<PAGE> 1
SUPPLEMENT DATED MAY 1, 1996
TO
PORTFOLIO DIRECTOR SEPARATE ACCOUNT A
PROSPECTUS
DATED MAY 1, 1996
1. The Prospectus is hereby amended by deleting in its entirety the "Transfers
Between Investment Options -- During the Purchase Period" section on page 21
of the Prospectus and by replacing in lieu thereof the following:
DURING THE PURCHASE PERIOD
During the Purchase Period, transfers may be made between Portfolio
Director's Fixed Account Options and Variable Account Options.
We currently permit transfers between Variable Account Options or from Variable
Account Options to Fixed Account Options, at any time. We may, however, limit
the number of transfers you can make.
Transfers are also permitted from the Fixed Account Options subject to the
following limitations:
<TABLE>
<CAPTION>
FIXED OTHER
ACCOUNT OPTION VALUE FREQUENCY RESTRICTIONS
<S> <C> <C> <C>
Fixed Account
Plus: Up to 20% per contract year(1) At any time None (2)
100% At any time If Account Value is less
than or equal to $500
Short-Term Fixed
Account: Up to 100% At any time 90-day holding period If
transfer was previously made
into Short-Term Fixed
Account.(3)
</TABLE>
- ---------------
(1) VALIC will allow transfers to be made each Participant Year in excess of the
20% limitation subject to a charge equal to 5% of the amount in excess of
the 20% limitation. In no event may this charge exceed 8.5% of the total
Purchase Payments attributable to the Participant Account at the time of the
transfer.
(2) Your employer may further limit or expand the restrictions. We may charge
for those modified restrictions if specified in your employer's retirement
plan.
(3) VALIC may change this holding period at any time in the future, but it will
never be more than 180 days.
2. The Prospectus is hereby amended by the addition of the following sections
under "Fees and Charges".
CHARGE FOR SURRENDERS FROM FIXED ACCOUNT PLUS DIRECTED TO OTHER FUNDING
ENTITIES.
For the purposes of this section, "other funding entities" means any
financial institution which provides a funding vehicle for the Participant's
employee retirement plan. For the purposes of this section "directed to"
means that the surrender of the Account Value allocated to Fixed Account Plus
is made payable directly to the other funding entities.
The Company will allow a Participant's Account Value allocated to one of the
Variable Account Options or the Short-Term Fixed Account to be surrendered
and directed to other funding entities at any time without the imposition of
a surrender charge.
The Company will allow a Participant's Account Value allocated to Fixed
Account Plus to be surrendered and directed to other funding entities as
follows:
a. Up to 100% of a Participant's Account Value allocated to Fixed Account
Plus may be surrendered and directed to other funding entities without the
imposition of a surrender charge upon the Participant's retirement,
separation from service or disability;
<PAGE> 2
b. Up to 20% of a Participant's Account Value allocated to Fixed Account Plus
may be surrendered and directed to other funding entities without the
imposition of a surrender charge during each Participant Year. If multiple
surrenders of the Participant's Account Value in Fixed Account Plus are
made and directed to other funding entities by a Participant in a
Participant Year, the percentages of the Fixed Account Plus Account Value
surrendered each time will be added together to determine the 20% limit
for that Participant Year. For each surrender, the percentage surrendered
is the ratio of the amount surrendered to the portion of the Account Value
allocated to Fixed Account Plus immediately prior to the surrender. If,
following a 20% of Account Value surrender the remaining amount allocated
to Fixed Account Plus would be less than $500, such value may also be
surrendered in full at that time without charge.
c. Up to 100% of the Participant's Account Value allocated to Fixed Account
Plus may be surrendered and directed to other funding entities without the
imposition of a surrender charge over a five year period under either one
of the following two methods.
(1) Five Year Equal Amount Installment Method
Under this method, the Participant's Account Value allocated to
Fixed Account Plus with interest credited will be paid out in equal
installments over a five-year period.
The interest rate during the five year payout period will be
declared in advance by VALIC. No other withdrawals may be made from
Fixed Account Plus once payments begin.
(2) Decreasing Balance Method
Under this method, (1),% of the account balance in Fixed Account
Plus will be surrendered the first year; 1/4 of the remaining
balance, the second year; 1/3 of the remaining balance the third
year; 1/2 of the remaining balance the fourth year; the entire
remaining balance the fifth year. Interest under this method will be
periodically credited at a rate determined by VALIC. Other
withdrawals from Fixed Account Plus may be made under this method.
d. All other surrenders of a Participant's Account Value allocated to Fixed
Account Plus directed to other funding entities not discussed above will
be subject to a surrender charge. The surrender charge will be 5% of
amounts in excess of the 20% limitation. Total surrender charges will not
be permitted to exceed 8.5% of the total Purchase Payments attributable to
the Participant Account at the time of the surrender.
CHARGE FOR TRANSFERS FROM FIXED ACCOUNT PLUS IN EXCESS OF 20% OF ACCOUNT
VALUE
The Company will allow transfers in excess of 20% of the Participant's
Account Value allocated to Fixed Account Plus to be made each Participant
Year (see Transfers Between Investment Options in this prospectus) subject to
a charge equal to 5% of the amount in excess of the 20% limitation. In no
event may this charge exceed 8.5% of the total Purchase Payments attributable
to the Participant Account at the time of transfer.
3. Other provisions of this Prospectus including the Fee Table and Exchange
Privilege sections are hereby deemed conformed to reflect the amendments
stated in 1 and 2 above.
VA 9084-A (Rev.5/96)
2
