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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 4 (File No. 33-52518) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 5 (File No. 811-3217) X
IDS LIFE ACCOUNT F
IDS LIFE ACCOUNT IZ
IDS LIFE ACCOUNT JZ
IDS LIFE ACCOUNT G
IDS LIFE ACCOUNT H
IDS LIFE ACCOUNT N
___________________________________________________________________
(Exact Name of Registrant)
IDS Life Insurance Company
___________________________________________________________________
(Name of Depositor)
IDS Tower 10, Minneapolis, MN 55440-0010
___________________________________________________________________
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-3678
Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
___________________________________________________________________
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 1995, pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(i) of Rule 485
on (date), pursuant to paragraph (a)(i) of Rule 485
____ 75 days after filing pursuant to paragraph (a)(ii) of Rule 485
____ 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 previously filed post-effective amendment.
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to section
24f-2 of the Investment Company Act of 1940. Registrant's Rule
24f-2 Notice for its most recent fiscal year was filed on or about
February 28, 1995.
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<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
Cross reference sheet showing location in the prospectus of the information
called for by the items enumerated in Part A and B of Form N-4.
Negative answers omitted from prospectus are so indicated.
PART A PART B
Section in
Section Statement of
Item No. in Prospectus Item No. Additional Information
<C> <C> <C> <C>
1 Cover page 15 Cover page
2 Key terms 16 Table of contents
3(a) Expense summary 17(a) NA
(b) The Employee Benefit (b) NA
Annuity in brief (c) About IDS Life*
4(a) Condensed financial information
(b) Performance information 18(a) NA
(c) Financial statements (b) NA
(c) Independent auditors
5(a) Cover page; About IDS Life (d) NA
(b) The variable accounts (e) NA
(c) The funds (f) Principal underwriter
(d) Cover page; The funds
(e) Voting rights 19(a) Distribution of the certificates*;
(f) NA About IDS Life*
(g) NA (b) Certificate charges*
6(a) Certificate charges 20(a) Principal underwriter
(b) Certificate charges (b) Principal underwriter
(c) Certificate charges (c) Principal underwriter
(d) Distribution of the certificates (d) NA
(e) The funds
(f) NA 21(a) Performance information
(b) Performance information
7(a) Buying the contract and certificate;
Benefits in case of death; 22 Calculating annuity payments
The annuity payout period
(b) The variable accounts; Making 23(a) Financial statements
the most of your annuity (b) Financial statements
(c) The funds; certificate charges
(d) Cover page
8(a) The annuity payout period
(b) Buying the contract and certificate
(c) The annuity payout period
(d) The annuity payout period
(e) The annuity payout period
(f) The annuity payout period
9(a) Benefits in case of death
(b) Benefits in case of death
10(a) Buying the contract and certificate; Valuing your investment
(b) Valuing your investment
(c) Buying the contract and certificate; Valuing your investment
(d) NA
11(a) Surrendering a certificate
(b) TSA - Special surrender provisions
(c) Surrendering a certificate
(d) Buying the contract and certificate
(e) The Employee Benefit Annuity in brief
12(a) Taxes
(b) Key terms
(c) NA
13 NA
14 Table of Contents of the Statement of Additional Information<PAGE>
PAGE 3
*Designates section in the prospectus, which is hereby incorporated by
reference in this Statement of Additional Information.
</TABLE>
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IDS Life Employee Benefit Annuity
Prospectus
May 1, 1995
The Employee Benefit Annuity is a flexible premium group deferred
fixed/variable annuity contract (the contract) offered by IDS Life
Insurance Company (IDS Life) a subsidiary of American Express
Financial Corporation. Participation in the contract will be
accounted for separately by the issuance of a certificate showing
the participant's interest under the contract.
The contract is a group deferred annuity in which purchase payments
are accumulated on a fixed and/or variable basis and retirement
benefits are paid to the participant on a fixed or variable basis
or a combination of both. It is available for an employer-
sponsored plan and a salary-reduction plan that meets the
requirements of Section 403(b) of the Code (the plan).
IDS Life Accounts F, IZ, JZ, G, H and N
Sold by: IDS Life Insurance Company, IDS Tower 10, Minneapolis, MN
55440-0010 Telephone: 612-671-3131.
THIS PROSPECTUS CONTAINS THE INFORMATION ABOUT THE VARIABLE
ACCOUNTS THAT YOU SHOULD KNOW BEFORE INVESTING. Refer to "The
variable accounts" in this prospectus.
THE PROSPECTUS IS ACCOMPANIED OR PRECEDED BY THE RETIREMENT ANNUITY
MUTUAL FUND PROSPECTUS FOR IDS LIFE AGGRESSIVE GROWTH FUND, IDS
LIFE INTERNATIONAL EQUITY FUND, IDS LIFE CAPITAL RESOURCE FUND, IDS
LIFE MANAGED FUND, INC., IDS LIFE SPECIAL INCOME FUND, INC. AND IDS
LIFE MONEYSHARE FUND, INC. PLEASE KEEP THESE PROSPECTUSES FOR
FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IDS LIFE IS NOT A FINANCIAL INSTITUTION, AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY FINANCIAL INSTITUTION NOR ARE THEY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY.
A Statement of Additional Information (SAI) dated May 1, 1995
(incorporated by reference into this prospectus) has been filed
with the Securities and Exchange Commission (SEC), and is available
without charge by contacting IDS Life at the telephone number above
or by completing and sending the order form on the last page of
this prospectus. The table of contents of the SAI is on the last
page of this prospectus.
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Table of Contents
Key terms....................................................... 3
The Employee Benefit Annuity in brief........................... 5
Expense summary................................................. 8
Condensed financial information................................. 10
Financial statements............................................ 12
Performance information......................................... 13
The variable accounts........................................... 15
The funds....................................................... 16
Aggressive Growth Fund..................................... 16
International Equity Fund.................................. 16
Capital Resource Fund...................................... 16
Managed Fund............................................... 16
Special Income Fund........................................ 16
Moneyshare Fund............................................ 17
The fixed account............................................... 18
Buying the contract and certificate............................. 19
Setting the retirement date................................ 19
Beneficiary................................................ 20
How to make purchase payments.............................. 21
Certificate charges............................................. 22
Administrative charge...................................... 22
Mortality and expense risk fee............................. 22
Surrender charge........................................... 23
Premium taxes.............................................. 23
Valuing your investment......................................... 25
Number of units............................................ 25
Accumulation unit value.................................... 25
Net investment factor...................................... 26
Factors that affect variable account
accumulation units......................................... 26
Making the most of your certificate............................. 27
Automated dollar-cost averaging............................ 27
Transferring money between accounts........................ 28
Transfer policies.......................................... 28
How to request a transfer or a surrender................... 29
Surrendering a certificate...................................... 31
Surrender policies......................................... 31
Receiving payment when a participant requests
a surrender................................................ 31
TSA special surrender provisions................................ 32
Changing ownership.............................................. 34
Benefits in case of death....................................... 35
The annuity payout period....................................... 36
Annuity payout plans....................................... 37
Death after annuity payouts begin.......................... 38
Transfers between accounts after annuity payouts begin..... 38
Taxes........................................................... 39
Voting rights................................................... 44
Substitution.................................................... 45
Distribution of the certificates................................ 46
About IDS Life.................................................. 47
Regular and special reports..................................... 48
Table of contents of the Statement of Additional Information.... 48
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Key terms
These terms can help you understand details about your annuity.
Annuity - A contract purchased from an insurance company that
offers tax-deferred growth of the investment until earnings are
withdrawn, and that can be tailored to meet the specific needs of
the individual during retirement.
Accumulation unit - A measure of the value of each variable account
before annuity payouts begin.
Annuitant - The participant on whose life or life expectancy the
annuity payouts are based.
Annuity payouts - An amount paid at regular intervals under one of
several plans available to a participant and/or any other payee.
This amount may be paid on a variable or fixed basis or a
combination of both.
Annuity unit - A measure of the value of each variable account used
to calculate the annuity payouts a participant receives.
Beneficiary - The person designated to receive annuity benefits in
case of a participant's death. Each participant may name a
beneficiary in accordance with the applicable provisions of any
plan and the Code.
Certificate - The document delivered to each participant that
evidences the participant's coverage under the contract.
Certificate value - The total value of the certificate before any
applicable surrender charge and any administrative charge have been
deducted.
Contract Certificate year - A period of 12 months, starting on the
effective date of the certificate and on each anniversary of the
effective date.
Close of business - When the New York Stock Exchange (NYSE) closes,
normally 3 p.m. Central time.
Code - Internal Revenue Code of 1986, as amended.
Contract owner (owner) - The person or party entitled to ownership
rights stated in the contract and in whose name the contract is
issued.
Fixed account - An account to which a participant may allocate
purchase payments. Amounts allocated to this account earn interest
at rates that are declared periodically by IDS Life.
IDS Life - In this prospectus, "we," "us," "our," and "IDS Life"
refer to IDS Life Insurance Company.
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Mutual funds (funds) - Six IDS Life Retirement Annuity mutual
funds, each with a different investment objective. (See "The
funds.") Purchase payments can be allocated into variable accounts
investing in shares of any or all of these funds.
Participant - The person named in the certificate who is entitled
to exercise all rights and privileges of ownership under the
certificate, except as reserved by the owner. In this prospectus,
"you" and "your" refer to the participant.
Purchase payments - Payments made to IDS Life under the contract by
or on behalf of a participant.
Retirement date - The date when annuity payouts are scheduled to
begin. This date is first established when enrollment in the
certificates takes place, subject to the terms of the plan. It can
be changed in the future.
Surrender charge - A deferred sales charge that may be applied if a
participant surrenders the certificate before the retirement date.
Surrender value - The amount a participant is entitled to receive
if the certificate is surrendered. It is the certificate value
minus any applicable surrender charge and administrative charge.
Valuation date - Any normal business day, Monday through Friday,
that the NYSE is open. The value of each variable account is
calculated at the close of business on each valuation date.
Variable accounts - Six separate accounts to which a participant
may allocate purchase payments; each invests in shares of one
mutual fund. (See "The variable accounts.") The value of your
investment in each variable account changes with the performance of
the particular fund.
The Employee Benefit Annuity in brief
Purpose: The Employee Benefit Annuity is designed to allow you to
build up funds for retirement. This is done by making one or more
investments (purchase payments) that may earn returns that increase
the value of your certificate. Beginning at a specified future
date (the retirement date), the contract and related certificate
provide you with lifetime or other forms of annuity payouts.
Ten-day free look: You may return a certificate to the financial
advisor or our Minneapolis office within 10 days after it is
delivered and receive a full refund of the certificate value. No
charges will be deducted. However, you bear the investment risk
from the time of purchase until return of the certificate; the
refund amount may be more or less than the payment made.
(Exception: If the law so requires, all of the purchase payment
will be refunded.)
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Accounts: You may allocate purchase payments among any or all of:
o six variable accounts, each of which invests in mutual funds
with a particular investment objective. The value of each
variable account varies with the performance of the particular
fund. We cannot guarantee that the value at the retirement date
will equal or exceed the total of purchase payments allocated to
the variable accounts. (p.15)
o one fixed account, which earns interest at rates that are
adjusted periodically by IDS Life. (p.18)
Buying the contract and certificate: A financial advisor will help
the owner complete and submit an application for a contract and
help you complete and submit an enrollment form for the
certificate. Applications and enrollment forms are subject to
acceptance at our Minneapolis office. The maximum amount of
purchase payments is determined by any restrictions imposed by the
plan and the Code.
o Minimum purchase payment - ($1,000) unless you pay in
installments under a group billing arrangement such as a
payroll deduction.
o Minimum installment payment - $25 monthly or $300 annually.
o Maximum first-year payment(s) - $50,000 to $1,000,000 depending
on your age.
o Maximum payment for each subsequent year - $50,000. (p.19)
Transfers: Subject to certain restrictions you may redistribute
money among accounts without charge at any time until annuity
payouts begin, and once per year among the variable accounts
thereafter. You may establish automated transfers among the fixed
and variable account(s). (p.28)
Surrenders: You may surrender all or part of your certificate
value at any time before the retirement date subject to certain
restrictions imposed by the Code and the plan. Surrenders may be
subject to charges and tax penalties and may have other tax
consequences. (p.31)
Changing ownership: Restrictions apply concerning change of
ownership of rights under a contract or certificate. (p.34)
Benefits in case of death: If the participant dies before annuity
payouts begin, we will pay the beneficiary an amount at least equal
to the certificate value. (p.35)
Annuity payouts: The certificate value of your investment can be
applied to an annuity payout plan that begins on the retirement
date. You may choose from a variety of plans to make sure that
payouts continue as long as they are needed. Payouts may be made
on a fixed or variable basis, or both. Total monthly payouts
include amounts from each variable account and the fixed account.
(p.36)
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Taxes: Generally your certificate value grows tax deferred until
you surrender it or begin to receive payouts. (Under certain
circumstances, IRS penalty taxes may apply.) Even if you direct
payouts to someone else, you will still be taxed on the
distribution. (p.39)
Certificate charges: Your certificate is subject to an annual
administrative charge of $30, a 1% mortality and expense risk
charge and an 8% declining surrender charge on purchase payments up
to 11 contract years old, and any premium taxes that may be imposed
by state or local governments and deducted either from your
purchase payments or upon total withdrawal or when annuity payments
begin. (p.22)
Expense summary
The purpose of this summary is to help the owner and participant
understand the various costs and expenses associated with the
contract and related certificates.
There is no sales charge when purchasing the contract or
certificate. All direct and indirect costs for the variable
accounts and underlying mutual funds are shown below. Some
expenses may vary as explained under "Certificate charges."
Direct charges. These are deducted directly from the certificate
value. They include:
Surrender charge: A surrender charge applies to surrenders within
the first 11 certificate years. The surrender charge is 8% of the
amount surrendered in the first through fourth certificate years,
and then declines by 1% per year from 7% in the fifth certificate
year to 1% in the 11th certificate year. The surrender charge is
further limited so that it will never exceed 8.5% of aggregate
purchase payments made to the certificate.
Annual administrative charge: $30.
Indirect charges. The variable account pays these expenses out of
its assets. They are reflected in the variable account's daily
accumulation unit value and are not charged directly to the
account. They include:
Mortality and expense risk fee: 1% per year, deducted from the
variable account as a percentage of the average daily net assets of
the underlying fund.
Operating expenses of underlying mutual funds: management fees and
other expenses deducted as a percentage of average net assets as
follows: *
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<TABLE>
<CAPTION>
Aggressive International Capital Special
Growth Equity Resource Managed Income Moneyshare
<S> <C> <C> <C> <C> <C> <C>
Management fees .64% .89% .64% .64% .64% .54%
Other expenses .04 .16 .04 .04 .04 .02
Total** .68% 1.05% .68% .68% .68% .56%
</TABLE>
* Premium taxes imposed by some state and local governments are not
reflected in this table.
**Annualized operating expenses of underlying mutual funds at Dec.
31, 1994.
<TABLE>
<CAPTION>
Aggressive International Capital Special
Growth Equity Resource Managed Income Moneyshare
Example * As a participant, you would pay the following expenses on
a $1,000 investment, assuming 5% annual return and surrender at the
end of each time period:
<S> <C> <C> <C> <C> <C> <C>
1 year $137.56 $141.05 $137.56 $137.56 $137.56 $136.43
3 years 251.27 260.96 251.27 251.27 251.27 248.11
5 years 353.52 368.60 353.52 353.52 353.52 348.58
10 years 579.55 605.38 579.55 579.55 579.55 570.95
You would pay the following expenses on the same investment
assuming no surrender or selection of an annuity payout plan at
the end of each time period:
1 year $ 58.22 $ 62.01 $ 58.22 $ 58.22 $ 58.22 $ 56.99
3 years 173.23 183.81 173.23 173.23 173.23 169.78
5 years 286.35 302.70 286.35 286.35 286.35 280.99
10 years 561.13 587.65 561.13 561.13 561.13 552.30
</TABLE>
This example should not be considered a representation of past or
future expenses. Actual expenses may be more or less than those
shown.
* In this example, the $30 annual administrative charge is
approximated as a .400% charge based on our average certificate
size.
Condensed financial information
(unaudited)
The following tables give per-unit information about the financial
history of each variable account.
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<TABLE>
<CAPTION>
Years Ended Dec. 31,
______________________________________________________________________________________
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
______________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Account F (investing in shares of Capital Resource Fund)
Accumulation unit value at
beginning of period.......... $4.93 $4.82 $4.67 $3.22 $3.23 $2.57 $2.31 $2.07 $1.92 $1.52
______________________________________________________________________________________________________________________
Accumulation unit value at
end of period................ $4.94 $4.93 $4.82 $4.67 $3.22 $3.23 $2.57 $2.31 $2.07 $1.92
______________________________________________________________________________________________________________________
Number of accumulation units
outstanding at end of period
(000 omitted)................ 576,724 488,632 402,977 309,984 242,767 204,645 186,639 180,907 148,626 112,2981
______________________________________________________________________________________________________________________
Ratio of operating expense to
average net assets........... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
______________________________________________________________________________________________________________________
Account IZ2 (investing in shares of International Equity Fund)
Accumulation unit value at
beginning of period.......... $1.29 $0.98 $1.00 - - - - - - -
______________________________________________________________________________________________________________________
Accumulation unit value at
end of period................ $1.25 $1.29 $0.98 - - - - - - -
______________________________________________________________________________________________________________________
Number of accumulation units
outstanding at end of period
(000 omitted)................ 913,364 405,536 69,874 - - - - - - -
______________________________________________________________________________________________________________________
Ratio of operating expense to
average net assets........... 1.00% 1.00% 1.00% - - - - - - -
______________________________________________________________________________________________________________________
Account JZ3 (investing in shares of Aggressive Growth Fund)
Accumulation unit value at
beginning of period.......... $1.21 $1.08 $1.00 - - - - - - -
______________________________________________________________________________________________________________________
Accumulation unit value at
end of period................ $1.12 $1.21 $1.08 - - - - - - -
______________________________________________________________________________________________________________________
Number of accumulation units
outstanding at end of period
(000 omitted)................ 780,423 347,336 115,574 - - - - - - -
______________________________________________________________________________________________________________________
Ratio of operating expense to
average net assets........... 1.00% 1.00% 1.00% - - - - - - -
______________________________________________________________________________________________________________________
Account G (investing in shares of Special Income Fund)
Accumulation unit value at
beginning of period.......... $3.99 $3.48 $3.21 $2.76 $2.67 $2.48 $2.27 $2.27 $1.93 $1.59
______________________________________________________________________________________________________________________
Accumulation unit value at
end of period................ $3.80 $3.99 $3.48 $3.21 $2.76 $2.67 $2.48 $2.27 $2.27 $1.93
______________________________________________________________________________________________________________________
Number of accumulation units
outstanding at end of period
(000 omitted)................ 361,640 405,429 330,000 270,858 236,926 222,248 175,878 170,241 156,811 93,0544
______________________________________________________________________________________________________________________
Ratio of operating expense to
average net assets........... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
______________________________________________________________________________________________________________________
Account H (investing in shares of Moneyshare Fund)
Accumulation unit value at
beginning of period.......... $2.12 $2.09 $2.04 $1.95 $1.82 $1.69 $1.59 $1.51 $1.43 $1.34
_______________________________________________________________________________________________________________________
Accumulation unit value at
end of period................ $2.18 $2.12 $2.09 $2.04 $1.95 $1.82 $1.69 $1.59 $1.51 $1.43
_______________________________________________________________________________________________________________________
Number of accumulation units
outstanding at end of period
(000 omitted)................ 84,475 74,935 102,277 126,489 139,005 108,690 63,005 51,578 38,126 42,7475
_______________________________________________________________________________________________________________________<PAGE>
PAGE 12
Ratio of operating expense to
average net assets........... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
_______________________________________________________________________________________________________________________
Simple yield6 4.39% -1.56% 1.67% 3.26% 6.25% 6.81% 7.30% 5.72% 4.14% 6.39%
_______________________________________________________________________________________________________________________
Compound yield6 4.49% -1.55% 1.69% 3.31% 6.44% 7.04% 7.57% 5.88% 4.22% 6.59%
_______________________________________________________________________________________________________________________
Account N7 (investing in shares of Managed Fund)
Accumulation unit value at
beginning of period........... $2.21 $1.98 $1.86 $1.45 $1.42 $1.14 $1.06 $1.01 $1.00 -
_______________________________________________________________________________________________________________________
Accumulation unit value at
end of period................ $2.09 $2.21 $1.98 $1.86 $1.45 $1.42 $1.14 $1.06 $1.01 -
_______________________________________________________________________________________________________________________
Number of accumulation units
outstanding at end of period
(000 omitted)................ 1,127,834 910,254 650,797 496,554 400,961 331,315 325,918 321,395 101,678 -
_______________________________________________________________________________________________________________________
Ratio of operating expense to
average net assets........... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% -
_______________________________________________________________________________________________________________________
1Account F includes 17,665,211 accumulation units issued in the merger of Account C into Account F on Dec. 13, 1985.
2Account IZ commenced operations on Jan. 13, 1992.
3Account JZ commenced operations on Jan. 13, 1992.
4Account G includes 23,659,421 accumulation units issued in the merger of Account D into Account G on Dec. 13, 1985.
5Account H includes 17,002,551 accumulation units issued in the merger of Account E into Account H on Dec. 13, 1985.
6Net of annual contract administrative charge and mortality and expense risk charge.
7Account N commenced operations on April 30, 1986.
</TABLE>
Financial statements
The SAI dated May 1, 1995, contains:
o complete audited financial statements of the variable
accounts including:
- statements of net assets as of Dec. 31, 1994;
- statements of operations for the year ended Dec. 31, 1994;
and
- statements of changes in net assets for the years ended
Dec. 31, 1994 and Dec. 31, 1993.
o complete audited financial statements for IDS Life including:
- consolidated balance sheets as of Dec. 31, 1994 and Dec.
31, 1993; and
- related consolidated statements of income and cash flows
for each of three years in the period ended Dec. 31, 1994.
Performance information
Performance information for the variable accounts may appear from
time to time in advertisements or sales literature. In all cases,
such information reflects the performance of a hypothetical
investment in a particular account during a particular time period.
Calculations are performed as follows:
Simple yield - Account H (investing in Moneyshare Fund): Income
over a given seven-day period (not counting any change in the
capital value of the investment) is annualized (multiplied by 52)
by assuming that the same income is received for 52 weeks. This
annual income is then stated as an annual percentage return on the
investment.
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PAGE 13
Compound yield - Account H: Calculated like simple yield, except
that, when annualized, the income is assumed to be reinvested.
Compounding of reinvested returns increases the yield as compared
to a simple yield.
Yield - Account G (investing in Special Income): Net investment
income (income less expenses) per accumulation unit during a given
30-day period is divided by the value of the unit on the last day
of the period. The result is converted to an annual percentage.
Average annual total return: Expressed as an average annual
compounded rate of return of a hypothetical investment over a
period of one, five and 10 years (or up to the life of the account
if it is less than 10 years old). This figure reflects deduction
of all applicable charges, including the administrative charge,
mortality and expense risk fee and surrender charge, assuming a
surrender at the end of the illustrated period. Optional total
return quotations may be made that do not reflect a surrender
charge deduction (assuming no surrender).
Aggregate total return: Represents the cumulative change in the
value of an investment over a specified period of time (reflecting
change in an account's accumulation unit value). The calculation
assumes reinvestment of investment earnings. Aggregate total
return may be shown by means of schedules, charts or graphs.
Performance information should be considered in light of the
investment objectives and policies, characteristics and quality of
the fund in which the account invests, and the market conditions
during the given time period. Such information is not intended to
indicate future performance. Because advertised yields and total
return figures include all charges attributable to the
certificates, which has the effect of decreasing advertised
performance, account performance should not be compared to that of
mutual funds that sell their shares directly to the public. (See
the SAI for a further description of methods used to determine
yield and total return for the accounts.)
If you would like additional information about actual performance,
contact your financial advisor.
The variable accounts
Purchase payments can be allocated to any or all of the variable
accounts that invest in shares of the following funds:
IDS Life Account Established
Aggressive Growth Fund JZ Sept. 20, 1991
International Equity Fund IZ Sept. 20, 1991
Capital Resource Fund F May 13, 1981
Managed Fund N April 12, 1985
Special Income Fund G May 13, 1981
Moneyshare Fund H May 13, 1981
<PAGE>
PAGE 14
Each variable account meets the definition of a separate account
under federal securities laws. Income, capital gains and capital
losses of each account are credited or charged to that account
alone. No variable account will be charged with liabilities of any
other account or of our general business. Each variable account's
net assets are held in relation to the contracts described in this
prospectus as well as other variable annuity contracts that we
issue that are not described in this prospectus. All obligations
arising under the contracts are general obligations of IDS Life.
All variable accounts were established under Minnesota law and are
registered together as a single unit investment trust under the
Investment Company Act of 1940 (the 1940 Act). This registration
does not involve any supervision of our management or investment
practices and policies by the SEC.
The funds
Aggressive Growth Fund
Objective: capital appreciation. Invests primarily in common stock
of small- and medium-size companies. The fund also may invest in
warrants or debt securities or in large well-established companies
when the portfolio manager believes such investments offer the best
opportunity for capital appreciation.
International Equity Fund
Objective: capital appreciation. Invests primarily in common stock
of foreign issuers and foreign securities convertible into common
stock. The fund also may invest in certain international bonds if
the portfolio manager believes they have a greater potential for
capital appreciation than equities.
Capital Resource Fund
Objective: capital appreciation. Invests primarily in U.S. common
stocks listed on national securities exchanges and other securities
convertible into common stock, diversified over many different
companies in a variety of industries.
Managed Fund
Objective: maximum total investment return. Invests primarily in
U.S. common stocks listed on national securities exchanges,
securities convertible into common stock, warrants, fixed income
securities (primarily high-quality corporate bonds) and
money-market instruments. The fund invests in many different
companies in a variety of industries.
Special Income Fund
Objective: to provide a high level of current income while
conserving the value of the investment for the longest time period.
Invests primarily in high-quality, lower-risk corporate bonds
issued by many different companies in a variety of industries, and
in government bonds.
Moneyshare Fund
Objective: maximum current income consistent with liquidity and
conservation of capital. Invests in high-quality money market
securities with remaining maturities of 13 months or less. The
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PAGE 15
fund also will maintain a dollar-weighted average portfolio
maturity not exceeding 90 days. The fund attempts to maintain a
constant net asset value of $1 per share.
The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under Section 817(h)
of the Code. Each mutual fund intends to comply with these
requirements.
The U.S. Treasury and the IRS have indicated they may provide
additional guidance concerning how many variable accounts may be
offered and how many exchanges among variable accounts may be
allowed before the participant is considered to have investment
control and thus is currently taxed on income earned within
variable account assets. We do not know at this time what
the additional guidance will be or when action will be taken. We
reserve the right to modify the contract/certificate, as necessary,
to ensure that the participant will not be subject to current
taxation as the owner of the variable account assets.
We intend to comply with all federal tax laws to ensure that the
contract/certificate continues to qualify as an annuity for federal
income tax purposes. We reserve the right to modify the
contract/certificate as necessary to comply with any new tax laws.
IDS Life is the investment advisor for each of the funds. IDS Life
cannot guarantee that the funds will meet their investment
objectives. Please read the Retirement Annuity Mutual Fund
prospectus for complete information on investment risks,
deductions, expenses and other facts you should know before
investing. It is available by contacting IDS Life at the address
or telephone number on the front of this publication, or from your
financial advisor.
The fixed account
Purchase payments can also be allocated to the fixed account. The
cash value of the fixed account increases as interest is credited
to the account. Purchase payments and transfers to the fixed
account become part of the general account of IDS Life, the
company's main portfolio of investments. Interest is credited
daily and compounded annually. We may change the interest rates
from time to time.
Because of exemptive and exclusionary provisions, interests in the
fixed account have not been registered under the Securities Act of
1933 (1933 Act), nor is the fixed account registered as an
investment company under the 1940 Act. Accordingly, neither the
fixed account nor any interests in it are generally subject to the
provisions of the 1933 or 1940 Acts, and we have been advised that
the staff of the SEC has not reviewed the disclosures in this
prospectus that relate to the fixed account. Disclosures regarding
the fixed account, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to
the accuracy and completeness of statements made in prospectuses.
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PAGE 16
Buying the contract and certificate
A financial advisor will help the owner prepare and submit an
application. The financial advisor will also help each participant
prepare and submit an enrollment form. These forms will be sent to
our Minneapolis office. Unless otherwise provided in the contract,
the owner has all rights under the contract. Your interest under
the contract, as evidenced by your certificate, is subject to the
terms of the owner's contract and the plan.
When you enroll in the certificate, you can select:
o the account(s) in which you want to invest;
o the date you want to start receiving annuity payouts (the
retirement date); and
o a beneficiary.
The owner selects the frequency with which it will make purchase
payments.
If the application and enrollment forms are complete, we will
process them within two days after we receive them. If the
application is accepted, we will send the owner a contract. If
your enrollment form is accepted, we will send you a certificate.
If we cannot accept an application or enrollment form within five
days, we will decline it and return any payment. We will credit
additional purchase payments to the account(s) at the next close of
business.
Setting the retirement date
Annuity payouts will be scheduled to begin on the retirement date.
This date can be aligned with your actual retirement from a job, or
it can be a different future date, depending on your needs and
goals and on certain restrictions. You can also change the date,
provided you send us written instructions at least 30 days before
annuity payouts begin.
To avoid IRS penalty taxes, the retirement date generally must be:
o on or after you reach age 59 1/2; and
o by April 1 of the year following the calendar year when you
reach age 70 1/2.
If you are taking the minimum 403(b) plan distributions as required
by the Code from another tax-qualified investment, or in the form
of partial surrenders under the certificate, retirement payments
can start as late as your 85th birthday or the 10th contract
anniversary.
Certain restrictions on retirement dates apply to participants in
the Texas Optional Retirement Program, should the Employee Benefit
Annuity be available in the program. (See "Special surrender
provisions.")
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Beneficiary
If death benefits become payable before the retirement date, your
named beneficiary will receive all or part of the certificate
value. If there is no named beneficiary, then your estate will be
the beneficiary. (See "Benefits in case of death" for more about
beneficiaries.)
Minimum purchase payments
$25 monthly
Installments must total at least $300 per year.*
*If no purchase payments have been made on a participant's behalf
for 24 months, and previous payments total $600 or less, we have
the right to pay the participant the total value of the certificate
in a lump sum. This right does not apply to contracts sold to New
Jersey residents.
Minimum lump sum purchase payment
Initial payment: $1,000
Minimum additional purchase payment(s): $50
Maximum first - year payment(s):
This maximum is based the participant's age on the effective date
of the certificate.
Up to age 75 $1 million
76 to 85 $500,000
86 to 90 $50,000
Maximum payment each subsequent year: $50,000**
**These limits apply in total to all IDS Life annuities you own.
We reserve the right to increase maximum limits or reduce age
limits. The plan's limits on annual contribution also apply.
How to make purchase payments
By scheduled payment plan: A financial advisor can help the owner
set up an automatic salary reduction arrangement.
Certificate charges
Administrative charge
This fee is for establishing and maintaining records for each
certificate under the contract. We deduct $30 from the certificate
value at the end of each certificate year.
If a participant surrenders a certificate, the annual charge will
be deducted at the time of surrender. The annual charge cannot be
increased and does not apply after annuity payouts begin.
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PAGE 18
Mortality and expense risk fee
This fee is to cover the mortality risk and expense risk and is
applied daily to the variable accounts and reflected in the unit
values of the accounts. The variable accounts pay this fee at the
time that dividends are distributed from the funds in which they
invest. Annually the fee totals 1% of the variable accounts'
average daily net assets. Approximately two-thirds of this amount
is for our assumption of mortality risk, and one-third is for our
assumption of expense risk. This fee does not apply to the fixed
account.
Mortality risk arises because of our guarantee to pay a death
benefit and our guarantee to make annuity payouts according to the
terms of the contract and certificates, no matter how long a
specific annuitant lives and no matter how long the entire group of
IDS Life annuitants live. If, as a group, IDS Life annuitants
outlive the life expectancy we have assumed in our actuarial
tables, then we must take money from our general assets to meet our
obligations. If, as a group, IDS Life annuitants do not live as
long as expected, we could profit from the mortality risk fee.
Expense risk arises because the administrative charge cannot be
increased and may not cover our expenses. Any deficit would have
to be made up from our general assets. We could profit from the
expense risk fee if the annual administrative charge is more than
sufficient to meet expenses.
We do not plan to profit from the administrative charge. However,
we do hope to profit from the mortality and expense risk fee. We
may use any profits realized from this fee for any proper corporate
purpose, including, among others, payment of distribution (selling)
expenses. We do not expect that the surrender charge, discussed in
the following paragraphs, will cover sales and distribution
expenses.
Surrender charge
If part or all of a certificate is surrendered within the first 11
certificate years, the following surrender charge applies:
______________________________________________________________
Surrender Charge as
Percent of
Certificate Year Amount Surrendered
1 8%
2 8
3 8
4 8
5 7
6 6
7 5
8 4
9 3
10 2
11 1
12 and later 0
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PAGE 19
The surrender charge is further limited so that it will never
exceed 8.5% of aggregate purchase payments made to the certificate.
IDS Life reserves the right to reduce or eliminate the surrender
charge.
In the case of a partial surrender, the surrender charge is
deducted from the certificate value remaining after you are paid
the partial surrender amount requested.
Example of surrender charge:
Owner requests.................$1,000 partial surrender = $1,052.63
Total amount surrendered..............$1,052.63
x 0.05
Total surrender charge................$ 52.63
No surrender charge: There is no surrender charge on amounts
surrendered:
o after the 11th certificate year;
o due to a participant's retirement under the plan on or after age
55;
o due to the death of the participant; or
o upon settlement of the certificate under an annuity payout plan
Possible group reductions: In some cases lower sales and
administrative expenses may be incurred due to the size of the
group, the average contribution and the use of group enrollment
procedures. In such cases, we may be able to reduce or eliminate
the administrative and surrender charges. However, we expect this
to occur infrequently.
Premium taxes
Certain state and local governments may impose premium taxes. A
charge may be made by us against the certificate value for any
state premium taxes to the extent the taxes are payable.
Valuing your investment
Here is how your accounts are valued:
Fixed account: The amounts allocated to the fixed account are
valued directly in dollars and equal the sum of your purchase
payments, plus interest earned, less any amounts surrendered or
transferred.
Variable accounts: Amounts allocated to the variable accounts are
converted into accumulation units. Each time you make a purchase
payment or transfer amounts into one of the variable accounts, a
certain number of accumulation units are credited to your
certificate for that account. Conversely, each time you take a
partial surrender, transfer amounts out of a variable account, or
are assessed an administrative charge, a certain number of
accumulation units are subtracted from your certificate.
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PAGE 20
The accumulation units are the true measure of investment value in
each account during the accumulation period. They are related to,
but not the same as, the net asset value of the underlying fund.
The dollar value of each accumulation unit can rise or fall daily
depending on the performance of the underlying mutual fund and on
certain fund expenses. Here is how unit values are calculated:
Number of units
To calculate the number of accumulation units for a particular
account, we divide the investment, after deduction of any premium
taxes, by the current accumulation unit value.
Accumulation unit value
The current accumulation unit value for each variable account
equals the last value times the account's current net investment
factor.
Net investment factor
o Determined each business day by adding the underlying mutual
fund's current net asset value per share, plus per share amount
of any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and
expense risk fee from the result.
Because the net asset value of the underlying mutual fund may
fluctuate, the accumulation unit value may increase or decrease.
The investor bears this investment risk in a variable account.
Factors that affect variable account accumulation units
Accumulation units may change in two ways; in number and in value.
Here are the factors that influence those changes:
The number of accumulation units owned may fluctuate due to:
o additional purchase payments allocated to the variable
account(s);
o transfers into or out of the variable account(s);
o partial surrenders;
o surrender charges; and/or
o administrative charges.
Accumulation unit values may fluctuate due to:
o changes in underlying mutual fund(s) net asset value;
o dividends distributed to the variable account(s);
o capital gains or losses of underlying mutual funds;
o mutual fund operating expenses; and/or
o mortality and expense risk fees.
Making the most of your certificate
Automated dollar-cost averaging
You can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For
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PAGE 21
example, you might have a set amount transferred monthly from a
relatively conservative variable account to a more aggressive one,
or to several others.
This systematic approach can help you benefit from fluctuations in
accumulation unit values caused by fluctuations in the market
value(s) of the underlying mutual fund(s). Since you invest the
same amount each period, you automatically acquire more units when
the market value falls, fewer units when it rises. The potential
effect is to lower the average cost per unit. For specific
features contact your financial advisor.
How dollar-cost averaging works
Amount Accumulation Number of units
Month invested unit value purchased
Jan $100 $20 5.00
Feb 100 16 6.25
Mar 100 9 11.11
Apr 100 5 20.00
May 100 7 14.29
June 100 10 10.00
July 100 15 6.67
Aug 100 20 5.00
Sept 100 17 5.88
Oct 100 12 8.33
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more units
when the per unit market price is low
(arrow in table pointing to August) and fewer units when the per
unit market price is high.
You have paid an average price of only $10.81 per unit over the 10
months, while the average market price actually was $13.10.
Dollar-cost averaging does not guarantee that any variable account
will gain in value, nor will it protect against a decline in value
if market prices fall. However, if you can continue to invest
regularly throughout changing market conditions, it can be an
effective strategy to help meet your long term goals.
Transferring money between accounts
You may transfer money from one account, including the fixed
account, to another before the annuity payouts begin. If we
receive your request before the close of business, we will process
it that day. Requests received after the close of business will be
processed the next business day. There is no charge for transfers.
Before making a transfer, you should consider the risks involved in
switching investments.
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We may suspend or modify transfer privileges at any time. Certain
restrictions apply to transfers involving the fixed account. In
addition, any restriction imposed by the plan will apply. (For
information on transfers after annuity payouts begin, see "The
annuity payout period.")
Transfer policies
o Subject to any restrictions imposed by the plan, you may
transfer certificate values between the variable accounts, or
from the variable account(s) to the fixed account at any time.
However, if a transfer has been made from the fixed account to
the variable account(s), you may not make a transfer (including
automated transfers) from any variable account back to the fixed
account until the next eligible transfer period as defined in
the plan, if any, or otherwise until the next certificate
anniversary.
o You may transfer certificate values from the fixed account to
the variable account(s) once per certificate year, (except for
automated transfers, which can be set up for transfer periods of
your choosing subject to certain minimums.)
o No transfers may be made to or from the fixed account once
annuity payouts begin.
How to request a transfer or a surrender
1 By letter
Send your name, account number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or
surrender to:
Regular mail:
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
Express mail:
IDS Life Insurance Company
733 Marquette Avenue
Minneapolis MN 55402
Minimum amount
Mail transfers: $250 or entire account balance
Mail surrenders: $250 or entire account balance
Maximum amount
Mail transfers: None (up to certificate value)
Mail surrenders: None (up to certificate value)
2 By phone
For salary reduction plans only.
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PAGE 23
Call between 7 a.m. and 6 p.m. Central time:
1-800-437-0602 (toll free) or
(612) 671-4738 (Minneapolis/St. Paul area)
TTY service for the hearing impaired:
1-800-285-8846 (toll free)
Minimum amount
Phone transfers: $250 or entire account balance
Phone surrenders: $250 or entire account balance
Maximum amount
Phone transfers: None (up to certificate value)
Phone surrenders: $50,000
We answer phone requests promptly, but you may experience delays
when the call volume is unusually high. If unable to get through,
you can use the mail procedure as an alternative.
We will honor any telephone transfer or surrender request believed
to be authentic and will use reasonable procedures to confirm that
they are. This includes asking identifying questions and tape
recording calls. A telephone surrender will not be allowed within
30 days of a phoned-in address change. As long as the procedures
are followed, neither IDS Life nor its affiliates will be liable
for any loss resulting from fraudulent requests.
Telephone transfers or surrenders are automatically available. You
may request that telephone transfers or surrenders not be
authorized from your account by writing IDS Life.
3 By automated transfers
Your financial advisor can help you set up automated transfers
among your accounts.
You can start or stop this service by written request or other
method acceptable to IDS Life. You must allow 30 days for IDS Life
to change any instructions that are currently in place.
o Automated transfers from the fixed to variable account(s) may
not exceed an amount that, if continued, would deplete the fixed
account within 12 months.
o Automated transfers are subject to all of the contract
provisions and terms, including transfer of certificate values
between accounts.
Minimum amount
Automated transfers: $50
Maximum amount
Automated transfers: None (except for automated transfers
from the fixed account)
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PAGE 24
Surrendering a certificate
Subject to certain restrictions imposed by the Code and any
restrictions imposed by the plan, you may surrender all or part of
your certificate at any time before annuity payouts begin by
sending a written request or calling us. For total surrenders we
will compute the value of the certificate at the close of business
after we receive the request. We may ask you to return the
certificate. You may have to pay surrender charges (see "Surrender
charge") and IRS taxes and penalties (see "Taxes"). No surrenders
may be made after annuity payouts begin.
Surrender policies
If you have a balance in more than one account and request a
partial surrender, we will withdraw money from all of your accounts
in the same proportion as your value in each account correlates to
the total certificate value, unless requested otherwise.
Receiving payment when participant requests a surrender
By regular or express mail:
o Payable to participant.
o Mailed to address of record.
By wire:
o Required that payment be wired to your bank;
o Bank account must be in the same ownership as your contract;
o Pre-authorization required. For instructions, contact your
financial advisor.
Payment normally will be sent within seven days after receiving the
request. However, we may postpone the payment if:
-the surrender amount includes a purchase payment check that
has not cleared;
-the NYSE is closed, except for normal holiday and weekend
closings;
-trading on the NYSE is restricted, according to SEC rules;
-an emergency, as defined by SEC rules, makes it impractical
to sell securities or value the net assets of the accounts;
or
-the SEC permits us to delay payment for the protection of
security holders.
TSA special surrender provisions
The Code imposes certain restrictions on a participant's right to
receive early distributions attributable to salary reduction
contributions from a Tax Sheltered Annuity (TSA):
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PAGE 25
o Distributions attributable to salary reduction contributions
made after Dec. 31, 1988, plus the earnings on them, or to
transfers or rollovers of such amounts from other contracts, may
be made from the TSA only if:
-the participant has attained age 59-1/2;
-the participant has become disabled as defined in the Code;
-the participant has separated from the service of the
employer who purchased the contract; or
-the distribution is made to the participant's beneficiary
because of death.
o If you should encounter a financial hardship (within the meaning
of the Code), you may receive a distribution of all certificate
values attributable to salary reduction contributions made after
Dec. 31, 1988, but not the earnings on them.
o Even though a distribution may be permitted under the above
rules, it still may be subject to IRS taxes and penalties. (See
"Taxes.")
o The above restrictions on the right to receive a distribution do
not affect the availability of the amount transferred or rolled
over to the certificate as of Dec. 31, 1988. The restrictions
do not apply to transfers or exchanges of certificate values
within the annuity, or to another registered variable annuity
contract or investment vehicle available through the employer.
o For certain types of contributions under a TSA contract to be
excluded from taxable income, the employer must comply with
certain nondiscrimination requirements.
Participation in the Texas Optional Retirement Program: Should the
Employee Benefit Annuity be available in this program, participants
cannot receive any distribution before retirement unless they
become totally disabled or end their employment at a Texas college
or university. This restriction affects a participant's right to:
o surrender all or part of the certificate at any time; and
o move up the retirement date.
If a participant is in the program for only one year, the portion
of the purchase payments made by the state of Texas will be
refunded to the state with no surrender charge. These restrictions
are based on an opinion of the Texas Attorney General interpreting
Texas law.
Changing ownership
The contract and related certificates cannot be sold, assigned,
transferred, discounted or pledged as collateral for a loan or as
security for the performance of an obligation or for any other
purpose to any person other than IDS Life. Your vested rights
under the certificate are nonforfeitable.
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PAGE 26
Benefits in case of death
If you die before annuity payouts begin, we will pay your
beneficiary as follows:
If death occurs before your 75th birthday, the beneficiary receives
the greater of:
o the certificate value; or
o purchase payments made to the certificate, minus any surrenders.
If death occurs on or after your 75th birthday, the beneficiary
receives the certificate value.
If your spouse is sole beneficiary and you die before the
retirement date, your spouse may keep the certificate in force. To
do this your spouse must, within 60 days after we receive proof of
death, give us written instructions to keep the certificate in
force. If you die before reaching age 70 1/2, your spouse may keep
the certificate in force until the date on which you would have
reached age 70 1/2.
Payments: We will pay the beneficiary in a single sum unless you
have given us other written instructions, or the beneficiary may
receive payouts under any annuity payout plan available under this
contract if:
o the beneficiary asks us in writing within 60 days after we
receive proof of death;
o payouts begin no later than one year after death; and
o the payout period does not extend beyond the beneficiary's life
or life expectancy.
When paying the beneficiary, we will determine the certificate's
value at the next close of business after our death claim
requirements are fulfilled. Interest, if any, will be paid from
the date of death at a rate no less than required by law. We will
mail payment to the beneficiary within seven days after our death
claim requirements are fulfilled. (See "Taxes.")
The annuity payout period
As the participant, you have the right to decide how and to whom
annuity payouts will be made starting at the retirement date. You
may select one of the annuity payout plans outlined below, or we
will mutually agree on other payout arrangements. The amount
available for payouts under the plan you select is the certificate
value on the retirement date. No surrender charges are deducted
under the payout plans listed below.
The contract and related certificates allow you to determine
whether payouts are to be made on a fixed or variable basis, or a
combination of fixed and variable. Amounts of fixed and variable
payouts depend on:
o the annuity payout plan you select;
o your age;
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PAGE 27
o the annuity table in the contract and related certificates;
o the amounts allocated to the account(s) at settlement on the
retirement date.
In addition, for variable payouts only, amounts depend on:
o the investment performance of the account(s) selected.
These payouts will vary from month to month because the performance
of the underlying mutual funds will fluctuate. (In the case of
fixed annuities, payouts remain the same from month to month.)
Annuity payout plans
You may choose any one of these annuity payout plans by giving us
written instructions at least 30 days before certificate values are
to be used to purchase the payout plan.
o Plan A - Life annuity - no refund: Monthly payouts are made
until the annuitant's death. Payouts end with the last payout
before the annuitant's death; no further payouts will be made.
This means that if the annuitant dies after only one monthly payout
has been made, no more payouts will be made.
o Plan B - Life annuity with five, 10 or 15 years certain: Monthly
payouts are made for a guaranteed payout period of five, 10 or 15
years that the annuitant elects. This election will determine the
length of the payout period to the beneficiary if the annuitant
should die before the elected period has expired. The guaranteed
payout period is calculated from the retirement date. If the
annuitant outlives the elected guaranteed payout period, payouts
will continue until the annuitant's death.
o Plan C - Life annuity - installment refund: Monthly payouts are
made until the annuitant's death, with our guarantee that payouts
will continue for some period of time. Payouts will be made for at
least the number of months determined by dividing the amount
applied under this option by the first monthly payout, whether or
not the annuitant is living.
o Plan D - Joint and last survivor life annuity - no refund:
Monthly payouts are made to the annuitant and a joint annuitant
while both are living. If either annuitant dies, monthly payouts
continue at the full amount until the death of the surviving
annuitant. Payouts end with the death of the second annuitant.
o Plan E - Payouts for a specified period: Monthly payouts are
made for a specific payout period of 10 to 30 years chosen by the
annuitant. Payouts will be made only for the number of years
specified whether the annuitant is living or not. Depending on the
time period selected, it is foreseeable that an annuitant can
outlive the payout period selected. In addition, a 10% IRS penalty
tax could apply under this payout plan. (See "Taxes".)
Restrictions on payout options: Because the certificate was
purchased under the plan, you must select a payout plan that
provides for payouts:
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PAGE 28
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated
beneficiary;
o for a period not exceeding the life expectancy of the
annuitant; or
o for a period not exceeding the joint life expectancies
of the annuitant and a designated beneficiary.
If we do not receive instructions: You must give us written
instructions for the annuity payouts at least 30 days before your
retirement date. If you do not, we will make payouts under Plan B,
with 120 monthly payouts guaranteed, unless this option is contrary
to applicable provisions of the plan or the Code.
If monthly payouts would be less than $20: We will calculate the
amount of monthly payouts at the time the certificate value is used
to purchase a payout plan. If the calculations show that monthly
payouts would be less than $20, we have the right to pay the
certificate value to the participant in a lump sum.
Death after annuity payouts begin
If the annuitant dies after annuity payouts begin, any amount
payable to the beneficiary will be as provided in the annuity
payout plan in effect.
Transfers between accounts after annuity payouts begin
After the annuity payouts begin, as the annuitant, you may transfer
the value of the annuity from one variable account to another once
each year. You must send us written instructions to do this. We
will make the transfer at the next close of business after we
receive your instructions.
Taxes
Generally, under current law, any increase in your certificate
value is taxable when you receive a payout or surrender except to
the extent that contributions were made with after-tax dollars.
(See detailed discussion below.) Any portion of the annuity
payouts and any surrenders requested that represent ordinary income
are normally taxable. You will receive a 1099 tax information form
for any year in which a taxable distribution was made.
Annuity payouts: The entire payout generally will be includable as
ordinary income and subject to tax. If you or your employer
invested in the certificate with pre-tax dollars, such amounts are
not considered to be part of your investment in the certificate and
will be taxed when paid to you.
Surrenders: Generally, if you surrender part or all of the
certificate before annuity payouts begin, the surrender payment
will be taxed. You also may have to pay a 10% IRS penalty for
surrenders before reaching age 59 1/2. Other penalties may apply
if you surrender the certificate before the plan specifies that you
can receive payouts.
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PAGE 29
Death benefits to beneficiaries: The death benefit under an
annuity is not tax exempt. Any amount received by the beneficiary
that represents previously deferred earnings within the
certificate, is taxable as ordinary income to the beneficiary in
the year(s) he or she receives the payments.
Penalties: If you receive amounts from the certificate before
reaching age 59 1/2, you may have to pay a 10% IRS penalty on the
amount includable in your ordinary income. However, this penalty
will not apply to any amount received by you or your beneficiary:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal
periodic payments, made at least annually, over your life or
life expectancy (or joint lives or life expectancies of you and
your designated beneficiary); or
o after you separate from service in the year you attain age 55.
Other penalties or exceptions may apply if you surrender your
certificate before your plan specifies that payments can be made.
Mandatory withholding: If you receive directly all or part of the
certificate value, mandatory 20% income tax withholding generally
will be imposed at the time the payment is made. Any withholding
that is done represents a prepayment of your tax due for the year
and you would take credit for such amounts on the annual tax return
you file. This mandatory withholding will not be imposed if:
o instead of receiving the distribution check, you elect to have
the distribution rolled over directly to an IRA or another
eligible plan;
o the payment is one in a series of substantially equal periodic
payments, made at least annually, over your life or life
expectancy (or the joint lives or life expectancies of you and
your designated beneficiary) or over a specified period of 10
years or more; or
o the payment is a minimum distribution required under the Code.
Payments made to a surviving spouse instead of being directly
rolled over to an IRA may also be subject to mandatory 20% income
tax withholding.
Elective withholding: If the distribution is not subject to
mandatory withholding as described above, you can elect not to have
any withholding occur. To do this you must provide us with a valid
Social Security Number or Taxpayer Identification Number.
If you do not make this election and if the payout is part of an
annuity payout plan, the amount of withholding generally is
computed using payroll tables. You can provide us with a statement
of how many exemptions to use in calculating the withholding. If
the distribution is any other type of payment (such as a partial or
full surrender), withholding is computed using 10% of the taxable
portion.
<PAGE>
PAGE 30
Some states also impose withholding requirements similar to the
federal withholding described above. If this should be the case,
any payment from which federal withholding is deducted may also
have state withholding deducted. The withholding requirements may
differ if payment is being made to a non-U.S. citizen or if the
payment is being delivered outside the United States.
Important: Our discussion of federal tax laws is based upon our
understanding of these laws as they are currently interpreted.
Federal tax laws or current interpretations of them may change.
For this reason and because tax consequences are complex and highly
individual and cannot always be anticipated, you should consult a
tax advisor if you have any questions about taxation of the
contract and/or related certificates.
Tax Qualification
The contract (and your certificate of participation thereunder) is
intended to qualify as an annuity contract for Federal income tax
purposes. To that end, the provisions of the contract and your
certificate are to be interpreted to ensure or maintain such tax
qualification, notwithstanding any other provisions to the
contrary. We reserve the right to amend the contract and/or
related certificates to reflect any clarifications that may be
needed or are appropriate to maintain such qualification or to
conform the contract and/or certificates to any applicable changes
in the tax qualification requirements. We will send you a copy of
any such amendment.
Voting rights
As an owner or participant with investments in the variable
account(s) you may vote on important mutual fund policies until
annuity payouts begin. Once they begin, the person receiving them
has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes is determined by
applying the percentage interest in each variable account to the
total number of votes allowed to the account.
After annuity payouts begin, the number of votes is equal to:
o the reserve held in each account for the contract or
certificate, divided by
o the net asset value of one share of the applicable underlying
mutual fund.
As we make annuity payouts, the reserve for the annuity decreases;
therefore, the number of votes also will decrease.
<PAGE>
PAGE 31
We calculate votes separately for each account not more than 60
days before a shareholders' meeting. Notice of these meetings,
proxy materials and a statement of the number of votes to which the
voter is entitled, will be sent.
We will vote shares for which we have not received instructions in
the same proportion as the votes for which we have received
instructions. We also will vote the shares for which we have
voting rights in the same proportion as the votes for which we have
received instructions.
Substitution
Shares of any of the underlying funds may not always be available
for purchase by the variable accounts, or we may decide that
further investment in any such fund's shares is no longer
appropriate in view of the purposes of the variable account. In
either event, shares of another registered open-end management
investment company may be substituted both for fund shares already
purchased by the variable account and for purchases to be made in
the future. In the event of any substitution pursuant to this
provision, we may make appropriate endorsement to the contract and
certificates to reflect the substitution.
We reserve the right to split or combine the value of accumulation
units. In effecting such change of unit values, strict equity will
be preserved and no change will have a material effect on the
benefits under the certificates or on any other provisions of the
contract and related certificates.
Distribution of the certificates
IDS Life, a registered broker/dealer, is the sole distributor of
the certificates. IDS Life pays total commissions of up to 7.0% of
the total purchase payments received on the certificates. A
portion of this total commission is paid to district and division
sales managers of the selling representative.
About IDS Life
The Employee Benefit Annuity is issued by IDS Life, a wholly owned
subsidiary of American Express Financial Corporation, which itself
is a wholly owned subsidiary of the American Express Company, a
financial services company headquartered in New York City.
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota and located at IDS Tower 10,
Minneapolis, MN 55440-0010. IDS Life conducts a conventional life
insurance business in the District of Columbia and all states
except New York.
American Express Financial Advisors Inc. offers mutual funds,
investment certificates and a broad range of financial management
services. IDS Life offers insurance and annuities.
<PAGE>
PAGE 32
American Express Financial Advisors Inc. serves individuals and
businesses through its nationwide network of more than 175 offices
and more than 8000 financial advisors.
Other subsidiaries provide investment management and related
services for pension, profit-sharing, employee savings and
endowment funds of businesses and institutions.
Regular and special reports
Services
To help you track and evaluate the performance of your annuity, we
provide:
Quarterly statements showing the value of your investment.
Annual reports containing required information on the annuity and
its underlying investments.
A personalized annuity progress report detailing the cumulative
return since the certificate was purchased and the average annual
rate of return on the investments. This report, which is unique in
the industry, is available upon request from your financial
advisor.
<PAGE>
PAGE 33
Table of contents of the Statement of Additional Information
Performance information....................... 3
Calculating annuity payouts................... 6
Rating agencies............................... 7
Principal underwriter......................... 8
Independent auditors.......................... 8
Morality and expense risk charge.............. 8
Prospectus.................................... 8
Financial statements -
IDS Life Accounts F, IZ, JZ, G, H and N........... 9
IDS Life Insurance Company........................ 17
___________________________________________________________________
Please check the appropriate box to receive a copy of the Statement
of Additional Information for:
_____ IDS Life Employee Benefit Annuity
_____ IDS Life Retirement Annuity Mutual Funds
Please return this request to:
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
Your name _______________________________________________________
Address _________________________________________________________
City ______________________ State ______________ Zip ___________
<PAGE>
PAGE 34
STATEMENT OF ADDITIONAL INFORMATION
for
IDS LIFE EMPLOYEE BENEFIT ANNUITY
IDS LIFE ACCOUNTS F, IZ, JZ, G, H and N
May 1, 1995
IDS Life Accounts F, IZ, JZ, G, H and N are separate accounts
established and maintained by IDS Life Insurance Company (IDS
Life).
This Statement of Additional Information dated May 1, 1995, is not
a prospectus. It should be read together with the accounts'
prospectus, dated May 1, 1995, which may be obtained from your
American Express financial advisor, or by writing or calling IDS
Life at the address or telephone number below.
IDS Life Insurance Company
P10/199
P.O. Box 74
Minneapolis, MN 55440-0074
612-671-3131
<PAGE>
PAGE 35
TABLE OF CONTENTS
Performance Information.......................................p. 3
Calculating Annuity Payouts...................................p. 6
Rating Agencies...............................................p. 7
Principal Underwriter.........................................p. 8
Independent Auditors..........................................p. 8
Mortality and Expense Risk Charge.............................p. 8
Prospectus....................................................p. 8
Financial Statements
- IDS Life Accounts F, IZ, JZ, G, H and N..........p. 9
- IDS Life Insurance Company.......................p. 17
<PAGE>
PAGE 36
PERFORMANCE INFORMATION
Calculation of yield for Account H
IDS Life Account H, which invests in IDS Life Moneyshare Fund,
Inc., calculates an annualized simple yield and a compound yield
based on a seven-day period.
The simple yield is calculated by determining the net change in the
value of a hypothetical account having the balance of one
accumulation unit at the beginning of the seven-day period. (The
net change does not include capital change, but does include a pro
rata share of the annual contract charges, including the annual
contract administrative charge and the mortality and expense risk
fee.) The net change in the account value is divided by the value
of the account at the beginning of the period to obtain the return
for the period. That return is then multiplied by 365/7 to obtain
an annualized figure. The value of the hypothetical account
includes the amount of any declared dividends, the value of any
shares purchased with any dividend paid during the period and any
dividends declared for such shares. The variable account's
(account) yield does not include any realized or unrealized gains
or losses, nor does it include the effect of any applicable
surrender charge.
The account calculates its compound yield according to the
following formula:
365/7
Compound Yield = [return for seven-day period +1) ] - 1
On Dec. 31, 1994, the Account's annualized simple yield was 4.12%
and its compound yield was 4.21%.
The rate of return, or yield, on the account's accumulation unit
may fluctuate daily and does not provide a basis for determining
future yields. Investors must consider, when comparing an
investment in Account H with fixed annuities, that fixed annuities
often provide an agreed-to or guaranteed fixed yield for a stated
period of time, whereas the variable account's yield fluctuates.
In comparing the yield of Account H to a money market fund, you
should consider the different services that the annuity provides.
Calculation of yield for Account G
IDS Life Account G invests in IDS Life Special Income Fund, Inc.
Quotations of yield will be based on all investment income earned
during a particular 30-day period, less expenses accrued during the
period (net investment income) and will be computed by dividing net
investment income per accumulation unit by the value of an
accumulation unit on the last day of the period, according to the
following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
<PAGE>
PAGE 37
where: a = dividends and investment income earned during the
period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends
d = the maximum offering price per accumulation unit on the
last day of the period
Yield on the account is earned from the increase in the net asset
value of shares of the fund in which the account invests and from
dividends declared and paid by the fund, which are automatically
invested in shares of the fund.
On Dec. 31, 1994, the account's annualized yield was 4.10%.
Calculation of average annual total return
Quotations of average annual total return for an account will be
expressed in terms of the average annual compounded rate of return
of a hypothetical investment in the annuity contract over a period
of one, five and 10 years (or, if less, up to the life of the
account), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five
or ten year (or other) period at the end of the
one, five or ten year (or other) period (or
fractional portion thereof)
Account total return figures reflect the deduction of the contract
administrative charge and mortality and expense risk fee.
Performance figures will be shown with the deduction of the
applicable surrender charge; in addition, performance figures may
be shown without the deduction of a surrender charge. The
Securities and Exchange Commission requires that an assumption be
made that the contract owner surrenders the entire contract at the
end of the one, five and ten year periods (or, if less, up to the
life of the account) for which performance is required to be
calculated.
The following performance figures are calculated on the basis of
historical performance of the funds.
<PAGE>
PAGE 38
Average Annual Total Return For Period Ended: Dec. 31, 1994
<TABLE>
<CAPTION>
Average Annual Total Return with Surrender
Since
Account investing in: 1 Year 5 Year 10 Year Inception
<S> <C> <C> <C> <C>
IDS LIFE
Aggressive Growth Fund (1/92)* -14.35% -- -- 1.74%
Capital Resource Fund (10/81) - 6.96% 7.67% 12.28% --
International Equity Fund (1/92) -10.03% -- -- 5.64%
Managed Fund (4/86) -12.58% 6.75% -- 8.29%
Moneyshare Fund (10/81) - 4.33% 2.24% 4.77% --
Special Income Fund (10/81) -12.02% 6.02% 8.87% --
Average Annual Total Return without Surrender
Since
Account investing in: 1 Year 5 Year 10 Year Inception
IDS LIFE
Aggressive Growth Fund (1/92)* -7.35% -- -- 3.97%
Capital Resource Fund (10/81) .04% 8.69% 12.28% --
International Equity Fund (1/92) -3.03% -- -- 7.72%
Managed Fund (4/86) -5.58% 7.80% -- 8.72%
Moneyshare Fund (10/81) 2.67% 3.49% 4.77% --
Special Income Fund (10/81) -5.02% 7.11% 8.87% --
* inception dates of the funds are shown in parentheses.
</TABLE>
Aggregate total return
Aggregate total return represents the cumulative change in the
value of an investment over a specified period of time (reflecting
change in an account's accumulation unit value) and is computed by
the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five,
or ten year (or other) period at the end of the
one, five, or ten year (or other) period (or
fractional portion thereof)
Performance of the accounts may be quoted or compared to rankings,
yields, or returns as published or prepared by independent rating
or statistical services or publishers or publications such as The
Bank Rate Monitor National Index, Barron's, Business Week,
Donoghue's Money Market Fund Report, Financial Services Week,
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
<PAGE>
PAGE 39
CALCULATING ANNUITY PAYOUTS
The Variable Account
The following calculations are done separately for each of the
variable accounts. The separate monthly payouts, added together,
make up your total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your certificate as of the
valuation date seven days before the retirement date and then
deduct any applicable premium tax.
o apply the result to the annuity table contained in the
certificate or another table at least as favorable. The annuity
table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as
described below.
Annuity Units: The value of your account is then converted to
annuity units. To compute the number credited to you, we divide
the first monthly payment by the annuity unit value (see below) on
the valuation date on (or next day preceding) the seventh calendar
day before the retirement date. The number of units in your
account is fixed. The value of the units fluctuate with the
performance of the underlying mutual fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date on or immediately
preceding the seventh calendar day before the payout is due; by
o the fixed number of annuity units credited to you.
Annuity Table: The table shows the amount of the first monthly
payment for each $1,000 of certificate value according to the age
of the annuitant. (Where required by law, we will use a unisex
table of settlement rates.) The table assumes that the certificate
value is invested at the beginning of the annuity payout period and
earns a 5% rate of return, which is reinvested and helps to support
future payouts.
Substitution of 3.5% Table: If you ask us at least 30 days before
the retirement date, we will substitute an annuity table based on
an assumed 3.5% investment rate for the 5% table in the
certificate. The assumed investment rate affects both the amount
of the first payout and the extent to which subsequent payouts
increase or decrease. Using the 5% table results in a higher
initial payment, but later payouts will increase more slowly when
annuity unit values are rising and decrease more rapidly when they
are declining.
Annuity Unit Values: This value was originally set at $1 for each
variable account. To calculate later values we multiply the last
annuity value by the product of:
o the net investment factor; and
o the neutralizing factor. The purpose of the neutralizing factor
<PAGE>
PAGE 40
is to offset the effect of the assumed investment rate built into
the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor:
o Determined each business day by adding the underlying mutual
fund's current net asset value per share plus per share amount of
any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and
expense risk fee from the result.
Because the net asset value of the underlying mutual fund may
fluctuate, the net investment factor may be greater or less than
one, and the accumulation unit value may increase or decrease. You
bear this investment risk in a variable account.
The Fixed Account
Your fixed annuity payout amounts are guaranteed. Once calculated,
your payout will remain the same and never change. To calculate
your annuity payouts we:
o take the value of your fixed account at the retirement date or
the date you have selected to begin receiving your annuity payouts;
then
o using an annuity table we apply the value according to the
annuity payout plan you select; and
o the annuity payout table we use will be the one in effect at the
time you choose to begin your annuity payouts. The table will be
equal to or greater than the table in your certificate.
RATING AGENCIES
The following chart reflects the ratings given to IDS Life by
independent rating agencies. These agencies evaluate the financial
soundness and claims-paying ability of insurance companies based on
a number of different factors. This information does not relate to
the management or performance of the variable accounts of the
annuity. This information relates only to the fixed account and
reflects IDS Life's ability to make annuity payouts and to pay
death benefits and other distributions from the annuity.
Rating Agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the accounts is IDS Life which offers
the variable annuities on a continuous basis.
<PAGE>
PAGE 41
Surrender charges received by IDS Life for 1994, 1993 and 1992,
aggregated $6,969,493, $4,408,562 and $3,649,836, respectively.
Commissions paid by IDS Life for 1994, 1993 and 1992, aggregated
$17,331,801, $16,783,495 and $10,334,092, respectively. The
surrender charges were applied toward payment of commissions.
INDEPENDENT AUDITORS
The financial statements of IDS Life Accounts F, IZ, JZ, G, H and N
including the statements of net assets as of December 31, 1994, and
the related statements of operations for the year then ended and
the related statements of changes in net assets for each of the two
years in the period then ended, and the consolidated financial
statements of IDS Life Insurance Company as of December 31, 1994
and for each of the three years in the period then ended, appearing
in this SAI, have been audited by Ernst & Young LLP, independent
auditors, as stated in their reports appearing herein.
MORTALITY AND EXPENSE RISK CHARGE
IDS Life has represented to the SEC that:
IDS Life has reviewed publicly available information regarding
products of other companies. Based upon this review, IDS Life has
concluded that the mortality and expense risk charge is within the
range of charges determined by industry practice. IDS Life will
maintain at its principal office, and make available on request of
the SEC or its staff, a memorandum setting forth in detail the
variable products analyzed and the methodology, and results of, its
comparative review.
IDS Life has concluded that there is a reasonable likelihood that
the proposed distribution financing arrangements made with respect
to the annuities will benefit the variable account and investors in
the annuities. The basis for such conclusion is set forth in a
memorandum which will be made available to the SEC or its staff on
request.
PROSPECTUS
The prospectus dated May 1, 1995, is hereby incorporated in this
Statement of Additional Information by reference.
<PAGE>
PAGE 42
<TABLE>
<CAPTION>
Statements of Net Assets Dec. 31, 1994
Combined
Segregated Asset Account Retirement
Assets F IZ JZ G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Investments in shares of mutual funds, at market value:
IDS Life Capital
Resource Fund --125,102,442 shares at
net asset value of
$22.79 per share (cost
$2,715,609,753)........$2,850,390,879 $ -- $ -- $ -- $ -- $ -- $2,850,390,879
IDS Life International
Equity Fund --95,481,767 shares at
net asset value of
$11.98 per share (cost
$1,142,519,037......... -- 1,143,971,125 -- -- -- -- 1,143,971,125
IDS Life Aggressive
Growth Fund, --76,384,383 shares at
net asset value of
$11.50 per share (cost
$853,263,139).......... -- -- 878,706,886 -- -- -- 878,706,886
IDS Life Special Income
Fund, -- 129,291,223
shares at net asset
value of $10.63 per share
(cost $1,459,290,588).. -- -- -- 1,374,522,053 -- -- 1,374,522,053
IDS Life Moneyshare
Fund, Inc. --184,083,808 shares at
net asset value of
$1.00 per share
(cost $184,069,039).... -- -- -- -- 184,069,016 -- 184,069,016
IDS Life Managed Fund,
Inc. -- 181,580,029
shares at net asset
value of $12.97 per
share (cost
$2,344,431,932)........ -- -- -- -- -- 2,354,791,773 2,354,791,773
2,850,390,879 1,143,971,125 878,706,886 1,374,522,053 184,069,016 2,354,791,773 8,786,451,732
Dividends receivable... -- -- -- 9,282,930 783,419 -- 10,066,349
Accounts receivable
from IDS Life for
contract purchase
payments............... 1,565,364 1,742,200 1,619,335 520,266 2,788,579 1,377,190 9,612,934
Receivable from mutual
funds for share
redemptions............ 462,135 832 5 900,511 691,584 391,230 2,446,297
Total assets........... 2,852,418,378 1,145,714,157 880,326,226 1,385,225,760 188,332,598 2,356,560,193 8,808,577,312
Liabilities
Payable to IDS Life for:
Mortality and expense
risk fee............... 2,327,548 926,749 707,689 1,136,252 147,237 1,925,144 7,170,619
Contract terminations.. 462,135 832 5 900,511 691,584 391,230 2,446,297
Payable to mutual funds
for investments
purchased.............. 1,565,364 1,742,233 1,619,335 9,046,778 3,424,761 1,377,190 18,775,661
Total liabilities...... 4,355,047 2,669,814 2,327,029 11,083,541 4,263,582 3,693,564 28,392,577
Net assets applicable to
contracts in
accumulation period.... 2,844,739,114 1,140,227,796 876,183,932 1,373,318,942 183,855,026 2,351,149,890 8,769,474,700
Net assets applicable
to contracts in payment
period (Note 5)........ 3,324,217 2,816,547 1,815,265 823,277 213,990 1,716,739 10,710,035
Total net assets.......$2,848,063,331 $1,143,044,343 $877,999,197 $1,374,142,219 $184,069,016 $2,352,866,629 $8,780,184,735
Accumulation units
outstanding............ 576,723,791 913,363,825 780,422,772 361,639,812 84,475,351 1,127,833,738
Net asset value per
accumulation unit......$ 4.94 $ 1.25 $ 1.12 $ 3.80 $ 2.18 $ 2.09
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 43
<TABLE>
<CAPTION>
Statements of Operations Year ended Dec. 31, 1994
Combined
Segregated Asset Account Retirement
Investment income: F IZ JZ G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Dividend income from
mutual funds............ $318,552,504 $31,517,651 $ 1,203,319 $120,559,964 $ 6,391,828 $143,265,112 $621,490,378
Mortality and expense
risk fee (Note 3)....... 26,236,047 9,017,869 6,359,108 15,171,463 1,685,428 22,165,205 80,635,120
Investment income
(loss) -- net........... 292,316,457 22,499,782 (5,155,789) 105,388,501 4,706,400 121,099,907 540,855,258
Realized and Unrealized Gain (Loss) on Investments -- net
Realized gain (loss)
on sales of investments
in mutual funds:
Proceeds from sales..... 483,989 4,642 1,354,409 226,089,362 45,221,749 2,643,217 275,797,368
Cost of investments
sold.................... 398,278 4,611 1,337,440 231,950,751 45,221,925 2,578,614 281,491,619
Net realized gain (loss)
on investments.......... 85,711 31 16,969 (5,861,389) (176) 64,603 (5,694,251)
Net change in unrealized
appreciation or
depreciation of
investments............. (285,085,781) (59,427,638) (27,460,080) (180,870,854) (212) (245,132,378) (797,976,943)
Net gain (loss) on
investments............. (285,000,070) (59,427,607) (27,443,111) (186,732,243) (388) (245,067,775) (803,671,194)
Net increase (decrease)
from operations......... $ 7,316,387 $(36,927,825) $32,598,900) $(81,343,742) $ 4,706,012 $(123,967,868) $(262,815,936)
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 44
<TABLE>
<CAPTION>
Statements of Changes in Net Assets Year ended Dec. 31, 1994
Combined
Segregated Asset Account Retirement
Operations F IZ JZ G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) -- net...........$ 292,316,457 $ 22,499,782 $ (5,155,789) $ 105,388,501 $ 4,706,400 $ 121,099,907 $ 540,855,258
Net realized gain (loss)
on investments.......... 85,711 31 16,969 (5,861,389) (176) 64,603 (5,694,251)
Net change in unrealized
appreciation or
depreciation of
investments............. (285,085,781) (59,427,638) (27,460,080) (180,870,854) (212) (245,132,378) (797,976,943)
Net increase (decrease)
from operations......... 7,316,387 (36,927,825) (32,598,900) (81,343,742) 4,706,012 (123,967,868) (262,815,936)
Contract Transactions
Variable annuity
contract purchase
payments................ 339,325,569 296,792,048 219,219,644 276,166,501 131,497,539 368,996,274 1,631,997,575
Net transfers*.......... 190,936,076 384,718,948 286,639,920 (373,201,534) (97,336,277) 180,480,671 572,237,804
Loan repayments......... 4,579,640 1,249,415 1,097,529 1,683,555 314,621 3,205,194 12,129,954
Annuity payments........ (152,217) (36,207) (65,026) (79,359) (16,218) (131,778) (480,805)
Contract charges
(Note 3)................ (3,854,998) (1,224,695) (940,741) (1,775,930) (191,660) (3,018,066) (11,006,090)
Contract terminations:
Surrender benefits...... (90,212,060) (20,356,976) (14,738,072) (54,837,796) (12,471,195) (69,087,185) (261,703,284)
Death benefits.......... (9,109,536) (2,664,292) (1,879,624) (11,703,499) (1,291,622) (11,436,756) (38,085,329)
Increase (decrease) from
contract transactions... 431,512,474 658,478,241 489,333,630 (163,748,062) 20,505,188 469,008,354 1,905,089,825
Net assets at beginning
of year................. 2,409,234,470 521,493,927 421,264,467 1,619,234,023 158,857,816 2,007,826,143 7,137,910,846
Net assets at end of
year....................$2,848,063,331 $1,143,044,343 $877,999,197 $1,374,142,219 $184,069,016 $2,352,866,629 $8,780,184,735
Accumulation Unit Activity
Units outstanding at
beginning of year....... 488,632,295 405,535,877 347,336,270 405,428,501 74,934,517 910,254,254
Contract purchase
payments................ 69,409,978 230,140,233 194,182,234 70,904,101 61,497,139 172,372,885
Net transfers*.......... 39,022,621 296,391,908 254,597,323 (97,050,500) (45,409,236) 83,777,064
Transfers for policy
loans................... 935,113 962,061 977,880 437,024 142,245 1,498,112
Contract charges........ (793,830) (955,777) (846,781) (463,580) (91,899) (1,425,215)
Contract terminations:
Surrender benefits...... (18,521,414) (16,526,366) (14,010,347) (14,402,198) (5,966,351) (32,963,969)
Death benefits.......... (1,960,972) (2,184,111) (1,813,807) (3,213,536) (631,064) (5,679,393)
Units outstanding at end
of year................. 576,723,791 913,363,825 780,422,772 361,639,812 84,475,351 1,127,833,738
*Includes transfer activity from (to) other Accounts and transfers (from) to IDS Life for conversion from (to) Fixed Account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 45
<TABLE>
<CAPTION>
Statements of Changes in Net Assets Year ended Dec.31, 1993
Combined
Segregated Asset Account Retirement
Operations F IZ JZ G H N Annuity
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) -- net...........$ 104,837,120 $ 5,496,373 ($ 2,035,497) $ 85,410,343 $ 2,976,613 $ 82,769,907 $ 279,454,859
Net realized gain
(loss) on investments... 1,726,721 (429) 9,141 1,736,608 357 -- 3,472,398
Net change in unrealized
appreciation or
depreciation of
investments............. (37,650,583) 61,178,701 39,404,999 95,406,120 (1,023) 87,484,868 245,823,082
Net increase from
operations.............. 68,913,258 66,674,645 37,378,643 182,553,071 2,975,947 170,254,775 528,750,339
Contract Transactions
Variable annuity
contract purchase
payments................ 330,981,853 160,547,955 124,277,716 466,011,798 70,267,853 382,661,419 1,534,748,594
Net transfers*.......... 134,056,694 229,679,989 139,206,625 (129,912,208) (116,421,311) 210,725,612 467,335,401
Loan repayments......... 4,553,364 434,912 549,319 1,585,070 340,014 2,550,478 10,013,157
Annuity payments........ (125,502) (2,998) (26,439) (49,683) (15,350) (57,871) (277,843)
Contract charges
(Note 3)................ (3,519,430) (315,610) (441,927) (1,727,247) (232,943) (2,388,727) (8,625,884)
Contract terminations:
Surrender benefits...... (58,637,955) (3,483,175) (4,541,055) (39,415,894) (10,201,392) (39,703,861) (155,983,332)
Death benefits.......... (7,598,094) (382,391) (510,497) (7,426,206) (1,132,267) (6,836,999) (23,886,454)
Increase (decrease) from
contract transactions... 399,710,930 386,478,682 258,513,742 289,065,630 (57,395,396) 546,950,051 1,823,323,639
Net assets at beginning
of year................. 1,940,610,282 68,340,600 125,372,082 1,147,615,322 213,277,265 1,290,621,317 4,785,836,868
Net assets at end of
year....................$2,409,234,470 $521,493,927 $ 421,264,467 $1,619,234,023 $158,857,816 $2,007,826,143 $7,137,910,846
Accumulation Unit Activity
Units outstanding at
beginning of year....... 402,977,447 69,874,129 115,574,391 330,000,476 102,276,956 650,797,089
Contract purchase
payments................ 71,151,021 139,260,645 111,983,807 122,331,094 33,585,205 182,420,082
Net transfers*.......... 28,700,204 200,006,390 124,582,489 (34,086,653) (55,447,607) 100,014,180
Transfers for policy
loans................... 974,940 383,588 495,860 417,082 161,745 1,213,283
Contract charges........ (762,431) (278,873) (401,877) (460,280) (112,836) (1,148,105)
Contract terminations:
Surrender benefits...... (12,665,962) (3,361,172) (4,418,007) (10,711,698) (4,976,299) (19,632,960)
Death benefits.......... (1,742,924) (348,830) (480,393) (2,061,520) (552,647) (3,409,315)
Units outstanding at end
of year................. 488,632,295 405,535,877 347,336,270 405,428,501 74,934,517 910,254,254
*Includes transfer activity from (to) other Accounts and transfers (from) to IDS Life for conversion from (to) Fixed Account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 46
Notes to Financial Statements
___________________________________________________________________
1. Organization
IDS Life Accounts F, G, H and N were established as segregated
asset accounts of IDS Life Insurance Company (IDS Life) under
Minnesota law and are registered collectively as a single unit
investment trust under the Investment Company Act of 1940.
Accounts F, G and H were established on May 13, 1981. Account N
was established on April 22, 1985 and commenced operations on April
30, 1986. Accounts IZ and JZ were established as segregated asset
accounts on Sept. 20, 1991 and commenced operations on Jan. 13,
1992. IDS Life Accounts F, IZ, JZ, G, H and N are collectively
referred to as "the Accounts."
The assets of the Account's are held for the exclusive benefit of
the Retirement Annuity contract owners and are not chargeable with
liabilities arising out of the business conducted by any other
segregated asset accounts or by IDS Life. Contract owners allocate
their variable purchase payments to one or more of the six
segregated asset accounts. Such funds are then invested in shares
of six mutual funds organized by IDS Life as the investment
vehicles for variable annuity contracts issued by IDS Life and by
IDS Life Insurance Company of New York.
IDS Life Capital Resource Fund, Inc., IDS Life Special Income Fund,
Inc. and IDS Life Moneyshare Fund, Inc. commenced operations Oct.
13, 1981. IDS Life Managed Fund, Inc. commenced operations April
30, 1986. These mutual funds are registered under the Investment
Company Act of 1940 as diversified, open-end management investment
companies. Funds allocated to IDS Life Account F are invested in
the shares of IDS Life Capital Resource Fund; IDS Life Account IZ
invests in the shares of IDS Life International Equity Fund; IDS
Life Account JZ invests in the shares of IDS Life Aggressive Growth
Fund; IDS Life Account G invests in the shares of IDS Life Special
Income Fund, Inc.; IDS Life Account H invests in the shares of IDS
Life Moneyshare Fund, Inc. and IDS Life Account N invests in the
shares of IDS Life Managed Fund, Inc.
IDS Life serves as manager, investment adviser and distributor for
the Accounts and the underlying six mutual funds.
___________________________________________________________________
2. Summary of Significant Accounting Policies
Investments in Mutual Funds
Investments in shares of the mutual funds are stated at market
value, which is the net asset value per share as determined by the
respective funds. Investment transactions are accounted for on the
date the shares are purchased and sold. The cost of investments
sold and redeemed is determined on the average cost method.
Dividend distributions received from the mutual funds are
reinvested, net of any expenses payable to IDS Life, in additional
shares of the mutual funds and are recorded as income by the
Accounts on the ex-dividend date.
<PAGE>
PAGE 47
___________________________________________________________________
2. Summary of Significant Accounting Policies (continued)
Unrealized appreciation or depreciation of investments in the
accompanying financial statements represents the Accounts' share of
the mutual funds' undistributed net investment income,
undistributed realized gain or loss and the unrealized appreciation
or depreciation on their investment securities.
Federal Income Taxes
IDS Life is taxed as a life insurance company. The Accounts are
treated as part of IDS Life for federal income tax purposes. Under
existing tax law, no income taxes are payable with respect to any
income of the Accounts.
___________________________________________________________________
3. Mortality and Expense Risk Fee and Contract Charges
IDS Life makes contractual assurances to the Accounts that possible
future adverse changes in administrative expenses and mortality
experience of the annuitants and beneficiaries will not affect the
Accounts. The mortality and expense risk fee paid to IDS Life is
computed daily and is equal, on an annual basis, to 1 percent of
the average daily net assets of the Accounts.
An annual charge of $20 is deducted from the contract value of each
Variable Retirement Annuity contract. An annual charge of $30 is
deducted from the contract value of each Combination Retirement
Annuity contract. An annual charge of $500 is deducted from the
contract value of each Group Variable Annuity contract. An annual
charge of $30 is deducted from the certificate value of each
Employee Benefit Annuity certificate. A quarterly charge of $6 is
deducted from the contract value of each Flexible Annuity contract.
The annual charges are deducted at contract year end and the
quarterly charges are deducted at contract quarter end, during the
accumulation period, for administrative services provided to the
Accounts by IDS Life.
A contingent deferred sales charge (surrender charge or withdrawal
charge) will be imposed upon:
a) certain Variable Retirement Annuity contract surrenders during
the first seven years,
b) Combination Retirement Annuity contract surrenders during the
first seven, eight or eleven years, depending on type of
contract,
c) Group Variable Annuity contract withdrawals during the first
seven years,
d) Employee Benefit Annuity certificate surrenders during the first
eleven years, and
e) Flexible Annuity contract surrenders of amounts other than those
representing earnings or those representing purchase payments
more than six years old.
<PAGE>
PAGE 48
___________________________________________________________________
3. Mortality and Expense Risk Fee and Contract Charges (continued)
Charges by IDS Life for surrenders are not available on an
individual segregated asset account basis. Charges for all
segregated asset accounts amounted to $6,969,493 in 1994 and
$4,408,562 in 1993. Such charges are not an expense of the
Accounts. They are deducted from contract surrender benefits paid
by IDS Life.
___________________________________________________________________
4. Investment Transactions
The Accounts' purchases of mutual fund shares (net of charges),
including reinvestment of dividend distributions, were as follows:
<TABLE>
<CAPTION>
Year Ended Dec. 31,
Account Investment 1994 1993
<S> <C> <C> <C>
F IDS Life Capital Resource Fund..................... $ 724,607,219 $ 515,379,012
IZ IDS Life International Equity Fund................. 681,492,412 392,511,644
JZ IDS Life Aggressive Growth Fund.................... 485,898,077 256,797,588
G IDS Life Special Income Fund, Inc.................. 168,109,635 407,642,377
H IDS Life Moneyshare Fund, Inc...................... 70,433,338 16,204,701
N IDS Life Managed Fund, Inc......................... 592,997,615 630,321,175
$2,723,538,296 $2,218,856,497
</TABLE>
___________________________________________________________________
5. Annuity Contracts in Payment Period
Net assets and annuity units relating to contracts in the payment
period as of Dec. 31, 1994, are as follows:
<TABLE>
<CAPTION>
F IZ JZ G H N
<S> <C> <C> <C> <C> <C> <C>
Net assets applicable to contracts
in payment period................... $3,324,217 $2,816,547 $1,815,265 $823,277 $213,990 $1,716,739
Annuity units in payment period..... 9,116 3,655 7,639 4,852 1,181 15,201
</TABLE>
<PAGE>
PAGE 49
Annual Financial Information
Report of Independent Auditors
The Board of Directors IDS Life Insurance Company
We have audited the accompanying individual and combined statements
of net assets of IDS Life Accounts F, IZ, JZ, G, H and N as of
December 31, 1994, and the related statements of operations for the
year then ended, and the statements of changes in net assets for
each of the two years in the period then ended. These financial
statements are the responsibility of the management of IDS Life
Insurance Company. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation by the underlying affiliated
mutual funds of securities owned at December 31, 1994. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the individual and combined
financial position of IDS Life Accounts F, IZ, JZ, G, H and N at
December 31, 1994, and the individual and combined results of their
operations and changes in their net assets for the periods
described in the first paragraph, in conformity with generally
accepted accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
March 17, 1995
<PAGE>
PAGE 50
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
December 31,
<TABLE>
<CAPTION>
ASSETS 1994 1993
(thousands)
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1994, $10,694,800) $11,269,861 $ -
Available for sale, at fair value (Amortized cost:
1994, $8,459,128) 8,017,555 -
Investment securities, at amortized cost (Fair value:
1993, $20,425,979) - 19,392,424
19,287,416 19,392,424
Mortgage loans on real estate
(Fair value: 1994, $2,342,520; 1993, $2,125,686) 2,400,514 2,055,450
Policy loans 381,912 350,501
Other investments 51,795 56,307
Total investments 22,121,637 21,854,682
Cash and cash equivalents 267,774 146,281
Receivables:
Reinsurance 80,304 55,298
Amounts due from brokers 7,933 5,719
Other accounts receivable 49,745 21,459
Premiums due 1,594 1,329
Total receivables 139,576 83,805
Accrued investment income 317,510 307,177
Deferred policy acquisition costs 1,865,324 1,652,384
Deferred income taxes 124,061 -
Other assets 30,426 21,730
Assets held in segregated asset
accounts, primarily common stocks
at market 10,881,235 8,991,694
Total assets $35,747,543 $33,057,753
======== ========
See accompanying notes.
<PAGE>
PAGE 51
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS (continued)
December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1994 1993
(thousands)
Liabilities:
Future policy benefits:
Fixed annuities $19,361,979 $18,492,135
Universal life-type insurance 2,896,100 2,753,455
Traditional life insurance 206,754 210,205
Disability income, health and
long-term care insurance 244,077 185,272
Policy claims and other
policyholders' funds 50,068 44,516
Deferred income taxes - 43,620
Amounts due to brokers 226,737 351,486
Other liabilities 291,902 292,024
Liabilities related to segregated
asset accounts 10,881,235 8,991,694
Total liabilities 34,158,852 31,364,407
Stockholder's equity:
Capital stock, $30 par value per share;
100,000 shares authorized, issued and outstanding 3,000 3,000
Additional paid-in capital 222,000 222,000
Net unrealized gain (loss) on investments (275,708) 114
Retained earnings 1,639,399 1,468,232
Total stockholder's equity 1,588,691 1,693,346
Total liabilities and stockholder's equity $35,747,543 $33,057,753
======== ========
Commitments and contingencies (Note 6)
See accompanying notes.
</TABLE>
<PAGE>
PAGE 52
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31,
1994 1993 1992
(thousands)
<S> <C> <C> <C>
Revenues:
Premiums:
Traditional life insurance $ 48,184 $ 48,137 $ 49,719
Disability income and
long-term care insurance 96,456 79,108 64,660
Total premiums 144,640 127,245 114,379
Policyholder and contractholder
charges 219,936 184,205 156,368
Management and other fees 164,169 120,139 84,591
Net investment income 1,781,873 1,783,219 1,616,821
Net loss on investments (4,282) (6,737) (3,710)
Total revenues 2,306,336 2,208,071 1,968,449
Benefits and expenses:
Death and other benefits:
Traditional life insurance 28,263 32,136 34,139
Universal life-type insurance
and investment contracts 52,027 49,692 42,174
Disability income, health and
long-term care insurance 13,393 13,148 10,701
Increase (decrease) in liabilities for
future policy benefits:
Traditional life insurance (3,229) (4,513) (5,788)
Disability income, health and
long-term care insurance 37,912 32,528 27,172
Interest credited on universal life-type
insurance and investment contracts 1,174,985 1,218,647 1,188,379
Amortization of deferred policy
acquisition costs 280,372 211,733 140,159
Other insurance and operating expenses 210,101 241,974 215,692
Total benefits and expenses 1,793,824 1,795,345 1,652,628
Income before income taxes 512,512 412,726 315,821
Income taxes 176,343 142,647 104,651
Net income $ 336,169 $ 270,079 $ 211,170
======= ======= =======
See accompanying notes.
<PAGE>
PAGE 53
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31,
1994 1993 1992
(thousands)
Cash flows from operating activities:
Net income $ 336,169 $ 270,079 $ 211,170
Adjustments to reconcile net income to
net cash provided by operating activities:
Policy loans, excluding universal
life-type insurance:
Issuance (37,110) (35,886) (32,881)
Repayment 33,384 29,557 26,750
Change in reinsurance receivable (25,006) (55,298) -
Change in other accounts receivable (28,286) (1,364) (4,772)
Change in accrued investment income (10,333) (22,057) (15,853)
Change in deferred policy acquisition
costs, net (192,768) (211,509) (229,252)
Change in liabilities for future policy
benefits for traditional life,
disability income, health and
long-term care insurance 55,354 79,695 21,384
Change in policy claims and other
policyholders' funds 5,552 (5,383) (1,347)
Change in deferred income taxes (19,176) (44,237) (30,385)
Change in other liabilities (122) 56,515 88,997
Amortization of premium
(accretion of discount), net 30,921 (27,438) (4,289)
Net loss on investments 4,282 6,737 3,710
Activity related to universal
life-type insurance:
Premiums 409,035 397,883 312,621
Surrenders and death benefits (290,427) (255,133) (166,162)
Interest credited to account
balances 150,955 156,885 161,873
Policyholder and contractholder
charges, non-cash (126,918) (115,140) (100,975)
Other, net (8,974) (1,907) (10,647)
Net cash provided by operating
activities $ 286,532 $ 221,999 $ 229,942
See accompanying notes.
<PAGE>
PAGE 54
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years ended December 31,
1994 1993 1992
(thousands)
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $ (879,740) $ - $ -
Maturities, sinking fund payments and calls 1,651,762 - -
Sales 58,001 - -
Fixed maturities available for sale:
Purchases (2,763,278) - -
Maturities, sinking fund payments and calls 1,234,401 - -
Sales 374,564 - -
Fixed maturities:
Purchases - (6,548,852) (6,590,279)
Maturities, sinking fund payments and calls - 3,934,055 2,696,239
Sales - 487,983 1,011,093
Other investments, excluding policy loans:
Purchases (634,807) (553,694) (411,069)
Sales 243,862 123,352 67,097
Change in amounts due from brokers (2,214) 14,483 289,335
Change in amounts due to brokers (124,749) 92,832 42,182
Net cash used in investing activities (842,198) (2,449,841) (2,895,402)
Cash flows from financing activities:
Activity related to investment contracts:
Considerations received 3,157,778 2,843,668 2,821,069
Surrenders and death benefits (3,311,965) (1,765,869) (1,168,633)
Interest credited to account balances 1,024,031 1,071,917 1,026,506
Universal life-type insurance policy loans:
Issuance (78,239) (70,304) (72,007)
Repayment 50,554 46,148 40,351
Capital contribution from parent - 200,000 -
Cash dividend to parent (165,000) (25,000) (20,000)
Net cash provided by financing activities 677,159 2,300,560 2,627,286
Net increase (decrease) in cash and
cash equivalents 121,493 72,718 (38,174)
Cash and cash equivalents at
beginning of year 146,281 73,563 111,737
Cash and cash equivalents at
end of year $ 267,774 $ 146,281 $ 73,563
======== ======== ========
See accompanying notes.
</TABLE>
<PAGE>
PAGE 55
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ thousands)
1. Summary of significant accounting policies
Nature of business
IDS Life Insurance Company (the Company) is engaged in the
insurance and annuity business. The Company sells various forms of
fixed and variable individual life insurance, group life insurance,
individual and group disability income insurance, long-term care
insurance, and single and installment premium fixed and variable
annuities.
Basis of presentation
The Company is a wholly owned subsidiary of American Express
Financial Corporation (formerly IDS Financial Corporation), which
is a wholly owned subsidiary of American Express Company. The
accompanying consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries, IDS Life
Insurance Company of New York, American Enterprise Life Insurance
Company and American Partners Life Insurance Company. All material
intercompany accounts and transactions have been eliminated in
consolidation.
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles which vary in certain respects from reporting practices
prescribed or permitted by state insurance regulatory authorities.
Investments
As of January 1, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Under SFAS No. 115,
fixed maturities that the Company has both the positive intent and
the ability to hold to maturity are classified as held to maturity
and carried at amortized cost. All other fixed maturities and all
marketable equity securities are classified as available for sale
and carried at fair value. Unrealized gains and losses on
securities classified as available for sale are carried as a
separate component of stockholder's equity. The effect of adopting
SFAS No. 115 was to increase stockholder's equity by approximately
$181 million, net of tax, as of January 1, 1994, but the adoption
had no impact on the Company's net income.
Management determines the appropriate classification of fixed
maturities at the time of purchase and reevaluates the
classification at each balance sheet date.
<PAGE>
PAGE 56
1. Summary of significant accounting policies (continued)
Mortgage loans on real estate are carried principally at the unpaid
principal balances of the related loans. Policy loans are carried
at the aggregate of the unpaid loan balances which do not exceed
the cash surrender values of the related policies. Other
investments include interest rate caps and equity securities. When
evidence indicates a decline, which is other than temporary, in the
underlying value or earning power of individual investments, such
investments are written down to the fair value by a charge to
income. Equity securities are carried at market value and the
related net unrealized appreciation or depreciation is reported as
a credit or charge to stockholder's equity.
Realized investment gain or loss is determined on an identified
cost basis.
Prepayments are anticipated on certain investments in
mortgage-backed securities in determining the constant effective
yield used to recognize interest income. Prepayment estimates are
based on information received from brokers who deal in
mortgage-backed securities.
Statement of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be cash equivalents.
These securities are carried principally at amortized cost which
approximates fair value.
Supplementary information to the consolidated statement of cash
flows for the years ended December 31 is summarized as follows:
1994 1993 1992
Cash paid during the year for:
Income taxes $226,365 $188,204 $140,445
Interest on borrowings 1,553 2,661 1,265
Recognition of profits on annuity contracts and insurance policies
The Company issues single premium deferred annuity contracts that
provide for a service fee (surrender charge) at annually decreasing
rates upon withdrawal of the annuity accumulation value by the
contract owner. No sales fee is deducted from the contract
considerations received on these contracts ("no load" annuities).
All of the Company's single premium deferred annuity contracts
provide for crediting the contract owners' accumulations at
specified rates of interest. Such rates are revised by the Company
from time to time based on changes in the market investment yield
rates for fixed-income securities.
Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned from
investment of contract considerations over interest credited to
contract owners and other expenses.
<PAGE>
PAGE 57
1. Summary of significant accounting policies (continued)
The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.
Premiums on traditional life, disability income, health and
long-term care insurance policies are recognized as revenue when
collected or due, and related benefits and expenses are associated
with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association
is accomplished by means of the provision for future policy
benefits and the deferral and subsequent amortization of policy
acquisition costs.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be realized
on the policies. For traditional life, disability income, health
and long-term care insurance policies, the costs are amortized over
an appropriate period in proportion to premium revenue.
Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.
Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.
Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981) and the 1975-1980 Select and Ultimate Basic Table for term
insurance policies issued after 1984, policy persistency derived
from Company experience data (first year rates ranging from
approximately 70 percent to 90 percent and increasing rates
thereafter), and estimated future investment yields of 4 percent
for policies issued before 1974 and 5.25 percent for policies
<PAGE>
PAGE 58
1. Summary of significant accounting policies (continued)
issued from 1974 to 1980. Cash value plans issued in 1980 and
later assume future investment rates that grade from 9.5 percent to
5 percent over 20 years. Term insurance issued from 1981 to 1984
assumes an 8 percent level investment rate, term insurance issued
from 1985-1993 assumes investment rates that grade from 10 percent
to 6 percent over 20 years and term insurance issued after 1993
assumes investment rates that grade from 8.7 percent to 6.57
percent over 7 years.
Liabilities for future disability income policy benefits have been
computed principally by the net level premium method, based on the
1964 Commissioners Disability Table with the 1958 Commissioners
Standard Ordinary Mortality Table at 3 percent interest for 1980
and prior, 8 percent interest for persons disabled from 1981 to
1991, 7.7 percent interest for persons disabled in 1992 and 6
percent interest for persons disabled after 1992.
Liabilities for future benefits on long-term care insurance have
been computed principally by the net level premium method, using
morbidity rates based on the 1985 National Nursing Home Survey and
mortality rates based on the 1983a Table. The interest rate basis
is 9.5 percent grading to 7 percent over ten years for policies
issued from 1989 to 1992, 7.75 percent grading to 7 percent over
four years for policies issued after 1992, 8 percent for claims
incurred in 1989 to 1991, 7.7 percent for claims incurred in 1992
and 6.7 percent for claims incurred after 1992.
Reinsurance
The maximum amount of life insurance risk retained by the Company
on any one life is $750 of life and waiver of premium benefits plus
$50 of accidental death benefits. The maximum amount of disability
income risk retained by the Company on any one life is $6 of
monthly benefit for benefit periods longer than three years. The
excesses are reinsured with other life insurance companies on a
yearly renewable term basis. Graded premium whole life policies
and long term care are primarily reinsured on a coinsurance basis.
Federal income taxes
The Company's taxable income is included in the consolidated
federal income tax return of American Express Company. The Company
provides for income taxes on a separate return basis, except that,
under an agreement between American Express Financial Corporation
and American Express Company, tax benefit is recognized for losses
to the extent they can be used on the consolidated tax return. It
is the policy of American Express Financial Corporation and its
subsidiaries that American Express Financial Corporation will
reimburse a subsidiary for any tax benefit.
<PAGE>
PAGE 59
1. Summary of significant accounting policies (continued)
Included in other receivables at December 31, 1994 is $22,034
receivable from American Express Financial Corporation for federal
income taxes. Included in other liabilities at December 31, 1993
is $14,709 payable to American Express Financial Corporation for
federal income taxes.
Segregated asset account business
The segregated asset account assets and liabilities represent funds
held for the exclusive benefit of the variable annuity and variable
life insurance contract owners. The Company receives investment
management and mortality and expense assurance fees from the
variable annuity and variable life insurance mutual funds and
segregated asset accounts. The Company also deducts a monthly cost
of insurance charge and receives a minimum death benefit guarantee
fee and issue and administrative fee from the variable life
insurance segregated asset accounts.
The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the segregated asset
accounts will not be affected by future variations in the actual
life expectancy experience of the annuitants and the beneficiaries
from the mortality assumptions implicit in the annuity contracts.
The Company makes periodic fund transfers to, or withdrawals from,
the segregated asset accounts for such actuarial adjustments for
variable annuities that are in the benefit payment period. The
Company guarantees, for the variable life insurance policyholders,
the contractual insurance rate and that the death benefit will
never be less than the death benefit at the date of issuance.
Reclassification
Certain 1993 and 1992 amounts have been reclassified to conform to
the 1994 presentation.
2. Investments
Fair values of investments in fixed maturities represent quoted
market prices and estimated values when quoted prices are not
available. Estimated values are determined by established
procedures involving, among other things, preview of market
indices, price levels of current offerings of comparable issues,
price estimates and market data from independent brokers and
financial files.
<PAGE>
PAGE 60
2. Investments (continued)
Net gain (loss) on investments for the years ended December 31 is
summarized as follows:
1994 1993 1992
Fixed maturities $(1,575) $ 20,583 $ 22,075
Mortgage loans (3,013) (25,056) (13,444)
Other investments 306 (2,264) (12,341)
$(4,282) $ (6,737) $ (3,710)
===== ===== =====
Changes in net unrealized appreciation (depreciation) of
investments for the years ended December 31 are summarized as
follows:
1994 1993 1992
Fixed maturities:
Held to maturity $(1,329,740) $ -- $ --
Available for sale (720,449) -- --
Investment securities -- 323,060 (128,683)
Equity securities (2,917) (156) 300
The amortized cost, gross unrealized gains and losses and fair
values of investments in fixed maturities and equity securities at
December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government
agency obligations $ 21,500 $ 43 $ 4,372 $ 17,171
State and municipal
obligations 9,687 132 -- 9,819
Corporate bonds
and obligations 8,806,707 100,468 459,568 8,447,607
Mortgage-backed
securities 2,431,967 10,630 222,394 2,220,203
$11,269,861 $111,273 $686,334 $10,694,800
======== ======= ======= ========
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
U.S. Government
agency obligations $ 128,093 $ 756 $ 1,517 $ 127,332
State and municipal
obligations 11,008 702 -- 11,710
Corporate bonds
and obligations 1,142,321 24,166 7,478 1,159,009
Mortgage-backed
securities 7,177,706 9,514 467,716 6,719,504
Total fixed maturities 8,459,128 35,138 476,711 8,017,555
Equity securities 4,663 -- 2,757 1,906
$8,463,791 $35,138 $479,468 $8,019,461
======= ======= ======= =======
</TABLE>
<PAGE>
PAGE 61
2. Investments (continued)
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $(275,822) in 1994.
The amortized cost, gross unrealized gains and losses and fair
values of investments in fixed maturities carried at amortized cost
at December 31, 1993 are as follows:
<TABLE><CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government
agency obligations $ 63,532 $ 3,546 $ 1,377 $ 65,701
State and municipal
obligations 11,072 2,380 -- 13,452
Corporate bonds
and obligations 9,339,297 768,747 22,929 10,085,115
Mortgage-backed
securities 9,978,523 341,067 57,879 10,261,711
$19,392,424 $1,115,740 $ 82,185 $20,425,979
======== ======== ======== ========
</TABLE>
At December 31, 1993, net unrealized appreciation on equity
securities included $160 of gross unrealized appreciation, $nil of
gross unrealized depreciation and deferred tax credits of $46. The
fair value of equity securities was $1,900 at December 31, 1993.
The amortized cost and fair value of investments in fixed
maturities at December 31, 1994 by contractual maturity are shown
below. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties.
Amortized Fair
Held to maturity Cost Value
Due in one year or less $ 108,056 $ 109,228
Due from one to five years 1,412,335 1,423,394
Due from five to ten years 5,467,826 5,245,742
Due in more than ten years 1,849,677 1,696,233
Mortgage-backed securities 2,431,967 2,220,203
$11,269,861 $10,694,800
======== ========
Amortized Fair
Available for sale Cost Value
Due from one to five years $ 757,160 $ 756,842
Due from five to ten years 433,717 449,057
Due in more than ten years 90,545 92,152
Mortgage-backed securities 7,177,706 6,719,504
$8,459,128 $8,017,555
======= =======
<PAGE>
PAGE 62
2. Investments (continued)
During the year ended December 31, 1994, fixed maturities
classified as held to maturity were sold with proceeds of $58,001
and gross realized gains and losses on such sales were $226 and
$3,515, respectively. The sale of these fixed maturities was due
to credit deterioration.
In addition, fixed maturities available for sale were sold during
1994 with proceeds of $374,564 and gross realized gains and losses
on such sales were $1,861 and $7,602, respectively.
Proceeds from sales of investments in fixed maturities during 1993
were $487,983. During 1993, gross gains of $48,499 and gross
losses of $43,039, respectively, were realized on those sales.
At December 31, 1994, bonds carried at $6,536 were on deposit with
various states as required by law.
Net investment income for the years ended December 31 is summarized
as follows:
1994 1993 1992
Interest on fixed maturities $1,556,756 $1,589,802 $1,449,234
Interest on mortgage loans 196,521 175,063 148,693
Other investment income 38,366 29,345 24,281
Interest on cash equivalents 6,872 2,137 5,363
1,798,515 1,796,347 1,627,571
Less investment expenses 16,642 13,128 10,750
$1,781,873 $1,783,219 $1,616,821
======= ======= =======
At December 31, 1994, investments in fixed maturities comprised 87
percent of the Company's total invested assets. These securities
are rated by Moody's and Standard & Poor's (S&P), except for
securities carried at cost approximately $1.7 billion which are
rated by American Express Financial Corporation internal analysts
using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities, at amortized cost, by rating on
December 31 is as follows:
Rating 1994 1993
Aaa/AAA $ 9,708,047 $ 9,959,884
Aa/AA 242,914 258,659
Aa/A 119,952 160,638
A/A 2,567,947 2,021,177
A/BBB 725,755 654,949
Baa/BBB 3,849,188 3,936,366
Baa/BB 796,063 717,606
Below investment grade 1,719,123 1,683,145
$19,728,989 $19,392,424
======== ========
<PAGE>
PAGE 63
2. Investments (continued)
At December 31, 1994, 97 percent of the securities rated Aaa/AAA
are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings
of any other issuer are greater than 1 percent of the Company's
total investments in fixed maturities.
At December 31, 1994, approximately 10.9 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region of the United States and by type of real
estate at December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
<S> <C> <C> <C> <C>
East North Central $ 581,142 $ 62,291 $ 552,150 $ 20,933
West North Central 257,996 7,590 361,704 16,746
South Atlantic 597,896 63,010 452,679 52,440
Middle Atlantic 408,940 34,478 260,239 41,090
New England 209,867 23,087 155,214 17,620
Pacific 138,900 -- 120,378 15,492
West South Central 50,854 -- 43,948 525
East South Central 67,503 -- 73,748 --
Mountain 122,668 18,750 70,410 14,594
2,435,766 209,206 2,090,470 179,440
Less allowance for losses 35,252 -- 35,020 --
$2,400,514 $209,206 $2,055,450 $179,440
======= ======= ======= =======
December 31, 1994 December 31, 1993
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
Apartments $ 904,012 $ 56,964 $ 744,788 $ 79,153
Department/retail stores 802,522 88,325 624,651 65,402
Office buildings 321,761 21,691 234,042 15,583
Industrial buildings 232,962 18,827 217,648 9,279
Nursing/retirement homes 89,304 4,649 83,768 917
Hotels/motels 32,666 -- 33,138 --
Medical buildings 36,490 15,651 30,429 5,954
Residential 20 -- 78 --
Other 16,029 3,099 121,928 3,152
2,435,766 209,206 2,090,470 179,440
Less allowance for losses 35,252 -- 35,020 --
$2,400,514 $209,206 $2,055,450 $179,440
======= ======= ======= =======
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authorities to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.
<PAGE>
PAGE 64
3. Income taxes
The Company qualifies as a life insurance company for federal
income tax purposes. As such, the Company is subject to the
Internal Revenue Code provisions applicable to life insurance
companies.
Income tax expense consists of the following:
1994 1993 1992
Federal income taxes:
Current $186,508 $180,558 $130,998
Deferred (19,175) (44,237) (30,385)
167,333 136,321 100,613
State income taxes-current 9,010 6,326 4,038
Income tax expense $176,343 $142,647 $104,651
====== ====== ======
Increases (decreases) to the federal tax provision applicable to
pretax income based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1994 1993 1992
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income
taxes based on
the statutory rate $179,379 35.0% $144,454 35.0% $107,379 34.0%
Increases (decreases)
are attributable to:
Tax-excluded interest
and dividend income (9,939) (2.0) (11,002) (2.7) (8,209) (2.6)
Other, net (2,107) (0.4) 2,869 0.7 1,443 0.4
Federal income taxes $167,333 32.6% $136,321 33.0% $100,613 31.8%
====== === ====== === ====== ===
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a "policyholders' surplus account." At December 31,
1994, the Company had a policyholders' surplus account balance of
$19,032. The policyholders' surplus account is only taxable if
dividends to the stockholder exceed the stockholder's surplus
account or if the Company is liquidated. Deferred income taxes of
$6,661 have not been established because no distributions of such
amounts are contemplated.
<PAGE>
PAGE 65
3. Income taxes (continued)
Significant components of the Company's deferred tax assets and
liabilities as of December 31 are as follows:
1994 1993
Deferred tax assets:
Policy reserves $533,433 $453,436
Investments 116,736 --
Life insurance guarantee
fund assessment reserve 32,235 35,000
Total deferred tax assets 682,404 488,436
Deferred tax liabilities:
Deferred policy acquisition costs 553,722 509,868
Investments -- 10,151
Other 4,621 12,037
Total deferred tax
liabilities 558,343 532,056
Net deferred tax assets (liabilities) $124,061 $(43,620)
====== ======
The Company is required to establish a "valuation allowance" for
any portion of the deferred tax assets that management believes
will not be realized. In the opinion of management, it is more
likely than not that the Company will realize the benefit of the
deferred tax assets, and, therefore, no such valuation allowance
has been established.
4. Stockholder's equity
Retained earnings available for distribution as dividends to the
parent are limited to the Company's surplus as determined in
accordance with accounting practices prescribed by state insurance
regulatory authorities. Statutory unassigned surplus aggregated
$1,020,981 as of December 31, 1994 and $922,246 as of December 31,
1993 (see Note 3 with respect to the income tax effect of certain
distributions). In addition, any dividend distributions in 1995 in
excess of approximately $288,601 would require approval of the
Department of Commerce of the State of Minnesota.
Statutory net income for 1994, 1993 and 1992 and capital and
surplus as of December 31, 1994, 1993 and 1992 are summarized as
follows:
1994 1993 1992
Statutory net income $ 294,699 $ 275,015 $180,296
Statutory capital and surplus 1,261,958 1,157,022 714,942
Dividends paid to American Express Financial Corporation were
$165,000 in 1994, $25,000 in 1993 and $20,000 in 1992.
<PAGE>
PAGE 66
5. Related party transactions
The Company has loaned funds to American Express Financial
Corporation under three loan agreements. The balance of the first
loan was $40,000 and $75,000 at December 31, 1994 and 1993,
respectively. This loan can be increased to a maximum of $75,000
and pays interest at a rate equal to the preceding month's
effective new money rate for the Company's permanent investments.
It is collateralized by equities valued at $110,034 at December 31,
1994. The second loan was used to fund the construction of the IDS
Operations Center. This loan was paid off during 1994 and had an
outstanding balance of $84,588 at December 31, 1993. The loan was
secured by a first lien on the IDS Operations Center property and
had an interest rate of 9.89 percent. The Company also had a loan
to an affiliate which was used to fund construction of the IDS
Learning Center. This loan was sold to the parent during 1994 and
the balance outstanding was $22,573 at December 31, 1993. The loan
was secured by a first lien on the IDS Learning Center property and
had an interest rate of 9.82 percent. Interest income on the above
loans totaled $2,894, $11,116 and $10,711 in 1994, 1993 and 1992,
respectively.
The Company purchased a five year secured note from an affiliated
company which had an outstanding balance of $23,333 and $27,222 at
December 31, 1994 and 1993, respectively. The note bears a fixed
rate of 8.42 percent. Interest income on the above note totaled
$2,278, $2,605 and $2,278 in 1994, 1993 and 1992, respectively.
The Company has a reinsurance agreement whereby it assumed 100
percent of a block of single premium life insurance business from
an affiliated company. The accompanying consolidated balance sheet
at December 31, 1994 and 1993 includes $765,366 and $759,714,
respectively, of future policy benefits related to this agreement.
The accompanying consolidated statement of income includes revenue
from policyholder charges of $8, $21 and $109, and expenses of
$6,912, $4,931 and $5,897 related to this agreement for 1994, 1993
and 1992, respectively.
The Company has a reinsurance agreement to cede 50 percent of its
long-term care insurance business to an affiliated company. The
accompanying consolidated balance sheet at December 31, 1994 and
1993 includes $65,123 and $44,086, respectively, of reinsurance
receivables related to this agreement. Premiums ceded amounted to
$20,360, $16,230 and $12,499 and reinsurance recovered from
reinsurers amounted to $62, $404 and $250 for the years ended
December 31, 1994, 1993 and 1992, respectively.
The Company participates in the retirement plan of American Express
Financial Corporation which covers all permanent employees age 21
and over who have met certain employment requirements. The
benefits are based on years of service and the employee's monthly
average of basic annual salary rates in effect on January 1 or such
other date at determined by American Express Financial Corporation
<PAGE>
PAGE 67
5. Related party transactions (continued)
of the highest five consecutive annual salaries of the last 10
years. American Express Financial Corporation's policy is to fund
retirement plan costs accrued subject to ERISA and federal income
tax considerations. The Company's share of the total net periodic
pension cost was $nil in 1994, 1993 and 1992.
The Company also participates in defined contribution pension plans
of American Express Financial Corporation which cover all employees
who have met certain employment requirements. Company
contributions to the plans are a percent of either each employee's
eligible compensation or basic contributions. Costs of these plans
charged to operations in 1994, 1993 and 1992 were $957, $2,008 and
$1,826, respectively.
The Company participates in defined benefit health care plans of
American Express Financial Corporation that provide health care and
life insurance benefits to retired employees and retired financial
advisors. The plans include participant contributions and service
related eligibility requirements. Upon retirement, such employees
are considered to have been employees of American Express Financial
Corporation. American Express Financial Corporation expenses these
benefits and allocates the expenses to its subsidiaries.
Accordingly, costs of such benefits to the Company are included in
employee compensation and benefits and cannot be identified on a
separate company basis. At December 31, 1994, the total
accumulated post retirement benefit obligation, determined in
accordance with SFAS 106 and based on an assumed interest rate of
8.75 percent and a health care cost trend rate of 7 percent, has
been recorded as a liability by American Express Financial
Corporation.
Charges by American Express Financial Corporation for use of joint
facilities, marketing services and other services aggregated
$335,183, $243,346 and $204,675 for 1994, 1993 and 1992,
respectively. Certain of these costs are included in deferred
policy acquisition costs. In addition, the Company rents its home
office space from American Express Financial Corporation on an
annual renewable basis. Such rentals aggregated $965, $4,513 and
$4,074 for 1994, 1993 and 1992, respectively.
6. Commitments and contingencies
At December 31, 1994 and 1993, traditional life insurance and
universal life-type insurance in force aggregated $52,666,567 and
$46,125,515, respectively, of which $3,246,608 and $3,038,426 were
reinsured at the respective year ends. The Company also reinsures
a portion of the risks assumed under disability income policies.
Under the agreements, premiums ceded to reinsurers amounted to
$29,489, $28,276 and $24,222 and reinsurance recovered from
reinsurers amounted to $5,505, $3,345 and $6,766 for the years
ended December 31, 1994, 1993 and 1992.
<PAGE>
PAGE 68
6. Commitments and contingencies (continued)
Reinsurance contracts do not relieve the Company from its primary
obligation to policyholders.
The Company is a defendant in various lawsuits, none of which, in
the opinion of the Company counsel, will result in a material
liability.
The Company settled all remaining IRS audit issues for the tax
years 1984 through 1986 in September of 1994. There was no
material impact as a result of this audit. Also, the IRS is
currently auditing the Company's 1987 through 1989 tax years.
Management does not believe there will be a material impact as a
result of this audit.
7. Lines of credit
The Company has available lines of credit with three banks
aggregating $100,000 at 40 to 80 basis points over the banks' cost
of funds or equal to the prime rate, depending on which line of
credit agreement is used. Borrowings outstanding under these
agreements were $nil and $1,519 at December 31, 1994 and 1993,
respectively.
8. Derivative financial instruments
The Company enters into transactions involving derivative
financial instruments to manage its exposure to interest rate risk,
including hedging specific transactions. The Company manages risks
associated with these instruments as described below. The Company
does not hold derivative instruments for trading purposes.
Market risk is the possibility that the value of the derivative
financial instruments will change due to fluctuations in a factor
from which the instrument derives its value, primarily an interest
rate. The Company is not impacted by market risk related to
derivatives held for non-trading purposes beyond that inherent in
cash market transactions. Derivatives held for purposes other than
trading are largely used to manage risk and, therefore, the cash
flow and income effects of the derivatives are inverse to the
effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not
fulfill the terms of the contract. The Company monitors credit
exposure related to derivative financial instruments through
established approval procedures, including setting concentration
limits by counterparty and industry, and requiring collateral,
where appropriate. A vast majority of the Company's counterparties
are rated A or better by Moody's and Standard & Poor's.
The notional or contract amount of a derivative financial
instrument is generally used to calculate the cash flows that are
received or paid over the life of the agreement. Notional amounts
are not recorded on the balance sheet. Notional amounts far exceed
the related credit exposure.
<PAGE>
PAGE 69
8. Derivative financial instruments (continued)
Credit exposure related to interest rate caps is measured by the
replacement cost of the contracts. The replacement cost
represents the fair value of the instruments. Financial futures
contracts are settled in cash daily.
<TABLE>
<CAPTION>
Notional Carrying Total Credit
Assets Amount Value Fair Value Exposure
<S> <C> <C> <C> <C>
Financial futures contracts $ 159,800 $ 2,072 $ 2,072 $ -
Interest rate caps 4,400,000 29,054 42,365 42,365
$4,559,800 $31,126 $44,437 $42,365
======= ===== ===== =====
</TABLE>
The fair values of derivative financial instruments are based on
market values, dealer quotes or pricing models. The financial
futures contracts expire in 1995. The interest rate caps expire on
various dates from 1995 to 1999.
Financial futures contracts and interest rate caps are used
principally to manage the Company's exposure to rising interest
rates. These instruments are used primarily to protect the margin
between interest rate earned on investments and the interest rate
credited to related annuity contract holders.
Changes in the fair value of financial futures contracts are
accounted for as adjustments to the carrying amount of the hedged
investments and amortized over the remaining lives of such
investments. The cost of interest rate caps is amortized to
interest expense over the life of the contracts and payments
received as a result of these agreements are recorded as a
reduction of interest expense when realized. The amortized cost of
interest rate cap contracts is included in other investments.
9. Fair values of financial instruments
The Company is required to disclose fair value information for most
on- and off-balance sheet financial instruments for which it is
practical to estimate that value. Certain financial instruments
such as life insurance obligations, receivables and all
non-financial instruments, such as deferred acquisition costs are
excluded from required disclosure. Off-balance sheet intangible
assets, such as the value of the field force, are also excluded.
Management believes the value of excluded assets is significant.
The fair value of the Company, therefore, cannot be estimated by
aggregating the amounts presented.
<PAGE>
PAGE 70
9. Fair values of financial instruments (continued)
<TABLE>
<CAPTION>
1994 1993
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $11,269,861 $10,694,800 $ -- $ --
Available for sale 8,017,555 8,017,555 -- --
Investment securities -- -- 19,392,424 20,425,979
Mortgage loans on
real estate (Note 2) 2,400,514 2,342,520 2,055,450 2,125,686
Other:
Equity securities (Note 2) 1,906 1,906 1,900 1,900
Derivative financial
instruments (Note 8) 31,126 44,437 26,923 14,201
Cash and
cash equivalents (Note 1) 267,774 267,774 146,281 146,281
Assets held in segregated
asset accounts (Note 1) 10,881,235 10,881,235 8,991,694 8,991,694
Financial Liabilities
Future policy benefits
for fixed annuities 18,325,870 17,651,897 17,519,876 16,881,747
Liabilities related to
segregated asset accounts 10,398,861 9,943,672 8,645,418 8,305,209
</TABLE>
At December 31, 1994 and 1993, the carrying amount and fair value
of future policy benefits for fixed annuities exclude life
insurance-related contracts carried at $971,897 and $913,127,
respectively, and policy loans of $64,212 and $59,132,
respectively. The fair value of these benefits is based on the
status of the annuities at December 31, 1994 and 1993. The fair
value of deferred annuities is estimated as the carrying amount
less any applicable surrender charges and related loans. The fair
value for annuities in non-life contingent payout status is
estimated as the present value of projected benefit payments at the
rate appropriate for contracts issued in 1994 and 1993.
At December 31, 1994 and 1993 the fair value of liabilities related
to segregated asset accounts is estimated as the carrying amount
less variable insurance contracts carried at $482,374 and $346,276,
respectively, and surrender charges, if applicable.
10. Segment information
The Company's operations consist of two business segments; first,
individual and group life insurance, disability income, health and
long-term care insurance, and second, annuity products designed for
individuals, pension plans, small businesses and employer-sponsored
groups. The consolidated statement of income for the years ended
December 31, 1994, 1993 and 1992 and total assets at December 31,
1994, 1993 and 1992 by segment are summarized as follows:
<PAGE>
PAGE 71
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Net investment income:
Life, disability income,
health and long-term
care insurance $ 247,047 $ 250,224 $ 246,676
Annuities 1,534,826 1,532,995 1,370,145
$1,781,873 $1,783,219 $1,616,821
======= ======= =======
Premiums, charges
and fees:
Life, disability income,
health and long-term
care insurance $335,375 $281,284 $250,386
Annuities 193,370 143,876 104,952
$528,745 $425,160 $355,338
====== ====== ======
Income before income taxes:
Life, disability income,
health and long-term
care insurance $122,677 $104,127 $ 96,215
Annuities 394,117 315,336 223,316
Net loss
on investments (4,282) (6,737) (3,710)
$512,512 $412,726 $315,821
====== ====== ======
Total assets:
Life, disability income,
health and long-term
care insurance $ 5,269,188 $ 4,810,145 $ 4,093,778
Annuities 30,478,355 28,247,608 23,201,995
$35,747,543 $33,057,753 $27,295,773
========= ======== ========
</TABLE>
Allocations of net investment income and certain general expenses
are based on various assumptions and estimates.
Assets are not individually identifiable by segment and have been
allocated principally based on the amount of future policy benefits
by segment.
Capital expenditures and depreciation expense are not material, and
consequently, are not reported.
<PAGE>
PAGE 72
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the accompanying consolidated balance sheets of IDS
Life Insurance Company (a wholly owned subsidiary of American
Express Financial Corporation) as of December 31, 1994 and 1993 and
the related consolidated statements of income and cash flows for
each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of IDS Life Insurance Company at December 31,
1994 and 1993, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting
principles.
As discussed in Note 1 to the consolidated financial statements,
the Company changes its method of accounting for certain
investments in debt and equity securities in 1994.
Ernst & Young LLP
Minneapolis, Minnesota
February 3, 1995
<PAGE>
PAGE 73
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration
Statement:
IDS Life Accounts F,IZ,JZ,G,H & N:
Statement of Net Assets at Dec. 31, 1994.
Statement of Operations for the year ended Dec. 31, 1994.
Statement of Changes in Net Assets for the years ended
Dec. 31, 1994 and Dec. 31, 1993.
Notes to Financial Statements.
Report of Independent Auditors dated March 17, 1995.
IDS Life Insurance Company:
Consolidated Balance Sheet at Dec. 31, 1994 and 1993;
Consolidated Statement of Income for the years ended Dec.
31, 1994, 1993, and 1992;
Consolidated Statement of Cash Flows for the years ended
Dec. 31, 1994, 1993, and 1992; and
Notes to Consolidated Financial Statements.
Report of Independent Auditors dated February 3, 1995.
Exhibits to Financial Statements included in Part B:
Financial Statement Schedules I, III, IV, and V as required
by Regulation S-X:
Schedule I - Consolidated Summary of Investments Other
than Investments in Related Parties
Schedule III - Supplementary Insurance Information
Schedule IV - Reinsurance
Schedule V - Valuation and Qualifying Accounts
Report of Independent Auditors dated February 3, 1995.
All other schedules to the consolidated financial statements
required by Article 7 of Regulation S-X are not required
under the related instructions or are inapplicable and,
therefore, have been omitted.
(b) Exhibits:
1.1 Copy of Resolution of the Executive Committee of the Board of
Directors of IDS Life establishing Accounts C, D, E, F, G,
and H adopted May 13, 1981, filed electronically as Exhibit
1.1 to Post-Effective Amendment No. 2 to Registration
Statement No. 33-52518 is incorporated herein by reference.
1.2 Copy of Resolution of the Board of Directors of IDS Life
establishing Account N on April 17, 1985, filed
electronically as Exhibit 1.2 to Post-Effective Amendment No.
2 to Registration Statement No. 33-52518 is incorporated
herein by reference.
<PAGE>
PAGE 74
1.3 Copy of Resolution of the Board of Directors of IDS Life
establishing Accounts IZ and JZ on September 20, 1991, filed
electronically as Exhibit 1.3 to Post-Effective Amendment No.
2 to Registration Statement No. 33-52518 is incorporated
herein by reference.
2. Not applicable.
3. Not applicable.
4.1 Copy of Group Deferred Fixed/Variable Contract (form 34607)
filed electronically as Exhibit 4 to Post-Effective Amendment
No. 2 to Registration Statement No. 33-52518 is incorporated
herein by reference.
4.2 Copy of Group Deferred Fixed/Variable Certificate (form
34610-MN) filed electronically as Exhibit 5 to Post-Effective
Amendment No. 2 to Registration Statement No. 33-52518 is
incorporated herein by reference.
5.1 Form of Master Application for Group Deferred Annuity
Contract (form 34608C) filed electronically herewith.
5.2 Form of Participant Enrollment Form (form 34609A) filed
electronically herewith.
6.1 Copy of Articles of Incorporation of IDS Life dated July 24,
1957, filed electronically as Exhibit 6.1 to Post-Effective
Amendment No. 2 to Registration Statement No. 33-52518 is
incorporated herein by reference.
6.2 Copy of Amendment to By-Laws of IDS Life filed electronically
as Exhibit 6.2 to Post-Effective Amendment No. 2 to
Registration Statement No 33-52518 is incorporated herein by
reference.
7. Not applicable.
8. Not applicable.
9. Opinion of counsel and consent to its use as to the legality
of the securities registered was filed with Registrant's 24f-
2 notice on or about February 28, 1995.
10. Consent of Independent Auditors, filed electronically
herewith.
11. Financial Statement Schedules and Report of Independent
Auditors, filed electronically herewith.
12. Not applicable.
13. Copy of Schedule for computation of each performance
quotation filed electronically as Exhibit 13 to Post-
Effective Amendment No. 2 to Registration Statement No. 33-
52518 is incorporated herein by reference.
<PAGE>
PAGE 75
14. Not applicable.
15. Power of Attorney to sign Amendments to this Registration
Statement dated March 31, 1994, filed electronically as
Exhibit 14.2 to Post-Effective Amendment No. 3 to
Registration Statement No. 33-52518 is incorporated herein by
reference.
<PAGE>
PAGE 76
Item 25. Directors and Officers of the Depositor (IDS Life
Insurance Company)
<TABLE>
<CAPTION>
Positions and
Name Principal Business Address Offices with Depositor
<S> <C> <C>
Timothy V. Bechtold IDS Tower 10 Vice President-Risk
Minneapolis, MN 55440 Management Products
David J. Berry IDS Tower 10 Vice President
Minneapolis, MN 55440
Alan R. Dakay IDS Tower 10 Vice President-
Minneapolis, MN 55440 Institutional Insurance
Marketing
Robert M. Elconin IDS Tower 10 Vice President
Minneapolis, MN 55440
Louis C. Fornetti IDS Tower 10 Director
Minneapolis, MN 55440
Morris Goodwin Jr. IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Lorraine R. Hart IDS Tower 10 Vice President-Investments
Minneapolis, MN 55440
David R. Hubers IDS Tower 10 Director
Minneapolis, MN 55440
James M. Jensen IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
Richard W. Kling IDS Tower 10 Director and President
Minneapolis, MN 55440
Paul F. Kolkman IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President
Ryan R. Larson IDS Tower 10 Vice President-
Minneapolis, MN 55440 Annuity Product
Development
Peter A. Lefferts IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Marketing
Janis E. Miller IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Variable Assets
James A. Mitchell IDS Tower 10 Director, Chairman of
Minneapolis, MN 55440 the Board and Chief
Executive Officer
<PAGE>
PAGE 77
Item 25. Directors and Officers of the Depositor (IDS Life
Insurance Company (cont'd)
Barry J. Murphy IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Client Service
Mary O. Neal IDS Tower 10 Vice President-
Minneapolis, MN 55440 Sales Support
James R. Palmer IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
Stuart A. Sedlacek IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Assured
Assets
F. Dale Simmons IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
Loan Management
William A. Stoltzmann IDS Tower 10 Vice President, General
Minneapolis, MN 55440 Counsel and Secretary
Melinda S. Urion IDS Tower 10 Director, Executive
Minneapolis, MN 55440 Vice President and
Controller
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
IDS Life Insurance Company is a wholly owned subsidiary
of American Express Financial Corporation. American
Express Financial Corporation is a wholly owned
subsidiary of American Express Company (American
Express).
The following list includes the names of major
subsidiaries of American Express.
Jurisdiction
Name of Subsidiary of Incorporation
I. Travel Related Services
American Express Travel Related
Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
<PAGE>
PAGE 78
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant (Continued)
Jurisdiction
Name of Subsidiary of Incorporation
III. Companies engaged in Investors
Diversified Financial Services
American Centurion Life Insurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Delaware
American Express Minnesota Foundation Minnesota
American Express Service Corporation Delaware
American Express Tax and Business Services Inc. Minnesota
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Advisory Group Inc. Minnesota
IDS Aircraft Services Corporation Minnesota
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Deposit Corp. Utah
IDS Fund Management Limited U.K.
IDS Futures Corporation Minnesota
IDS Futures III Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of Mississippi Inc. Mississippi
IDS Insurance Agency of Nevada Inc. Nevada
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS International, Inc. Delaware
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
Investors Syndicate Development Corp. Nevada
Item 27. Number of Contractowners
On March 31, 1994, there were 8,610 contract owners of
the Employee Benefit Annuity.
<PAGE>
PAGE 79
Item 28. Indemnification
The By-Laws of the depositor provide that it shall
indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that
he is or was a director, officer, employee or agent of
this Corporation, or is or was serving at the direction
of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture,
trust or other enterprise, to any threatened, pending or
completed action, suit or proceeding, wherever brought,
to the fullest extent permitted by the laws of the State
of Minnesota, as now existing or hereafter amended,
provided that this Article shall not indemnify or protect
any such director, officer, employee or agent against any
liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the
performance of his duties or by reason of his reckless
disregard of his obligations and duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Item 29. Principal Underwriters
(a) IDS Life is the principal underwriter for IDS Life
Accounts F, IZ, JZ, G, H and N, IDS Life Variable
Annuity Fund A, IDS Life Variable Annuity Fund B,
IDS Life Account RE, IDS Life Account MGA and IDS
Life Account SBS.
(b) This table is the same as our response to Item 25 of
this Registration Statement.
(c)
<TABLE><CAPTION>
Name of Net Underwriting
Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
<S> <C> <C> <C> <C>
IDS Life None $6,969,493.29 None None
/TABLE
<PAGE>
PAGE 80
Item 30. Location of Accounts and Records
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes that it will file a post-
effective amendment to this registration statement
as frequently as is necessary to ensure that the
audited financial statements in the registration
statement are never more than 16 months old for so
long as payments under the variable annuity
contracts may be accepted.
(b) Registrant undertakes that it will include either
(1) as part of any application to purchase a
contract offered by the prospectus, a space that an
applicant can check to request a Statement of
Additional Information, or (2) a post card or
similar written communication affixed to or included
in the prospectus that the applicant can remove to
send for a Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of
Additional Information and any financial statements
required to be made available under this Form
promptly upon written or oral request to IDS Life
Contract Owner Service at the address or phone
number listed in the prospectus.
(d) Registrant represents that it is relying upon the
no-action assurance given to the American Council of
Life Insurance (pub. avail. Nov. 28, 1988).
Further, Registrant represents that it has complied
with the provisions of paragraphs (1)-(4) of that
no-action letter.
<PAGE>
PAGE 81
SIGNATURES
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, IDS Life Insurance Company, on behalf of the
Registrant certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Registration Statement
and, has caused this Registration Statement to be signed on its
behalf in the City of Minneapolis, and State of Minnesota, on the
20th day of April, 1995.
IDS LIFE ACCOUNT F
IDS LIFE ACCOUNT IZ
IDS LIFE ACCOUNT JZ
IDS LIFE ACCOUNT G
IDS LIFE ACCOUNT H
IDS LIFE ACCOUNT N
(Registrant)
By IDS Life Insurance Company
(Sponsor)
By /s/ Richard W. Kling*
Richard W. Kling
President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities indicated on the 20th day of April, 1995.
Signature Title
/s/ James A. Mitchell* Chairman of the Board
James A. Mitchell and Chief Executive
Officer
/s/ Richard W. Kling* Director and President
Richard W. Kling
/s/ Louis C. Fornetti* Director
Louis C. Fornetti
/s/ David R. Hubers* Director
David R. Hubers
/s/ Paul F. Kolkman* Director and Executive Vice
Paul F. Kolkman President
/s/ Peter A. Lefferts* Director and Executive Vice
Peter A. Lefferts President, Marketing
/s/ Janis E. Miller* Director and Executive Vice
Janis E. Miller President, Variable Assets
/s/ Barry J. Murphy* Director and Executive Vice
Barry J. Murphy President, Client Service
<PAGE>
PAGE 82
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
/s/ Melinda S. Urion* Director, Executive Vice
Melinda S. Urion President and Controller
* Signed pursuant to Power of Attorney dated March 31, 1994, filed
electronically as Exhibit 14.2 to Post-Effective Amendment No. 3 to
Registration Statement No. 33-52518 is incorporated herein by
reference.
_____________________________
Mary Ellyn Minenko
<PAGE>
PAGE 83
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 4
This Post-Effective Amendment is comprised of the following papers
and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
<PAGE>
<PAGE>
PAGE 1
EXHIBIT INDEX
Exhibit 5.1 Form of Master Application for Group Deferred Annuity
Contract.
Exhibit 5.2 Form of Participant Enrollment Form.
Exhibit 10 Consent of Independent Auditors.
Exhibit 11 Financial Statement Schedules and Report of Independent
Auditors.
<PAGE>
PAGE 1
Employee Benefit Annuity
Master Application For Group Deferred Annuity Contract
<TABLE>
<CAPTION>
Application is hereby made to IDS Life Insurance Company of Minneapolis, Minnesota for a
Group Deferred Annuity Contract to provide annuity benefits for those employees upon whose
behalf completed "enrollment forms" are submitted and accepted by the Company.
<S> <C> <C> <C> <C>
1. Applicant (Contractowner):________________________________________________________
2. Address: ________________________________________________________________________
________________________________________________________________________
3. Type of Business: ________________________________________________________________
4. Applicant qualifies for purchasing tax-sheltered annuities under Section 403(b) of
the Internal Revenue Code as a:
____ Public School ____ 501(c)(3) Organization
(include copy of determination letter)
5. Requested Effective Date of Master Contract: _____________________________________
6. Special Requests/Information: ___________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Applicant acknowledges receipt of a Prospectus for the IDS Life Group Deferred
Fixed/Variable Annuity Contract and the Retirement Annuity Mutual Funds. It is understood
that all benefits and values provided by the contract, when based on investment experience
of a separate account, are variable and are not guaranteed as to fixed dollar amount.
Dated At: _______________________________ Dated: ________________________________
City, State
Applicant: ___________________________
Witness: _______________________________ By: ___________________________________
Signature of Licensed Agent Authorized Signature
___________________________________
Title
___________________________________
Authorized Signature
___________________________________
Title
<PAGE>
PAGE 2
Applicant Information
IDS Group Payment Setup
This information must be completed:
Start Date of First Group Payment: ___________________________
Payment Frequency:
___ Monthly 12/year
___ Semimonthly 24/year
___ Biweekly 26/year
Other: ________________________________________________
Indicate months when employer should not be billed:______________________________________
Planner Use Only
Planner Name: ________________________ Planner Number: _________ DO Number: _____
Please Print
Planner Telephone Number: _______________
Comments: ____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
</TABLE>
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
Participant Enrollment Form
(for Employee Benefit Annuity
Group Billing No. _____________________
IDS Life Home Office Use Only Certificate Number:
Participant Information
<S> <C> <C> <C> <C> <C>
Name _______________________________________________________ Soc. Sec. No. _______________________
Last First M.I.
Address ____________________________________________________________________________________________
City _____________________ State _____ Zip _______ Telephone No. _______________________
Date of Birth ______________ Age _____ Marital Status: ___ Married ___ Single Sex: ___ M ___ F
Date of Hire ______________________ Annual Salary $__________________
Purchase Payment Election and Billing Information
1) ___ Installment Payments totalling $________ annually. 2) ___ Single Payment $ ___________________________________
(Note: Minimum $300/year. If over 20% of (Note: Minimum single payment of $1,000)
salary or $9,500, must attach InfoServ Calculation). Indicate months when employer should not be billed.
J F M A M J J A S O N D
Amount of each installment payment $ _________________
Investment Election
I elect to invest my account in the group annuity as follows:
Fixed Account _______% Aggressive Growth Fund _______% Managed fund ____________%
Capital Resource Fund _______% Special Income Fund _______% TOTAL 100%
International Growth Fund _______% Moneyshare Fund _______% ============
Beneficiary Election
If you are married, your spouse must be your beneficiary unless he or she consents to your naming another beneficiary as described
below. Name your beneficiary below (to name more than one person attach a separate piece of paper with the name, relationship,
address and the percentage each person should receive).
Beneficiary Name _____________________________________ Date of Birth _____________ Relationship ___________________
Address _____________________________________________ City _______________________ State ____________ Zip _________
ERISA Qualified Plans Only -- If you are married and have named someone other than your spouse to receive benefits, he or she must
agree to your designation of beneficiary by completing, in the presence of a notary public, a separate form entitled "Consent to
Name Nonspouse Beneficiary."
Signatures and Statements
Is this annuity intended to replace or change any existing life insurance or annuities? _____ Yes _____ No
I acknowledge receipt of Prospectuses for the IDS Life Group Deferred Fixed/Variable Annuity Contract and the Retirement Annuity
Mutual Funds. I understand that all benefits and values provided under the contract, when based on investment experience of a
separate account, are variable and are not guaranteed as to fixed dollar amount. I understand that the Certificate issued from
this enrollment form will evidence my participation under the master group annuity contract issued to my employer and that such
documents together with the 403(b) Retirement Plan constitute my rights and obligations under the Plan.
Dated at: City _____________________________________ State __________________________ Date __________________
___________________________________________________________________________________________________________________________________
Participant's Signature Financial Planner's Signature
<PAGE>
PAGE 2
Employer Information
Approved By ________________________________________________ Address ________________________________________________________
Employer Name ______________________________________________ City ___________________________________________________________
Date _______________________________________________________ State ___________________________________ Zip ________________
Tax-Sheltered Annuity (TSA) Explanation, Disclosure and Acknowledgment
Check marks indicate that the item has been explained by the IDS planner and is fully understood by the participating employee.
___ 1. Contributions may be allocated to purchase (a) variable benefits only, (b) fixed benefits only, or (c) a
combination of both variable and fixed benefits.
___ 2. To the extent contributions are used to purchase variable benefits, the value of the certificate during the years
prior to retirement, and also the amount of retirement benefits, will vary with the investment performance of the
assets in the variable accounts and no assurance can be made as to how many dollars will be available to the
participant.
___3. Information about administrative and surrender charges; mortality and expense fees; and mutual fund management fees
have been explained.
___4. The main purpose of an annuity is for long-term retirement accumulation and benefits and it should be purchased for
this purpose.
___5. The investments made in accordance with my elections shall be for my exclusive benefit and are neither assignable
nor transferable.
___6. Under current federal income tax law, as a general rule, payments to the annuitant/participant will be taxable when
received, as ordinary income. Payments also may be subject to a 10% IRS early withdrawal penalty tax and 20%
federal income tax withholding. (See the prospectus for further discussion of the tax treatment.)
___7. The annuity certificate benefits and provisions also may be subject to the Employer's qualified plan rules and
provisions.
___8. If the IRS has notified you that you are subject to back-up withholding because of a failure to report all interest
and dividends, check here _____.
If you are a tax-exempt payee, check here ____.
___9. You certify, under the penalties of perjury as required by Form W-9 of the Internal Revenue Service, that the
names, addresses, Social Security (taxpayer ID) numbers, and back-up withholding information provided in this
enrollment form are true, correct and complete.
___10. Effective 1-1-89 a distribution from a Tax-Sheltered Annuity (TSA) purchased under Section 403(b) of the Internal
Revenue Code may be made only if the employee/participant has:
1. attained age 59 1/2; or
2. separated from the service of the employer that purchased the TSA; or
3. died; or
4. become disabled, as defined in Section 72(m)(7) of the Code; or
5. encountered financial hardship within the meaning of Section 403(b) of the Code and as defined in the
Employer's qualified plan.
The restriction applies to contributions of deferred salary made after December 31, 1988, and all earnings credited
to the TSA after that date. The "hardship" exception above is limited to the amount of contributions made and does
not apply to any earnings credited to the TSA.
The restriction does not apply to any values in the TSA as of December 31, 1988, nor to transfers or exchanges of
certificate values within the annuity or to another registered variable annuity contract or investment vehicle
available through the employer.
Participant's Name _____________________________________________________________ Date _________________________________
(Print)
_____________________________________________________________ _________________________________________________________
Participant's Signature Financial Planner's Signature
<PAGE>
PAGE 3
Financial Planner's Report
Declaration and Signature
You certify that you personally solicited this application and witnessed its signing. The application and this report are complete
and accurate to the best of your knowledge and belief.
Are you related to the annuitant/participant? Please state relationship ____________________________________________ (required)
This application ____ does ____ does not involve replacement of existing insurance or annuities.
________________________________________ __________________ ___________________ ________ (612)
Financial Planner's Signature Planner I.D. Compensation % D.O. Phone
________________________________________ __________________ ___________________ ________ (612)
Joint Financial Planner's Signature Planner I.D. Compensation % D.O. Phone
____ Freeze contributions to existing TSA account number: _________________________________
</TABLE>
<PAGE>
PAGE 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our reports dated February 3, 1995 on the
consolidated financial statements and financial statement schedules
of IDS Life Insurance Company and our report dated March 17, 1995
on the financial statements of IDS Life Accounts F, IZ, JZ, G, H
and N in Post-Effective Amendment No. 4 to the Registration
Statement (Form N-4 No. 33-52518) being filed under the Securities
Act of 1933 and the Investment Company Act of 1940 for the
registration of the Employee Benefit Annuity to be offered by IDS
Life Insurance Company.
Minneapolis, Minnesota
April 20, 1995
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1994
Column A Column B Column C Column D
Type of Investment Cost Value Amount at which
shown in the
balance sheet
<S> <C> <C> <C>
Fixed maturities:
Held to maturity:
United States Government and
government agencies and
authorities (a) $ 1,301,547 $ 1,177,730 $ 1,301,547
States, municipalities and
polictical subdivisions 9,687 9,819 9,687
All other corporate bonds 9,958,627 9,507,251 9,958,627
Total held to maturity 11,269,861 10,694,800 11,269,861
Available for sale:
United States Government and
government agencies and
authorities (b) 3,783,176 3,514,514 3,514,514
States, municipalities and
polictical subdivisions 11,008 11,710 11,710
All other corporate bonds 4,664,944 4,491,331 4,491,331
Total available for sale 8,459,128 8,017,555 8,017,555
Mortgage loans on real estate 2,400,514 XXXXXXXXX 2,400,514
Policy loans 381,912 XXXXXXXXX 381,912
Other investments 51,795 XXXXXXXXX 51,795
Total investments $22,563,210 $ XXXXXXXXX $22,121,637
(a) - Includes mortgage-backed securities with a cost and market value of $1,280,047 and $1,160,559, respectively.
(b) - Includes mortgage-backed securities with a cost and market value of $3,655,083 and $3,387,182, respectively.
</TABLE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1994
Column A Column B Column C Column D Column E Column F Column G
Segment Deferred Future Unearned Other policy Premium Net
policy policy premiums claims and revenue investment
acquisition benefits, benefits income
cost losses, payable
claims and
loss
expenses
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Annuities $1,150,585 $19,361,979 $ - $23,888 $ - $1,534,826
Life, DI,
Long-term Care and
Health Insurance 714,739 3,346,931 - 26,180 144,640 247,047
_____________________________________________________________________________________________________________________________
Total $1,865,324 $22,708,910 $ - $50,068 $144,640 $1,781,873
_____________________________________________________________________________________________________________________________
Column H Column I Column J Column K
Benefits, Amortization Other Premiums
claims, of deferred operating written
losses and policy expenses
settlement acquisition
expenses costs
_____________________________________________________________________________________________________________________________
Annuities $ (5,762) $ 194,060 $131,515 N/A
Life, DI,
Long-term Care and
Health Insurance 134,128 86,312 78,586 N/A
_____________________________________________________________________________________________________________________________
Total $ 128,366 $ 280,372 $210,101 N/A
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E Column F Column G
Segment Deferred Future Unearned Other policy Premium Net
policy policy premiums claims and revenue investment
acquisition benefits, benefits income
cost losses, payable
claims and
loss
expenses
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Annuities $1,008,378 $18,492,135 $ - $21,508 $ - $1,532,995
Life, DI,
Long-term Care and
Health Insurance 644,006 3,148,932 - 23,008 127,245 250,22
_____________________________________________________________________________________________________________________________
Total $1,652,384 $21,641,067 $ - $44,516 $127,245 $1,783,219
_____________________________________________________________________________________________________________________________
Column H Column I Column J Column K
Benefits, Amortization Other Premiums
claims, of deferred operating written
losses and policy expenses
settlement acquisition
expenses costs
_____________________________________________________________________________________________________________________________
Annuities $ 3,656 $ 139,602 $122,999 N/A
Life, DI,
Long-term Care and
Health Insurance 119,335 72,131 118,975 N/A
_____________________________________________________________________________________________________________________________
Total $ 122,991 $ 211,733 $241,974 N/A
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 4
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1992
Column A Column B Column C Column D Column E Column F Column G
Segment Deferred Future Unearned Other policy Premium Net
policy policy premiums claims and revenue investment
acquisition benefits, benefits income
cost losses, payable
claims and
loss
expenses
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Annuities $ 860,027 $16,342,419 $ - $28,705 $ - $1,370,145
Life, DI,
Long-term Care and
Health Insurance 580,848 2,883,469 - 21,194 114,379 246,676
_____________________________________________________________________________________________________________________________
Total $1,440,875 $19,225,888 $ - $49,899 $114,379 $1,616,821
_____________________________________________________________________________________________________________________________
Column H Column I Column J Column K
Benefits, Amortization Other Premiums
claims, of deferred operating written
losses and policy expenses
settlement acquisition
expenses costs
_____________________________________________________________________________________________________________________________
Annuities $ 1,870 $ 81,706 $100,928 N/A
Life, DI,
Long-term Care and
Health Insurance 106,528 58,453 114,764 N/A
_____________________________________________________________________________________________________________________________
Total $ 108,398 $ 140,159 $215,692 N/A
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 5
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE IV - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
Column A Column B Column C Column D Column E Column F
Gross amount Ceded to other Assumed from Net % of amount
companies other companies Amount assumed to net
______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1994
Life insurance in force $50,814,651 $3,246,608 $1,851,916 $49,419,959 3.75%
______________________________________________________________________________________________________________
Premiums:
Life insurance $ 51,219 $ 3,354 $ 319 $ 48,184 0.66%
DI & health insurance 114,049 17,593 -- 96,456 0.00%
Total premiums $ 165,268 $ 20,947 $ 319 $ 144,640 0.22%
______________________________________________________________________________________________________________
For the year ended
December 31, 1993
Life insurance in force $44,188,493 $3,038,426 $1,937,022 $43,087,089 4.50%
______________________________________________________________________________________________________________
Premiums:
Life insurance $ 51,764 $ 3,627 $ -- $ 48,137 0.00%
DI & health insurance 96,250 17,142 -- 79,108 0.00%
Total premiums $ 148,014 $ 20,769 $ -- $ 127,245 0.00%
______________________________________________________________________________________________________________
For the year ended
December 31, 1992
Life insurance in force $38,888,963 $2,937,590 $2,015,382 $37,966,755 5.31%
______________________________________________________________________________________________________________
Premiums:
Life insurance $ 53,238 $ 3,849 $ 330 $ 49,719 0.66%
DI & health insurance 78,347 13,687 -- 64,660 0.00%
Total premiums $ 131,585 $ 17,536 $ 330 $ 114,379 0.29%
______________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
Column A Column B Column C Column D Column E
Additions
---------
Balance at Charged to
Description Beginning Charged to Other Accounts- Deductions- Balance at End
of Period Costs & Expenses Describe * Describe ** of Period
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1994
- -----------------------------
Reserve for Mortgage Loans $35,020 $232 $ 0 $ 0 $35,252
Reserve for Fixed Maturities $22,777 ($16,777) $ 0 $6,000 $ 0
Reserve for Other Investments $10,700 ($3,185) $ 0 $ 0 $ 7,515
For the year ended
December 31, 1993
- -----------------------------
Reserve for Mortgage Loans $23,595 $13,635 $ 0 $2,210 $35,020
Reserve for Fixed Maturities $37,899 ($15,122) $ 0 $22,777
Reserve for Other Investments $12,834 ($4,344) $ 0 ($2,210) $10,700
For the year ended
December 31, 1992
- ------------------------------
Reserve for Mortgage Loans $16,131 $8,440 $ 0 $976 $23,595
Reserve for Fixed Maturities $45,100 ($7,601) $400 $ 0 $37,899
Reserve for Other Investments $ 7,782 $4,076 $ 0 ($976) $12,834
* Cash received on bond previously written down.
** 1994 amount represents a direct writedown of the related investments in fixed maturities. 1993 and 1992 amounts represent
transfers between reserve accounts.
</TABLE>
<PAGE>
PAGE 7
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the consolidated financial statements of IDS Life
Insurance Company as of December 31, 1994 and 1993, and for each of
the three years in the period ended December 31, 1994, and have
issued our report thereon dated February 3, 1995 (included
elsewhere in this Registration Statement).
Our audits also included the financial statement schedules I, III,
IV and V included elsewhere in this Registration Statement. These
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
February 3, 1995
