42,436,643 | ||||||||
9.
|
CONSOLIDATED MASSACHUSETTS MUTUAL VARIABLE
ANNUITY SEPARATE ACCOUNT 1
|
| As discussed in Note 1,
the financial statements only represent activity of the Variable Annuity
Fund 4 and Flex-Annuity IV (Qualified) segment of the Massachusetts
Mutual Variable Annuity Separate Account 1. The combined net assets as of
December 31, 1999 for Massachusetts Mutual Variable Annuity Separate
Account 1, which includes the segments pertaining to the Variable Annuity
Fund 4, Flex-Annuity IV (Qualified) and Flex Extra (Qualified) are as
follows:
|
| MML
Equity Division |
MML
Money Market Division |
MML
Managed Bond Division |
MML
Blend Division |
*Oppenheimer
Capital Appreciation Division |
*Oppenheimer
Global Securities Division |
*Oppenheimer
Strategic Bond Division |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | $1,703,866,600 | $107,644,771 | $132,667,722 | $1,912,871,928 | $736,881,297 | $403,063,796 | $70,641,266 | |||||||
| Total liabilities | 6,450,532 | 461,959 | 521,566 | 7,579,548 | 2,454,171 | 1,080,261 | 419,774 | |||||||
| Net assets | $1,697,416,068 | $107,182,812 | $132,146,156 | $1,905,292,380 | $734,427,126 | $401,983,535 | $70,221,492 | |||||||
| Net assets consist of: | ||||||||||||||
| Accumulation units - value | $1,695,899,210 | $107,114,013 | $132,019,299 | $1,902,938,611 | $734,267,997 | $401,884,077 | $70,200,599 | |||||||
| Annuity reserves | 1,516,858 | 68,799 | 126,857 | 2,353,769 | 159,129 | 99,458 | 20,893 | |||||||
| Net assets | $1,697,416,068 | $107,182,812 | $132,146,156 | $1,905,292,380 | $734,427,126 | $401,983,535 | $70,221,492 | |||||||
*
|
Offered on the Flex Extra
(Qualified) Contracts only.
|
|
|