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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 58 (File No. 2-29081) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 19 (File No. 811-1653) X
IDS Life Variable Annuity Fund A (Individual and Employer)
IDS Tower 10, Minneapolis, Minnesota 55440-0010
(612) 671-3678
Mary Ellyn Minenko - IDS Tower 10, Minneapolis 55440-0010
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
X on April 28, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of rule 485
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to section
24-F of the Investment Company Act of 1940. Registrant's Rule
24f-2 Notice for its most recent fiscal year was filed on February
23, 1995.
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IDS Life Variable Annuity Fund A Post-Effective
(Individual and Employer) Amendment No. 58
Registration Form N-1
Cross reference sheet showing location in the prospectus of the
information called for by the items enumerated in Part I of Form
N-1.
Negative answers omitted from prospectus are so indicated.
IDS LIFE VARIABLE ANNUITY FUND A (INDIVIDUAL AND EMPLOYER)
Section
Item No. In Prospectus
1 Cover
2 Summary of Contents
3 Financial Highlights
4(a) History
(b) Not Applicable
(c) Not Applicable
5(a) Investment Objective
(b) Investments the Fund will not make
(c) Investment objective
(d) Financial Highlights; Investment objective
6(a) Tax charges
(b) Tax charges; What about your taxes?
(c) Not Applicable
(d) Not Applicable
7(a) Brokerage
(b) Brokerage
(c) Brokerage
(d) Not Applicable
8 Not Applicable
9(a) Ownership of IDS Life and American Express
Financial Corporation
(b) Not Applicable
(c) Members of the Board of Managers and Officers of
the Fund
10 Members of the Board of Managers and Officers of
the Fund
11 Not Applicable
12(a) Custodian
(b) Not Applicable
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13(a) Investment agreements; Brokerage; Ownership of
IDS Life and American Express Financial
Corporation
(b) Not Applicable
(c) Not Applicable
(d) Not Applicable
14(a) Voting rights
(b) Not Applicable
15(a) Measuring the value of your contract; Dates we
revalue-Valuation date; The Valuation period;
Valuing Fund assets; The charges you pay
(b) Automated transfers and partial surrenders;
Valuing an annuity unit; Annuity payment starting
date; Table of settlement rates; Annuity payment
plans; Determination of monthly annuity payments
for deferred contracts; Determination of monthly
annuity payments for immediate contracts;
Surrendering your contract; Making withdrawals on
your contract; Special rules if the annuitant
dies before the annuity payment starting date;
Your right to cancel installment contracts
(c) Not Applicable
16(a) Investment agreements; Brokerage; Cover; Annuity
payment plans; The charges you pay; Making
withdrawals on your contract
(b) Directors and officers of IDS Life Insurance
Company; Other affiliations
(c) The charges you pay
(d) Not Applicable
17 Not Applicable
18 Financial statements; IDS Life Financial
Information
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IDS Life Variable Annuity Fund A
Individual Variable Annuity Contracts and Variable Annuity
Contracts for Employer Plans
Prospectus/April 28, 1995
IDS Life Variable Annuity Fund A (the Fund) is a segregated asset
account of IDS Life Insurance Company (IDS Life). The investment
objective of the Fund is long-term capital appreciation. The Fund
invests primarily in common stocks of U.S. corporations. The Fund
also may invest in preferred stocks and in corporate and government
bonds.
This prospectus describes the following types of individual
non-tax-qualified, variable annuity contracts offered by IDS Life:
1) an annuity for use in connection with non-qualified retirement
or deferred compensation plans or programs adopted by an employer
that are not intended to qualify under Sections 401, 403, or 408 of
the Internal Revenue Code (the Code); 2) an installment payment
deferred annuity; 3) a single payment deferred annuity; and 4) a
single payment immediate annuity.
New contracts are not currently being offered. This prospectus
gives you facts about the Fund. You should read it and keep it
with your investment records for future reference.
The Fund is responsible only for statements included in this
prospectus or in authorized sales material.
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 Variable Annuity Fund A
IDS Tower 10
Minneapolis, Minnesota 55440-0010
General Information (612) 671-3733
Annuity Service (612) 671-4738
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IDS Life Variable Annuity Fund A
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440-0010
Prospectus, April 28, 1995
Individual Variable Annuity Contracts and Variable Annuity
Contracts For Employer Plans
Table of Contents Page
Summary of contents...........................................
Financial Highlights..........................................
The variable annuity..........................................
Investment objective..........................................
Investments the Fund will not make............................
Portfolio manager.............................................
Investment agreements.........................................
Brokerage.....................................................
The contracts.................................................
The fixed account.............................................
Automated transfers and partial surrenders....................
Measuring the value of your contract..........................
Valuing Fund assets...........................................
The investment factor.........................................
Valuing an accumulation unit..................................
Valuing an annuity unit.......................................
Annuity payment starting date.................................
Table of settlement rates.....................................
Annuity payment plans.........................................
The charges you pay...........................................
Surrendering your contract....................................
Making withdrawals on your contract...........................
Special rules if annuitant dies before the
annuity payment starting date...............................
What about your taxes?........................................
Voting rights.................................................
Board of managers and officers................................
History.......................................................
Assets of the Fund............................................
Headquarters..................................................
Ownership of IDS Life and American Express
Financial Corporation.......................................
Other affiliations............................................
Custodian.....................................................
Insurance regulation..........................................
Financial statements..........................................
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Summary of Contents
About the variable annuity - The variable annuities are offered for
sale through the Fund, a diversified open-end management investment
company. Variable annuity contracts guarantee regular payments to
contract purchasers. The amount of these payments is influenced by
the performance of the securities in which the Fund invests (page
__).
Financial Highlights - This table shows important financial
information you will need to evaluate the Fund's performance (page
__).
Investment objective - The Fund's investment objective is long-term
capital appreciation in order to build up values and to make
annuity payments. The Fund invests primarily in common stock and
also may invest in preferred stock and in government and corporate
bonds. The Fund may invest in foreign securities, futures
contracts and options on futures contracts. There can be no
guarantee the Fund will achieve its investment objective because
any investment involves risk (page __).
Portfolio manager - The Fund is managed by senior portfolio manager
Mitzi Malevich (page __).
Investment agreements - The Fund is a segregated asset account of
IDS Life Insurance Company, a stock life insurance company. The
investments of the Fund are managed by IDS Life pursuant to an
Investment Management Agreement. Under this agreement, IDS Life
receives a management fee equal to 0.4% of the Fund's average daily
net assets for each year. Pursuant to a Distribution and Services
Agreement, IDS Life also serves as principal underwriter of the
Fund. IDS Life annually pays 0.25% of the Fund's net assets to
American Express Financial Corporation for investment advice
regarding management of the Fund's investments (page __).
Contracts - This prospectus describes the following types of
individual non-tax-qualified variable annuity contracts:
o An individual variable annuity contract for use in connection
with non-qualified retirement or deferred compensation plans
or programs adopted by an employer. These plans or programs
are not intended to qualify under Sections 401, 403, or 408
of the Code. Under this contract, you make an annual
purchase payment. This payment must be at least equal to the
larger of an amount which, when multiplied by the number of
contract years between the application date and the
retirement date, equals (1) $3,000 or (2) $300 a year. This
contract also provides several optional settlement plans
which may be elected, except that if at the annuity payment
starting date the accumulation value of the contract is less
than $2,000, the accumulation value may be paid in a lump sum
(page __);
o A single payment deferred annuity that can be purchased by
making an initial payment of at least $3,000 (page __);
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PAGE 7
o A single payment immediate annuity that can be purchased by
making an initial payment of at least $3,000 (page __); and
o An installment payment deferred annuity that may be purchased
by making 10 or more annual payments that total at least $300
(page __).
Who owns the contract? - The annuitant is the owner, unless your
application says otherwise, or if ownership of the contract is
later transferred to someone else. Transfers go into effect when
recorded by IDS Life at its corporate office (page __).
If the contract described in this prospectus is purchased by an
employer in connection with a deferred compensation plan, the
employer becomes the exclusive owner of all rights under the
contract. Any employee referred to in the contract as an annuitant
is called an annuitant solely for purposes of identification. All
funds payable under the contract are paid to and are the exclusive
property of the employer. No certificates are issued by IDS Life
to any employee with whom an employer has entered into a deferred
compensation agreement. Any employee participating in a deferred
compensation plan should refer to the deferred compensation
agreement with his employer for information on any additional
charges in connection with the plan.
Transfers between accounts - Before the annuity payment starting
date, you may give IDS Life written or telephone instructions to
transfer the contract value of your investment between the fixed
account and the variable account. Transfers must be at least for
$50 (page __).
Charges you pay - IDS Life will deduct a combined sales and
administrative charge from payments you make into the Fund.
For the individual variable annuity contract intended for use with
non-qualified plans adopted by an employer, the deduction is 5.75%
of the first $10,000 paid into the Fund, 4% of the next $40,000,
and 2% of all amounts in excess of $50,000 (page __).
For the other three individual annuity contracts, if you make a
single payment, the deduction is 8% of the first $15,000, 5% of the
next $10,000, and 2% of any further amounts. If you choose to make
installment payments, the deductions average 8.7% over the first 10
years. You may lose money if you surrender your individual
installment contract too soon because the percentage that is
deducted is higher in the earlier years (20% for the first year of
an installment payment contract, 18% for the second and third
contract years, 7% for the fourth year, and 4% thereafter)
(page __).
Additionally, IDS Life may deduct for premium taxes. Most states
don't have premium taxes but in those that do, IDS Life may make a
deduction. State premium taxes range from 0 to 3.5% of the gross
purchase payments. You may receive some money in excess of the
amount requested if, as a result of your surrender, the Fund's
state premium tax liability is reduced (page __).
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Surrendering your contract - You can surrender all or part of a
deferred annuity contract any time before the annuity payment
starting date by giving IDS Life written or telephone instructions.
IDS Life will cash in the number of accumulation units or fixed
dollar accumulation value required for the amount of money you
request. The accumulation units will be given the accumulation
unit value determined on the date your request is received.
However, you can't surrender part of your contract if the remaining
accumulation value is less than $20. There can be no surrenders of
any type after annuity payments have started. You will pay income
tax on the taxable part of your surrender and you may have to pay
an IRS penalty tax on early withdrawal if you surrender part or all
of your contract before reaching age 59-1/2.
A surrender may result in adverse tax consequences. You should
consult a tax advisor before making a surrender request (page __).
Additional Information
For information about the Fund's history, organization and
headquarters as well as information about IDS Life and American
Express Financial Corporation (see page __).
<TABLE>
<CAPTION>
Financial Highlights From Jan 1, 1985 to Dec. 31, 1994
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>
Accumulation unit value at
beginning of year $10.70 $ 9.77 $9.13 $6.10 $5.98 $4.58 $4.26 $3.35 $2.88 $2.35
___________________________________________________________________________________________________________________________________
Income from investment operations:
Net investment income (loss) .03 (.02) (.03) .02 .06 .05 .05 .03 .01 .03
Net gains (losses) on securities,
both realized and unrealized (0.46) 0.95 0.67 3.01 .06 1.35 .27 .88 .46 .50
___________________________________________________________________________________________________________________________________
Total from investment operations (0.43) 0.93 0.64 3.03 .12 1.40 .32 .91 .47 .53
___________________________________________________________________________________________________________________________________
Accumulation unit value at end
of year $10.27 $10.70 $9.77 $9.13 $6.10 $5.98 $4.58 $4.26 $3.35 $2.88
___________________________________________________________________________________________________________________________________
Total Return* (4.01)% 9.50% 6.97% 49.83% 1.97% 30.60% 7.56% 26.90% 16.34% 22.59%
___________________________________________________________________________________________________________________________________
Ratios/Supplemental Data
___________________________________________________________________________________________________________________________________
Total contract owner's equity
at end of year (000 omitted) $223,317 $241,623 $228,366 $222,205 $155,426 $163,568 $136,141 $140,773 $121,189 $115,657
Ratio of operating expenses
to average net assets 1.40% 1.40% 1.40% 1.41% 1.41% 1.43% 1.40% 1.40% 1.40% 1.40%
Ratio of net investment income
(loss) to average net assets 0.27% (0.17)% (0.30)% 0.22% 0.97% 0.99% 1.22% 0.67% 0.47% 1.24%
Portfolio turnover rate 63% 64% 74% 68% 56% 55% 66% 87% 110% 125%
___________________________________________________________________________________________________________________________________
*Total return does not reflect payment of a sales charge.
This table pertains to accumulation units only. When you begin to receive your annuity payments, accumulation units change to
annuity units. The value of an annuity unit (assuming a 3.5% investment rate) was $4.11 as of Dec. 31, 1994, $4.44 as of Dec. 31,
1993, $4.19 as of Dec. 31, 1992, $4.06 as of Dec. 31, 1991, $2.80 as of Dec. 31, 1990, $2.84 as of Dec. 31, 1989, $2.25 as of Dec.
31, 1988, $2.17 as of Dec. 31, 1987, $1.77 as of Dec. 31, 1986 and $1.57 as of Dec. 31, 1985. The value of an annuity unit
(assuming a 5% investment rate) was $2.80 as of Dec. 31, 1994, $3.06 as of Dec. 31, 1993, $2.93 as of Dec. 31, 1992, $2.88 as of
Dec. 31, 1991, $2.02 as of Dec. 31, 1990, $2.08 as of Dec. 31, 1989, $1.67 as of Dec. 31, 1988, $1.63 as of Dec. 31, 1987, $1.35 as
of Dec. 31, 1986 and $1.22 as of Dec. 31, 1985.
The information in this table has been examined by Ernst & Young LLP, independent auditors. The independent auditor's report and
additional information about the performance of the Fund are contained in the Fund's annual report, which if not included with this
prospectus, may be obtained without charge.
/TABLE
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The variable annuity
An annuity is a contract with a life insurance company that
guarantees regular income to the purchaser. Most people buy
annuities to provide income in their retirement years. When most
people think of an annuity, they are thinking of a fixed dollar
annuity. With a fixed dollar annuity, the insurance company bears
the risk of investment gain or loss and guarantees payment of an
exact monthly amount. A variable annuity also guarantees you
regular payments. However, the amount of the payments will
fluctuate with the performance of the securities in which the
annuity fund invests. So if the securities go up in value, you may
receive larger annuity payments. If they go down, the amount of
the annuity payments you receive may be reduced.
Investment objective
The Fund's investment objective is long-term capital appreciation
so that the Fund can build up values and increase the size of
annuity payments. There can be no guarantee the Fund will achieve
its investment objective because any investment involves risk. The
Fund's investment objective can be changed by IDS Life without the
approval of the Fund's contract holders, but IDS Life has no
intention of doing so.
The Fund invests primarily in U.S. common stocks. The Fund also
may invest in preferred stocks and in corporate and government
bonds. Some bonds issued by agencies of the U.S. government are
not supported by the full faith and credit of the United States.
The Fund may invest up to 30% of its total assets at the time of
purchase in foreign securities. In selecting foreign investments,
the Fund generally will seek to invest in companies that it
anticipates will experience economic growth at least as great as
that anticipated in the U.S. companies in which it invests. The
securities that the Fund believes offer attractive opportunities
for investment may change from time to time. Foreign investments
may be subject to additional risks, including future political and
economic developments, the possible imposition of withholding taxes
on dividend income, the seizure or nationalization of companies,
the establishment of exchange controls or the adoption of other
restrictions that might adversely affect an investment.
The Fund may invest in the securities of foreign issuers directly
or in the form of American Depository Receipts (ADRs). ADRs are
receipts typically issued by an American bank or trust company that
evidence ownership of underlying securities issued by a foreign
corporation. Since investments in foreign securities will involve
currencies of foreign countries, the value of the Fund's assets as
measured in U.S. dollars may be affected favorably or unfavorably
by changes in currency rates and in exchange control regulations.
The Fund also may enter into forward commitments for the purchase
or sale of foreign currencies, but only in connection with the
settlement of foreign securities transactions and not for
speculative purposes.
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The Fund may enter into a forward contract to buy or sell foreign
currencies. For example, if the Fund believes the value of the
U.S. dollar will decline in relationship to a foreign currency, the
Fund will buy the foreign currency at today's price in U.S. dollars
agreeing to pay for the currency at a future date. If the U.S.
dollar declines, then the foreign currency can be sold for more
U.S. dollars than it cost and the Fund realizes a profit. The Fund
will not enter into forward contracts in excess of an offsetting
position of cash and investment in U.S. dollars. If the U.S.
dollar does not decline as expected, the Fund will sustain a loss
because of having entered into the forward contract.
The Fund may buy or write (sell) options traded on any U.S. or
foreign exchange or in the over-the-counter market. It may write
covered call options on individual securities. Options in the
over-the-counter market will be purchased only when the investment
manager believes a liquid secondary market exists for the options
and only from dealers and institutions the investment manager
believes present a minimal credit risk. Some options are
exercisable only on a specific date. In that case, or if a liquid
secondary market does not exist, the Fund could be required to buy
or sell securities at disadvantageous prices, thereby incurring
losses. In covered call options, the seller owns the underlying
security required to be sold upon exercise of the option.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities. The writer of an
option agrees to buy or sell a security at a fixed price and could
forgo a profit or incur a loss from a change in the market price of
the security. The purchaser of an option pays a premium whether or
not the option is exercised. If a liquid secondary market does not
exist at a particular time, it might not be possible to close an
option position when it is desirable to do so. The Fund may buy
put and call options as a trading technique.
For temporary purposes, the Fund may make certain investments. It
may buy short-term U.S. and Canadian government securities. It may
invest in bank obligations including negotiable certificates of
deposit, non-negotiable fixed time deposits, bankers' acceptances
and documented discount notes (letters of credit). The Fund may
buy short-term corporate notes and obligations rated in the top two
classifications by Standard and Poor's, Moody's or the equivalent.
The Fund does not look to buy and sell stocks for the short-term,
but will do so if it is appropriate. The Fund may use repurchase
agreements with broker-dealers registered under the Securities
Exchange Act of 1934 and commercial banks. Repurchase agreements
involve investments in debt securities where the seller agrees to
repurchase the securities at cost plus an agreed-to interest rate
within a specified time. A risk of a repurchase agreement is that
if the seller seeks the protection of the bankruptcy laws the
Fund's ability to liquidate the security involved could be
impaired, and it might subsequently incur a loss if the value of
the securities declines or if the other party to a repurchase
agreement defaults on its obligation.
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PAGE 11
The Fund may enter into stock index futures contracts traded on any
U.S. or foreign exchange. The Fund may buy or write put and call
options on these futures and on stock indexes. These instruments
may be considered speculative and may expose the Fund to greater
risk. Stock index futures contracts, options on futures contracts
and options on stock indexes must be used as a hedge. This means
they must be used to offset changes in the value of some or all the
Fund's existing investments in stocks or be offset by the Fund's
cash position. The futures contracts and related options may help
the Fund to gain rapid exposure or protect itself from changes in
the market. Successful hedges depend on the portfolio manager's
ability to predict the future direction of stock prices or interest
rates. If the portfolio manager's prediction is incorrect, the
Fund would have been better off if no hedge had been made. Also,
skills and techniques necessary to arrive at such predictions are
different from those needed for predicting changes in individual
stocks.
No more than 5% of the Fund's net assets can be used at any one
time for good faith deposits on futures and premiums for options on
futures that do not offset existing investment positions.
No securities will be bought on margin, nor will the Fund make any
short sales of securities.
The Fund will not invest in securities that are not readily
marketable without registration or the filing of a notification
under the 1933 Act, or the taking of similar action under other
securities laws relating to the sale of securities, if immediately
after the making of any such investment more than 10% of the Fund's
net assets (taken at market or other current value) is invested in
these securities. For valuation, see page __ of this prospectus.
The Fund will not buy securities of any investment trust or
investment company, except by purchase in the open market where no
commission or profit to a sponsor or dealer results from a purchase
other than customary broker's commission. The Fund does not intend
to invest in these securities but may do so to the extent of not
more than 15% of the Fund's net assets (taken at market or other
current value). The Fund will not invest in other mutual funds.
Notwithstanding any of the Fund's other investment policies, the
Fund may invest its assets in an open-end management investment
company having substantially the same investment objectives,
policies and restrictions as the Fund for the purpose of having
those assets managed as part of a combined pool.
The investment policies described above may be changed by the board
of managers.
For 1994, the Fund's portfolio turnover rate was 63%. For 1993,
the Fund's portfolio turnover rate was 64%, and for 1992, it was
74%. Portfolio turnover results in brokerage costs and may affect
the taxes the Fund must pay.
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PAGE 12
The prices of the securities in which the Fund invests fluctuate
daily. This means that the value of your contract goes up and
down. If values go down, your contract may be worth less than what
you paid for it.
Investments the Fund will not make
The Fund observes the following fundamental investment
restrictions, that may not be changed without approval by a vote of
the contract holders:
o The Fund will not borrow money or property except as a
temporary measure for extraordinary or emergency purposes,
and in an amount not exceeding one third of the market value
of its total assets (including borrowings) less liabilities
(other than borrowings) immediately after the borrowing.
o The Fund shall not underwrite securities of other issuers.
However, this shall not preclude the purchase of securities
for investment, on original issue or otherwise, and shall not
preclude the acquisition of portfolio securities under
circumstances where the Fund would not be free to sell them
without being deemed an underwriter for purposes of the
Securities Act of 1933 (1933 Act) and without registration of
these securities or the filing of a notification under the
1933 Act, or the taking of similar action under other
securities laws relating to the sale of securities.
o The Fund does not intend to concentrate investments in any
particular industry, but reserves freedom of action to do so
provided that not more than 25% of its total assets, taken at
cost, may be so invested at any one time.
o The Fund may invest up to 10% of its total assets, taken at
cost, in real properties, but will not do so as a principal
activity.
o The Fund will not invest more than 5% of its total assets, at
market value, in securities of any one company, government or
political subdivision thereof, except that the limitation
will not apply to investments in securities issued by the
U.S. government, its agencies or instrumentalities and except
that up to 25% of the Fund's total assets may be invested
without regard to this 5% limitation.
o The Fund will not buy securities of any issuer if immediately
after, and as a result of a purchase, the Fund would own more
than 10% of the outstanding voting securities of the issuer.
o The Fund may not make cash loans, if the total commitment
amount exceeds 5% of the Fund's total assets.
o The Fund will not buy or sell physical commodities unless
acquired as a result of ownership of securities or other
instruments, except this shall not prevent the Fund from
buying or selling options and futures contracts or from
investing in securities or other instruments backed by, or
whose value is derived from, physical commodities.
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PAGE 13
Portfolio manager
Mitzi Malevich joined American Express Financial Corporation in
1983 and serves as vice president and senior portfolio manager.
She was appointed to manage this fund and IDS Life Variable Annuity
Fund B (Fund B) in January 1995, and has managed IDS Growth Fund
since 1992. Prior to that, she was a portfolio manager of pension
fund accounts.
Investment agreements
IDS Life is the Fund's investment manager. Under the Investment
Management Agreement between IDS Life and the Fund, IDS Life
charges a fee for managing the Fund's investments. This amounts to
0.4% of the Fund's average daily net assets for the year.
IDS Life does not keep all of this fee. IDS Life and American
Express Financial Corporation have an Investment Advisory Agreement
that calls for IDS Life to pay American Express Financial
Corporation a fee for serving as investment advisor for the Fund.
The fee is 0.25% of the Fund's average daily net assets for the
year.
In addition to paying its own management fee, the Fund also pays
all brokerage commissions and charges in the purchase and sale of
assets. Brokerage charges are paid to IDS Life for reimbursement
of charges incurred in the purchase and sale of foreign securities.
An Investment Management Agreement and an Advisory Agreement were
approved by the contract holders on Dec. 30, 1983, as a result of
the IDS/American Express Company merger. Both agreements will
continue each year as long as they are approved:
o by a majority of the Board of Managers of the Fund or a
majority of the outstanding votes of the Fund, and
o by a majority of the Board of Managers of the Fund who are
not "interested persons" of IDS Life or American Express
Financial Corporation.
All votes by the Board of Managers must be taken at a meeting
called specifically to approve or disapprove the agreements and all
votes must be cast in person.
IDS Life may cancel either of its agreements without penalty,
provided it gives 60 days' notice in writing. American Express
Financial Corporation and the Fund may do the same. If the Fund
decides to cancel its management agreement with IDS Life, it must
have the approval of either the Board of Managers or a majority of
the votes of contract holders. If there is any assignment of
either agreement it ends immediately.
Brokerage
Under the Investment Management Agreement, IDS Life has
responsibility for making the Fund's investment decisions, for
effecting the execution of trades for the Fund's portfolio and for
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PAGE 14
negotiating any brokerage commissions. IDS Life intends to direct
American Express Financial Corporation to execute trades and
negotiate commissions on its behalf. These services are covered by
the Investment Advisory Agreement between American Express
Financial Corporation and IDS Life. When American Express
Financial Corporation acts on IDS Life's behalf for the Fund, it
follows the rules described here for IDS Life. Total brokerage
commissions paid by the Fund for each of the last three
years were as follows: for 1994, $ 310,227; for 1993, $327,804;
and for 1992, $346,938. IDS Life intends to continue to examine
and consider ways available to reduce brokerage costs.
The Investment Management Agreement generally requires IDS Life to
use its best efforts to obtain the best available price and the
most favorable execution. However, brokerage firms may provide
some extra services, including economic or investment research and
analysis. Sometimes it may be desirable to compensate a broker for
research or brokerage services by paying a commission that might
not otherwise be charged, or a commission in excess of what another
broker might charge. The Board of Managers has adopted a policy
authorizing IDS Life to do so to the extent authorized by law, if
IDS Life determines, in good faith, that the amount of commission
is reasonable in relation to the value of the brokerage or research
services provided by the broker.
In purchases and sales of securities involving transactions not
listed on an exchange or in listed securities that are traded off
of the exchange, the Fund will deal with a market maker as
principal, or a broker as agent, depending upon the method believed
to produce the best available price and most favorable execution as
described above. In transactions with a broker who acts as
principal, commissions are generally not stated separately, but are
included in the price of the securities.
American Express Financial Corporation gives investment advice to a
number of investment companies and mutual funds. Where more than
one of these companies or funds are interested in the same
securities at the same time, American Express Financial Corporation
carries out the sale or purchase in a way that all agree in advance
is fair.
Sharing in a large transaction may affect the price or volume of
shares acquired. But by these transactions, the Fund hopes to gain
an advantage in execution.
The Fund may pay brokerage commissions to broker-dealer affiliates
of IDS Life, American Express Financial Corporation and American
Express Company.
The contracts
This prospectus describes the following types of individual
non-tax-qualified variable annuity contracts:
<PAGE>
PAGE 15
o An individual variable annuity contract offered for sale in
connection with an employer plan that, as of Dec. 8, 1981,
had already purchased one or more Fund annuity contracts.
These plans or programs are not intended to qualify under
Sections 401, 403, or 408 of the Code. Your purchase payment
for this contract is made by a number of annual payments;
o Installment payment - deferred annuity. You make purchase
payments in installments over a number of years. Annuity
payments will begin at some future date after all
installments have been paid;
o Single payment - deferred annuity. You make a single purchase
payment. Annuity payments are deferred until some future
date; and
o Single payment - immediate annuity. You make a single
purchase payment. Annuity payments will start within 60 days
after IDS Life approves your application.
The fixed account
The fixed account is an additional account to which you may choose
to allocate purchase payments and contract values. It provides
guaranteed values and periodically adjusted interest-crediting
rates.
If you have a deferred annuity contract, you can change your mind
from time to time and apply all or part of your future purchase
payments to the fixed account.
Also, the contract provides that once each contract year, you can
transfer accumulation values of at least $250 from the variable
account to the fixed account or from the fixed account to the
variable account. This right ends 30 days before annuity payments
begin. Presently, IDS Life does not intend to limit the number of
transfers from the variable account to the fixed account; however,
transfers from the fixed account to the variable account are
limited to one per contract year. Just write or telephone IDS Life
and indicate the dollar amount, percentage of, or number of
variable accumulation units to transfer from the Fund or the amount
of fixed dollar accumulation value to transfer to the Fund.
Automated transfers and partial surrenders
IDS Life currently allows deferred annuity contract holders to
establish: (1) automated transfers of contract values between the
fixed account and variable account; or (2) automated partial
surrenders of contract values. Both services can be in effect at
the same time and may be established through a one-time written or
telephone request to IDS Life.
The minimum transfer amount from any account or partial surrender
amount from the contract is $50 and such transfer or surrender can
be made on a monthly, quarterly, semi-annual or annual basis. You
may start or stop this service at any time but you must give IDS
<PAGE>
PAGE 16
Life 30 days' notice to change any automated transfer or surrender
instructions that are currently in place. Automated transfers or
partial surrenders are subject to all of the other contract
provisions and terms including provisions relating to the transfer
of money between accounts. They are not available for 1969 Series
Contracts that were issued prior to May 1971.
Automated transfers from the fixed account may not exceed an amount
that will deplete the fixed account within 24 months. If you have
made any type of transfer from the fixed account, you may not
transfer contract values from the variable account back to the
fixed account until the next contract anniversary.
Automated partial surrenders may be restricted by applicable law in
some contracts. In addition, the payment of additional purchase
payments, if allowed under the contract, while automated partial
surrenders are in effect, may not be appropriate and therefore, is
not permitted.
IDS Life has the authority to honor any telephone requests believed
to be authentic and will use reasonable procedures to confirm that
they are. This includes asking identifying questions and tape
recording calls. As long as the procedures are followed, neither
IDS Life nor its affiliates will be liable for any loss resulting
from fraudulent requests. If IDS Life receives your transfer
and/or variable surrender request before its close of business
(normally 3 p.m. Central time), it will be processed that day.
Calls received after its close of business will be processed the
next business day. At times when the volume of telephone requests
is unusually high, IDS Life will take special measures to ensure
that your call is answered as promptly as possible. A telephone
surrender request will not be allowed within 30 days of a phoned-in
address change.
You may request that telephone withdrawals not be authorized from
your account by writing IDS Life.
Automated partial surrenders may result in income taxes and IRS
penalty taxes being applied to all or a portion of the amount
surrendered. See the sections on Tax charges and Surrendering your
contract (page __).
Consult your tax advisor if you have any questions about the
taxation of your annuity.
Measuring the value of your contract
Because values are always changing with the performance of the
Fund's investments, it is not easy to measure value with a variable
annuity contract. For this reason we use a technique that involves
"units." The performance of the Fund is measured by changes in the
value of a single unit, rather than the total value of the Fund.
There are two kinds of units. As long as you are paying into the
Fund they are called "accumulation units." When you begin to
receive your annuity payments, they change to "annuity units."
<PAGE>
PAGE 17
o Accumulation units are used to measure the value of deferred
annuity contracts during the period before annuity payments
are made.
number of your value of one total
accumulation x accumulation = accumulation
units unit value
When you buy a deferred annuity contract, your purchase payments
will be credited as accumulation units to your contract.
o Annuity units determine the value of each annuity payment.
When you buy an immediate annuity contract, your purchase
payment will be credited as annuity units to your account.
Under a deferred annuity contract, when annuity payments are to
start, your accumulation value will be converted into annuity
units. From then on, your annuity payments are based on the
current annuity unit value.
number of your x annuity = value of one
annuity units unit value annuity payment
Dates we revalue units - Valuation date
Your units are valued at least once every seven days. At the
present time, your units are revalued each business day at the
close of trading on the New York Stock Exchange (NYSE). The Fund's
securities also will be valued on any business day there is a
sufficient degree of trading in the Fund's portfolio securities
such that the current net asset value of units might be materially
affected (if on that day the Fund is required to sell or redeem
securities). The net asset value per share generally changes each
day. During an emergency the Fund can suspend redemption. Such
emergency situations would occur if:
o The NYSE closes for reasons other than the usual weekend and
holiday closings, or trading on the NYSE is restricted;
o Disposal of the Fund's securities is not reasonably
practicable, or it is not reasonably practicable for the Fund
to determine the fair value of its net assets, or
o The Securities and Exchange Commission under the provisions
of the 1940 Act declares a period of emergency to exist.
Splitting units
IDS Life can split accumulation or annuity units. It will only do
so if it is in the best interests of the contract holders, the
annuitants and IDS Life.
The valuation period
The valuation period starts after the close of business on one
valuation date and ends with the close of business on the next
valuation date.
<PAGE>
PAGE 18
Valuing Fund assets
The net value of the Fund's assets is determined at the start of
each valuation period by taking the total value of the Fund's
assets and subtracting liabilities. The Fund's portfolio
securities are valued as follows:
o Securities traded on national securities exchanges are valued
at the last quoted sales price on that day. If a particular
security hasn't been traded on a certain day, we take the
average price between the last bid (offer to buy) and the
last asked (offer to sell) price.
o Securities with readily available market quotations but
without a listing on an exchange also are valued at the
average between the last bid and the last asked price.
o Short-term securities maturing more than 60 days from the
valuation date are valued at the market price or approximate
market value based on current interest rates. Short-term
securities maturing in 60 days or less but that originally
had maturities of more than 60 days at the acquisition date
are valued on an amortized cost basis using the market value
on the 61st day before maturity. Short-term securities
maturing in 60 days or less at the acquisition date are
valued at amortized cost. (Amortized cost is an approximation
of market value determined by systematically increasing the
carrying value of a security if acquired at a discount, or
systematically reducing the carrying value if acquired at a
premium, so that the carrying value is equal to maturity
value on the maturity date.)
o Securities and other assets without a ready market price are
valued at fair value. The Board of Managers is responsible
for using valuation methods that they believe give fair
value. In cases like this, they may use an outside
organization to value these securities. These organizations
may use methods that take into consideration yields, trading
characteristics and other market data.
When we credit your purchase payments
IDS Life credits each purchase payment at the end of the valuation
period during which it received the payment at its corporate
office.
The investment factor
On each valuation date, an investment factor is calculated for the
valuation period. This factor measures the Fund's investment
performance during the period. Here is how the investment factor
is determined:
First, the investment income for the period is determined by
combining the Fund's income (interest and any dividends), net
realized and unrealized capital gains or losses on investments and
<PAGE>
PAGE 19
expenses. Then, the net investment rate is determined by dividing
the Fund's net investment income by the net value of the Fund's
assets at the beginning of the valuation period.
Finally, the investment factor for any valuation period is the sum
of 1 plus the net investment rate. If the Fund has a negative
investment rate for a period, the investment factor will be less
than 1.
Valuing an accumulation unit
Accumulation units are used to measure the value of your contract
during the period before annuity payments begin. The value of an
accumulation unit is determined by multiplying the accumulation
unit value for the last valuation period by the investment factor
for the current period.
Here is an example: Assume the Fund's assets at the start of the
day were $1 million and the investment income for the day was
$2,000. The total expenses were $398.35 and the value of an
accumulation unit the day before was $1.101000.
Step 1. First, the net investment income is determined. This is
income minus expenses or $1,601.65 ($2,000 - $398.35).
Step 2. Next the investment rate is determined. This is the net
investment income divided by the assets at the start of the day or
0.001602 ($1,601.65 divided by 1,000,000).
Step 3. The investment factor is one plus the investment rate, or
1.001602.
Step 4. Finally, the value of an accumulation unit is determined
by multiplying yesterday's accumulation unit by the investment
factor. The current value of an accumulation unit comes out to
$1.102764 (1.101000 X 1.001602).
Valuing an annuity unit
When you are ready to receive annuity payments, your accumulation
units are exchanged for annuity units. Annuity units measure each
variable annuity payment. To determine the value of an annuity
unit, the annuity unit value on the last valuation date is
multiplied by the product of (1) the investment factor for the
current period, and (2) the neutralizing factor.
The neutralizing factor removes the assumed investment rate that is
built into the variable annuity tables in your contract. The
neutralizing factor for a one-day valuation period is 0.999866,
when the usual 5% assumed investment rate is used.
Here is a shortcut for calculating the value of an annuity unit:
Substitute the term "annuity unit" for the term "accumulation unit"
each time it appears in the example used for calculating
accumulation unit values.
<PAGE>
PAGE 20
Then take the answer in Step 4 ($1.102764) and multiply it by the
neutralizing factor (0.999866). The answer is the current value of
an annuity unit, or $1.102616.
The assumed investment rate is not always 5%. For example,
contracts subject to Texas law cannot use more than a 3.5%
investment rate. You can request a 3.5% investment rate by sending
a written request to IDS Life at its home office. The current
policy of IDS Life is to grant a request received no later than 30
days before settlement.
Why would you want a lower assumed investment rate? The value of
an annuity unit will rise or fall to the extent that the actual
investment rate for the period is more or less than the assumed
investment rate. A lower assumed rate produces a lower initial
annuity payment, but later payments will rise faster if unit values
are going up. Later payments will fall more slowly if unit values
are dropping.
Annuity payment starting date
For individual deferred contracts paid for in annual installments,
the annuity payment starting date selected must be at least 10
years after the date of your application. You can change the
payment date at any time not less than 30 days before annuity
payments are to start.
For single payment deferred contracts, the annuity payment starting
date must be at least 60 days after the application date.
For immediate contracts, the annuity payment starting date must be
no later than 60 days after the application date.
For employer plans, the annuity starting date must be at least so
many years after the application date that the number of years
multiplied by the annual purchase payment equals or exceeds $3,000.
For all contracts the annuity payment starting date must come
before (whichever one is later):
o the contract anniversary nearest the annuitant's 75th
birthday, or
o the 30th contract anniversary.
Table of settlement rates
Settlement rates are based on the Progressive Annuity Table
assuming all births in 1900. To determine the rate applicable at
settlement, we look at the annuitant's birthday nearest the
settlement date and subtract an adjustment according to the
following chart.
<PAGE>
PAGE 21
Calendar year of Adjustment for
annuitant's birth Male Female
______________________________________________________
Prior to 1920...................... 0 4
1920 through 1939.................. 1 5
1940 through 1954.................. 2 6
1955 through 1969.................. 3 7
After 1969......................... 4 8
______________________________________________________
In Arizona Governing Committee for Tax Deferred Annuity and
Deferred Compensation Plans, etc. et al. v. Nathalie Norris, etc.,
the United States Supreme Court decided that Title VII of the Civil
Rights Act of 1964 prohibits an employer from offering its
employees the option of receiving retirement benefits from one of
several companies selected by the employer, all of which pay a
woman lower monthly retirement benefits than a similarly situated
man. The Court ordered that all retirement benefits derived from
contributions made on and after Aug. 1, 1983, must be calculated
without regard to the sex of the annuitant.
IDS Life has been administering contributions received since Aug.
1, 1983, on the company's in-force annuity contracts to provide
retirement benefits without regard to the sex of the annuitant in
those markets which are affected by the Norris decision. Annuity
contract amendments also have been developed for new contracts in
order to assure continued compliance by employers with the
obligations imposed on them by the Norris decision.
Annuity payment plans
You may select on the application how you want annuity payments
made and when the payments are to begin. If you have a deferred
annuity contract you may change your payment plan at any time at
least 30 days before the annuity payment starting date.
Here are the plans available for all annuity contracts as described
in this prospectus:
Plan A - An annuity is paid each month during the lifetime of the
annuitant. No payments are made after the annuitant's death,
therefore, it is possible to receive only one annuity payment if
the annuitant dies shortly after annuity payments begin.
Plan B - An annuity is paid each month during the lifetime of the
annuitant with the additional guarantee that payments will be made
for at least five, 10, or 15 years as you select.
Plan C - An annuity is paid each month during the lifetime of the
annuitant with the additional guarantee that payments will be made
for a period not less than the number of months determined by
dividing the amount applied to Plan C by the amount of the first
monthly annuity payment.
<PAGE>
PAGE 22
Plan D - An annuity is paid each month during the lifetimes of two
named annuitants. When the first annuitant dies, payments continue
for the lifetime of the survivor. No payments are made after the
survivor's death unless you ask for the Plan D option. This
provides payments for a guaranteed period as in Plan B or Plan C.
A beneficiary of a variable annuity contract may ask for a lump-sum
payment under Plan B or Plan C. IDS Life will not grant the
request if you asked us not to.
If no plan has been selected by the annuity payment starting date,
Plan B with 120 guaranteed monthly payments will be used.
If the value of the contract is less than $2,000 on the annuity
payment starting date, the accumulation value may be paid in a
lump-sum.
Determination of monthly annuity payments for deferred contracts
When annuity payments are to begin, the first monthly variable
annuity payment is computed on the valuation date on or right
before the seventh day before the annuity payment starting date.
The computations are made using the table of settlement rates in
your contract unless an optional table is agreed upon. A different
table is used if you have elected a 3.5% assumed investment rate.
The amount of the first payment is divided by the annuity unit
value to give the number of annuity units for your contract.
Each monthly payment after the first one will be determined by
multiplying the number of annuity units by the current annuity unit
value. Payouts made by check will be computed on the valuation
date on or right before the fifth day before the annuity payment
date. Payouts made by a transfer to another IDS fund account will
be computed on the valuation date on or right before the annuity
payment date.
Here is an example: Assume the variable accumulation value on the
valuation date seven days before the annuity payment starting date
was $30,000 and the plan you selected produces an initial payment
of $6 for each $1,000 of accumulation value.
Ignoring premium taxes, if any, the first payment would be $180 (30
x $6 = $180).
Now assume the annuity unit value on the valuation date seven days
before the annuity payment starting date is $1.800000. The number
of annuity units for your contract is 100 ($180 divided by
$1.800000 = 100). Ordinarily, the value of the same number of
annuity units will be paid each month.
Determination of monthly annuity payments for immediate contracts
The number of your annuity units is multiplied by the value of one
unit. The value of one unit is determined on the valuation date on
or right before the seventh day before the annuity payment is due.
The following example shows how the number of your annuity units is
determined:
<PAGE>
PAGE 23
Assume the net purchase payment is $30,000 and the conversion
factor, based on actuarial tables and the contract you selected, is
$5.50.
Assume the value of one annuity unit on the valuation date is
$1.500000.
First divide the net purchase payments by $1,000: $30,000 divided
by $1,000 = $30. Next multiply the answer by the conversion
factor: $30 x $5.50 = $165.
Divide the answer by the value of one unit. This gives the number
of annuity units paid out each month: $165 divided by $1.500000 =
110 units.
The charges you pay
1) Sales and administrative charges
The tables below show the deductions from your purchase payments
for sales and administrative charges. The net amount invested is
the total purchase payments minus the deduction for sales and
administrative charges.
<TABLE>
<CAPTION>
Single payment contracts
____________________________________________________________________________________________________
Total charge Total deduction
Part of the Deduction Deduction for as percentage of as percentage of
total purchase for sales administrative total purchase net amount
payment charge charge payment invested
____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
First $15,000 6% 2% 8% 8.70%
Next $10,000 4 1 5 5.26
Over $25,000 1.5 0.5 2 2.04
____________________________________________________________________________________________________
Installment payment contracts (other than employer plan contracts)
____________________________________________________________________________________________________
Total charge Total deduction
Deduction Deduction for as percentage of as percentage of
for sales administrative total purchase net amount
Contract year charge charge payments invested
____________________________________________________________________________________________________
1st 18% 2% 20% 25.00%
2nd & 3rd 16 2 18 21.95
4th 5 2 7 7.53
5th and after 2 2 4 4.17
If kept through 10 years 6.7 2 8.7 9.53
____________________________________________________________________________________________________
Employer plan -- annual purchase contracts
____________________________________________________________________________________________________
Part of Deduction Deduction Total Total
the total for for charge as deduction as
purchase sales administrative percentage of total percentage of net
payment charge charge purchase payments amount invested
____________________________________________________________________________________________________
First $10,000 3.75% 2% 5.75% 6.10%
Next $40,000 2 2 4 4.17
Excess over $50,000 0.5 1.5 2 2.04
____________________________________________________________________________________________________
</TABLE>
Pursuant to a Distribution and Services Agreement with the Fund,
IDS Life is the principal underwriter and performs all sales and
administrative duties. It pays salaries, sales commissions, legal,
<PAGE>
PAGE 24
accounting, auditing or actuarial fees, and death benefits under
deferred variable annuity contracts. The deductions for sales and
administrative charges came to $91,643 for 1994, $100,741 for 1993,
and $97,658 for 1992.
The sales and administrative charge may be reduced or eliminated,
but only to the extent IDS Life anticipates that it will incur
lower sales and administrative expenses or perform fewer services
due to economies arising from the size of the particular group, the
average contribution per participant and the utilization of mass
enrollment procedures. Generally, this will occur with programs
established by an employer for all employees or for all employees
in a class, wherein employees do not individually elect to
participate in the program.
2) Premium taxes
Some states may charge a premium tax in an amount of up to 3.5%.
If a state requires payment of a premium tax on your contract, a
deduction will be made from your purchase payments or from your
contract's accumulation value.
3) Increases in life expectancy and administrative expenses
IDS Life will bear any expenses that occur because of an increase
in administrative expenses, or because of an increase in the life
expectancy of people receiving variable annuity payments. But it
is not responsible for increases in brokers' fees and transfer
taxes on the purchase and sale of assets.
For bearing this risk, IDS Life charges the Fund a fee equal to 1%
of the Fund's average daily net assets for the year. This came to
$2,323,727 for 1994, $2,330,759 for 1993, and $2,097,372 for 1992.
If the fee is more than enough to cover the increases, IDS Life
will keep the difference. If the fee is not enough, IDS Life bears
the loss.
4) Charge for investment management
For acting as investment manager, IDS Life charges the Fund a fee
equal to 0.4% of the Fund's average net assets for the year, less
any brokerage credits. This came to $929,540 for 1994, $932,353
for 1993, and $839,059 for 1992.
5) Tax charges
IDS Life is taxed as a life insurance company under Subchapter L of
the Code. The Fund is treated as part of IDS Life for federal
income tax purposes. IDS Life must pay all taxes that come about
because of the Fund. For this reason, IDS Life can charge the Fund
for tax charges. Under current federal income tax law, no taxes
are payable with respect to any income of the Fund.
Investment results credited to a contract are not taxed until
annuity benefits are received.
<PAGE>
PAGE 25
Surrendering your contract
You can surrender all or part of your annuity contract any time
before the annuity payment starting date. There can be no
surrender in whole or in part after annuity payments have started.
For a discussion of automated partial surrenders, see page __.
Make your request to IDS Life in writing. IDS Life will cash in
the number of accumulation units for the amount you request. The
units are valued on the day your request is received in our
Minneapolis home office. You cannot surrender part of your
contract if the remaining accumulation value will be less than $20,
and you cannot repay any amount you surrender. A check usually
will be mailed to you within seven days after we process your
request. However, IDS Life can delay sending your check until we
are sure we have received good payment for the accumulation units
you want to surrender.
You may receive extra money if the Fund's state premium tax
liability is reduced as a result of your surrender. If it is, you
will receive either the amount of the reduction or the amount
already deducted from your purchase payments for premium taxes,
whichever is less.
Your surrender may result in adverse tax consequences. Consult a
qualified tax advisor before requesting a surrender.
Making withdrawals on your contract
You can make a temporary withdrawal on your contract any time
before the annuity payment starting date. The least you can
withdraw, including charges, is $250. The most you can withdraw is
the sum of your purchase payments less any amounts you previously
surrendered. There may be no more than one temporary withdrawal
outstanding at any one time. A charge of 2% of your withdrawal
will be made at the time of withdrawal in order to cover the
administrative costs of IDS Life.
You must pay your withdrawal back within two years. Your repayment
will be used to buy accumulation units at their current price.
However, you cannot make a repayment after the annuity payment
starting date. There are no sales charges. If you do not pay your
withdrawal back within two years, IDS Life will regard it as if
you surrendered that part of your contract.
How do you repay your withdrawal? Inform IDS Life in writing.
Otherwise your regular purchase payments will be used toward
repayment. What is left after you fully repay your withdrawal will
go toward your regular purchase payments. Any amount of your
purchase payment left over after repayment must be at least $10.
o Example: You make a withdrawal of $295 and your next purchase
payment is $300. Instead of applying $295 toward the withdrawal
and $5 toward the purchase payment, we will apply $290 toward the
withdrawal and $10 toward the purchase payment. Now you owe $5 on
your withdrawal. This amount will be taken out next time.
<PAGE>
PAGE 26
Keep track of all your withdrawals and surrenders. If your
accumulation value falls to zero, your account will be closed.
Special rules if the annuitant dies before the annuity payment
starting date
Under a deferred annuity contract, if the annuitant dies before
annuity payments begin, the beneficiary will receive either:
o the sum of all purchase payments minus surrenders and unrepaid
withdrawals; or
o the accumulation value of the contract, whichever is more.
If the annuitant dies on or after the contract anniversary date
nearest his or her 75th birthday, only the accumulation value will
be paid to the beneficiary.
Your right to cancel installment contracts
You will receive a Statement of Charges and a Notice of
Cancellation Rights within 60 days after the contract is sent to
you. You will have 45 days from the time this notice was sent to
you to cancel your installment contract. You will receive the
current accumulation value of your account plus any amounts
deducted for taxes and charges.
What about your taxes?
Part of the annuity payment you receive is taxed as ordinary income
and part is excluded from income as your investment in the contract
under Section 72 of the Code.
The income earned on an annuity contract held by such entities as
corporations, partnerships or trusts generally will be treated as
ordinary income received during that year. This provision is
effective for annuity contract purchase payments made after Feb.
28, 1986.
If you surrender all or part of the contract before your annuity
payment starting date, the federal income tax consequences will
depend on when you made your purchase payments. For amounts
allocable to purchase payments made after Aug. 13, 1982, the amount
of any partial surrender will be taxed as ordinary income to the
extent that contract value exceeds the owner's investment in the
contract. In addition, a 10% penalty tax will be imposed on the
amount of any surrender proceeds that is includable in the owner's
income. However, the penalty tax would not affect any surrender
occurring after (1) the owner reaches age 59-1/2, (2) death of the
owner, (3) the owner's disability, or (4) if the distribution is
part of a series of substantially equal periodic payments over the
life or life expectancy of the owner (or joint lives or life
expectancy of the owner and beneficiary).
<PAGE>
PAGE 27
Any amount received as a withdrawal and the value of any part of an
annuity contract pledged or assigned as collateral is taxed as a
cash withdrawal to the extent allocable to investment in annuity
contracts after Aug. 13, 1982.
Amounts allocable to earlier purchase payments will be taxed as
ordinary income to the extent the amount surrendered exceeds the
owner's investment in the contract and will not be subject to the
10% penalty tax.
Unlike life insurance proceeds, the death benefit under an annuity
contract is not tax exempt. The gain, if any, is taxable as
ordinary income to the beneficiary in the year(s) he or she
receives the payments.
The contract is intended to qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract
are to be interpreted to ensure or maintain such tax qualification,
notwithstanding any other provisions of the contract. We reserve
the right to amend the contract to reflect any clarifications that
may be needed or are appropriate to maintain such qualification or
to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such
amendment.
Important: This discussion of federal tax laws is based upon IDS
Life's 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 your contract.
Voting rights
Voting rights of contract holders are granted and defined by the
regulations of the Fund. To the extent permitted under the 1940
Act, these voting rights may be modified by IDS Life without
submission to a vote of a majority of the outstanding voting units.
Variable contract holders can vote on:
o any changes in fundamental investment restrictions;
o the approval of and any changes to the investment management and
advisory agreements;
o the election of the Board of Managers; and
o the acceptance of the Fund's independent auditors.
A variable contract holder with accumulation units has a number of
votes equal to the number of accumulation units owned. Under a
contract where annuity payments have started, the number of votes
is determined by dividing the present value of all future annuity
payments by the value of one accumulation unit on the record date.
So there may be a gradual decline in the number of votes to which a
<PAGE>
PAGE 28
contract holder is entitled as annuity payments continue to be made
under the contract. The record date will be set by the Board of
Managers not more than 60 days before the regular meeting or any
special meeting of variable contract holders. Cumulative voting is
not authorized.
Management
Members of the Board of Managers and officers of the Fund
Richard W. Kling*
Chairman of the Board of Managers
IDS Tower 10
Minneapolis, MN
Director since February 1984; President since March 1994.
Executive Vice President, Marketing and Products from January 1988
to March 1994. Vice President, American Express Financial
Corporation, since January 1988. Director of IDS Life Series Fund,
Inc. and Member of the Board of Managers of IDS Life Variable
Annuity Funds A & B.
Edward Landes
Member of the Board of Managers
30 South 9th Street
Minneapolis, MN
Retired, Former Development Consultant.
Janis E. Miller*
Member of the Board of Managers
IDS Tower
Minneapolis, MN
Director and Executive Vice President - Variable Assets, IDS Life,
since March 1994; Vice President, American Express Financial
Corporation, since June 1990. Director, Mutual Funds Product
Development and Marketing, American Express Financial Corporation,
from May 1987 to May 1990. Director of IDS Life Series Fund, Inc.
since March 1994.
Carl N. Platou
Member of the Board of Managers
312 South 6th Street
Minneapolis, MN
President Emeritus and Chief Executive Officer, Fairview Hospital
and Healthcare Services.
Gordon H. Ritz
Member of the Board of Managers
404 WCCO Radio Building
Minneapolis, MN
President, Con Rad Broadcasting Corp. (radio broadcasting);
Director, Sunstar Foods and Mid-America Publishing.
<PAGE>
PAGE 29
Morris Goodwin, Jr.*
Vice President and Treasurer
IDS Tower
Minneapolis, MN
Vice President and Corporate Treasurer, American Express Financial
Corporation, since July 1989; Chief Financial Officer and
Treasurer, American Express Trust Company, from January 1988 to
July 1989.
Louis C. Fornetti*
Vice President
IDS Tower
Minneapolis, MN
Director, IDS Life, since March 1994; Senior Vice President and
Director, American Express Financial Corporation, since February
1985.
Colleen Curran*
Secretary
IDS Tower
Minneapolis, MN
Senior Counsel and Secretary, American Express Financial
Corporation, since 1990; Assistant Vice President, American Express
Financial Corporation, since 1987.
William A. Stoltzmann*
General Counsel and Assistant Secretary
IDS Tower
Minneapolis, MN
Vice President and Assistant General Counsel, American Express
Financial Corporation, since November 1985 and Vice President,
General Counsel and Secretary, IDS Life, since December 1989.
Robert O. Schneider*
Controller
IDS Tower
Minneapolis, MN
Assistant Controller - Corporate Reports and Equity Administration,
IDS Life. Controller of IDS Life Capital Resource Fund, IDS Life
Aggressive Growth Fund, IDS Life International Equity Fund, IDS
Life Special Income Fund, Inc., IDS Life Managed Fund, Inc. and IDS
Life Moneyshare Fund, Inc.
*Interested person of the Fund by reason of being an employee of
IDS Life or American Express Financial Corporation.
You vote at each regular meeting for the Fund's Board of Managers.
Members who are not salaried employees of IDS Life or one of its
affiliates receive up to $4,000 annually for serving on the Board.
<PAGE>
PAGE 30
All officers of the Fund are salaried employees of IDS Life or
American Express Financial Corporation and receive no remuneration
from the Fund. The officers and managers of the Fund aggregately
hold less than 1% of the outstanding voting units.
Directors and officers of IDS Life Insurance Company*
The Directors:
Louis C. Fornetti, 45
Director since March 1994; Senior Vice President and Director,
American Express Financial Corporation, since February 1985.
David R. Hubers, 52
Director since September 1989; President and Chief Executive
Officer, American Express Financial Corporation, since August 1993
and Director, American Express Financial Corporation, since January
1984. Senior Vice President, Finance, and Chief Financial Officer,
American Express Financial Corporation, from January 1984 to August
1993.
Richard W. Kling, 54
Director since February 1984; President since March 1994.
Executive Vice President, Marketing and Products from January 1988
to March 1994. Vice President, American Express Financial
Corporation, since January 1988. Director of IDS Life Series Fund,
Inc. and Member of the Board of Managers of IDS Life Variable
Annuity Funds A & B.
Paul F. Kolkman, 48
Director since May 1984; Executive Vice President since March 1994;
Vice President, Finance from May 1984 to March 1994; Vice
President, American Express Financial Corporation, since January
1987.
Peter A. Lefferts, 53
Director and Executive Vice President, Marketing since March 1994;
Senior Vice President and Director, American Express Financial
Corporation, since February 1986.
Janis E. Miller, 43
Director and Executive Vice President, Variable Assets since March
1994; Vice President, American Express Financial Corporation, since
June 1990. Director, Mutual Funds Product Development and
Marketing, American Express Financial Corporation, from May 1987 to
May 1990. Director of IDS Life Series Fund, Inc. and Manager of
IDS Life Variable Annuity Funds A & B.
James A. Mitchell, 53
Chairman of the Board since March 1994; Director since July 1984;
Chief Executive Officer since November 1986; President from July
1984 to March 1994; Executive Vice President, American Express
Financial Corporation, since March 1994; Director, American Express
Financial Corporation, since July 1984. Senior Vice President,
American Express Financial Corporation, from July 1984 to March
1994.
<PAGE>
PAGE 31
Barry J. Murphy, 44
Director and Executive Vice President, Client Service since March
1994; Senior Vice President, Operations, Travel Related Services
(TRS), a subsidiary of American Express Company, since July 1992;
Vice President, TRS, from November 1989 to July 1992; Chief
Operating Officer, TRS, from March 1988 to November 1989.
Stuart A. Sedlacek, 37
Director and Executive Vice President, Assured Assets since March
1994; Vice President, American Express Financial Corporation, since
September 1988.
Melinda S. Urion, 41
Director and Controller since September 1991; Executive Vice
President since March 1994; Vice President and Treasurer from
September 1991 to March 1994; Vice President, American Express
Financial Corporation, since September 1991; Chief Accounting
Officer, American Express Financial Corporation, from July 1988 to
September 1991.
Officers Other Than Directors
Morris Goodwin Jr., 43
Vice President and Treasurer since March 1994; Vice President and
Corporate Treasurer, American Express Financial Corporation, since
July 1989; Chief Financial Officer and Treasurer, American Express
Trust Company, from January 1988 to July 1989.
William A. Stoltzmann, 46
Vice President, General Counsel and Secretary since 1985.
*The address for all of the directors and principal officers is:
IDS Tower 10, Minneapolis, MN 55440-0010.
Other Information
History
The Fund is an open-end diversified investment company as defined
under the 1940 Act. It was organized as a segregated asset account
by IDS Life under Minnesota law on May 10, 1968.
IDS Life is a stock life insurance company organized under
Minnesota law on Aug. 7, 1957. It conducts a conventional life
insurance business in addition to its variable annuity business.
IDS Life Insurance Company is not a bank, and the securities it
offers are not backed or guaranteed by any bank nor are they
insured by the FDIC.
Assets of the Fund
On Dec. 31, 1994, there were 11,961 outstanding contracts. The
assets were $224,586,165.
<PAGE>
PAGE 32
The assets of the Fund are held solely for the variable contract
holders. The assets are not used to pay liabilities of any other
business of IDS Life.
Headquarters
The corporate office of IDS Life is located in the IDS Tower in
Minneapolis, Minnesota.
Ownership of IDS Life and American Express Financial Corporation
All of the capital stock of IDS Life is owned by American Express
Financial Corporation. On Jan. 12, 1984, Investors Diversified
Services, Inc., of which IDS Life was a wholly owned subsidiary,
was merged into a wholly owned subsidiary of American Express
Company to form IDS Financial Services Inc. On Jan. 1, 1995, IDS
Financial Corporation's name was changed to American Express
Financial Corporation, and IDS Financial Services Inc.'s name was
changed to American Express Financial Advisors Inc. American
Express Financial Corporation serves as investment advisor for the
Fund. American Express Financial Corporation is an investment
advisor for a number of open-end investment companies and for its
subsidiaries. The headquarters of American Express Financial
Corporation is IDS Tower, Minneapolis, Minnesota.
Other affiliations
IDS Life also distributes different variable annuity contracts
including: Fund B, IDS Life Variable Retirement Annuity, IDS Life
Combination Retirement Annuity, IDS Life Flexible Annuity, IDS Life
Real Estate Variable Annuity, IDS Life Group Variable Annuity
Contract and IDS Life Employee Benefit Annuity.
The members of the Fund's Board of Managers also serve on the Board
of Managers of Fund B and on the Board of Directors of IDS Life
Series Fund, Inc.
IDS Life manages Fund A, Fund B and six mutual funds existing
within the IDS MUTUAL FUND GROUP advised by American Express
Financial Corporation. These six mutual funds are available for
purchase only through variable annuity contracts which are
distributed by IDS Life and its subsidiaries, IDS Life Insurance
Company of New York and American Enterprise Life Insurance Company.
The names of these funds are: IDS Life Capital Resource Fund, IDS
Life Aggressive Growth Fund, IDS Life International Equity Fund,
IDS Life Special Income Fund, Inc., IDS Life Managed Fund, Inc. and
IDS Life Moneyshare Fund, Inc. IDS Life also manages IDS Life
Series Fund, Inc., which is available for purchase only through
policies distributed by IDS Life and IDS Life Insurance Company of
New York.
Custodian
Pursuant to a custodian agreement, the Fund's securities and cash
are held by American Express Trust Company, 1200 Northstar Center
West, 625 Marquette Ave., Minneapolis, MN 55402-2307.
<PAGE>
PAGE 33
The custodian has entered into a sub-custodian arrangement with
Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, NY
11201. As part of this arrangement, portfolio securities purchased
outside the United States may be held in custody and deposit
accounts that have been established by Morgan Stanley with one or
more domestic or foreign banks, or through the facilities of one or
more clearing agencies or central securities depositories as may be
permitted by law and by the Fund's sub-custodian agreement.
Insurance regulation
IDS Life is regulated by the Department of Commerce of the State of
Minnesota. From time to time, the department examines the
company's liabilities and reserves and certifies their correctness.
IDS Life also is subject to insurance laws and regulations of other
states where it is licensed to do business.
Financial statements
The Report of Independent Auditors and the Financial Statements,
including Notes to Financial Statements and the schedule of
investments in securities, contained in the 1994 Annual Report to
IDS Life Variable Annuity Fund A contract holders, pursuant to
Section 30(d) of the 1940 Act, are hereby incorporated in this
Prospectus by reference. No other portion of the Annual Report,
however, is incorporated by reference.
<PAGE>
PAGE 34
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 35
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 36
<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 37
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 38
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 39
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
($ thousands)
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 40
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 41
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
issued from 1974 to 1980. Cash value plans issued in 1980 and
later assume future investment rates that grade from 9.5 percent to
<PAGE>
PAGE 42
1. Summary of significant accounting policies (continued)
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.
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.
<PAGE>
PAGE 43
1. Summary of significant accounting policies (continued)
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.
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:
<PAGE>
PAGE 44
2. Investments (continued)
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>
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
<PAGE>
PAGE 45
2. Investments (continued)
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
======= =======
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:
<PAGE>
PAGE 46
2. Investments (continued)
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
======== ========
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
======= ======= ======= =======
<PAGE>
PAGE 47
2. Investments (continued)
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.
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:
<PAGE>
PAGE 48
3. Income taxes (continued)
<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.
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.
<PAGE>
PAGE 49
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.
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.
<PAGE>
PAGE 50
5. Related party transactions (continued)
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
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
<PAGE>
PAGE 51
5. Related party transactions (continued)
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.
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.<PAGE>
PAGE 52
8. Derivative financial instruments (continued)
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.
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
<PAGE>
PAGE 53
9. Fair values of financial instruments (continued)
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.
<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 54
<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 55
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 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 changed its method of accounting for
certain investments in debt and equity securities in 1994.
Ernst & Young LLP
Minneapolis, Minnesota
February 3, 1995
<PAGE>
PAGE 56
PART II. OTHER INFORMATION
Item 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
List of financial statements filed as part of this Post-
Effective Amendment to the Registration Statement.
Financial statements included in the prospectus, Part I:
IDS Life Insurance Company:
Consolidated Balance Sheets as of December 31, 1994,
and December 31, 1993.
Consolidated Statements of Income for the years ended
December 31, 1994, 1993 and 1992.
Consolidated Statements of Cash Flows for the years
ended December 31, 1994, 1993 and 1992.
Notes to Consolidated Financial Statements.
Report of Independent Auditors dated Feb. 3, 1995.
Exhibits to Financial Statements included in Part II:
IDS Life Insurance Company Schedules I, III, IV and V as
required by Regulation S-X.
(b) Exhibits
(1) Resolution of the Executive Committee of the Board of
Directors of Investors Syndicate Life Insurance and Annuity
Company dated May 10, 1968, filed as Exhibit 1 to
Registrant's Registration Statement No. 2-29081 filed on May
16, 1968, and refiled electronically April 27, 1994 as
Exhibit 1 with Post-effective Amendment No. 56, is
incorporated herein by reference.
(2) Regulations of IDS Life Variable Annuity Fund A as Amended
and Restated, dated June 22, 1979, filed as Exhibit 2 to
Registrant's Post-Effective Amendment No. 32 to Registration
Statement No. 2-29081 filed on December 10, 1979, are filed
electronically herewith.
(3) Not applicable.
(4) Contracts filed as Exhibit 4 to Registrant's Post-Effective
Amendment No. 32 to Registration Statement No. 2-29081 filed
on December 10, 1979, are incorporated herein by reference.
(5) (a) Investment Advisory Agreement between IDS Life
Insurance Company and IDS/American Express dated
January 12, 1984, filed as Exhibit 5(a) to Registrant's
<PAGE>
PAGE 57
Post-Effective Amendment No. 44, and refiled
electronically April 27, 1994 as Exhibit 5(a) with
Post-Effective Amendment No. 56, is incorporated herein
by reference.
(b) Investment Management and Advisory Agreements between
IDS Life Insurance Company and IDS Life Variable
Annuity Fund A dated January 12, 1984, filed as Exhibit
5(b) to Registrant's Post-Effective Amendment No. 44,
and refiled electronically April 27, 1994 as Exhibit
5(b) with Post-Effective Amendment No. 56, are
incorporated herein by reference.
(6) Distribution and Services Agreement between Registrant and
IDS Life Insurance Company, dated January 12, 1984, filed as
Exhibit 6 to Registrant's Post-Effective Amendment No. 44,
and refiled electronically April 27, 1994 as Exhibit 6 with
Post Effective Amendment No. 56, is incorporated herein by
reference.
(7) None.
(8) (a) Custodian Agreement between Registrant, IDS Life
Insurance Company, and American Express Bank & Trust,
dated July 12, 1990, filed as Exhibit 8(a) to
Registrant's Post-Effective Amendment No. 53 to this
Registration Statement, filed April 15, 1991, and
refiled electronically April 27, 1994 as Exhibit 8(a)
with Post-Effective Amendment No. 56, is incorporated
herein by reference.
(8) (b) Custody Agreement between Morgan Stanley Trust Company
and IDS Bank & Trust dated May, 1993 is filed
electronically herewith.
(9) Not applicable.
(10) Opinion and Consent of Counsel as to the legality of the
securities registered was filed with Registrant's 24f-2
Notice on or about Feb. 23, 1995.
(11) Consent of Independent Auditors is filed electronically
herewith.
(12) Financial statement schedules omitted from Item 17 of Part I:
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, on
IDS Life Insurance Company financial statement schedules.
<PAGE>
PAGE 58
(13) through (15) not applicable.
(16) Financial Data Schedule is filed electronically herewith.
(17)(a) IDS Life Insurance Company Powers of Attorney to sign
Amendments to this Registration Statement, dated March
31, 1994, filed electronically as Exhibit 16 to
Registrant's Post-Effective Amendment No. 56, are
incorporated herein by reference.
(17)(b) Board of Managers Power of Attorney to sign Amendments
to this Registration Statement, dated February 9, 1995,
filed electronically herewith.
Item 2. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT
Both the Registrant and IDS Life Variable Annuity Fund B are
separate accounts of IDS Life. Consequently, the securities and
funds of the Registrant and Fund B are technically those of IDS
Life, even though the securities and funds of the two Funds are
maintained as separate accounts under Minnesota Law pursuant to a
safekeeping agreement with American Express Bank & Trust. As
separate Accounts, Minnesota Law provides that the assets of the
Funds are not chargeable with liabilities arising out of any other
business of IDS Life and are held for the exclusive benefit of
owners of variable annuity contracts based on the Funds.
Item 3. NUMBER OF HOLDERS OF SECURITIES
Number of Record Holders
Title of Class as of March 31, 1995
Variable Annuities 11,767
Item 4. INDEMNIFICATION
The Regulations of the Registrant provide that each member of
the Board of Managers and each Officer of the Fund shall be
indemnified by IDS Life, of which the Fund is a separate account,
for reasonable costs and expenses actually and necessarily incurred
in defense of any action, suit or proceedings where the defendant
is a party by reason of being a Manager or Officer. No
indemnification will be forthcoming in the event of an adjudication
of willful misfeasance, bad faith, gross negligence or reckless
disregard by the Officer or Manager of the duties of his office.
In the absence of an adjudication expressly absolving the Office or
Manager of the afore-detailed wrongful conduct, indemnification may
still be advanced should 2/3 of the members of the Board of
Directors of IDS Life who were not involved in the processing
resolve there was no instance of such wrongful conduct. In the
instance of such a resolution, the indemnification claim still must
be found to be reasonable in amount and proper in presentation by
independent counsel of IDS Life. Should any proceeding be settled,
indemnification shall not exceed the costs, fees and expenses which
would have been incurred had the proceeding been litigated. The
payment of indemnification by IDS Life will not prevent a variable
<PAGE>
PAGE 59
contract holder from challenging the payment by appropriate legal
action on the basis that the payment was improper because of
willful misfeasance, bad faith, gross negligence or reckless
disregard by an Officer or Manager of his duties.
The By-Laws of the Registrant's investment management
underwriter, IDS Life, also contains an indemnification clause.
The clause provides that IDS Life 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 Manager of Variable Annuity Funds A
and B, director, officer, employee or agent of IDS Life, or is or
was serving at the direction of IDS Life as a Manager of Variable
Annuity Funds A and B, 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 Manager of Variable Annuity Funds A and B, Director,
Officer, employee or agent against any liability to IDS Life 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.
At the time of the filing of the Registration Statement of the
Registrant, IDS Life included the following undertaking with regard
to the foregoing indemnification procedures:
"Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant
to the foregoing provision, or otherwise ISL [si__. IDS
Life] 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 of ISL
[si__. IDS Life] 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, ISL [si__.
IDS Life] 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."
<PAGE>
PAGE 60
<TABLE>
<CAPTION>
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)
Directors and officers of American Express Financial Corporation who are directors and/or
officers of one or more other companies:
Ronald G. Abrahamson, Vice President--Service Quality and Reengineering
<S> <C> <C>
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
and Reengineering
American Express Service Corporation Vice President
Douglas A. Alger, Vice President--Total Compensation
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
Jerome R. Amundson, Vice President--Investment Accounting
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Accounting
Peter J. Anderson, Director and Senior Vice President--Investments
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Investments
IDS Advisory Group Inc. Director and Chairman
of the Board
IDS Capital Holdings Inc. Director and President
IDS International, Inc. Director, Chairman of the
Board and Executive Vice
President
IDS Securities Corporation Executive Vice President-
Investments
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Ward D. Armstrong, Vice President-Sales and Marketing, American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-Sales and
Minneapolis, MN 55440 Marketing, American
Express Institutional
Services
Joseph M. Barsky III, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
IDS Advisory Group Inc. Vice President
<PAGE>
PAGE 61
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Robert C. Basten, Vice President--Tax and Business Services
American Express Financial Advisors IDS Tower 10 Vice President-Tax
Minneapolis, MN 55440 and Business Services
American Express Tax & Business Director, President and
Services Inc. Chief Executive Officer
Timothy V. Bechtold, Vice President--Risk Management Products
American Express Financial Advisors IDS Tower 10 Vice President-Risk
Minneapolis, MN 55440 Management Products
IDS Life Insurance Company Vice President-Risk
Management Products
Carl E. Beihl, Vice President--Strategic Technology Planning
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Strategic Technology
Planning
Alan F. Bignall, Vice President--Financial Planning Systems
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Financial Planning
Systems
American Express Service Corporation Vice President
John C. Boeder, Vice President--Mature Market Group
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Group
IDS Life Insurance Company of New York Box 5144 Director
Albany, NY 12205
Karl J. Breyer, Director and Senior Vice President--Corporate Affairs and General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Affairs and
Special Counsel
American Express Minnesota Foundation Director
IDS Aircraft Services Corporation Director and President
Harold E. Burke, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Express Service Corporation Vice President
<PAGE>
PAGE 62
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Daniel J. Candura, Vice President--Marketing Support
American Express Financial Advisors IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Support
Cynthia M. Carlson, Vice President--American Express Securities Services
American Enterprise Investment IDS Tower 10 Director, President and
Services Inc. Minneapolis, MN 55440 Chief Executive Officer
American Express Financial Advisors Vice President-American
Express Securities Services
Orison Y. Chaffee III, Vice President--Field Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Real Estate
James E. Choat, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
IDS Insurance Agency of Massachusetts Inc. Vice President--North
Central Region
IDS Insurance Agency of Nevada Inc. Vice President--North
Central Region
IDS Insurance Agency of New Mexico Inc. Vice President--North
Central Region
IDS Insurance Agency of North Carolina Inc. Vice President--North
Central Region
IDS Insurance Agency of Ohio Inc. Vice President--North
Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-- North
Central Region
IDS Property Casualty Insurance Co. Director
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Manager-IDS Property
Casualty
IDS Property Casualty Insurance Co. I WEG Blvd. Director and President
DePere, Wisconsin 54115
<PAGE>
PAGE 63
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Alan R. Dakay, Vice President--Institutional Products Group
American Enterprise Life Insurance Co. IDS Tower 10 Director and President
Minneapolis, MN 55440
American Express Financial Advisors Vice President -
Institutional Products
Group
American Partners Life Insurance Co. Director and President
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
Regenia David, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
William H. Dudley, Director and Executive Vice President--Investment Operations
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Investment Operations
IDS Advisory Group Inc. Director
IDS Capital Holdings Inc. Director
IDS Futures Corporation Director
IDS Futures III Corporation Director
IDS International, Inc. Director
IDS Securities Corporation Director, Chairman of the
Board, President and
Chief Executive Officer
Roger S. Edgar, Director, Senior Vice President and Technology Advisor
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 Technology Advisor
Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 General Counsel
IDS Insurance Agency of Alabama Inc. Director and Vice President
IDS Insurance Agency of Arkansas Inc. Director and Vice President
IDS Insurance Agency of Massachusetts Inc. Director and Vice President
IDS Insurance Agency of Nevada Inc. Director and Vice President
IDS Insurance Agency of New Mexico Inc. Director and Vice President
IDS Insurance Agency of North Carolina Inc. Director and Vice President
IDS Insurance Agency of Ohio Inc. Director and Vice President
IDS Insurance Agency of Wyoming Inc. Director and Vice President
IDS Real Estate Services, Inc. Vice President
Investors Syndicate Development Corp. Director
<PAGE>
PAGE 64
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Robert M. Elconin, Vice President--Government Relations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Life Insurance Company Vice President
Mark A. Ernst, Vice President--Retail Services
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Vice President-
Retail Services
American Express Tax & Business Director and Chairman of
Services Inc. the Board
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mutual Fund Equity
Investments
IDS Advisory Group Inc. Executive Vice President
IDS International, Inc. Vice President and
Portfolio Manager
Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer
American Enterprise Investment IDS Tower 10 Vice President
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Chief Financial Officer
American Express Tax & Business Director
Services Inc.
American Express Trust Company Director
IDS Cable Corporation Director
IDS Cable II Corporation Director
IDS Capital Holdings Inc. Senior Vice President
IDS Certificate Company Vice President
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Inc. Vice President
IDS Insurance Agency of Nevada Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Inc. Vice President
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Life Insurance Company Director
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Property Casualty Insurance Co. Director and Vice President
IDS Real Estate Services, Inc. Vice President
IDS Sales Support Inc. Director
IDS Securities Corporation Vice President
Investors Syndicate Development Corp. Vice President
<PAGE>
PAGE 65
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Robert G. Gilbert, Vice President--Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
John J. Golden, Vice President--Field Compensation Development
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Compensation Development
Harvey Golub, Director
American Express Company American Express Tower Chairman and Chief
World Financial Center Executive Officer
New York, New York 10285
American Express Travel Chairman and Chief
Related Services Company, Inc. Executive Officer
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Vice President and
Company Treasurer
American Express Financial Advisors Vice President and
Corporate Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Express Service Corporation Vice President and
Treasurer
American Express Tax & Business Vice President and
Services Inc. Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Director, Vice President
and Treasurer
IDS Cable II Corporation Director, Vice President
and Treasurer
IDS Capital Holdings Inc. Vice President and
Treasurer
IDS Certificate Company Vice President and
Treasurer
IDS Deposit Corp. Director, President
and Treasurer
IDS Insurance Agency of Alabama Inc. Vice President and
Treasurer
IDS Insurance Agency of Arkansas Inc. Vice President and
Treasurer
IDS Insurance Agency of Massachusetts Inc. Vice President and
Treasurer
IDS Insurance Agency of Nevada Inc. Vice President and
Treasurer<PAGE>
PAGE 66
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Insurance Agency of New Mexico Inc. Vice President and
Treasurer
IDS Insurance Agency of North Carolina Inc. Vice President and
Treasurer
IDS Insurance Agency of Ohio Inc. Vice President and
Treasurer
IDS Insurance Agency of Wyoming Inc. Vice President and
Treasurer
IDS International, Inc. Vice President and
Treasurer
IDS Life Insurance Company Vice President and
Treasurer
IDS Life Series Fund, Inc. Vice President and
Treasurer
IDS Life Variable Annuity Funds A&B Vice President and
Treasurer
IDS Management Corporation Director, Vice President
and Treasurer
IDS Partnership Services Corporation Director, Vice President
and Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Property Casualty Insurance Co. Vice President and
Treasurer
IDS Real Estate Services, Inc Vice President and
Treasurer
IDS Realty Corporation Director, Vice President
and Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Sloan Financial Group, Inc. Director
Suzanne Graf, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
David A. Hammer, Vice President and Marketing Controller
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Marketing Controller
IDS Plan Services of California, Inc. Director and Vice President
<PAGE>
PAGE 67
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Lorraine R. Hart, Vice President--Insurance Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Express Financial Advisors Vice President-Insurance
Investments
American Partners Life Insurance Co. Director and Vice
President-Investments
IDS Certificate Company Vice President-Investments
IDS Life Insurance Company Vice President-Investments
IDS Life Series Fund, Inc. Vice President-Investments
IDS Life Variable Annuity Funds A&B Vice President-Investments
IDS Property Casualty Insurance Company Vice President-Investment
Officer
Investors Syndicate Development Corp. Vice President-Investments
Scott A. Hawkinson, Vice President--Assured Assets Product Development and Management
American Express Financial Advisors IDS Tower 10 Vice President-Assured
Minneapolis, MN 55440 Assets Product
Development & Management
Raymond E. Hirsch, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
James G. Hirsh, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Securities Corporation Director, Vice President
and General Counsel
Darryl G. Horsman, Vice President--Product Development and Technology, American Express
Institutional Services
American Express Trust Company IDS Tower 10 Director and President
Minneapolis, MN 55440
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Financial Advisors Vice President-
Government and
Customer Relations
American Express Service Corporation Vice President
IDS Securities Corporation Vice President and Chief
Compliance Officer
<PAGE>
PAGE 68
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
David R. Hubers, Director, President and Chief Executive Officer
American Express Financial Advisors IDS Tower 10 Chairman, Chief Executive
Minneapolis, MN 55440 Officer and President
American Express Service Corporation Director and President
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Life Insurance Company Director
IDS Plan Services of California, Inc. Director and President
IDS Property Casualty Insurance Co. Director
Marietta L. Johns, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
Douglas R. Jordal, Vice President--Taxes
American Express Financial Advisors IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
IDS Aircraft Services Corporation Vice President
James E. Kaarre, Vice President--Marketing Information
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing Information
Linda B. Keene, Vice President--Market Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Market Development
G. Michael Kennedy, Vice President--Investment Services and Investment Research
American Express Financial Advisors IDS Tower 10 Vice President-Investment
Minneapolis, MN 55440 Services and Investment
Research
Susan D. Kinder, Director and Senior Vice President--Human Resources
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Human Resources
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
<PAGE>
PAGE 69
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Express Financial Advisors Senior Vice President-
Risk Management Products
American Partners Life Insurance Co. Director and Chairman of
the Board
IDS Insurance Agency of Alabama Inc. Director and President
IDS Insurance Agency of Arkansas Inc. Director and President
IDS Insurance Agency of Massachusetts Inc. Director and President
IDS Insurance Agency of Nevada Inc. Director and President
IDS Insurance Agency of New Mexico Inc. Director and President
IDS Insurance Agency of North Carolina Inc. Director and President
IDS Insurance Agency of Ohio Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Director and President
IDS Life Insurance Company Director and President
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A&B Chairman of the Board of
Managers and President
IDS Property Casualty Insurance Co. Director and Chairman of
the Board
IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the
of New York Albany, NY 12205 Board and President
Paul F. Kolkman, Vice President--Actuarial Finance
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Actuarial Finance
IDS Life Insurance Company Director and Executive
Vice President
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
Claire Kolmodin, Vice President--Service Quality
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems
American Express Financial Advisors IDS Tower 10 Director and Senior Vice
Minneapolis, MN 55440 President-Field
Management and Business
Systems
American Express Service Corporation Vice President
Edward Labenski, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS Advisory Group Inc. Senior Vice President
<PAGE>
PAGE 70
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Kurt A. Larson, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
Lori J. Larson, Vice President--Variable Assets Product Development
American Express Financial Advisors IDS Tower 10 Vice President-Variable
Minneapolis, MN 55440 Assets Product
Development
IDS Cable Corporation Director and Vice President
IDS Cable II Corporation Director and Vice President
IDS Futures Brokerage Group Assistant Vice President-
General Manager/Director
IDS Futures Corporation Director and Vice President
IDS Futures III Corporation Director and Vice President
IDS Management Corporation Director and Vice President
IDS Partnership Services Corporation Director and Vice President
IDS Realty Corporation Director and Vice President
Ryan R. Larson, Vice President--IPG Product Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 IPG Product Development
IDS Life Insurance Company Vice President-
Annuity Product
Development
Daniel E. Laufenberg, Vice President and Chief U.S. Economist
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Chief U.S. Economist
Richard J. Lazarchic, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
Peter A. Lefferts, Director and Senior Vice President--Corporate Strategy and Development
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Strategy and
Development
American Express Service Corporation Director
American Express Trust Company Director
IDS Life Insurance Company Director and Executive
Vice President-Marketing
IDS Plan Services of California, Inc. Director
Investors Syndicate Development Corp. Director
<PAGE>
PAGE 71
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Douglas A. Lennick, Director and Executive Vice President--Private Client Group
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Private
Client Group
American Express Service Corporation Vice President
Mary J. Malevich, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS International, Inc. Vice President and
Portfolio Manager
Fred A. Mandell, Vice President--Field Marketing Readiness
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Marketing Readiness
William J. McKinney, Vice President--Field Management Support
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Support
Thomas W. Medcalf, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
William C. Melton, Vice President-International Research and Chief International Economist
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 International Research
and Chief International
Economist
Janis E. Miller, Vice President--Variable Assets
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Variable Assets
IDS Cable Corporation Director and President
IDS Cable II Corporation Director and President
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Life Insurance Company Director and Executive
Vice President-Variable
Assets
IDS Life Series Fund, Inc. Director
IDS Life Variable Annuity Funds A&B Director
IDS Management Corporation Director and President
IDS Partnership Services Corporation Director and President
IDS Realty Corporation Director and President
IDS Life Insurance Company of New York Box 5144 Executive Vice President
Albany, NY 12205
<PAGE>
PAGE 72
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
James A. Mitchell, Director and Executive Vice President--Marketing and Products
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Executive Vice President-
Marketing and Products
American Express Tax and Business Director
Services Inc.
IDS Certificate Company Director and Chairman of
the Board
IDS Life Insurance Company Director, Chairman of
the Board and Chief
Executive Officer
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
Pamela J. Moret, Vice President--Corporate Communications
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Communications
American Express Minnesota Foundation Director and President
Barry J. Murphy, Director and Senior Vice President--Client Service
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Client Service
IDS Life Insurance Company Director and Executive
Vice President-Client
Service
Robert J. Neis, Vice President--Information Systems Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Information Systems
Operations
James R. Palmer, Vice President--Insurance Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Insurance Operations
IDS Life Insurance Company Vice President-Taxes
Carla P. Pavone, Vice President--Specialty Service Teams and Emerging Business
American Express Financial Advisors IDS Tower 10 Vice President-Specialty
Minneapolis, MN 55440 Service Teams and
Emerging Business
George M. Perry, Vice President--Corporate Strategy and Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Strategy
and Development
IDS Property Casualty Insurance Co. Director
<PAGE>
PAGE 73
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Susan B. Plimpton, Vice President--Segmentation Development and Support
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Segmentation Development
and Support
Ronald W. Powell, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Cable Corporation Vice President and
Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Management Corporation Vice President and
Assistant Secretary
IDS Partnership Services Corporation Vice President and
Assistant Secretary
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
James M. Punch, Vice President--TransAction Services
American Express Financial Advisors IDS Tower 10 Vice President-Trans
Minneapolis, MN 55440 Action Services
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Taxable Mutual Fund
Investments
IDS Advisory Group Inc. Vice President
ReBecca K. Roloff, Vice President--1994 Program Director
American Express Financial Advisors IDS Tower 10 Vice President-1994
Minneapolis, MN 55440 Program Director
Stephen W. Roszell, Vice President--Advisory Institutional Marketing
American Express Financial Advisors IDS Tower 10 Vice President-Advisory
Minneapolis, MN 55440 Institutional Marketing
IDS Advisory Group Inc. President and Chief
Executive Officer
Robert A. Rudell, Vice President--American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-American
Minneapolis, MN 55440 Express Institutional
Services
American Express Trust Company Director and Chairman of
the Board
IDS Sales Support Inc. Director and President
<PAGE>
PAGE 74
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
John P. Ryan, Vice President and General Auditor
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Auditor
Erven A. Samsel, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
New England Region
IDS Insurance Agency of Nevada Inc. Vice President-
New England Region
IDS Insurance Agency of New Mexico Inc. Vice President-
New England Region
IDS Insurance Agency of North Carolina Inc. Vice President-
New England Region
IDS Insurance Agency of Ohio Inc. Vice President-
New England Region
IDS Insurance Agency of Wyoming Inc. Vice President-
New England Region
Stuart A. Sedlacek, Vice President--Assured Assets
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
American Express Financial Advisors Vice President-
Assured Assets
IDS Certificate Company Director and President
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Chairman of the Board
and President
Donald K. Shanks, Vice President--Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Property Casualty
IDS Property Casualty Insurance Co. Senior Vice President
<PAGE>
PAGE 75
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments
American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
American Express Financial Advisors Vice President-Senior
Portfolio Manager,
Insurance Investments
American Partners Life Insurance Co. Vice President-Real
Estate Loan Management
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Life Insurance Company Vice President-Real
Estate Loan Management
IDS Partnership Services Corporation Vice President
IDS Real Estate Services Inc. Director and Vice President
IDS Realty Corporation Vice President
IDS Life Insurance Company of New York Box 5144 Vice President and
Albany, NY 12205 Assistant Treasurer
Judy P. Skoglund, Vice President--Human Resources and Organization Development
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources and
Organization Development
Ben C. Smith, Vice President--Workplace Marketing
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Workplace Marketing
William A. Smith, Vice President and Controller--Private Client Group
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Private
Client Group
Bridget Sperl, Vice President--Human Resources Management Services
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources Management
Services
Jeffrey E. Stiefler, Director
American Express Company American Express Tower Director and President
World Financial Center
New York, NY 10285
<PAGE>
PAGE 76
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
William A. Stoltzmann, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Partners Life Insurance Co. Director, Vice President,
General Counsel and
Secretary
IDS Life Insurance Company Vice President, General
Counsel and Secretary
American Enterprise Life Insurance P.O. Box 534 Director, Vice President,
Company Minneapolis, MN 55440 General Counsel
and Secretary
James J. Strauss, Vice President--Corporate Planning and Analysis
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Planning and
Analysis
Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD
American Express Financial Advisors IDS Tower 10 Vice President-Information
Minneapolis, MN 55440 Resource Management/ISD
Fenton R. Talbott, Director
ACUMA Ltd. ACUMA House President and Chief
The Glanty, Egham Executive Officer
Surrey TW 20 9 AT
UK
<PAGE>
PAGE 77
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
John R. Thomas, Director and Senior Vice President--Information and Technology
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information and
Technology
IDS Bond Fund, Inc. Director
IDS California Tax-Exempt Trust Trustee
IDS Discovery Fund, Inc. Director
IDS Equity Select Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Global Series, Inc. Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS Investment Series, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Money Market Series, Inc. Director
IDS New Dimensions Fund, Inc. Director
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
Melinda S. Urion, Vice President and Corporate Controller
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Express Financial Advisors Vice President and
Corporate Controller
American Partners Life Insurance Co. Director, Vice President,
Controller and Treasurer
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
Wesley W. Wadman, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Fund Management Limited Director and Vice Chairman
IDS International, Inc. Senior Vice President
<PAGE>
PAGE 78
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Michael L. Weiner, Vice President--Corporate Tax Operations
American Express Financial Advisors IDS Tower 10 Vice President-Corporate
Minneapolis, MN 55440 Tax Operations
IDS Capital Holdings Inc. Vice President
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
IDS Futures III Corporation Vice President, Treasurer
and Secretary
Lawrence J. Welte, Vice President--Investment Administration
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Administration
IDS Securities Corporation Director, Executive Vice
President and Chief
Operating Officer
Jeffry F. Welter, Vice President--Equity and Fixed Income Trading
American Express Financial Advisors IDS Tower 10 Vice President-Equity
Minneapolis, MN 55440 and Fixed Income Trading
William N. Westhoff, Director, Senior Vice President and Global Chief Investment Officer
American Enterprise Life Insurance IDS Tower 10 Director
Company Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Global Chief Investment
Officer
IDS Fund Management Limited Director
IDS International, Inc. Director
IDS Partnership Services Corporation Director and Vice President
IDS Real Estate Services Inc. Director, Chairman of the
Board and President
IDS Realty Corporation Director and Vice President
Investors Syndicate Development Corp. Director
Edwin M. Wistrand, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
<PAGE>
PAGE 79
Item 5. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Michael R. Woodward, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
North Region
IDS Insurance Agency of Arkansas Inc. Vice President-
North Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
North Region
IDS Insurance Agency of Nevada Inc. Vice President-
North Region
IDS Insurance Agency of New Mexico Inc. Vice President-
North Region
IDS Insurance Agency of North Carolina Inc. Vice President-
North Region
IDS Insurance Agency of Ohio Inc. Vice President-
North Region
IDS Insurance Agency of Wyoming Inc. Vice President-
North Region
IDS Life Insurance Company Box 5144 Director
of New York Albany, NY 12205
</TABLE>
<PAGE>
PAGE 80
PART II. OTHER INFORMATION (Continued)
Item 6. PRINCIPAL UNDERWRITERS
(a) IDS Life is the Principal underwriter for IDS
Life Variable Annuity Fund A, IDS Life Variable
Annuity Fund B, IDS Life Accounts F, IZ, JZ, G,
H, and N, IDS Life Account RE, IDS Life Account
MGA and IDS Life Account SBS.
Item 6(b). Principal Underwriter (IDS Life Insurance Company)
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
<S> <C> <C>
Timothy V. Bechtold Vice President-Risk None
IDS Tower 10 Management Products
Minneapolis, MN 55440
David J. Berry Vice President None
IDS Tower 10
Minneapolis, MN 55440
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Insurance
Minneapolis, MN 55440 Marketing
Robert M. Elconin Vice President None
IDS Tower 10
Minneapolis, MN 55440
Louis C. Fornetti Director Vice President
IDS Tower 10
Minneapolis, MN 55440
Morris Goodwin Jr. Vice President and Treasurer Vice President and
IDS Tower 10 Treasurer
Minneapolis, MN 55440
Lorraine R. Hart Vice President-Investments None
IDS Tower 10
Minneapolis, MN 55440
David R. Hubers Director None
IDS Tower 10
Minneapolis, MN 55440
James M. Jensen Vice President-Insurance None
IDS Tower 10 Product Development
Minneapolis, MN 55440
Richard W. Kling Director and President Chairman of the
IDS Tower 10 Board of Managers
Minneapolis, MN 55440
Paul F. Kolkman Director and Executive None
IDS Tower 10 Vice President
Minneapolis, MN 55440<PAGE>
PAGE 81
Item 6.(b) Principal Underwriter (IDS Life Insurance Company)(cont'd)
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
Ryan R. Larson Vice President- None
IDS Tower 10 Annuity Product
Minneapolis, MN 55440 Development
Peter A. Lefferts Director and Executive None
IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing
Janis E. Miller Director and Executive Member of the Board
IDS Tower 10 Vice President- of Managers
Minneapolis, MN 55440 Variable Assets
James A. Mitchell Director, Chairman of None
IDS Tower 10 the Board and Chief
Minneapolis, MN 55440 Executive Officer
Barry J. Murphy Director and Executive None
IDS Tower 10 Vice President-
Minneapolis, MN 55440 Client Service
Mary O. Neal Vice President- None
IDS Tower 10 Sales Support
Minneapolis, MN 55440
James R. Palmer Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Stuart A. Sedlacek Director and Executive None
IDS Tower 10 Vice President-Assured
Minneapolis, MN 55440 Assets
F. Dale Simmons Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440 Loan Management
William A. Stoltzmann Vice President, General General Counsel and
IDS Tower 10 Counsel and Secretary Assistant Secretary
Minneapolis, MN 55440
Melinda S. Urion Director, Executive None
IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller
</TABLE>
Item 7. LOCATION OF ACCOUNTS AND RECORDS
IDS Life Insurance Company
IDS Tower
Minneapolis, Minnesota
Item 8. MANAGEMENT SERVICES
Not Applicable.
<PAGE>
PAGE 82
Item 9. DISTRIBUTION EXPENSES
Not Applicable.
Item 10. UNDERTAKINGS
(a) and (b) These undertakings were filed in
Registrant's initial Registration Statement.
<PAGE>
PAGE 83
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant IDS Life Variable
Annuity Fund A, certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Amendment to its Registration Statement to be signed on its behalf
by the undersigned thereunto duly authorized, in the city of
Minneapolis, and State of Minnesota on the 11th day of April, 1995.
IDS LIFE VARIABLE ANNUITY FUND A
By: /s/ Richard W. Kling**
Richard W. Kling**
Chairman of the Board
of Managers
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated on the 11th day
of April, 1995.
Signature Title
/s/ Edward Landes** Member, Board of Managers
Edward Landes
/s/ Carl N. Platou** Member, Board of Managers
Carl N. Platou
/s/ Gordon H. Ritz** Member, Board of Managers
Gordon H. Ritz
/s/ R. W. Kling** Member, Board of Managers
Richard W. Kling
/s/ Janis E. Miller** Member, Board of Managers
Janis E. Miller
/s/ Louis C. Fornetti** Vice President
Louis C. Fornetti
/s/ Morris Goodwin Jr.** Vice President and Treasurer
Morris Goodwin Jr.
/s/ William A. Stoltzmann** General Counsel and
William A. Stoltzmann Assistant Secretary
/s/ Colleen Curran** Secretary
Colleen Curran
/s/ Robert O. Schneider** Controller
Robert O. Schneider
<PAGE>
PAGE 84
** Signed pursuant to Powers of Attorney filed electronically
herewith as Exhibit 17(b) to this Registration Statement No. 29081.
by
Mary Ellyn Minenko
<PAGE>
PAGE 85
SIGNATURES
Pursuant to the requirements of 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 all of the
requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the city of Minneapolis, and State of Minnesota
on the 11th day of April, 1995.
IDS LIFE INSURANCE COMPANY
By: /s/ Richard W. Kling*
Richard W. Kling
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated on the 11th 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
/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
<PAGE>
PAGE 86
* Signed pursuant to Powers of Attorney, dated March 31, 1994,
filed electronically as Exhibit 16 to Registrant's Post-Effective
Amendment No. 56 to this Registration Statement No. 29081.
by
Mary Ellyn Minenko
<PAGE>
PAGE 87
CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 58
TO REGISTRATION STATEMENT NO. 2-29081
This Post-Effective Amendment comprises the following papers and
documents.
The facing sheet.
Part I.
Cross Reference Sheet.
Prospectus.
Part II.
Other Information.
Signatures.
<PAGE>
PAGE 1
EXHIBIT INDEX
Exhibit 2 Regulations of IDS Life Variable Annuity Fund A
as Amended and Restated, dated June 22, 1979.
Exhibit 8(b) Custody Agreement between Morgan Stanley Trust
Company and IDS Bank & Trust dated May, 1993.
Exhibit 11 Consent of Independent Auditors.
Exhibit 12 Financial Statement Schedules and Report of
Independent Auditors, dated February 3, 1995.
Exhibit 16 Financial Data Schedule.
Exhibit 17(b) Board of Managers Power of Attorney, dated
February 9, 1995.
<PAGE>
PAGE 1
June 22, 1979
AMENDED AND RESTATED
REGULATIONS OF IDS LIFE VARIABLE ANNUITY FUND A
IDS Life Variable Annuity Fund A (Fund) is a separate account
within IDS Life Insurance Company (the Company) pursuant to
Minnesota Statutes, Section 61A.14, as amended. The Fund's assets
are those allocated to it from time to time under the terms of
variable annuity contracts which expressly provide for such
allocation. Such assets constitute the source of payments which
the Company is obligated to make under the terms of such variable
annuity contracts.
ARTICLE I
Purpose
Section 1.1. The Company is empowered by Minnesota law to delegate
management of the Fund to a committee (Board of Managers) and to
grant voting rights to holders of variable annuity contracts to the
extent the Company deems necessary under the Investment Company Act
of 1940. The purpose of these regulations is to exercise such
power and to establish the basis for the management and
administration of the Fund.
Section 1.2 The Fund is deemed an investment company of the open-
end diversified management type within the meaning of the
Investment Company Act of 1940. The Company intends to operate the
Fund in such a way as to comply with the Act and amendments
thereof, or pursuant to such exemptions from otherwise applicable
provisions of such Act as may be obtained from time to time. The
Company expressly reserves the power to take such actions as it
deems necessary to obtain and maintain compliance with applicable
laws of all jurisdictions to which it now is or may become subject.
Section 1.3. Interpretation of these regulations shall be
consistent with (a) the basic purpose of the Fund to provide the
investment medium for and the source of payments required by
variable annuity contracts, (b) the legal authority of the Company
as a Minnesota Corporation to establish and operate the Fund, (c)
the status of the Company as a life insurance company licensed to
do business in the several states, and (d) the operation of the
Fund in accordance with requirements of applicable state and
federal securities and insurance laws.
ARTICLE II
Voting Rights of Variable Contract Holders
Section 2.1. A Variable Contract as defined herein, is a variable
annuity or supplementary contract under the terms of which there
<PAGE>
PAGE 2
are values or benefits based on the Fund. A Participant, as
defined herein, is any natural person who has credited to him
accumulation units or annuity units based on the Fund.
Section 2.2. The owner of a Variable Contract shall have the right
to vote at meetings of Variable Contract Holders, upon such matters
and in the manner as hereinafter provided, except if, and to the
extent that a Group Variable Contract by its terms grants voting
rights to one or more Participants. A Variable Contract Holder, as
defined herein, is an owner, or a Participant with voting rights
under a Group Variable Contract.
Section 2.3. The number of votes which a Variable Contract Holder
may cast at any meeting of Variable Contract Holders or adjournment
thereof shall be determined as of a reasonable date, fixed by the
Board of Managers or in such manner as they may direct, as follows:
(a) A Variable Contract Holder, who has credited to him
accumulation units based on the Fund, shall be entitled
to a number of votes equal to the number of such
accumulation units credited to him; and
(b) A Variable Contract Holder of a contract, who has
credited to him annuity units based on the Fund, shall
be entitled to a number of votes equal to the number
determined by dividing (1) the present value of all
future variable annuity payments under the contract by
(2) the value as of the record date of one accumulation
unit of the Fund. Such computations shall assume the
mortality and interest bases and settlement mode used
to determine the initial variable annuity payment under
the contract and shall further assume a constant
annuity unit value determined as of the record date.
Section 2.4. Only Variable Contract Holders of record on the
record date for any meeting shall be entitled to notice of, and to
vote at, such meeting of Variable Contract Holders. A Variable
Contract Holder entitled to vote may vote at any such meeting
either in person or by a duly executed proxy. A valid proxy for
any meeting shall be valid for any adjournment of such meeting.
Section 2.5. The appointment of a proxy shall be in writing filed
with the inspectors at or before the meeting. The authority of a
proxy, if not coupled with an interest, may be terminated at will.
The authority of every proxy shall cease within one year after the
appointment. A termination of a proxy's authority by act of the
Variable Contract Holder shall be ineffective until written notice
of the termination has been given to the inspectors. Unless
otherwise provided, therein, the appointment shall have the effect
of revoking all appointments of prior date.
<PAGE>
PAGE 3
ARTICLE III
Meetings of Variable Contract Holders
Section 3.1. An annual meeting of Variable Contract Holders for
the transaction of such business as may properly come before the
meeting shall be held each year at a date and time to be determined
by the Board of Managers or in such manner as they may direct.
Section 3.2. Special meetings of the Variable Contract Holders may
be called by the Chairman of the Board of Managers or any two
members of the Board of Managers.
Section 3.3. Meetings of Variable Contract Holders shall be held
at the principal office of the Company in the City of Minneapolis,
Minnesota.
Section 3.4. A written notice stating the place, date and hour of
the meeting and the purpose or purposes for which the meeting is
called, shall be delivered or mailed to each Variable Contract
Holder. Mailed notice shall be mailed, to the address of the
Variable Contract Holder as it appears on the records, not less
than twenty days prior to the date of such meeting.
Section 3.5. The number of votes present at any meeting of
Variable Contract Holders shall include votes of Variable Contract
Holders who are personally present and those represented by proxy.
If fewer than the required number are present at any meeting in
order to vote on a specific matter as hereinafter provided, the
Chairman of the Board of Managers may nevertheless adjourn the
meeting at the time until the required number of votes are present
at any such adjourned meeting.
Section 3.6. At each meeting of the Variable Contract Holders the
polls shall be opened and closed, the proxies and ballots shall be
received and taken in charge, and all questions touching the
qualification of voters or the validity of proxies and the
acceptance or rejection of votes shall be decided by three
inspectors. Such inspectors, who need not be Variable Contract
Holders, shall be appointed by the Chairman of the Board of
Managers.
Section 3.7. Any action, which may be taken at a meeting of the
Variable Contract Holders, may be taken without a meeting if done
in writing signed by all Variable Contract Holders who would be
entitled to a notice of a meeting, for such purpose.
ARTICLE IV
Board of Managers
Section 4.1. The Board of Managers shall consist of not less than
five nor more than nine members, as the Board of Managers may from
time to time determine. The members of the Board of Managers shall
be subject to election at each annual meeting of the Variable
<PAGE>
PAGE 4
Contract Holders. The term of office of each member of the Board
of Managers shall be until the next annual meeting of the Variable
Contract Holders and until his successor has been elected and
qualified. Members of the Board of Managers need not be Variable
Contract Holders.
Section 4.2. If there be a vacancy in the Board of Managers by
reason of death, resignation, removal, or otherwise, such vacancy
shall be filled for the unexpired term by a majority vote of the
remaining Board of Managers, though less than a quorum. Provided,
however, if immediately after filling any such vacancy less than
two-thirds of the directors then holding office would have been
elected to such office by the Variable Contract Holders, such
vacancy shall be filled by the Variable Contract Holders at an
annual or special meeting duly called for that purpose, and such
vacancy shall not be filled by the remaining Board of Managers. In
the event that at any time less than a majority of the Board of
Managers holding office were elected by the Variable Contract
Holders, the Board of Managers shall forthwith cause to be held as
promptly as possible and, in any event within sixty days unless
appropriate regulatory authorities permit an extension of such
period, a meeting of Variable Contract Holders for the purpose of
electing Board of Managers members to fill any existing vacancies
in the Board of Managers.
Section 4.3. At least forty percent (40%) of the outstanding votes
of Variable Contract Holders shall be present to constitute a
quorum for the election of Board of Managers members at any annual
or special meeting of Variable Contract Holders.
Section 4.4. A Variable Contract Holder may in any election of
Board of Managers members cast the total number of votes which he
holds for each of the vacancies on the Board of Managers. There
shall not be cumulative voting. Those candidates for election to
the Board of Managers who receive the largest number of votes,
whether a majority of the votes cast or not, shall be declared
elected to the vacancies on the Board of Managers.
Section 4.5. Any Variable Contract Holder, or his duly appointed
proxy, may nominate a candidate or candidates for Board of Managers
membership at any meeting of Variable Contract Holders at which an
election of Board of Managers members is duly being held.
Section 4.6. The entire Board of Managers or any individual member
thereof may be removed from the Board of Managers, with or without
cause, by a vote of Variable Contract Holders holding a majority of
the votes entitled to be cast for election of members of the Board
of Managers.
ARTICLE V
Meetings and Organization of Board of Managers
Section 5.1. A Chairman shall be elected by the Board of Managers
from their own number. He shall preside at meetings of the Board
<PAGE>
PAGE 5
of Managers and at meetings of the Variable Contract Holders and
shall perform such other duties as may be delegated to the Chairman
from time to time.
Section 5.2. A Secretary, who may or may not be a member of the
Board of Managers, shall be elected by the Board of Managers. He
shall attend all meetings of the Board of Managers, the Variable
Contract Holders, and such other meetings as may be designated by
the Board of Managers. He shall act as clerk of such meetings and
record all of the proceedings of such meetings in a book or books
to be kept for that purpose and shall have custody of the minute
books of the Board of Managers. He shall perform such additional
duties as are assigned to him by the Board of Managers.
Section 5.3. The Chairman and Secretary of the Board of Managers
shall serve until their successors are chosen and qualify in their
stead and may be removed either with or without cause at any time
by the affirmative vote of a majority of the Board of Managers.
Section 5.4. Regular meetings of the Board of Managers may be held
at such time and place as shall from time to time be fixed by
resolution of the Board of Managers. No notice of regular meetings
shall be required.
Section 5.5. Special meetings of the Board of Managers may be
called by the Chairman or by any two members of the Board of
Managers. Notice of the time and place of special meetings shall
be given to each member of the Board of Managers at least one day
prior thereto by mail, telephone, telegraph, or in person. Special
meetings of the Board of Managers may be held at such place as is
indicated in the notice thereof.
Section 5.6. A majority of the members of the Board of Managers
shall constitute a quorum, but a smaller number may adjourn from
time to time without notice, other than by announcement at the
meeting, until a quorum is secured; and likewise, in case a quorum
be present, the meeting may be adjourned from time to time without
notice other than by announcement at the meeting. At any adjourned
meeting at which a quorum be present, any business may be
transacted which might have been transacted at the meeting as
originally called.
Section 5.7. The affirmative vote of a majority of the members of
the Board of Managers present at any meeting shall pass any
question duly presented, except as may be otherwise provided for
any question by the Investment Company Act of 1940.
Section 5.8. Any action required or permitted to be taken at any
meeting of the Board of Managers may be taken without a meeting if
a written consent thereto is signed by all members of the Board of
Managers.
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PAGE 6
ARTICLE VI
Authority
Section 6.1. The President of the Company shall be the President
of the Fund ex officio. The Company by its duly authorized
officers, shall at all times retain control over the disposition of
all assets of the Company and shall have the authority to draw upon
the Fund to pay fees, make adjustments and payments pursuant to
Variable Annuity Contracts based on the Fund. The Company shall
determine the amount of and liability for such payments and its
decision shall be binding on the Fund.
Section 6.2. Except as may be otherwise provided or limited by the
Investment Company Act of 1940 or agreements entered into by the
Company and the Fund pursuant to such Act, the Company, by its duly
authorized officers, shall at all times have access to the assets
of the fund for any lawful purpose including the making of such
valuations, reports, etc., as deemed necessary by the Company.
Section 6.3. The Company shall, in the amount and manner deemed by
the Company to be necessary, provide and pay for all administrative
services and costs related to the Fund.
Section 6.4. In addition to other rights to withdraw amounts from
the Fund which the Company may have pursuant to contracts between
the Company and the Fund, the Company shall have the authority to
withdraw from the Fund the amounts payable to the Company pursuant
to Variable Annuity Contracts based on the Fund, including but not
limited to amounts: for providing mortality and expense
guarantees, for mortality adjustments, and for capital gains or
other taxes.
Section 6.5. The Board of Managers shall have the following powers
with respect to the Fund provided that such powers shall be
exercised at all times consistent with the status of the Fund as a
separate account of the Company under Minnesota law and as a
registered investment company under the Investment Company Act of
1940 and the status of the Company as a corporation organized under
Minnesota law and as an insurance company under the laws of other
applicable jurisdictions:
a) The Board of Managers may enter into a written
agreement to obtain investment advisory services for
the Fund. Such written contract may allow or provide
that any investment advisor or manager may in turn
contract with others for the performance of all or part
of such investment advisory services. To the extent
required by the Investment Company Act of 1940, any
such contract or contracts shall not be effective until
such time as it is approved by a vote of Variable
Contract Holders of either (1) at least 67% of the
votes present at such meeting if at least 50% of the
outstanding votes are present, or (2) at least 50% of
the outstanding votes of the Fund whichever is less;
provided, however, that such requirement of approval by
<PAGE>
PAGE 7
Variable Contract Holders shall not be required to make
the contract effective for any period for which an
exemption from such requirement has been obtained from
the appropriate regulatory authorities. The amount of
the fee paid for such investment advisory services may
not exceed the valuation period equivalent of an annual
rate of .4% of the net value of the Fund assets.
b) The Board of Managers may enter into a written contract
providing for the distribution of variable annuity
contracts with values or benefits based, in whole or in
part, on the Fund.
c) The Board of Managers shall select an independent
public accountant for the Fund at a meeting held within
30 days before or after the beginning of each fiscal
year of the Fund or before the annual meeting of
Variable Contract Holders in that year and such
selection shall be submitted for ratification or
rejection at the next succeeding annual meeting of
Variable Contract Holders provided that at least 40% of
the outstanding votes must be present in person or by
proxy at the meeting of Variable Contract Holders. A
majority of the votes cast on the question of
ratification or rejection of such selection shall
decide the question. In the event that the selection
of such an independent public accountant be rejected or
his employment terminated the vacancy so occurring may
be filled at a meeting of Variable Contract Holders by
a vote of a majority of the outstanding votes for such
meeting.
d) The Board of Managers shall select a Controller of the
Fund who shall serve at the pleasure of the Board of
Managers and who may participate as required by law in
the preparation of any Fund financial statement filed
with the Securities and Exchange Commission.
e) The Board of Managers shall select a Treasurer who
shall be a chief financial officer of the Fund and one
or more Assistant Treasurers as may be deemed necessary
or desirable, who shall serve at the pleasure of the
Board of Managers.
f) The Chairman of the Board of Managers on behalf of the
Board of Managers shall enter into an appropriate
agreement or agreements for the safekeeping of
Securities and other assets of the Fund. The Board of
Managers shall by resolution designate certain persons
who shall have access to the assets of the Fund in a
manner to be defined in the appropriate safekeeping
agreement. The Board of Managers may cause such
persons to be bonded, retain an independent public
accountant, and cause to be kept such records and do
all other things as may be necessary to maintain such
safekeeping agreements in compliance with applicable
provisions of the Investment Company Act of 1940.
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PAGE 8
ARTICLE VII
Policy of the Fund
Section 7.1. The principal investment objective of the Fund is to
invest in securities with an opportunity of long-term capital
appreciation consistent with the Fund's purpose of serving as the
vehicle for accumulating values and providing annuity payments
under variable annuity contracts issued by the Company. The
principal objective does not preclude the making of investments for
the purpose of seeking short-term capital appreciation. It is
anticipated that the Fund's assets will be invested primarily in
common stocks, but investments may be made in senior securities and
debt instruments and government obligations, including short-term
obligations. Any income or realized capital gains on investments
of the Fund will be reinvested. The Fund does not intend to invest
in companies for the purpose of exercising control or management.
It intends to select securities which it is believed may be
profitably retained over a period of time, and it is not the policy
of the Fund to engage in trading for short-term profits. However,
notwithstanding the length of time a security has been held,
changes in the portfolio will be made promptly when determined to
be advisable by reason of developments not foreseen at the time of
the investment decision.
Section 7.2. The Company and the Fund shall adhere to the
following fundamental investment policies with respect to the Fund.
a) The Fund shall not borrow amounts in excess of 10% of
the gross assets of the Fund taken at cost determined
in accordance with good accounting practice and no
borrowing shall be undertaken except as a temporary
measure for extraordinary or emergency purposes. The
Fund may borrow only from banks.
b) The Fund shall not underwrite securities of other
issuers. However, this shall not preclude the purchase
of securities for investment, on original issue or
otherwise, and shall not preclude the acquisition of
portfolio securities under circumstances where the Fund
would not be free to sell them without being deemed an
underwriter for purposes of the Securities Act of 1933
and without registration of such securities or the
filing of a notification under that Act, or the taking
of similar action under other securities laws relating
to the sale of securities. The Fund will not invest in
securities which are not readily marketable without
registration or the filing of a notification under the
Securities Act of 1933, or the taking of similar action
under other securities laws relating to the sale of
securities, if immediately after the making of any such
investment more than 15% of the Fund's net assets
(taken at market or other current value) is invested in
such securities.
<PAGE>
PAGE 9
c) The Fund does not intend to concentrate its investments
in any particular industry, but reserves freedom of
action to do so provided that not more than 25% of its
assets, taken at cost, may be so invested at any one
time.
d) The Fund will not purchase or sell real estate as a
principal activity. However, the right is reserved to
invest up to 10% of the Fund's assets, taken at cost,
in real properties.
e) Not more than 5% of the gross assets of the Fund taken
at cost will be invested in securities of any one
corporation, government or political subdivision
thereof, but this limitation shall not apply to
investments in obligations of the United States or in
obligations of any corporation organized under general
act of Congress if such corporation be an
instrumentality of the United States.
f) The Fund will not purchase securities of any issuer if
immediately after and as a result of such purchase the
Fund would own more than 10% of the outstanding voting
securities of such issuer.
g) The Fund will not purchase securities of any investment
trust or investment company, except by purchase in the
open market where no commission or profit to a sponsor
or dealer results from such purchase other than
customary broker's commission. The Fund does not
intend to invest in such securities but may do so to
the extent of not more than 15% of the Fund's net
assets (taken at market or other current value).
h) No securities will be purchased on margin, nor will the
Fund make any short sales of securities.
i) The Fund shall not make loans to other persons, except
by the purchase, upon original issuance or otherwise,
of a portion of an issue of bonds, notes, debentures,
or other securities publicly distributed or of a type
customarily purchased by financial institutions.
j) The Fund will not engage in the purchase and sale of
commodities or commodity contracts.
Section 7.3. To the extent required by the Investment Company Act
of 1940, any amendment of Section 7.2. shall not be effective until
such time as it is approved by a vote of Variable Contract Holders
of either (1) at least 67% of the votes present, or (2) at least
50% of the outstanding votes of the Fund, whichever is less;
provided, however, that such requirement of approval by Variable
Contract Holders shall not be required for any period for which an
exemption from such requirement has been obtained from the
appropriate regulatory authorities.
<PAGE>
PAGE 10
ARTICLE VIII
Miscellaneous
Section 8.1. The fiscal year of the Fund shall begin on the first
day of January, in each year and end on the thirty-first day of
December following.
Section 8.2. The "close of business" for any valuation date of the
Fund shall coincide with the time of closing of the New York Stock
Exchange. The business of the Fund shall be conducted in
accordance with such closing.
ARTICLE IX
Indemnification
Section 9.1. Subject to the further provisions hereof, each member
of the Board of Managers and each Officer of the Fund shall be
indemnified by the Company against reasonable costs and expenses
actually and necessarily incurred by him in connection with the
defense of any action, suit or proceedings to which he may be made
a party by reason of his being or having been a member of the Board
of Managers or Officer of the Fund, except in relation to any
action, suit, or proceeding in which he has been adjudged in such
action, suit, or proceeding to be liable because of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office. In the absence
of an adjudication which expressly absolves the member or office of
liability to the Fund or its Contract Holders for willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office or in the event of
a settlement, each member of the Board of Managers and Officer of
the Fund (and his heirs, executors, and administrators) may be
indemnified by the Company against payments made, including
reasonable costs and expenses; provided that such indemnity shall
be conditioned upon the prior determination by a resolution of two-
thirds of the members of the Board of Directors of the Company who
are not involved in the action, suit, or proceeding, that the
member of the Board of Managers or Officer has no liability by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office; and provided further, if a majority of the members of the
Board of Directors of the Company are involved in the action, suit,
or proceeding, no sums shall be paid until the Company is further
advised by written opinion of independent counsel that the amount
is reasonable, and that the costs and expenses were actually and
necessarily incurred, and that the claim is proper. In the event
of a settlement, the amounts which the Company may pay by way of
indemnification shall not exceed the costs, fees, and expenses
which would have been reasonably incurred if the action, suit, or
proceeding had been litigated to a conclusion. Such a
determination by the Board of Directors or by independent counsel,
and the payment of amounts by the Company on the basis thereof
shall not prevent a Variable Contract Holder from challenging such
<PAGE>
PAGE 11
indemnification by appropriate legal proceedings on the grounds
that the person indemnified was liable to the Fund or its Variable
Contract Holders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
ARTICLE X
Amendment of Regulations
Section 10.1. These regulations may be amended by the Board of
Directors of the Company subject to approval of the Board of
Managers or Variable Contract Holders as may be required by the
Investment Company Act of 1940.
<PAGE>
PAGE 1
CUSTODY AGREEMENT
This Custody Agreement is dated May, 1993 between MORGAN STANLEY
TRUST COMPANY, a New York State chartered trust company (the
"Custodian"), and IDS Bank & Trust (the "Customer").
1. The Customer hereby appoints the Custodian as a custodian of
securities and other property owned or under the control of the
Customer which are delivered to the Custodian, or any Subcustodian
as appointed below, from time to time to be held in custody for the
benefit of the Customer. The Customer instructs the Custodian to
establish on the books and records of the Custodian an account (the
"Account") in the name of the Customer. The Custodian shall record
in the Account and shall have general responsibility for the
safekeeping of all securities ("Securities"), cash and other
property (all such Securities, cash and other Property being
collectively the "Property") of the Customer so delivered for
custody. It is understood that the specific procedures the
Custodian will use in carrying out its responsibilities under this
Agreement are set forth in the procedures manual (the "Procedures
Manual") prepared by the Custodian and delivered to the Customer,
as such Procedures Manual may be amended from time to time by the
Custodian by 90 days prior written notice to the Customer (unless
the Customer agrees to a shorter period). The Customer acknowledges
that the Procedures Manual constitutes an integral part of this
Agreement.
2. The Property may be held in custody and deposit accounts that
have been established by the Custodian with one or more domestic or
foreign banks, or through the facilities of one or more clearing
agencies or central securities depositories, as listed on Exhibit A
hereto (the "Subcustodians"), as such Exhibit may be amended from
time to time by the Custodian by written notice to the Customer.
The Custodian shall deliver to the Customer such information as is
necessary or appropriate for the Customer to determine that the
Customer is in compliance with Rule 17f-5 promulgated under the
Investment Company Act of 1940, as amended. The Custodian may hold
Property for all of its customers with a Subcustodian in a single
account that is identified-as belonging to the Custodian for the
benefit of its customers. Any Subcustodian may hold Property in a
securities depository and may utilize a clearing agency. The
Customer agrees that the Property may be physically held outside
the United States. The Custodian shall not be liable for any loss
resulting directly from the physical presence of any Property in a
foreign country (and not by virtue of the actions of the Custodian
or any Subcustodian) including, but not limited to, losses
resulting from nationalization, expropriation, exchange controls or
acts of war or terrorism. Except as provided in the previous
sentence, the liability of the Custodian for losses incurred by the
Customer in respect of Securities shall not be affected by the
Custodian's use of Subcustodians.
<PAGE>
PAGE 2
3. With respect to Property held by a Subcustodian pursuant to
Section 2:
(a) The Custodian will identify on its books as belonging to
the Customer any Property held by a Subcustodian for the
Custodian's account;
(b) The Custodian will hold Property through a Subcustodian
only if (i) such Subcustodian and any securities depository or
clearing agency in which such Subcustodian holds Property, or
any of their creditors, may not assert any right, charge
security interest, lien, encumbrance or other claim of any
kind to such Property except a claim of payment for its safe
custody or administration and (ii) beneficial ownership of
such Property may be freely transferred without the payment of
money or value other than for safe custody or administration;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the
Subcustodian's books as separate from any property held by the
Subcustodian other than property of the Custodian's customers
and as held solely for the benefit of customers of the
Custodian; and
(d) In the event that the Subcustodian holds Property in a
securities depository or clearing agency, such Subcustodian
will be required by its agreement with the Custodian to
identify on its books such Property as being held for the
account of the Custodian as a custodian for its customers.
4. The Custodian shall allow the Customer's accountants reasonable
access to the Custodian's records relating to the Property held by
the Custodian as such accountants may reasonably require in
connection with their examination of the Customer's affairs. The
Custodian shall also obtain from any Subcustodian (and will require
each Subcustodian to use reasonable efforts to obtain from any
securities depository or clearing agency in which it deposits
Property) an undertaking, to the extent consistent with local
practice and the laws of the jurisdiction or jurisdictions to which
such Subcustodian, securities depository or clearing agency is
subject, to permit independent public accountants such reasonable
access to the records of such Subcustodian, securities depository
or clearing agency as may be reasonably required in connection with
the examination of the Customer's affairs or to take such other
action as the Custodian in its judgment may deem sufficient to
ensure such reasonable access.
5. The Custodian shall provide such reports and other information
to the Customer and to such persons as the Customer directs as the
Custodian and the Customer may agree from time to time, including
such reports which are described in the Procedures Manual.
<PAGE>
PAGE 3
6. The Custodian shall make or cause any Subcustodian to make
payments from monies being held in the Account only:
(a) upon the purchase of Securities and then, to the extent
consistent with practice in the jurisdiction in which
settlement occurs, upon the delivery of such Securities;
(b) for payments to be made in connection with the conversion,
exchange or surrender of Securities;
(c) upon a request of the Customer that the Custodian return
monies being held in the Account;
(d) upon a request of the Customer that monies be exchanged
for or used to purchase monies denominated in a different
currency and then only upon receipt of such exchanged or
purchased monies;
(e) as provided in Section 8 and 12 hereof;
(f) upon termination of this Custody Agreement as hereinafter
set forth; and
(g) for any other purpose upon receipt of explicit
instructions of the Customer accompanied by evidence
reasonably acceptable to the Custodian as to the authorization
of such payment.
Except as provided in the last two sentences of this Section 6 and
as provided in Section 8, all payments pursuant to this Section 6
will be made only upon receipt by the Custodian of Authorized
Instructions (as hereinafter defined) from the Customer which shall
specify the purpose for which the payment is to be made. In the
event that it is not possible to make a payment in accordance with
Authorized Instructions of the Customer, the Custodian shall
proceed in accordance with the procedures set forth in the
Procedures Manual. Any payment pursuant to subsection (f) of this
Section 6 will be made in accordance with Section 16.
7. The Custodian shall make or cause any Subcustodian to make
transfers, exchanges or deliveries of Securities only:
(a) upon sale of such Securities and then, to the extent
consistent with practice in the jurisdiction in which
settlement occurs, upon receipt of payment therefor;
(b) upon exercise of conversion, subscription, purchase,
exchange or other similar rights pertaining to such Securities
and, if applicable to such exercise and if consistent with
practice in the applicable jurisdiction, only on receipt of
substitute or additional securities to be received upon such
exercise;
(c) as provided in Section 8 hereof;
(d) upon the termination of this Custody Agreement as
hereinafter set forth; and
<PAGE>
PAGE 4
(e) for any other purpose upon receipt of explicit
instructions of the Customer accompanied by evidence
reasonably acceptable to the Custodian as to the authorization
of such transfer, exchange or delivery.
Except as provided in the last two sentences of this Section 7 and
as provided in Section 8, all transfers, exchanges or deliveries of
Securities pursuant to this Section 7 will be made only upon
receipt by the Custodian of Authorized Instructions of the Customer
which shall specify the purpose for which the transfer, exchange or
delivery is to be made. In the event that it is not possible to
transfer Securities in accordance with Authorized Instructions of
the Customer, the Custodian shall proceed in accordance with the
procedures set forth in the Procedures Manual. Any transfer or
delivery pursuant to subsection (d) of this Section 7 will be made
in accordance with Section 16.
8. In the absence of Authorized Instructions from the Customer to
the contrary, the Custodian may, and may authorize any Subcustodian
to:
(a) make payments to itself or others for expenses of handling
Property or other similar items relating to its duties under
this Agreement, provided that all such payments shall be
accounted for to the Customer;
(b) receive and collect all income and principal with respect
to Securities and to credit cash receipts to the Account;
(c) exchange Securities when the exchange is purely
ministerial (including, without limitation, the exchange of
interim receipts or temporary securities for securities in
definitive form and the exchange of warrants, or other
documents of entitlement to securities, for the securities
themselves);
(d) surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
(e) execute in the Customer's name such ownership and other
certificates as may be required to obtain the payment of
income from Securities:
(f) pay or cause to be paid, from the Account, any and all
taxes and levies in the nature of taxes imposed on Property by
any governmental authority in connection with custody of and
transactions in such Property;
(g) endorse for collection, in the name of the Customer,
checks, drafts and other negotiable instruments; and
(h) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and
other dealings with the Property.
<PAGE>
PAGE 5
9. "Authorized Instructions" of the Customer shall mean
instructions received by telecopy, tested telex, electronic link or
other electronic means or by such other means as may be agreed in
writing in advance between the Customer and the Custodian. The
Custodian shall be entitled to act, and shall have no liability for
acting, in accordance with the terms of this Agreement or upon any
instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been
properly executed by one or more persons which the Customer has
previously identified to the Custodian as authorized to act on the
Customer's behalf.
10. Securities which must be held in registered form may be
registered in the name of the Custodian's nominee or, in the case
of Securities in the custody of an entity other than the Custodian,
in the name of such entity's nominee. The Customer agrees to hold
the Custodian and Subcustodians and any such nominee harmless from
any liability arising out of any such person acting as a holder of
record of such Securities. The Custodian may without notice to the
Customer cause any Securities to cease to be registered in the name
of any such nominee and to be registered in the name of the
Customer.
11. All cash received by the Custodian for the Account shall be
held by the Custodian as a short-term credit balance in favor of
the Customer and, if the Custodian and the Customer have agreed in
writing in advance that such credit balances shall bear interest,
the Customer shall earn interest at the rates and times as agreed
between the Custodian and the Customer. The Customer understands
that any such credit balances will not be accompanied by the
benefit of any governmental insurance.
12. From time to time, the Custodian may arrange or extend short-
term credit for the Customer which is (i) necessary in connection
with payment and clearance of securities and foreign exchange
transactions or (ii) pursuant to an agreed schedule, as and if set
forth in the Procedures Manual, of credits for dividends and
interest payments on Securities. All such extensions of credit
shall be repayable by the Customer on demand. The Custodian shall
be entitled to charge the Customer interest for any such credit
extension at rates to be agreed upon from time to time. In addition
to any other remedies available, the Custodian shall be entitled to
a right of set-off against the Property to satisfy the repayment of
such credit extensions and the payment of accrued interest thereon.
The Custodian may act as the Customer's agent or act as a principal
in foreign exchange transactions at such rates as are agreed from
time to time between the Customer and the Custodian.
13. The Customer represents that (i) the execution, delivery and
performance of this Agreement (including, without limitation, the
ability to obtain the short-term extensions of credit in accordance
with Section 12) are within the Customer's power and authority and
have been duly authorized by all requisite action (corporate or
otherwise) and (ii) this Agreement and each extension of short-term
credit extended or arranged for the benefit of the Customer in
accordance with Section 12 will at all times constitute a legal,
valid and binding obligation of the Customer and be enforceable'
<PAGE>
PAGE 6
against the Customer in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights in general and
subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
The Custodian represents that the execution, delivery and
performance of this Agreement is within the Custodian's power and
authority and has been duly authorized by all requisite action of
the Custodian. This Agreement constitutes the legal, valid and
binding obligation of the Custodian enforceable against the
Custodian in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to the
effect of general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
14. The Custodian shall be responsible for the performance of only
such duties as are set forth in this Agreement or the Procedures
Manual or contained in Authorized Instructions given to the
Custodian which are not contrary to the provisions of any relevant
law or regulation. The Custodian shall not be liable to the
Customer or to any other person for any action taken or omitted to
be taken by it in connection with this Agreement in the absence of
negligence or willful misconduct on the part of the Custodian. Upon
Custodian, the Customer agrees to deliver to the Custodian a duly
executed power of attorney, in form and substance satisfactory to
the Custodian, authorizing the Custodian to take any action or
execute any instrument on behalf of the Customer as necessary or
advisable to accomplish the purposes of this Agreement.
15. The Customer agrees to pay to the Custodian from time to time
such compensation for its services pursuant to this Agreement as
may be mutually agreed upon from time to time and the Custodian's
out-of-pocket or incidental expenses. The Customer hereby agrees to
hold the Custodian harmless from any liability or loss resulting
from any taxes or other governmental charges, and any expenses
related thereto, which may be imposed or assessed with respect to
the Account or any Property held therein. The Custodian is and any
Subcustodians are authorized to charge the Account for such items
and the Custodian shall have a lien, charge and security interest
on any and all Property for any amount owing to the Custodian from
time to time under this Agreement. Except as set forth in the
previous sentence, or otherwise permitted pursuant to the terms of
this agreement, the Custodian shall not pledge, assign, hypothecate
or otherwise encumber Property without Authorized Instructions; it
being understood that a Subcustodian will generally retain a lien
against securities which the Subcustodian has purchased for the
Account but for which the Customer has not yet paid.
If the Customer is a U.S. person as defined in Rule 902 promulgated
by the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), the Customer
recognizes that, in connection with the Customer's election from
time to time to participate in distributions of securities (whether
pursuant to rights offerings, warrant subscriptions, mergers,
reorganizations or otherwise) which have not been registered
<PAGE>
PAGE 7
pursuant to the Act, the Custodian may inform the issuer and its
agents that the acquire of the securities is a U.S. person. The
Custodian shall not be responsible to the Customer for the
consequences of any issuer's or agent's refusal to permit the
Customer to acquire such securities, and the Customer shall hold
the Custodian harmless from liability to the issuer and its agents
in connection with any such election by the Customer.
16. This Agreement may be terminated by the Customer or the
Custodian by 90 days written notice to the other, sent by
registered mail. If notice of termination is given, the Customer
shall, within 60 days following the giving of such notice, deliver
to the Custodian a statement in writing specifying the successor
custodian or other person to whom the Custodian shall transfer the
Property. In either event the Custodian, subject to the
satisfaction of any lien it may have, will transfer the Property to
the person so specified. If the Custodian does not receive such
statement the Custodian, at its election, may transfer the Property
to a bank or trust company established under the laws of the United
States or any state thereof to be held and disposed of pursuant to
the provisions of this Agreement or may continue to hold the
Property until such a statement is delivered to the Custodian. In
such event the Custodian shall be entitled to fair compensation for
its services during such period as the Custodian remains in
possession of any Property and the provisions of this Agreement
relating to the duties and obligations of the Custodian shall
remain in full force and effect; provided, however, that the
Custodian shall no longer settle any transactions in securities for
the Account.
17. The Custodian, its agents and employees will maintain the
confidentiality of information concerning the Property held in the
Account, including in dealings with affiliates of the Custodian. In
the event the Custodian or any Subcustodian is requested or
required to disclose any confidential information concerning the
Property, the Custodian shall to the extent practicable and legally
permissible, promptly notify the Customer of such request or
requirement so that the Customer may seek a protective order or
waive the Custodian's or such Subcustodian's compliance with this
Section 17. In the absence of such a waiver, if the Custodian or
such Subcustodian is compelled, in the opinion of its counsel, to
disclose any confidential information, the Custodian or such
Subcustodian may disclose such information to such persons as, in
the opinion of counsel, is so required.
18. Any notice or other communication from the Customer to the
Custodian, unless otherwise provided by this Agreement, shall be
sent by certified or registered mail to Morgan Stanley Trust
Company, One Pierrepont Plaza, Brooklyn, New York, 11201,
Attention: President, and any notice from the Custodian to the
Customer is to be mailed postage prepaid, addressed to the Customer
at the address appearing below, or as it may hereafter be changed
on the Custodian's records in accordance with notice from the
Customer.
<PAGE>
PAGE 8
19. The Custodian may assign all of its rights and obligations
hereunder to any other entity which is qualified to act as
custodian under the terms of this Agreement and majority-owned,
directly or indirectly, by Morgan Stanley Group Inc., and upon the
assumption of the rights and obligations hereunder by such entity,
such entity shall succeed to all of the rights and obligations of,
and be substituted for, the Custodian hereunder as if such entity
had been originally named as custodian herein. The Custodian shall
give prompt written notice to the Customer upon the effectiveness
of any such assignment.
This Agreement shall bind the successors and assigns of the
Customer and the Custodian and shall be governed by the laws of the
State of New York applicable to contracts executed in and to be
performed in that state.
________________________
By /s/ Mark Ellis
Name: Mark Ellis
Title: Vice President
Address for record: IDS Trust
1200 Northstar West
P.O. Box 534
Minneapolis, MN 55440-0534
________________________
Accepted:
MORGAN STANLEY TRUST COMPANY
By /s/ David P. Roccato
Authorized Signature
Roccato
<PAGE>
PAGE 9
BILLING GUIDE for IDS
PURPOSE OF THIS GUIDE
We have written this guide to provide a ready reference for billing
questions. Of course, personal help continues to be available from
your billing representative and your Client Executive.
UPDATE SCHEDULE
This guide will be amended periodically as changes occur. We
appreciate your feedback on improvements to our communication as we
continue to upgrade our service to you.
DEFINITIONS
Transaction
A Transaction is an entry to the system e.g. an original trade.
Custody
An asset in Custody is a position, short or long.
Out of Pocket Expenses
Out of Pocket Expenses are those charges relating to stamp duty,
transfer taxes, registration fees, Spanish put-throughs, tax
reclaim commission, and similar charges which are market-mandated
and which, when incurred through our sub-custodian banks, are
passed directly along to you as indicated in your Custody
Agreement.
Cut-Off Date
The Cut-Off Date is the date on which the MSGS Billing System is
closed. Therefore only transactions entered before that date are
charged on that particular bill.
Process Date
The Process Date of a transaction is the date on which it was
entered to the MSGS system.
Trade Date
The Trade Date of a transaction is the date quoted by the client on
which it was executed.
Basis Point
One Basis Point is a multiple of 0.0001 per year (e.g.
$1,000,000,000 of assets at 1 basis point equals a charge of
$100,000 per year).
MSGS
<PAGE>
PAGE 10
DEFINITIONS (continued)
In-Kind
An In-kind transaction is a book entry between a client's accounts
at MSGS, rather than movements external to MSGS.
Regular
A Regular transaction is a term used to describe an entry of a
trade to the system, not including cancel/correct, in-kind, cash
movement, bulk and conversion transactions, etc.
Conversion
A Conversion transaction is a movement of securities to or from an
outside custodian, i.e. external to MSGS.
Internal
An Internal transaction is one with Morgan Stanley as the broker.
External
An External transaction is one with a broker other than Morgan
Stanley.
Cash Movement
A Cash Movement transaction is a movement of funds from a client
account to a bank, broker, institution, etc. These are based on an
instruction from the client.
PREPARATION OF BILLS
Your bills are produced automatically by the MSGS Billing System
and are reviewed by your billing representative.
The bills are printed by the third business day of the month. They
include transactions processed up to the 'Cut-Off Date' quoted in
the cover letter to your bill. Further information can be found in
the 'Custody Fees' and 'Transaction Fees' sections.
Our standard is to mail your bills by the fifteenth day of the
month.
PAYMENT OF BILLS
Payment of bills is required by the last business day of the month.
Wire transfer or direct debit is preferred.
ADJUSTMENT TO BILLS
If there are adjustments to be made to any bill, these will be made
on the next bill that is due. Adjustments are separately identified
on your cover letter and supporting details are provided. Timely
review of your bills is beneficial as no adjustments are made three
months after the mailing date.
MSGS
<PAGE>
PAGE 11
FEES FOR NEW COUNTRIES / NEW PRODUCTS
If you trade in a country that is new to you or if you trade in a
new product and you do not have a fee for it on your fee schedule,
you are requested to discuss the appropriate fee with your client
executive in advance. If your client executive is not notified
ahead of time, you will be charged at the MSGS generic rates for
each respective new country / new product.
CUSTODY FEES
Average Month-End Valuation
Custody of assets will be billed on the basis of Average Month-End
Valuation. The closing asset positions recorded on the last
business day of the month are added to the closing asset positions
of the previous month and the sum is divided by two. This is done
for each issue currency that you hold. These are converted from the
various global currencies to your billing currency at the Morgan
Stanley & Company closing exchange rates.
The absolute value of the short and long trade date positions is
used to calculate the asset value. Available cash is billed;
however, ledger cash is not billed except for dividend and interest
accruals. The asset values of as-of transactions are not included.
Material Differences
MSGS may use a Daily Weighted Average Valuation where patterns of
business would lead to a material difference in asset value
compared to the Average Month-End Valuation method. The Daily
Weighted Average Valuation method records the closing asset
positions (in issue currency) on each business day and converts
them to your billing currency at the daily Morgan Stanley & Company
closing exchange rates. If this method of valuation is to be
introduced, it will be discussed with you and put into writing at
least one complete month before the change.
Eurobond vs. Euroclear
Assets are billed based on their product type but not based on
their location. A eurobond, regardless of where it is held, is
charged at the eurobond rate. Assets other than eurobonds are
charged based on the product type and/or the issue currency. Please
refer your fee schedule in Appendix A for specific charges.
GLOBAL PROXY VOTING SERVICE
You may elect to subscribe to our Global Proxy Voting Service. This
service provides meeting notifications and execution of voting
instructions, as well as reporting on a monthly, quarterly, semi-
annual or annual basis upon request. For a summary of the charges
see Appendix B.
MSGS
<PAGE>
PAGE 12
TRANSACTION FEES
Transactions that have been input since the previous billing 'Cut-
Off Date' are billed in the current month. If a trade is entered
and is later cancelled outright within the same billing period, the
cancel is charged but the trade is not charged. If it is cancelled
outright in a different billing period, both the trade and the
cancel are charged. If it is cancel/corrected, both the trade and
the cancel are always charged. Only stored trades are charged,
including same-day cancel/corrects.
Transactions are billed on the following basis:
Example
November 1992 Bill
* The trade date is earlier than December 1, 1992 - and -
* The transaction has not been previously charged - and -
* The transaction was processed before the cut-off date stated on
your bill
Examples of Transactions (Including Cancel/Corrects)
Trade AAAA11 Trade Date November 11, 1992
Process Date November 21, 1992
Cut-Off Date December 10, 1992
Included in the November 1992 Bill
Trade AAAA22 Trade Date November 30, 1992
Process Date December 2, 1992
Cut-Off Date December 10, 1992
Included in the November 1992 Bill
Trade AAAA33 Trade Date December 1, 1992
Process Date December 2, 1992
Cut-Off Date December 10, 1992
Included in the December 1992 Bill
Trade AAAA44 Trade Date November 30, 1992
Process Date December 11, 1992
Cut-Off Date December 10, 1992
Included in the December 1992 Bill
Trade AAAA55 Trade Date November 30, 1992
Process Date November 30, 1992
Cut-Off Date December 10, 1992
Included in the November 1992 Bill as one
transaction charge (a trade) - then -
Cancelled December 14, 1992
Included in the December 1992 Bill as one
cancel/correct charge
(an outright cancellation)
MSGS
<PAGE>
PAGE 13
TRANSACTION FEES (continued)
Examples of Transactions (continued)
Trade AAAA66 Trade Date November 11, 1992
Process Date November 11, 1992
Cancelled November 11, 1992
Cut-Off Date December 10, 1992
Included in the November 1992 Bill as one
transaction charge (a trade) and one
cancel/correct charge (a same day cancel)
Trade AAAA77 Trade Date November 30, 1992
Process Date November 30, 1992
Cancelled December 3, 1992
Cut-Off Date December 10, 1992
Included in the November 1992 Bill as one
cancel/correct charge (an outright
cancellation)
Trade AAAA88 Trade Date November 30, 1992
Process Date November 30, 1992
Cut-Off Date December 10, 1992
Included in the November 1992 Bill as one
transaction charge (a trade) - then -
Cancel/Corrected December 14, 1992
Included in the December 1992 Bill as one
cancel/correct charge
Trade AAAA99 Trade Date November 30, 1992
Process Date November 30, 1992
Cancel/Corrected December 3, 1992
Cut-Off Date December 10, 1992
Included in the November 1992 Bill as one
transaction charge (a trade) and one
cancel/correct charge
MSGS
<PAGE>
PAGE 14
YOUR BILL AND AVAILABLE SUPPORTING REPORTS
Cover Letter (example - appendix C1)
The relevant account numbers are shown on the top left-hand corner
of the cover letter.
The invoice date is the date on which the cover letter is produced.
Please note that it is not the date to which the transactions are
counted or the date on which the assets are valued.
The name and address of the recipient are shown. Please help us
keep our records accurate by informing us of any changes to this
data, either in writing or by electronic mail to your client
executive.
Specifically mentioned are the billing period for the custody of
assets and the cut-off date for the processing of transactions.
The opening balance is calculated by subtracting any payment
received since the previous bill from the prior month balance.
The current billing period activity details any adjustments
processed and fees charged for the month. Adjustments are also
explained on a supporting note to the bill where necessary. All of
the fee categories shown on your bill are supported by the reports
detailed in this guide. See 'Appendix' for reference. 'Additional
Charges' are also documented by an extra notation where necessary.
The amount for the current billing period is calculated and added
to the amount outstanding from previous billing periods to arrive
at the total amount due.
'Client Level Summary' Report
(example - appendix C2)
This automatic report is the overall summary of your bill detailing
the charges for 'Custody', 'Transactions', 'Lending' (i.e.
Securities Lending), 'Misc Fee' (i.e. Miscellaneous Fees), 'Cash
Mov Fee' (i.e. Cash Movement Fees) and 'Total Fees'. If a category
does not apply to your bill, zeroes will be shown in that column.
'Account Level Custody Fees' Report
(example - appendix C3)
This automated report is the overall summary of your assets
detailing the countries of issue, and local and base currency
market value of the assets.
The 'Average Assets in Issue Currency' column shows the local asset
value for each country of issue. This is converted to your billing
currency. (See 'Custody Fees' section for more detailed
information.)
The basis point rates are shown in the 'Annual Fee Schedule (Basis
Points)' column. The result of the calculation:
(Basis Points * 1/12 of the year) * (Average Assets in US dollars)
is shown in the column 'Total Monthly Fees'.
MSGS
<PAGE>
PAGE 15
YOUR BILL AND AVAILABLE SUPPORTING REPORTS (continued)
MT5016 'Securities Valuation Listed By Holding Location' Report
This report details, by cusip, the holdings on an individual
account basis. The report calculates the security holdings total
for each location where assets are held and this is detailed as
'Location Totals' on the report. Also detailed are the dividend and
interest accruals (if applicable) and cash. We bill on dividend and
interest accruals, the 'Total Cash' (except ledger cash) and the
'Location Totals'. With the exception of ledger cash, billed assets
are derived directly from the MT5016 valuation by averaging the
prior month-end values with the current month-end values.
'Transactions Summary' Report
(example - appendix C4)
This report is the overall summary of your transactions, detailing
the charges by transaction type.
'Account Level Transaction Fees' Report
(example - appendix C5)
This automated report further details your transactions by
identifying charges for regular transactions, regular
cancel/corrects, in-kind transfer transactions, in-kind transfer
cancel/corrects, conversion transactions, conversion
cancel/corrects, bulk transactions, bulk cancel/corrects,
underlying transactions, and underlying cancel/corrects. If a
category does not apply in any billing period, it will not appear
on your bill.
Products and countries of issue are separately identified. These
are further categorized as internal (Morgan Stanley as the broker)
or external (a broker other than Morgan Stanley.
'Transactions Detail Listing' Report
This report is used by MSGS as an internal audit control and can be
made available to you for reconciliation purposes. Items specified
on this report are:
trade date
order number
process date
buy/sell indicator
principal value ('net amount' of the trade)
quantity (number of shares)
issue currency
cancel/corrects
product identifier
execution method (in-kind, bulk, conversion)
MSGS's agent mnemonic
client reference number
security description
number and identity of trades and cancel/corrects billed
MSGS
<PAGE>
PAGE 16
'Agent Fees - Other Charges (Country)' Report
(see appendix C6)
This report states the out-of-pocket charges passed on to MSGS from
our global agents. For a summary of the charges see Appendix D.
To help your review of the 'Agent Fees' report, the column headings
are listed in the order that they are printed on the report.
Client: the client name
Client A/C #: the client account number
Trade Date: the trade date as input to the MSGS
system
Order Number: the unique identification number
attached to the trade by the MSGS
system
Security Description: the description of the security being
traded, as found in the MSGS Product
File.
Quantity: the trade number of shares as input
to the MSGS system.
Charges: the charges incurred through our sub-
custodian bank for registration/stamp
duty and taxes, etc. in the named
country, calculated using the matrix
in Appendix D
MSGS
<PAGE>
PAGE 17
Appendix A
Current Fee Schedule for IDS Bank & Trust
This letter describes Morgan Stanley Trust Company's ("Morgan
Stanley") compensation under the revised fee schedule of September
8, 1992 with IDS Bank & Trust.
Morgan Stanley's compensation shall be as follows:
Transaction Custody Rate
Country Rate (Basis Points)
Australia $100 10
Austria $50 10
Belgium $50 10
Canada $50 10
Finland $50 10
France $80 10
Germany $50 10
Hong Kong $80 10
Italy $80 10
Japan $35 6
Malaysia $80 12
Mexico $100 30
Netherlands $80 10
Norway $50 10
Singapore $80 12
Spain $80 15
Sweden $50 10
Switzerland $80 10
Thailand $300 15
United Kingdom * $80/$45 10
* The $45 UK transaction rate applies to the International
Collective Fund and the International Collective Tilt Fund.
Transactions are defined in the Morgan Stanely Trust Company
Billing Guide, as is the method of calculating custody.
All new business will be separately negotiated. You are requested
to contact your client executive if you are trading in new
countries or in new products. If your client executive is not
notified ahead of time, you will be charged at the MSTC generic
rates for each respective new country/new product (see attached).
In-Kind transactions will not be charged.
Cancel/corrects will not be charged.
Cash movements will not be charged.
<PAGE>
PAGE 18
Appendix A
Generic Fees for IDS Bank & Trust
Subject to negotiation or change, Morgan Stanley's compensation
shall be as follows:
Transaction Custody Rate
Country Rate (Basis Points)
Argentina $150 45
Brazil $150 40
Chile $125 45
China $200 45
Columbia $175 60
Denmark $50 11
ECU $50 11
Greece $100 60
Indonesia $200 40
Ireland $80 12
New Zealand $125 12
Pakistan $150 35
Peru $175 65
Philippines $500 20
Portugal $300 50
South Africa $125 12
South Korea $100 25
Sri Lanka $100 25
Taiwan $200 15
Turkey $200 25
United States $35 5
Uruguay Equity $100 60
Uruguay Fixed Income $100 45
Venezuela $150 45
Eurobonds $35 7
Euro CDs $35 5
<PAGE>
PAGE 19
Appendix A
IDS Bank & Trust
Registration/transfer fees will be charged where incurred by Morgan
Stanley.
Stamp taxes/duties will be charged where incurred by Morgan
Stanley.
All fees are calculated and billed quarterly in arrears.
The fees are due for renegotiation two years from the date of the
Agreement, and they will remain effective until renegotiation is
complete.
For further assistance, please contact Lee Williams, your client
executive, at (718) 754-2734, or Alice Malina, your billing
representative, at (718) 754-2704.
<PAGE>
PAGE 20
Appendix B
Fees (USD
Country Fees Frequency equivalent)
Austria ATS 200 per vote 20
Belgium BEF 1,500 annual fee 50
BEF 3,000 per vote 100
Denmark DKK 5,000 per vote 800
DKK 7.75 registration fee n/a
Finland FIM 1,000 per vote 190
variable registration fees
France** FRF 1,000 per company 200
Italy ** ITL 515,200 per company 300
Japan USD 25 per vote 25
Norway NOK 1,400 per vote 200
Sweden SEK 5,000 annual fee 706
SEK 400 registration fees 60
** Please note that in these countries the cost is per
company. If more than one client votes, the cost will be
equally distributed among the voting clients.
<PAGE>
PAGE 21
Appendix C1
MORGAN STANLEY Morgan Stanley Trust Co.
One Pierrepoint Plaza
Account: 40540-40552 Brooklyn, New York 11201
Invoice Date: January 13, 1993 (212)703-4000
Mr. Chan Patel
IDS Bank & Trust
2800 Multifoods Tower
Minneapolis, MN 55402
For the billing period December 1, 1992 to December 31, 1992:
Prior Month Balance $ 97,730.90 USD
Payment Received $0.00
Opening Balance $ 97,730.90 USD
Current Billing Period Activity:
Adjustments: $0.00
Transaction Fees: $ 15,995.00
Custody Fees: $ 41,456.09
Securities Lending Fees: $525.00
Cancel/Correct Fees: $ 1,310.00
Out of Pocket Fees: $ 26,317.00
Additional Charges: $0.00
Monthly Total: $ 85,603.09 USD
Balance outstanding as of
December 31, 1992 $183,333.99 USD
===========
* The Cut-Off Date for Transactions
is January 6, 1993
If you hvae any questions, please feel free to call me at (718)
754-2734 or Alice Malina at (718) 754-2704.
Yours Sincerely,
/s/ Lee Williams
Lee Williams
Client Executive
<PAGE>
PAGE 22
<TABLE>
<CAPTION>
Appendix C2
Date: 03/12/93
MORGAN STANLEY TRUST COMPANY
CLIENT LEVEL SUMMARY
BILLING DETAIL FOR FEBRUARY 1993
Client: IDS Financial Services, Inc.
Billing Currency: USD
CUSTODY TRANSACTIONS LENDING MISC CASH MOV TOTAL
ACCOUNT VALUATION FEE QTY FEE QTY FEE FEE FEE FEES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40540 43,631,645 3,364.12 62 3,550.00 6.0 210.00 0.00 0.00 7,124.12
40541 146,375,346 14,891.56 16 960.00 2.0 70.00 0.00 0.00 15,921.56
40543 13,549,667 1,037.09 1 50.00 0.0 0.00 0.00 0.00 1,087.09
40544 7,800,544 650.05 0 0.00 0.0 0.00 0.00 0.00 650.05
40546 13,078,522 1,089.88 9 540.00 0.0 0.00 0.00 0.00 1,629.88
40547 699,545 58.30 0 0.00 0.0 0.00 0.00 0.00 58.30
40548 216,640,474 16,930.04 66 3,735.00 15.0 540.00 0.00 0.00 21,205.04
40549 80,933,575 6,453.05 31 2,075.00 0.0 0.00 0.00 0.00 8,528.05
40552 7,849,521 457.88 0 0.00 0.0 0.00 0.00 0.00 457.88
TOTALS USD 530,558,839 44,931.97 185 10,910.00 23.0 820.00 0.00 0.00 56,661.97
</TABLE>
<PAGE>
PAGE 23
<TABLE>
<CAPTION>
APPENDIX C3
MORGAN STANLEY TRUST COMPANY DATE: 03/12/93
ACCOUNT LEVEL TRANSACTION FEES
BILLING DETAIL FOR FEBRUARY 1993
CLIENT: IDS FINANCIAL SERVICES INC. IDS STRATEGY FUND INC/
BILLING CURRENCY: USD ACCOUNT: 00-40540
I N T E R N A L E X T E R N A L TOTAL TOTAL
COUNTRY TRNS. RATE FEE TRNS. RATE FEE TRNS. FEES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REGULAR TRANSACTIONS
TRANSACTIONS
EQUITIES
SWITZERLAND 0.00 0.00 0.00 6.00 80.00 480.00 6.00 480.00
GERMANY 0.00 0.00 0.00 5.00 50.00 250.00 5.00 250.00
FRANCE 0.00 0.00 0.00 4.00 80.00 320.00 4.00 320.00
UNITED KINGDOM 0.00 0.00 0.00 10.00 80.00 800.00 10.00 800.00
HONG KONG 0.00 0.00 0.00 4.00 80.00 320.00 4.00 320.00
JAPAN 0.00 0.00 0.00 26.00 35.00 910.00 26.00 910.00
NETHERLANDS 0.00 0.00 0.00 1.00 80.00 80.00 1.00 80.00
SWEDEN 0.00 0.00 0.00 2.00 50.00 100.00 2.00 100.00
TRANSACTIONS TOTAL 0.00 0.00 58.00 3,260.00 58.00 3,260.00 USD
C/C TRANSACTIONS
EQUITIES
SWITZERLAND 0.00 0.00 0.00 1.00 80.00 80.00 1.00 80.00
GERMANY 0.00 0.00 0.00 1.00 50.00 50.00 1.00 50.00
SPAIN 0.00 0.00 0.00 1.00 80.00 80.00 1.00 80.00
FRANCE 0.00 0.00 0.00 1.00 80.00 80.00 1.00 80.00
C/C TRANSACTIONS
TOTAL 0.00 0.00 4.00 290.00 4.00 290.00 USD
REGULAR TRANSACTIONS
TOTAL 0.00 0.00 62.00 3,550.00 62.00 3,550.00 USD
GRAND TOTAL
0.00 0.00 62.00 3,550.00 62.00 3,550.00 USD
</TABLE>
<PAGE>
PAGE 24
<TABLE>
<CAPTION>
APPENDIX C4
MORGAN STANLEY TRUST COMPANY DATE: 03/12/93
TRANSACTIONS SUMMARY REPORT
BILLING DETAIL FOR FEBRUARY 1993
CLIENT: IDS FINANCIAL SERVICES INC.
BILLING CURRENCY: USD
ACCOUNT I N T E R N A L E X T E R N A L TOTAL TOTAL
NO TRNS. FEE TRNS. FEE TRNS. FEES
<S> <C> <C> <C> <C> <C> <C> <C>
REGULAR TRANSACTIONS
TRANSACTIONS
00-40540 0.00 0.00 58.00 3,260.00 58.00 3,260.00
00-40541 0.00 0.00 15.00 880.00 15.00 880.00
00-40543 0.00 0.00 1.00 50.00 1.00 50.00
00-40546 0.00 0.00 8.00 460.00 8.00 460.00
00-40548 0.00 0.00 63.00 3,525.00 63.00 3,525.00
00-40549 0.00 0.00 30.00 1,995.00 30.00 1,995.00
TRANSACTIONS TOTAL 0.00 0.00 175.00 10,170.00 175.00 10,170.00
C/C TRANSACTIONS
00-40540 0.00 0.00 4.00 290.00 4.00 290.00
00-40541 0.00 0.00 1.00 80.00 1.00 80.00
00-40546 0.00 0.00 1.00 80.00 1.00 80.00
00-40548 0.00 0.00 3.00 210.00 3.00 210.00
00-40549 0.00 0.00 1.00 80.00 1.00 80.00
C/C TRANSACTIONS TOTAL 0.00 0.00 10.00 740.00 10.00 740.00
REGULAR TRANSACTIONS TOTAL
0.00 0.00 185.00 10,910.00 185.00 10,910.00
GRAND TOTAL
0.00 0.00 185.00 10,910.00 185.00 10,910.00
</TABLE>
<PAGE>
PAGE 25
<TABLE>
<CAPTION>
APPENDIX C5
MORGAN STANLEY TRUST COMPANY DATE: 03/12/93
ACCOUNT LEVEL CUSTODY FEES
BILLING DETAIL FOR FEBRUARY 1993
CLIENT: IDS FINANCIAL SERVICES INC. IDS STRATEGY FUND INC/
BILLING CURRENCY: USD ACCOUNT: 00-40540
AVERAGE AVERAGE ANNUAL
ASSETS IN ASSETS IN FEE SCHEDULE TOTAL
COUNTRY ISSUE CURRENCY USD (BASIS POINTS) MONTHLY FEEES
<S> <C> <C> <C> <C> <C>
AUSTRALIA
AUSTRALIA 267,850 184,301
TOTAL AUSTRALIA 184,301
184,301 10.00 15.36
CANADA
CANADA 1,117,652 887,996
TOTAL CANADA 887,996
887,996 10.00 74.00
FRANCE
FRANCE 29,251,621 5,305,892
TOTAL FRANCE 5,305,892
5,305,892 10.00 442.16
GERMANY
GERMANY 773,578 473,429
TOTAL GERMANY 473,429
473,429 10.00 39.45
HONG KONG
HONG KONG 15,512,013 2,005,991
TOTAL HONG KONG 2,005,991
2,005,991 10.00 167.17
JAPAN
JAPAN 1,577,073,667 12,994,948
TOTAL JAPAN 12,994,948
12,994,948 6.00 649.75
MALAYSIA
MALAYSIA 1,207,000 460,063
TOTAL MALAYSIA 460,063
460,063 12.00 46.01
</TABLE>
<PAGE>
PAGE 26
<TABLE>
<CAPTION>
APPENDIX C6
MORGAN STANLEY TRUST COMPANY
AGENT FEES - OTHER CHARGES (SINGAPORE)
FEBRUARY 26, 1993
CLIENT TRADE ORDER SECURITY CHARGES
CLIENT A/C# DATE NUMBER DESCRIPTION QUANTITY REGISTRATION STAMP DUTY TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3-Feb United Overseas Bank 15,000 18 174 192
4-Feb United Overseas Bank 37,000 45 430 475
4-Feb Singapore Press Holdings 36,000 44 717 761
5-Feb United Overseas Bank 10,000 12 113 126
119 1,434 1,553
</TABLE>
<PAGE>
PAGE 27
<TABLE>
<CAPTION>
STAMP AND REGISTRATION FEES
COUNTRY CONTRACT STAMP TAX TRANSFER TAX STAMP OTHER CHARGEABLE FEES
<S> <C> <C> <C>
.2% on the value of the Stock Exchange Transaction Registration(Scrip) Fee: HKD 2.00 per
transaction payable by both Levy: .025% on the value of board lot (500 or 1000 shares) payable
the buyer and the seller the transaction payable by by the registerer (ie, buyer of each
HONG KONG by both the buyer and seller new certificate)
to the SEHK Special Levy: .03% of transaction
value
Incorporated in the net Pass through to client Pass through to client
settlement figure
- ---------------------------------------------------------------------------------------------------------------------------------
IDR 1000 per contract (trade) Stock Exchange Clearing Registration Fee: USD 3.00 per board
Fees: .1% of the total lot (500 shares). Additional put
consideration through charges for off-market trans-
INDONESIA actions including NCBO's (approx.
.0475% of transaction value)
Incorporated in the net Pass through to client Pass through to client
settlement figure
- --------------------------------------------------------------------------------------------------------------------------------
.1% transaction value paid Change of ownership: .3% Registration Fee: MYR 3.00 or MYR
by both the buyer and seller of the transaction value 5.00 per certificate (1000 shares)
(round up to nearest MYR payable by the buyer payable by the Registerer
MALAYSIA 1000) NCBO transfer: MYR 10.00
Incorporated in the net
settlement figure Pass through to client Pass through to client
- --------------------------------------------------------------------------------------------------------------------------------
1% of transaction value .2% of market value payable Registration Fee: SGD 2.00 per
paid by both the buyer and by the buyer certificate (1000 shares) payable
the seller by the Registerer
(round up to nearest SGD
SINGAPORE 1000)
Incorporated in the net
settlement figure Pass through to client Pass through to client
- --------------------------------------------------------------------------------------------------------------------------------
Registration fee: Negotiable by
Network Management
NONE NONE Corporate Action Bank Commissions:
SPAIN 60 basis points on sale proceeds
30 BPs of nominal value on purchases
Subscription Cost: 60 basis points
Tax Reclaim Fees: 5% with a minimum
charge of ESP 10,000
Pass through to client
- --------------------------------------------------------------------------------------------------------------------------------
1.5% on the par value of the
shares payable by the buyer
PAKISTAN NONE NONE
Incorporated in the net
settlement figure
</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 in Post-Effective Amendment No. 58 to
the Registration Statement (Form N-1 No. 2-29081) being filed under
the Securities Act of 1933 and the Investment Company Act of 1940
for the registration of Individual and Employer Variable Annuity
contracts to be offered by IDS Life Insurance Company.
We also consent to the incorporation by reference therein of our
report dated January 20, 1995 with respect to the financial
statements of IDS Life Variable Annuity Fund A included in the 1994
Annual Report to IDS Life Variable Annuity Fund A contract holders.
Ernst & Young LLP
Minneapolis, Minnesota
April 11, 1995
AUDITORS
<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 statements schedules I, III,
IV and V included elsewhere in this Registration Statment. 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
<PAGE>
PAGE 1
[ARTICLE] 6
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1994
[PERIOD-END] DEC-31-1994
[INVESTMENTS-AT-COST] 180864089
[INVESTMENTS-AT-VALUE] 224279646
[RECEIVABLES] 306519
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 224586165
[PAYABLE-FOR-SECURITIES] 207000
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1062385
[TOTAL-LIABILITIES] 1269385
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 0
[SHARES-COMMON-STOCK] 21424899
[SHARES-COMMON-PRIOR] 22264611
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 223316780 0
[DIVIDEND-INCOME] 2382307
[INTEREST-INCOME] 1510620
[OTHER-INCOME] 0
[EXPENSES-NET] 3253267
[NET-INVESTMENT-INCOME] 639660
[REALIZED-GAINS-CURRENT] 13002716
[APPREC-INCREASE-CURRENT] (23165263)
[NET-CHANGE-FROM-OPS] (9522887)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] (18306189)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 929540
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 3253267
[AVERAGE-NET-ASSETS] 232981932
[PER-SHARE-NAV-BEGIN] 10.70
[PER-SHARE-NII] .03
[PER-SHARE-GAIN-APPREC] (.46)
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.27
<PAGE>
PAGE 2
[EXPENSE-RATIO] 1.40
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
PAGE 1
IDS LIFE VARIABLE ANNUITY FUND A
IDS LIFE VARIABLE ANNUITY FUND B
POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as a member of the Board of Managers or
officer of IDS Life Variable Annuity Funds A & B, which are open-
end, diversified investment companies organized as segregated asset
accounts of IDS Life Insurance Company that previously have filed
registration statements and amendments thereto pursuant to the
requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 with the Securities and Exchange Commission,
File Numbers 2-29081 and 811-1653 and 2-47430, 2-29358 and 811-
1674, respectively, hereby constitute and appoint William A.
Stoltzmann, Mary Ellyn Minenko and Colleen Curran or any one of
them, as his/her attorney-in-fact and agent, to sign for him/her in
his/her name, place and stead any and all further filings,
applications (including applications for exemptive relief),
periodic reports, registration statements (with all exhibits and
other documents required or desirable in connection therewith),
other documents, an amendments thereto and to such filings,
applications, periodic reports, registration statements, other
documents, and amendments thereto with the Securities and Exchange
Commission, and any necessary states, and grants to any or all of
them the full power and authority to do and perform each and every
act required or necessary in connection therewith.
Dated the 9th day of February, 1995.
/s/ Richard W. Kling /s/ Louis C. Fornetti
Richard W. Kling Louis C. Fornetti
/s/ Edward Landes /s/ Morris Goodwin Jr.
Edward Landes Morris Goodwin Jr.
/s/ Janis E. Miller /s/ William A. Stoltzmann
Janis E. Miller William A. Stoltzmann
/s/ Carl N. Platou /s/ Colleen Curran
Carl N. Platou Colleen Curran
/s/ Gordon H. Ritz /s/ Robert O. Schneider
Gordon H. Ritz Robert O. Schneider
