<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1995
REGISTRATION NO. 33-91588
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [ ]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 1 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]
AMENDMENT NO. [ ]
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(EXACT NAME OF REGISTRANT)
---------------
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(NAME OF INSURANCE COMPANY)
787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019
(ADDRESS OF INSURANCE COMPANY'S PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 392-5279
---------------
ANTHONY A. DREYSPOOL
VICE PRESIDENT AND SENIOR COUNSEL
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
787 SEVENTH AVENUE,
NEW YORK, NEW YORK 10019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
PETER E. PANARITES
FREEDMAN, LEVY, KROLL & SIMONDS
1050 CONNECTICUT AVENUE, N.W.,
WASHINGTON, D.C. 20036
---------------
<PAGE>
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective (check appropriate
box):
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485 .
[ ] On (date) pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
[X] On August 30, 1995 pursuant to paragraph (a)(1) of Rule 485.
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
[ ] On (date) pursuant to paragraph (a)(3) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective
date for previously filed post-effective amendment.
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUS
<TABLE>
<CAPTION>
FORM N-3 ITEM PROSPECTUS CAPTION
- ------------------------------------------ --------------------------------------------
<S> <C>
1. Cover Page Cover Page
2. Definitions Not Applicable
3. Synopsis Summary
4. Condensed Financial Information Condensed Financial Information
5. General Description of Registrant, Equitable and the Investment
Depositor and Portfolio Company Managers-Equitable; Conservative Investors
and Growth Investor Funds
6. Deductions and Expenses Deductions and Charges
7. General Description of Variable The Program; Summary
Annuity Contracts
8. Annuity Period Provisions of the Contract and Services We
Provide/-Distributions and Benefit Payment
Options; Variable Annuity Benefits
Prospectus Supplement
9. Death Benefit Provisions of the Contract and Services We
Provide/-Distributions and Benefit Payment
Options/-Participant Death Benefits
10. Purchases and Contract Value Fund Performance/-Investment of
Contributions in the Funds
11. Redemptions Provisions of the Contract and Services We
Provide/-Distributions and Benefit Payment
Options
12. Taxes Federal Income Tax Considerations
13. Legal Proceedings Miscellaneous-Legal Proceedings
14. Table of Contents of Additional Table of Contents of the Statement of
Information Additional Information
</TABLE>
<PAGE>
Cross Reference Sheet
Showing Location of Information in Statement of Additional Information
<TABLE>
<CAPTION>
FORM N-3 ITEM PROSPECTUS CAPTION
- ------------------------------------------ --------------------------------------------
<S> <C>
1. Cover Page Cover Page
2. Table of Contents Table of Contents
3. General Information and History Equitable and the Investment Managers(1)
4. Services Not Applicable
5. Purchase of Securities Being Offered Underwriter
6. Underwriters Underwriter
7. Calculation of Performance Data Fund Performance
8. Annuity Payments Provisions of the Members
Plans/-Contributions to Qualified Plans;
Variable Annuity Benefits Prospectus
Supplement
9. Financial Statements Financial Statements
</TABLE>
[FN]
- -------------
(1) Contained in the Prospectus of the Members Retirement Program.
<PAGE>
Supplement, dated August 30, 1995, to
Prospectus, dated May 1, 1995, for
MEMBERS RETIREMENT PROGRAM
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
787 Seventh Avenue, New York, New York 10019
- -----------------------------------------------------------------------------
The information set forth herein supplements the information in the
Prospectus, dated May 1, 1995, for the Members Retirement Program of The
Equitable Life Assurance Society of the United States regarding the Balanced
Fund (Separate Account No. 10). You should keep this supplement to the
Prospectus for future reference. You may obtain an additional copy of the
Prospectus, or the related Statement of Additional Information, free of charge,
if you write to The Members Retirement Program, Box 2468, G.P.O., New York, New
York 10116 or call 1-800-526-2701.
Special terms used in the Prospectus have the same meaning in this
supplement, unless otherwise noted.
This supplement is for the purpose of expanding the description of the types
of securities and investment techniques that may be used by the Balanced
Fund. In particular, this supplement includes a discussion of the following
securities and investment techniques that, in general, have not previously
been used by the Balanced Fund: mortgage pass-through obligations,
collateralized mortgage obligations, asset-backed securities, zero coupon
bonds, repurchase agreements, when-issued and delayed delivery securities and
hedging transactions. This additional disclosure is being added because it is
expected that the Balanced Fund may use these types of securities and
investment techniques to a greater extent in the future. Nevertheless, we do
not believe that the changes reflected in this supplement fundamentally alter
the investment characteristics of the Balanced Fund or the types of investors
for whom it is appropriate.
The fourth and fifth sentences under THE BALANCED FUND--INVESTMENT POLICIES
on page 11 of the Prospectus is replaced with the following:
At the years ended December 31, 1985 through 1994, the percentage of the
Balanced Fund's assets invested in equity securities (including equity-type
securities such as convertible preferred stocks or convertible debt
instruments) has ranged from 86% to 43%. The Fund's non-money market debt
securities will consist primarily of publicly-traded securities issued or
guaranteed by the United States Government or its agencies or
instrumentalities and corporate fixed income securities, including, but not
limited to, bank obligations, notes, asset-backed securities, mortgage
pass-through obligations, collateralized mortgage obligations, zero coupon
bonds, and preferred stock. The Balanced Fund may also buy debt securities
with equity features such as conversion or exchange rights or warrants for
the acquisition of stock or participations based on revenues, sales or
profits. All non-money market debt securities will be investment grade, i.e.,
rated within the four highest credit categories by Standard & Poor's
Corporation (S&P) (AAA, AA, A or BBB) or by Moody's Investors Services, Inc.
(Moody's) (Aaa, Aa, A or Baa) or, if unrated, will be of comparable
investment quality as determined by our credit analysis. Securities held by
the Fund that fail to continue to meet the foregoing quality criteria need
not be disposed of if we determine that it continues to be appropriate for
the Fund to hold them.
The following is added to THE BALANCED FUND--INVESTMENT POLICIES on page 11 of
the Prospectus:
MORTGAGE PASS-THROUGH SECURITIES. The Balanced Fund may invest in mortgage
pass-through securities, which are securities representing interests in pools
of mortgages. Principal and interest payments made on the mortgages in the
pools are passed through to the holder of such securities. Payment of
principal and interest on some mortgage pass-through securities (but not the
market value of the securities themselves) may be guaranteed by the full
faith and credit of the U.S. Government (in the case of securities guaranteed
by the Government National Mortgage Association, or "GNMA"), or guaranteed by
agencies or instrumentalities of the U.S. Government (in the case of
securities guaranteed by the Federal National Mortgage Association ("FNMA")
or the Federal Home Loan Mortgage Corporation ("FHLMC") which are supported
- --------------------------------------------------------------------------------
Copyright 1995 The Equitable Life Assurance Society of the United States. All
Rights Reserved.
only by the discretionary authority of the U.S. Government to purchase the
agency's obligations). Mortgage pass-through securities created by
non-governmental issuers (such as commercial banks, savings and loan
institutions, private mortgage insurance companies, mortgage bankers, and
other secondary market issuers) may be supported by various forms of
insurance or guarantees, including individual loan, title, pool, and hazard
insurance, and letters of credit, which may be issued by governmental
entities, private insurers or the mortgage poolers.
COLLATERALIZED MORTGAGE OBLIGATIONS. The Balanced Fund may invest in
collateralized mortgage obligations (CMOs). CMOs are debt securities
collateralized by underlying mortgage loans or pools of mortgage pass-through
securities guaranteed by GNMA, FHLMC or FNMA and are generally issued by
limited purpose finance subsidiaries of U.S. Government instrumentalities.
CMOs are not, however, mortgage pass-through securities. Rather, they are
pay-through securities, i.e., securities backed by the cash flow from the
underlying mortgages. Investors in CMOs are not owners of the underlying
mortgages, which serve as collateral for such debt securities, but are simply
owners of a debt security backed by such pledged assets. CMOs are typically
structured into multiple classes, with each class bearing a different stated
maturity and having different payment streams. Monthly payments of principal,
including prepayments, are first returned to investors holding the shortest
maturity class; investors holding longer maturity classes receive principal
payments only after the shorter class or classes have been retired.
ASSET-BACKED SECURITIES. The Balanced Fund may purchase asset-backed
securities that represent either fractional interests or participation in
pools of leases, retail installment loans or revolving credit receivables
held by a trust or limited purpose finance subsidiary. Such asset-backed
securities may be secured by the underlying assets (such as Certificates for
Automobile Receivables) or may be unsecured (such as Credit Card Receivable
Securities). Depending on the structure of the asset-backed security, monthly
or quarterly payments of principal and interest or interest only are
passed-through like mortgage pass-through securities) or paid through (like
CMOs) to certificate holders. Asset-backed securities may be guaranteed up to
certain amounts by guarantees, insurance or letters of credit issued by a
financial institution affiliated or unaffiliated with the originator of the
pool.
ZERO-COUPON BONDS. The Balanced Fund may invest in zero-coupon bonds. Such
bonds may be issued directly by agencies and instrumentalities of the U.S.
Government or by private corporations. Zero-coupon bonds may originate as
such or may be created by stripping an outstanding bond. Zero-coupon bonds do
not make regular interest payments. Instead, they are sold at a deep discount
from their face value. Because a zero-coupon bond does not pay current
income, its price can be very volatile when interest rates change.
REPURCHASE AGREEMENTS. In repurchase agreements, the Balanced Fund buys
securities from a seller, usually a bank or brokerage firm, with the
understanding that the seller will repurchase the securities at a higher
price at a future date. During the term of the repurchase agreement the
Balanced Fund retains the securities subject to the repurchase agreement as
collateral securing the seller's repurchase obligation, continually monitors
on a daily basis the market value of the securities subject to the agreement
and requires the seller to deposit with the Fund collateral equal to any
amount by which the market value of the securities subject to the repurchase
agreement falls below the resale amount provided under the repurchase
agreement. We evaluate the creditworthiness of sellers with whom we enter
into repurchase agreements. Such transactions afford an opportunity for the
Fund to earn a fixed rate of return on available cash at minimal market risk,
although the Fund may be subject to various delays and risks or loss if the
seller is unable to meet its obligation to repurchase. The Funds currently
treat repurchase agreements maturing in more than seven days as illiquid
securities.
The following is added under PART III--INVESTMENT OPTIONS--RISKS AND
INVESTMENT TECHNIQUES on page 12 of the Prospectus:
FOREIGN CURRENCY FORWARD CONTRACTS--The Balanced Fund may enter into
contracts for the purchase or sale of a specific foreign currency at a future
date at a price set at the time of the contract. Generally, such forward
contracts will be for a period of less than three months. The Fund will enter
into such forward contracts for hedging purposes only. These transactions
will include forward purchases or sales of foreign currencies for the purpose
of protecting the dollar value of securities denominated in a foreign
currency or protecting the dollar equivalent of interest or dividends to be
2
paid on such securities. Forward contracts are traded in the inter-bank market,
and not on organized commodities or securities exchanges. Accordingly, the Fund
is dependent upon the good faith and creditworthiness of the other party to the
transaction, as evaluated by the Fund's manager. To the extent inconsistent with
any restrictions in the SAI concerning the Fund's trading in foreign exchange,
this paragraph will control.
Underlying automobile sales contracts and credit card receivables are, of
course, subject to prepayment (although to a lesser degree than mortgage
pass-through securities), which may shorten the securities' weighted average
life and reduce their overall return to certificate holders. Certificate
holders may also experience delays in payment if the full amounts due on
underlying loans, leases or receivables are not realized because of
unanticipated legal or administrative costs of enforcing the contracts or
because of depreciation or damage to the collateral (usually automobiles)
securing certain contracts, or other factors. The value of these securities
also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the pool, the originator of the
pool, or the financial institution providing credit support enhancement for
the pool. If consistent with its investment objective and policies, the
Balanced Fund may invest in other asset-backed securities that may be
developed in the future.
DEBT SECURITIES SUBJECT TO PREPAYMENT RISKS--Mortgage pass-through securities
and certain collateralized mortgage obligations, asset-backed securities and
other debt instruments in which the Balanced Fund may invest are subject to
prepayments prior to their stated maturity. It is usually not possible to
accurately predict the rate at which prepayments will be made, which rate may
be affected, among other things, by changes in generally-prevailing market
interest rates. If prepayments occur, the Fund suffers the risk that it will
not be able to reinvest the proceeds at as high a rate of interest as it had
previously been receiving. Also, the Fund will incur a loss to the extent
that prepayments are made for an amount that is less than the value at which
the security was then being carried by the Fund. Moreover, securities that
may be prepaid tend to increase in value less during times of declining
interest rates, and to decrease in value more during times of increasing
interest rates, than do securities that are not subject to prepayment.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Balanced Fund may
purchase and sell securities on a when-issued or delayed delivery basis. In
these transactions, securities are purchased or sold by a Fund with payment
and delivery taking place in the future in order to secure what is considered
to be an advantageous price or yield to the Fund at the time of entering into
the transaction. However, the market value of such securities at the time of
settlement may be more or less than the purchase price then payable. When a
Fund engages in when-issued or delayed delivery transactions, the Fund relies on
the other party to consummate the transaction. Failure to consummate the
transaction may result in the Fund missing the opportunity of obtaining a price
or yield considered to be advantageous. When-issued and delayed delivery
transactions are generally expected to settle within three months from the date
the transactions are entered into, although the Fund may close out its position
prior to the settlement date. A Fund will sell on a forward settlement basis
only securities it owns or has the right to acquire.
HEDGING TRANSACTIONS. The Balanced Fund may engage in hedging transactions
which are designed to protect against anticipated adverse price movements in
securities owned or intended to be purchased by the Fund. When interest rates
go up, the market value of outstanding debt securities declines and vice
versa. In recent years the volatility of the market for debt securities has
increased significantly, and market prices of longer-term obligations have
been subject to wide fluctuations, particularly as contrasted with those of
short-term instruments. The Fund will take certain risks into consideration
when determining which, if any, options or financial futures contracts it
will use. If the price movements of hedged portfolio securities are in fact
favorable to the Fund, the hedging transactions will tend to reduce and may
eliminate the economic benefit to the Fund which otherwise would result.
Also, the price movements of options and futures used for hedging purposes
may not correlate as anticipated with price movements of the securities being
hedged. This can make a hedge transaction less effective than anticipated and
could result in a loss. The options and futures markets can sometimes become
illiquid and the exchanges on which such instruments are traded may impose
trading halts or delays on the exercise of options and liquidation of futures
positions in certain circumstances. This could in some cases operate to the
Fund's detriment.
3
<PAGE>
- -----------------------------------------------------------------------------
PROSPECTUS
- -----------------------------------------------------------------------------
MAY 1, 1995
MEMBERS RETIREMENT PROGRAM
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Separate Account Units of interest under a group annuity contract with THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, 787 Seventh Avenue,
New York, New York 10019, which funds the Members Retirement Program.
- -----------------------------------------------------------------------------
The contract currently provides for nine Investment Options:
SEPARATE ACCOUNT FUNDS
o Growth Equity Fund
o Aggressive Equity Fund
o Balanced Fund
o Global Fund
o Conservative Investors Fund
o Growth Investors Fund
GUARANTEED OPTIONS
o 3 year Guaranteed
Rate Account
o 5 year Guaranteed
Rate Account
o Money Market
Guarantee Account
The Global Fund, Conservative Investors Fund, and the Growth Investors Fund
invest in shares of a corresponding portfolio (Portfolio) of The Hudson River
Trust, a mutual fund that invests the assets of separate accounts of
insurance companies. The prospectus for The Hudson River Trust, which is
attached to this prospectus, describes the investment objectives, policies
and risks of those Portfolios and should be read carefully and retained for
future reference. This prospectus is not valid unless it is attached to a
current prospectus for The Hudson River Trust.
- -----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- -----------------------------------------------------------------------------
THIS PROSPECTUS CONTAINS INFORMATION YOU SHOULD KNOW BEFORE INVESTING.
IT SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.
A Statement of Additional Information (the "SAI") dated May 1, 1995 has been
filed with the Securities and Exchange Commission. The SAI is available free
of charge and may be obtained by mailing the SAI request form located at the
back of this prospectus or by calling, for current participants,
1-800-526-2701; for all others, 1-800-523-1125. Parts of the SAI have been
incorporated by reference into this prospectus. A table of contents for the
SAI appears on page 32 of this prospectus. Additional copies of the
prospectus may be obtained by calling the above-listed number.
Copyright 1995 by The Equitable Life Assurance Society of the United States.
All rights reserved.
<PAGE>
INVESTMENT OPTION CHARACTERISTICS
<TABLE>
<CAPTION>
AGGRESSIVE EQUITY
GROWTH EQUITY FUND FUND BALANCED FUND GLOBAL FUND
<S> <C> <C> <C> <C>
Designed for Long term growth of Long term growth of Competitive return Long term growth of
(Objective) capital capital through a capital
combination of
growth of capital
and current income
Invests Primarily in Common stocks and Common stocks and Common stocks and Equity securities of
other equity-type other equity-type other equity-type non-United States as
securities securities issued by securities, well as United
generally issued by medium and smaller publicly traded States companies
large and sized companies with debt securities and
intermediate-sized strong growth money market
companies potential instruments--mix
determined by
portfolio manager
Risk to Principal Average for a Greatest risk of all Somewhat lower than Just below average
growth fund Investment Options Growth Equity Fund for a growth fund
Primary Growth Capital Capital appreciation Capital Capital appreciation
Potential Through appreciation and appreciation,
reinvested reinvested
dividends dividends and
interest
Income Guarantee No No No No
Volatility of Return Somewhat more Highly volatile Generally lower Somewhat more
volatile than the than pure equity volatile than the
S&P 500 funds, but degree S&P 500
may vary depending
on market
conditions
Transfers to Other Permitted daily Permitted daily Permitted daily Permitted daily
Options
Withdrawal No No No No
Penalties
</TABLE>
(RESTUBBED TABLE CONTINUED FROM PREVIOUS PAGE)
<TABLE>
<CAPTION>
CONSERVATIVE INVESTORS GROWTH INVESTORS GUARANTEED RATE MONEY MARKET
FUND FUND ACCOUNTS GUARANTEE ACCOUNT
<S> <C> <C> <C> <C>
Designed for High total return High total return Principal and Principal and
(Objective) without undue risk to consistent with interest guaranteed interest guaranteed
principal reasonable risk -- interest rates --short term rates
reflect maturities
Invests Primarily in Diversified mix of Diversified mix of Contributions Contributions
publicly-traded publicly-traded credited with fixed credited with
securities. Asset mix securities. Asset rate of interest guaranteed current
generally consists of mix generally until the maturity rate of interest
30% equity and 70% consists of 30% date
fixed income fixed income and
securities but will 70% equity
vary depending on securities but will
market conditions. vary depending on
market conditions.
Risk to Principal Lowest risk of all Below average for a Equitable Life Equitable Life
equity options growth fund guarantees guarantees
principal and principal and
interest interest
Primary Growth Capital appreciation, Capital Interest income Interest income
Potential Through reinvested dividends appreciation and
and interest reinvested
dividends and
interest
Income Guarantee No No Yes--subject to Yes
withdrawal
penalties
Volatility of Return Very low volatility Somewhat less Equitable Life Equitable Life
volatile than the guarantees interest guarantees monthly
S&P 500 rate until the interest rate
maturity date
Transfers to Other Permitted daily Permitted daily Permitted only at Permitted daily
Options maturity
Withdrawal No No Prior to maturity, No
Penalties withdrawals may not
be permitted or may
be subject to a
penalty
</TABLE>
The Funds each have different investment objectives and policies that can
affect the returns of each Fund and the market and financial risks to which
each is subject. While we do not intend to change the investment objectives
of the pooled funds, we nevertheless have the right to do so, subject to the
approval of the New York State Insurance Department. The Funds involve a
greater potential for growth but involve risks that are not present with the
Guaranteed Options. There is no assurance that any of the investment
objectives of the Funds will be achieved or that the risk to principal or
volatility of return will be as indicated.
<PAGE>
PART I: SUMMARY
The Members Retirement Program of The Equitable Life Assurance Society of the
United States ("Equitable Life") consists of retirement plans and trusts
through which members of certain groups and other eligible persons can
accumulate retirement savings for themselves and their employees. The Program
is sponsored by Equitable Life. The Trustee under the trusts is the United
States Trust Company of New York. At December 31, 1994, the combined value of
the assets in the Investment Options under the Program was $107 million, and
there were 6,958 participants. The Program is funded through a group annuity
contract issued by Equitable Life.
Equitable Life provides this prospectus which describes the Separate Accounts
and their Units of interest registered under the Securities Act of 1933 and
the General Account Options and other elements of the Program which are not
so registered. Whenever words like "we" and "our" are used in the prospectus,
they refer to Equitable Life. The terms "you" and "your" refer to the
participant or to the employer, as appropriate.
THE MEMBERS RETIREMENT PROGRAM
As an employer, you can use the Program to adopt the Members Retirement Plan,
or the Pooled Trust for individually designed plans or the Self-Directed
Prototype Plan.
o THE MEMBERS RETIREMENT PLAN--Under the Members Retirement Plan, a master
plan, you will automatically receive a full range of services from Equitable
Life, including a variety of Investment Options, plan-level and
participant-level recordkeeping, benefit payments and tax withholding and
reporting.
o The Members Retirement Plan is a defined contribution master plan
which can be adopted as a profit sharing plan (including an optional 401(k)
feature), a defined contribution pension plan or both. The Plan is designed
to comply with the requirements of Section 404(c) of the Employee
Retirement Income Security Act of 1974 ("ERISA").
o THE POOLED TRUST FOR MEMBERS RETIREMENT PLANS--a funding vehicle to be
used by those who have an individually designed qualified retirement plan.
The Pooled Trust is for investment only and can be used for both defined
benefit and defined contribution plans. We provide participant-level or
plan-level recordkeeping services for plan assets held in the Pooled Trust.
o THE SELF-DIRECTED PROTOTYPE PLAN--a defined contribution prototype plan
which can be used to combine the Program Investment Options with individual
investments such as stocks and bonds. Employers must also adopt the Pooled
Trust and maintain a minimum of $25,000 in the Trust at all times. We provide
recordkeeping services for plan assets held in the Pooled Trust.
2
<PAGE>
THE INVESTMENT OPTIONS
SEPARATE ACCOUNT FUNDS
o Aggressive Equity Fund
(Separate Account No. 3 (Pooled))
o Growth Equity Fund
(Separate Account No. 4 (Pooled))
o Balanced Fund (Separate Account No. 10 (Pooled))
o Global Fund (Separate Account No. 51 (Pooled))
o Conservative Investors Fund (an Asset Allocation Option)
(Separate Account No. 51 (Pooled))
o Growth Investors Fund (an Asset Allocation Option)
(Separate Account No. 51 (Pooled))
GUARANTEED OPTIONS
o 3-Year Guaranteed Rate Account
o 5-Year Guaranteed Rate Account
o Money Market Guarantee Account
CONTRIBUTIONS
o Contributions can be allocated to any one Option or divided among them
o Contributions may be made by check or money order payable to Equitable Life
o Contributions must be sent along with a Contribution Remittance Form to the
address shown in Corresponding With the Program
o Contributions are credited on the day of receipt if they are accompanied by
properly completed forms; otherwise delays may occur
TRANSFERS AMONG INVESTMENT OPTIONS
o Generally, amounts may be transferred among the Investment Options at any
time
o Transfers may be made by telephone (on our Account Investment Management
(AIM) System)
o There is no charge for transfers and no tax liability
o Transfers from the Guaranteed Rate Accounts may not be made prior to
maturity. See Transfers Among Investment Options in Part VI
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PLAN OR TRUST WHO SELECTS ARE LOANS AVAILABLE? WHEN ARE YOU ELIGIBLE
INVESTMENTS? FOR DISTRIBUTIONS?
- -------------------- ------------------- --------------------- ---------------------
Members Retirement Participant Yes, if permitted Upon retirement,
Plan under your Plan death, disability or
termination of
employment.
- -------------------- ------------------- --------------------- ---------------------
Pooled Trust for Participant or Yes, if permitted Benefits depend upon
Individually Trustee, as under your Plan the terms of your
Designed Plans specified under Plan.
your Plan.
- -------------------- ------------------- --------------------- ---------------------
Self-Directed Participant or Yes, if permitted Upon retirement,
Prototype Plan Trustee, as under your Plan death, disability or
specified under termination of
your Plan. employment.
- -------------------- ------------------- --------------------- ---------------------
</TABLE>
3
<PAGE>
CORRESPONDING WITH THE PROGRAM
EXISTING PARTICIPANTS
o For regular mail (except contributions):
The Members Retirement Program
Box 2468 G.P.O.
New York, New York 10116
o For registered, certified or overnight mail
(except contributions):
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, New Jersey 07094
o For contribution checks ONLY:
The Members Retirement Program
P.O. Box 1599
Newark, New Jersey 07101-9764
o To reach the AIM System (24 hours a day) or an
Equitable Life Account Executive
(9 a.m. to 5 p.m. Eastern Time, Monday through Friday):
1-800-526-2701
o To receive current Unit Values and Guaranteed Rates:
1-800-341-2227
FUTURE PARTICIPANTS
o To reach a Retirement Program Specialist
(9 a.m. to 5 p.m. Eastern Time, Monday through Friday):
1-800-523-1125, ext. 5009
(From Alaska, call 0-201-392-5331, collect)
o For regular Mail:
The Members Retirement Program
c/o Equitable Life
Box 2011
Secaucus, New Jersey 07094
o For registered, certified or overnight mail:
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, New Jersey 07094
SUMMARY OF ANNUAL FUND EXPENSES
The Program is subject to deductions and charges, including record
maintenance and report, enrollment, program expense, and investment
management and financial accounting fees. Certain expenses are also borne
directly by the Funds and by The Hudson River Trust, in which Separate
Account No. 51 (Pooled) invests. For more information, see Part VII:
Deductions and Charges and The Hudson River Trust prospectus which
accompanies this prospectus.
The purpose of the tables below is to assist employers and participants in
understanding the various costs and expenses they will bear directly or
indirectly. The expenses shown are based on the actual experience of the
Funds during the year ended December 31, 1994. Future expenses may be greater
or less than those shown below. Similarly, the annual rate of return assumed
in the example is not an estimate or guarantee of future performance. The
tables give effect to generally applicable charges. Other charges may also be
applicable, including enrollment, record maintenance and report fees. See
Part VII: Deductions and Charges.
4
<PAGE>
SUMMARY OF ANNUAL FUND EXPENSES
<TABLE>
<CAPTION>
CONSERVATIVE GROWTH
GROWTH EQUITY AGGRESSIVE INVESTORS INVESTORS
PARTICIPANT TRANSACTION EXPENSES FUND EQUITY FUND BALANCED FUND GLOBAL FUND FUND FUND
--------------- ------------- --------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sales Load ___________________________________________ None __________________________________________
Deferred Sales Load ___________________________________________ None __________________________________________
Surrender Fees ___________________________________________ None __________________________________________
Transfer (Exchange) Fee ___________________________________________ None __________________________________________
</TABLE>
SEPARATE ACCOUNT AND THE HUDSON RIVER
TRUST ANNUAL EXPENSES:
SEPARATE ACCOUNT ANNUAL EXPENSES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Management fees (including
financial accounting)(1) 0.50 0.65 0.50 0.20 0.20 0.20
Other Expenses
Program Expense Charge .. 1.00 1.00 1.00 1.00 1.00 1.00
Other(2) ................. 0.22 0.21 0.22 0.62 0.63 0.57
Total Separate
Account Annual Expenses . 1.72 1.86 1.72 1.82 1.83 1.77
HUDSON RIVER TRUST ANNUAL EXPENSES
Investment Advisory Fee ........................... 0.54 0.55 0.54
Other Expenses .................................... 0.15 0.04 0.05
TOTAL ANNUAL EXPENSES FOR THE HUDSON RIVER TRUST . 0.69 0.59 0.59
Total Separate Account and Trust Expenses ........ 2.51 2.42 2.36
</TABLE>
EXAMPLE
A $1,000 investment in each Fund listed below would be subject to the
expenses indicated, assuming a 5% annual return. Applicable expenses are the
same whether or not you withdraw all or part of your Account Balance at the
end of each time period shown(3).
<TABLE>
<CAPTION>
AGGREGATE EXPENSES
------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Growth Equity Fund .......... $18.45 $57.09 $ 98.17 $212.58
Aggressive Equity Fund ..... 19.84 61.31 105.28 227.13
Balanced Fund ............... 18.45 57.09 98.17 212.58
Global Fund ................. 26.78 82.17 140.08 296.70
Conservative Investors Fund 25.58 78.57 134.12 284.97
Growth Investors Fund ....... 24.85 76.41 130.52 277.86
</TABLE>
No annuity could be purchased under the assumptions in the example since the
minimum amount that can be used to purchase any type of annuity under the
Members Plans is $3,500. We normally charge a fee of $350 upon annuitization.
If you annuitize, premium taxes may also apply. See Part VII: Deductions and
Charges.
(1) The Global, Conservative Investors and Growth Investors Funds invest
through Equitable's Separate Account No. 51 in corresponding Portfolios
of The Hudson River Trust. This charge represents only financial
accounting expenses for Separate Account No. 51.
(2) Reflects the amount deducted for the daily accrual of direct expenses.
See How We Determine the Unit Value in Part IV.
(3) These calculations include all asset based charges plus a component
for record maintenance and report fees and enrollment fees. The
component is computed by aggregating such fees and dividing by the
average assets for the same period. See Members Retirement Plan
(Pension and Profit Sharing), Prototype Self-Directed Plan and
Investment Only Fees in Part VII of this prospectus.
5
<PAGE>
PART II: CONDENSED FUND FINANCIAL INFORMATION
Your interest in the Funds under the Program is represented by Units. See How
We Determine the Unit Value in Part IV. The following tables give information
about income, expenses and capital changes in the Growth Equity Fund
(Separate Account No. 4 (Pooled)), the Aggressive Equity Fund (Separate
Account No. 3 (Pooled)), and the Balanced Fund (Separate Account No. 10
(Pooled)) attributable to a Unit outstanding under the Program for the
periods indicated, along with other supplementary data. For 1994 and 1993 the
tables have been audited by Price Waterhouse LLP, independent accountants, as
stated in their reports under Financial Statements in the SAI. For years
prior to 1993, such condensed financial information was audited by other
independent accountants. These tables should be read in conjunction with the
full Financial Statements. Information about the Aggressive Equity and
Balanced Funds is provided for the period during which each has been
available under the Program. CONDENSED FINANCIAL INFORMATION FOR THE GLOBAL,
CONSERVATIVE INVESTORS, AND GROWTH INVESTORS PORTFOLIOS IS CONTAINED IN THE
HUDSON RIVER TRUST PROSPECTUS ACCOMPANYING THIS PROSPECTUS. ADDITIONAL COPIES
OF THE HUDSON RIVER TRUST PROSPECTUS AND ITS STATEMENT OF ADDITIONAL
INFORMATION (SAI) MAY BE OBTAINED BY CALLING AN ACCOUNT EXECUTIVE. THOSE
FINANCIAL STATEMENTS, HOWEVER, DO NOT REFLECT THE PROGRAM EXPENSE CHARGE AND
THE DAILY ACCRUAL OF DIRECT EXPENSES DEDUCTED FROM AMOUNTS HELD IN SEPARATE
ACCOUNT NO. 51 (POOLED). UNIT VALUES FOR THE GLOBAL, CONSERVATIVE INVESTORS,
AND GROWTH INVESTORS FUNDS OF SEPARATE ACCOUNT 51 (POOLED) ARE SHOWN BELOW
AND DO REFLECT THE PROGRAM EXPENSE CHARGE AND DAILY ACCRUAL OF DIRECT
EXPENSES SO DEDUCTED.
FULL FINANCIAL STATEMENTS. The Financial Statements of the Growth Equity,
Aggressive Equity and the Balanced Funds and the Consolidated Financial
Statements of Equitable Life are contained in the SAI. The Financial
Statements of the Global, Conservative Investors and Growth Investors
Portfolios are contained in the SAI for The Hudson River Trust.
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED) of The Equitable Life Assurance Society of
the United States
GROWTH EQUITY FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT OUTSTANDING
THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------- -------------------------------
1994 1993* 1992
- -------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Income ................................ $ 1.79 $ 1.75 $ 1.51
Expenses (Note A) ..................... (2.76) (2.54) (2.22)
- -------------------------------------- --------- --------- ---------
Net income (loss) ..................... (.97) (.79) (.71)
Net realized and unrealized gain
(loss) on investments (Note B) ...... (3.76) 26.16 .77
- -------------------------------------- --------- --------- ---------
Net increase (decrease) in Growth
Equity Fund Unit Value ............... (4.73) 25.37 .06
Growth Equity Fund Unit Value
(Note C):
Beginning of year .................... 165.88 140.51 140.45
- -------------------------------------- --------- --------- ---------
End of year ......................... $161.15 $165.88 $140.51
====================================== ========= ========= =========
Ratio of expenses to average net
assets attributable to the Program .. 1.72% 1.69% 1.65%
Ratio of net income (loss) to average
net assets attributable to the
Program .............................. (0.60)% (0.52)% (0.53)%
Number of Growth Equity Fund Units
outstanding at end of year (000's) .. 219 208 212
Portfolio turnover rate (Note E) ..... 91% 82% 68%
====================================== ========= ========= =========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM PREVIOUS PAGE)
<TABLE>
<CAPTION>
- --------------------------------------
1991 1990 1989 1988 1987 1986 1985
- -------------------------------------- --------- --------- --------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income ................................ $ 1.37 $ 1.92 $ 1.70 $ 1.29 $ 1.25 $ 1.37 $ 1.28
Expenses (Note A) ..................... (2.00) (1.56) (1.59) (1.21) (1.54) (1.27) (.75)
- -------------------------------------- --------- --------- --------- -------- --------- -------- --------
Net income (loss) ..................... (.63) .36 .11 .08 (.29) .10 .53
Net realized and unrealized gain
(loss) on investments (Note B) ...... 47.67 (13.52) 31.92 9.94 2.77 6.60 12.48
- -------------------------------------- --------- --------- --------- -------- --------- -------- --------
Net increase (decrease) in Growth
Equity Fund Unit Value ............... 47.04 (13.16) 32.03 10.02 2.48 6.70 13.01
Growth Equity Fund Unit Value
(Note C):
Beginning of year .................... 93.41 106.57 74.54 64.52 62.04 55.34 42.33
- -------------------------------------- --------- --------- --------- -------- --------- -------- --------
End of year ......................... $140.45 $ 93.41 $106.57 $74.54 $64.52 $62.04 $55.34
====================================== ========= ========= ========= ======== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------
1991 1990 1989 1988 1987 1986 1985
- -------------------------------------- --------- --------- --------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of expenses to average net
assets attributable to the Program .. 1.68% 1.64% 1.74% 1.73% 2.08% 2.02% 1.56%
Ratio of net income (loss) to average
net assets attributable to the
Program .............................. (0.54)% 0.38% 0.11% 0.12% (0.40)% 0.16% 1.10%
Number of Growth Equity Fund Units
outstanding at end of year (000's) .. 189 47 48 63 69 78 83
Portfolio turnover rate (Note E) ..... 66% 93% 113% 101% 121% 102% 92%
====================================== ========= ========= ========= ======== ========= ======== ========
</TABLE>
See notes following these tables.
6
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
of The Equitable Life Assurance Society of the United States
AGGRESSIVE EQUITY FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT
OUTSTANDING THROUGHOUT THE YEARS INDICATED AND THE PERIOD FROM MAY 1, 1985 TO
DECEMBER 31, 1985, AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPARATE ACCOUNT NO. 3
-------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1993* 1992
- ---------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Income .................................. $ .18 $ .26 $ .31
Expenses (Note A) ....................... (.60) (.57) (.50)
- ---------------------------------------- --------- --------- ---------
Net investment income (loss) ............ (.42) (.31) (.19)
Net realized and unrealized gain (loss)
on investments (Note B) ................ (1.32) 4.25 (1.13)
- ---------------------------------------- --------- --------- ---------
Net increase (decrease) in Aggressive
Equity Fund Unit Value ................ (1.74) 3.94 (1.32)
Aggressive Equity Fund Unit Value (Note
C):
Beginning of period ................... 33.95 30.01 31.33
- ---------------------------------------- --------- --------- ---------
End of period ......................... $ 32.21 $ 33.95 $ 30.01
======================================== ========= ========= =========
Ratio of expenses to average net assets
attributable to the Program ........... 1.86% 1.84% 1.74%
Ratio of net investment income (loss) to
average net assets attributable to
the Program ........................... (1.31)% (1.02)% (0.66)%
Number of Aggressive Equity Fund Units
outstanding at end of period (000's) . 283 249 229
Portfolio turnover rate (Note E) ....... 94% 83% 71%
======================================== ========= ========= =========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
----------------------------------------------------------- MAY 1, 1985-
1991 1990 1989 1988 1987 1986 DEC. 31, 1985
- ---------------------------------------- --------- -------- -------- -------- -------- -------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income .................................. $ .29 $ .28 $ .29 $.17 $.17 $.15 $ .19
Expenses (Note A) ....................... (.41) (.27) (.24) (.20) (.28) (.24) (.11)
- ---------------------------------------- --------- -------- -------- -------- -------- -------- -------- ----------
Net investment income (loss) ............ (.12) .01 .05 (.03) (.11) (.09) .08
Net realized and unrealized gain (loss)
on investments (Note B) ................ 14.52 1.17 4.85 .11 (.34) .13 1.10
- ---------------------------------------- --------- -------- -------- -------- -------- -------- -------- ----------
Net increase (decrease) in Aggressive
Equity Fund Unit Value ................ 14.40 1.18 4.90 .08 (.45) .04 1.18
Aggressive Equity Fund Unit Value (Note
C):
Beginning of period ................... 16.93 15.75 10.85 10.77 11.22 11.18 10.00
- ---------------------------------------- --------- -------- -------- -------- -------- -------- -------- ----------
End of period ......................... $ 31.33 $16.93 $15.75 $10.85 $10.77 $11.22 $11.18
======================================== ========= ======== ======== ======== ======== ======== ======== ==========
Ratio of expenses to average net assets
attributable to the Program ........... 1.59% 1.65% 1.74% 1.71% 2.19% 2.07% 1.49% (Note D)
Ratio of net investment income (loss) to
average net assets attributable to
the Program ........................... (0.48)% .07% .35% (.23)% (.84)% (.78)% 1.23% (Note D)
Number of Aggressive Equity Fund Units
outstanding at end of period (000's) . 150 13 5 3 2 7 2
Portfolio turnover rate (Note E) ....... 63% 48% 92% 103% 227% 162% 76%
======================================== ========= ======== ======== ======== ======== ======== ======== ==========
</TABLE>
See notes following these tables.
7
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
of The Equitable Life Assurance Society of the United States
BALANCED FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT OUTSTANDING
THROUGHOUT THE YEARS INDICATED AND THE PERIOD FROM MAY 1, 1985 TO DECEMBER
31, 1985, AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPARATE ACCOUNT NO. 10
----------------------------
YEAR ENDED DECEMBER 31,
----------------------------
1994 1993* 1992
- --------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Income ................................. $ .74 $ .77 $ .79
Expenses (Note A) ...................... (.40) (.39) (.35)
- --------------------------------------- -------- -------- --------
Net investment income (loss) ........... .34 .38 .44
Net realized and unrealized gain
(loss) on investments (Note B) ...... (2.60) 2.00 (1.34)
- --------------------------------------- -------- -------- --------
Net increase (decrease) in Balanced
Fund Unit Value ....................... (2.26) 2.38 (.90)
Balanced Fund Unit Value (Note C):
Beginning of period .................. 24.45 22.07 22.97
- --------------------------------------- -------- -------- --------
End of period ........................ $ 22.19 $ 24.45 $ 22.07
======================================= ======== ======== ========
Ratio of expenses to average net assets
attributable to the Program .......... 1.72% 1.70% 1.65%
Ratio of net investment income to
average net assets attributable to
the Program .......................... 1.51% 1.61% 2.03%
Number of Balanced Fund Units
outstanding at end of period (000's) . 446 419 364
Portfolio turnover rate (Note E) ...... 107% 102% 90%
======================================= ======== ======== ========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
----------------------------------------------------------- MAY 1, 1985-
1991 1990 1989 1988 1987 1986 DEC. 31, 1985
- ---------------------------------------- --------- -------- -------- -------- -------- -------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income ................................. $ .80 $ .94 $ .93 $ .72 $ .53 $ .51 $ .38
Expenses (Note A) ...................... (.32) (.27) (.25) (.21) (.30) (.26) (.11)
- --------------------------------------- -------- -------- -------- -------- -------- -------- -------- -----------
Net investment income (loss) ........... .48 .67 .68 .51 .23 .25 .27
Net realized and unrealized gain
(loss) on investments (Note B) ...... 6.04 (.98) 2.66 1.07 (1.10) .89 1.30
- --------------------------------------- -------- -------- -------- -------- -------- -------- -------- -----------
Net increase (decrease) in Balanced
Fund Unit Value ....................... 6.52 (.31) 3.34 1.58 (.87) 1.14 1.57
Balanced Fund Unit Value (Note C):
Beginning of period .................. 16.45 16.76 13.42 11.84 12.71 11.57 10.00
- --------------------------------------- -------- -------- -------- -------- -------- -------- -------- -----------
End of period ........................ $ 22.97 $ 16.45 $ 16.76 $ 13.42 $ 11.84 $ 12.71 $ 11.57
======================================= ======== ======== ======== ======== ======== ======== ======== ===========
Ratio of expenses to average net assets
attributable to the Program .......... 1.67% 1.66% 1.73% 1.70% 2.12% 2.02% 1.49% (Note D)
Ratio of net investment income to
average net assets attributable to
the Program .......................... 2.47% 4.12% 4.38% 4.00% 1.66% 1.95% 3.78% (Note D)
Number of Balanced Fund Units
outstanding at end of period (000's) . 284 27 16 12 10 8 3
Portfolio turnover rate (Note E) ...... 114% 199% 175% 172% 238% 230% 161%
======================================= ======== ======== ======== ======== ======== ======== ======== ===========
</TABLE>
See notes below.
<PAGE>
NOTES:
* Prior to July 22, 1993, Equitable Capital Management Corporation (Equitable
Capital) served as the investment adviser to the Trust. On July 22, 1993,
Alliance Capital Management L.P. acquired the business and substantially all
of the assets of Equitable Capital and became the investment adviser to the
Trust.
A. Enrollment fees are not included above and did not affect Growth Equity,
Aggressive Equity or Balanced Fund Unit Values. Enrollment fees were
generally deducted from contributions to the Program.
B. See Note 2 to Financial Statements of Separate Account Nos. 3 (Pooled),
4 (Pooled) and 10 (Pooled), which may be found in the SAI.
C. The value for a Growth Equity Fund Unit was established at $10.00 on
January 1, 1968 under the National Association of Realtors Members
Retirement Program (NAR Program). The NAR Program was merged into the
Members Retirement Program on December 27, 1984. The values for an
Aggressive Equity and a Balanced Fund Unit were established at $10.00
on May 1, 1985, the date on which the Funds were first made available
under the Program.
D. Annualized basis.
E. The portfolio turnover rate includes all long-term U.S.
Government securities, but excludes all short-term U.S. Government
securities and all other securities whose maturities at the time
of acquisition were one year or less. Represents the annual
portfolio turnover rate for the entire Separate Account.
Income, expenses, gains and losses shown above pertain only to
participants' accumulations attributable to the Program. Other
plans also participate in the Growth Equity, Aggressive Equity and
Balanced Funds and may have operating results and other
supplementary data different from those shown above.
8
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED) UNIT VALUES
<TABLE>
<CAPTION>
GROWTH
GLOBAL CONSERVATIVE INVESTORS
FUND INVESTORS FUND FUND
-------- -------------- -----------
<S> <C> <C> <C>
Unit Value as of:
December 31, 1993 ........... $ 11.05 $ 10.22 $ 10.49
December 31, 1994 ........... $ 11.45 $ 9.62 $ 9.98
Number of Units Outstanding
at December 31, 1994 (000's) 314 185 208
</TABLE>
PART III: INVESTMENT OPTIONS
Nine INVESTMENT OPTIONS are available under the Program. Six Options are
Funds--the Growth Equity Fund, the Aggressive Equity Fund, the Balanced Fund,
the Global Fund and two Asset Allocation Options--the Conservative Investors
Fund and the Growth Investors Fund. Three Options are General Account
Options--two Guaranteed Rate Accounts and the Money Market Guarantee Account.
THE FUNDS
Each of the Funds has a different investment objective that it seeks to
achieve by following specific investment policies. We do not anticipate that
the investment objective of any of the Funds will change. We do, however,
have the right to change the investment objectives of the Growth Equity,
Aggressive Equity and Balanced Funds, subject to the approval of the New York
State Insurance Department. The investment objectives of the Global,
Conservative Investors and Growth Investors Funds can only be changed by a
majority vote of the shareholders of the corresponding Portfolios of The
Hudson River Trust. See Voting Rights under Part V: Equitable Life and the
Investment Managers below. THERE IS NO ASSURANCE THAT THE INVESTMENT
OBJECTIVES OF ANY OF THE FUNDS WILL BE MET OR THAT THE RISK TO PRINCIPAL OR
VOLATILITY OF RETURN WILL BE AS INDICATED. See Risks and Investment
Techniques below.
THE GROWTH EQUITY FUND
OBJECTIVE. The Growth Equity Fund seeks to achieve long-term growth of
capital by investing in the securities of carefully selected companies we
believe will share in the growth of our nation's economy--and those of other
leading industrialized countries--over a long period. The Growth Equity Fund
invests in securities of companies of any capitalization but is generally
invested primarily in securities of intermediate to large sized companies.
9
<PAGE>
INVESTMENT POLICIES. The Growth Equity Fund invests primarily in common
stocks. Smaller amounts may be invested in other equity-type securities, such
as convertible preferred stocks or convertible debt instruments. The Growth
Equity Fund may use its assets to make non-equity investments. These could
include non-participating and non-convertible preferred stocks, bonds and
debentures. Some non-equity investments may carry certain equity features
such as conversion or exchange rights or warrants for the acquisition of
stocks of the same or different issuers or participation based on revenues,
sales or profits. If, in light of economic conditions and the general level
of stock prices, it appears that the Fund's investment objective will not be
met by buying equities and equity type securities, non-equity investment may
be substantial. The Fund may invest up to 10% of its total assets in
restricted securities.
The Growth Equity Fund may make temporary investments in government
obligations, short-term commercial paper and other money market instruments,
either directly or through our Separate Account No. 2A. While equity
investments will be made primarily in securities of United States companies
or foreign companies doing substantial business in the United States, up to
15% of the value of the Fund's assets may be invested in the securities of
established foreign companies without substantial business in the United
States. See Risks and Investment Techniques below for more information on
restricted securities, Separate Account No. 2A, securities of medium and
smaller sized companies, foreign securities, investment concentration, money
market investments and convertible securities.
THE AGGRESSIVE EQUITY FUND
OBJECTIVE. The Aggressive Equity Fund seeks to achieve long-term capital
growth, consistent with investment quality. The Fund will attempt to achieve
this objective by investing primarily in securities of medium and smaller
sized companies (with capitalization generally between $50 million and $1.5
billion) which we believe have greater growth potential than larger
companies.
INVESTMENT POLICIES. Most of the time, the Aggressive Equity Fund will invest
primarily in common stocks of medium and smaller sized companies. The Fund
may also invest in securities not generally defined as growth stocks, but
with unusual value or earnings potential. For example, opportunities for
capital growth exist from time to time in what are believed to be cyclical
industries, companies whose securities are temporarily undervalued, special
situations, younger but not widely known companies and companies doing
business in countries whose economies are expanding. The Aggressive Equity
Fund may invest in foreign companies without substantial business in the
United States. Industry diversification is not an objective of the Aggressive
Equity Fund and it may at times be less diversified than a traditional equity
portfolio. Some other equity-type investments may also be made. The Fund may
also invest in short-term debt securities such as corporate notes, and
temporary money market investments, including our Separate Account No. 2A.
Additionally, the Fund may invest up to 10% of its total assets in restricted
securities.
See Risks and Investment Techniques below for more information on foreign
securities, restricted securities, securities of medium and smaller sized
companies and money market investments. This Fund may hold investments with
greater growth potential and greater risks than those investments held by the
Growth Equity and Balanced Funds. Due to this Fund's aggressive investment
policies and less diversified investments, you should consider limiting the
amount allocated to this Fund, particularly as you near retirement.
THE BALANCED FUND
OBJECTIVE. The Balanced Fund's investment objective is to achieve both
appreciation of capital and current income by investments in a diversified
portfolio of common stocks, other equity-type securities and longer-term
fixed
10
<PAGE>
income securities and current income by investments in publicly traded debt
securities and short-term money market instruments. The investment mix is
determined by the portfolio manager.
INVESTMENT POLICIES. It is anticipated that we will vary the portion of the
Balanced Fund's assets invested in each type of security in accordance with
our evaluation of economic conditions, the general level of common stock
prices, anticipated interest rates and other relevant considerations,
including our assessment of the risks associated with each investment medium.
The Fund is subject to the risk that we may incorrectly predict changes in
the relative values of the stock and bond markets. In general, equity
securities will comprise the greatest portion of the Balanced Fund's assets.
From its inception through December 31, 1994, the percentage of the Balanced
Fund's assets invested in equity securities (including equity-type securities
such as convertible preferred stocks or convertible debt instruments) has
ranged from 42% to 88%. The publicly traded debt securities investments will
consist primarily of bonds, notes, debentures and equipment trust
certificates, and also may include equity features such as those described
for the Growth Equity Fund. The average maturity of the debt securities held
by the Balanced Fund will vary according to market conditions and the stage
of interest rate cycles. The Balanced Fund may also realize gains on debt
securities when such actions are considered advantageous in light of existing
market conditions. The Fund may invest up to 10% of its total assets in
restricted securities and may invest in foreign companies without substantial
business in the United States. The Balanced Fund may invest in money market
securities through our Separate Account No. 2A or directly. The Balanced Fund
may invest in put and call options and trade in stock index or interest rate
futures for hedging purposes only. In option transactions, the economic
benefit will be offset by the cost of the option, while any loss would be
limited to such cost. The Fund also enters into hedging transactions. These
transactions are undertaken only when any required regulatory procedures have
been completed and when economic and market conditions indicate that such
transactions would serve the best interests of the Fund.
See Risks and Investment Techniques below for more information on foreign
securities, restricted securities, securities of medium and smaller sized
companies, debt instruments issued by Schedule B Banks, hedging transactions,
money market investments and convertible securities.
THE GLOBAL, CONSERVATIVE INVESTORS AND GROWTH INVESTORS FUNDS
The Global, Conservative Investors and Growth Investors Funds invest in
corresponding Portfolios of The Hudson River Trust. The Hudson River Trust is
an open-end, diversified management investment company, more commonly called
a mutual fund. As a "series" type of mutual fund, it includes various
Portfolios, three of which are offered through this Program. The Hudson River
Trust commenced operations in January 1987. The Hudson River Trust does not
impose a sales charge or "load" for buying and selling its shares. All
dividend distributions from The Hudson River Trust are reinvested in the
Portfolio to which they relate.
The Hudson River Trust prospectus accompanying this prospectus contains
information about the objectives, investment policies and special risks of
the Global, Conservative Investors and Growth Investors Portfolios. You
should carefully read The Hudson River Trust Prospectus before you allocate
contributions or transfer amounts to the Global, Conservative Investors or
Growth Investors Funds.
GLOBAL FUND OBJECTIVE. The Global Fund seeks to achieve long-term growth of
capital by investing primarily in equity securities of non-United States as
well as United States companies.
CONSERVATIVE INVESTORS FUND OBJECTIVE. The Conservative Investors Fund seeks
to achieve high total return without, in the Fund adviser's opinion, undue
risk to principal. The Fund invests in a diversified mix of publicly-traded,
fixed income and equity securities. Asset mix and security selection are
primarily based upon factors expected to reduce risk.
11
<PAGE>
GROWTH INVESTORS FUND OBJECTIVE. The objective of the Growth Investors Fund
is high total return consistent with the Fund adviser's determination of
reasonable risk. The Fund invests in a diversified mix of publicly-traded,
fixed income and equity securities. Asset mix and security selection are
based upon factors expected to increase the possibility of high long-term
return.
RISKS AND INVESTMENT TECHNIQUES
You should be aware that any investment in securities carries with it a risk
of loss. The different investment objectives and policies of each Fund may
affect the return of each Fund. Additionally, there are market and financial
risks inherent in any securities investment. By market risks, we mean factors
which do not necessarily relate to a particular issuer but which affect the
way markets, and securities within those markets, perform. We sometimes
describe market risk in terms of volatility, that is, the range and frequency
of market value changes. Market risks include such things as changes in
interest rates, general economic conditions and investor perceptions
regarding the value of debt and equity securities. By financial risks we mean
factors associated with a particular issuer which may affect the price of its
securities, such as its competitive posture, its earnings and its ability to
meet its debt obligations. The risk factors and investment techniques
associated with the Growth Equity, the Aggressive Equity and the Balanced
Funds are stated below. See The Hudson River Trust prospectus for risk
factors and investment techniques associated with an investment in the
Global, Conservative Investors and Growth Investors Funds.
Foreign Securities--The Growth Equity, Aggressive Equity and Balanced Funds
may make a limited portion of their investments in the securities of
established foreign companies which do not do substantial business in the
United States. For many foreign securities, there are dollar-denominated
American Depository Receipts (ADRs), which are traded in the United States on
exchanges or over-the-counter, and are issued by domestic banks. The Funds
may invest in foreign securities directly and through ADRs and may hold some
foreign securities outside of the U.S. ADRs do not lessen the foreign
exchange risk inherent in investing in the securities of foreign issuers.
However, by investing in ADRs rather than directly in foreign issuers' stock,
the Funds will avoid currency risks during the settlement period for either
purchases or sales. Foreign investments may involve risks not present in
domestic investments, such as changes in the political or economic climate of
countries in which companies do business. Foreign securities may be less
liquid or subject to greater price volatility than securities of domestic
issuers, and foreign accounting, auditing and disclosure standards may differ
from domestic standards. There may be less regulation in foreign countries of
stock exchanges, brokers, banks, and listed companies than in the United
States. The value of foreign investments may rise or fall because of changes
in currency exchange rates or exchange controls.
Restricted Securities--The Growth Equity, Aggressive Equity and Balanced
Funds may make investments in restricted securities. Restricted securities
are generally less liquid than registered securities and market quotations
for such securities may not be readily available. The Funds may not be able
to sell restricted securities except pursuant to registration under
applicable Federal and State securities laws or pursuant to Securities and
Exchange Commission rules which limit their sale to certain purchasers and
may require that they be held by the Funds for a specified period of time
prior to resale. Because of these restrictions, at times the Funds may not be
readily able to sell them at fair market value.
Securities of Medium and Smaller Sized Companies--The Aggressive Equity Fund
invests primarily in the securities of medium and smaller sized companies,
although the Growth Equity and Balanced Fund may also make these investments.
For this purpose the term medium and smaller sized companies means companies
with $500 million
12
<PAGE>
to $1.5 billion in capitalization. Medium and smaller sized companies may be
dependent on the performance of only one or two products. Such companies may
be vulnerable to competition from larger companies with greater resources and
to economic conditions affecting their market sector. Therefore, consistent
earnings may not be as likely in small companies as in large companies. Such
companies may also be more dependent on access to equity markets to raise
capital than larger companies with greater ability to support debt. Small and
intermediate sized companies may be new, without long business or management
histories, and perceived by the market as unproven. Their securities may be
held primarily by insiders or institutional investors, which may have an
impact on marketability. The price of these stocks may rise and fall more
frequently and to a greater extent than the overall market.
Investment Concentration--From time to time, the equity holdings in the
Growth Equity Fund may be concentrated in the securities of a relatively
small number of issuers. In no event will an investment be made for the Fund
in the securities of one issuer if such investment would cause more than 10%
of the book value of the Growth Equity Fund to be invested in the securities
of such issuer, and no investment will be made for the Fund if such
investment would cause more than 40% of the book value of the Fund to be
invested in the securities of four or fewer issuers. This strategy of
investment concentration may increase an investor's risk of loss in the event
of a decline in the value of one of these securities. As of December 31,
1994, 29.8% (of market value) of the Growth Equity Fund was held in the
stocks of four issuers. See Separate Account No. 4 (Pooled) Statement of
Investments and Net Assets in the SAI.
Debt Instruments Issued by Schedule B Banks--The Balanced Fund may invest in
debt instruments issued by Schedule B Banks, which are foreign branches of
United States banks. Schedule B Banks are not required to maintain the same
financial reserves which are required of United States banks, but Schedule B
Bank certificates of deposit are fully guaranteed by the U.S. parent of the
issuing bank. Debt instruments issued by Schedule B Banks may include
certificates of deposit and time deposits of London branches of United States
banks ("Eurodollars"). Eurodollar investments are subject to the types of
risks associated with foreign securities. London branches of the United
States banks have extensive government regulation which may limit both the
amount and the type of loans and interest rates. In addition, the banking
industry's profitability is closely linked to prevailing money market
conditions for financing lending operations. Both general economic conditions
and credit risks play an important part in the operations of the banking
industry. United States banks are required to maintain reserves, are limited
in how much they can loan to a single borrower and are subject to other
regulations to promote financial soundness. Not all of these laws and
regulations apply to foreign branches of United States banks.
Hedging Transactions--The Balanced Fund may engage in hedging transactions
which are designed to protect against anticipated adverse price movements in
securities owned or intended to be purchased by the Fund. When interest rates
go up, the market value of outstanding debt securities declines and vice
versa. In recent years the volatility of the market for debt securities has
increased significantly, and market prices of longer-term obligations have
been subject to wide fluctuations, particularly as contrasted with those of
short-term instruments. The Fund will take certain risks into consideration
when determining which, if any, options or financial futures contracts it
will use. If the price movements of hedged portfolio securities are in fact
favorable to the Fund, the hedging transactions will tend to reduce and may
eliminate the economic benefit to the Fund which otherwise would result.
Also, the price movements of options and futures used for hedging purposes
may not correlate as anticipated with price movements of the securities being
hedged. This can make a hedge transaction less effective than anticipated and
could result in a loss. The options and futures markets can sometimes become
illiquid and the exchanges on which such instruments are traded may impose
trading halts or delays on the exercise of options and liquidation of futures
positions in certain circumstances. This could in some cases operate to the
Fund's detriment.
13
<PAGE>
Money Market Investments--The Growth Equity, the Aggressive Equity and the
Balanced Funds may make temporary investments in government obligations,
short-term commercial paper and other money market instruments. They may buy
these directly or acquire units in our Separate Account No. 2A. Separate
Account No. 2A provides an efficient means for certain of our other separate
accounts to invest cash positions on a pooled basis at no additional costs.
Separate Account No. 2A seeks to obtain a high level of current income,
preserve its assets and maintain liquidity. It invests only in short-term
securities which mature in 60 days or less from the date of purchase or which
are subject to repurchase agreements requiring repurchases in 60 days or
less. In repurchase agreements, Separate Account No. 2A buys securities from
a seller, usually a bank or brokerage firm, with the understanding that the
seller will repurchase the securities at a higher price at a future date.
Such transactions afford an opportunity for Separate Account No. 2A to earn a
fixed rate of return on available cash at minimal market risk, although the
account may be subject to various delays and risks of loss if the seller is
unable to meet its obligation to repurchase. Units in Separate Account No. 2A
are not registered under the Securities Act of 1933.
The kinds of direct investments the Funds make in money market instruments
will be payable only in United States dollars and will consist principally of
securities issued or guaranteed by the United States Government or one of its
agencies or instrumentalities, negotiable certificates of deposit, bankers'
acceptances or bank time deposits, repurchase agreements (covering securities
issued or guaranteed by the United States Government or one of its agencies
or instrumentalities, certificates of deposit or bankers' acceptances),
commercial paper that is rated Prime-1 by Moody's Investors Service
("Moody's") or A-1 or A-1 Plus by Standard & Poor's Corporation ("S&P"),
unrated commercial paper, master demand notes or variable amount floating
rate notes of any issuer that has an outstanding issue of unsecured debt that
is currently rated Aa or better by Moody's or AA or better by S&P, and any
debt securities issued or guaranteed by an issuer, which is currently rated
Aa or better by Moody's or AA or better by S&P, with less than one year to
maturity. Such investments may include Eurodollars, certificates of deposit
and commercial paper issued by Schedule B Banks.
Convertible Securities--The Growth Equity, the Aggressive Equity and the
Balanced Funds may invest in convertible preferred stocks or convertible debt
instruments. Convertible securities contain both debt and equity features.
Because of their debt element, they may provide some protection when stock
prices decline. Nevertheless, convertible securities may lose significant
value in periods of extreme market volatility.
THE GENERAL ACCOUNT OPTIONS
Contributions to the General Account Options become part of our general
account, which supports all of our insurance and annuity guarantees as well
as our general obligations. The general account, as part of our insurance and
annuity operations, is subject to regulation and supervision by the Insurance
Department of the State of New York and to insurance laws and regulations of
all jurisdictions in which we are authorized to do business. Because of
applicable exemptive and exclusionary provisions, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of
1940. Accordingly, neither the general account nor any interests therein are
subject to regulation under the 1933 Act or the 1940 Act, and we have been
advised that the staff of the Securities and Exchange Commission has not made
a review of the disclosures which are included in this prospectus for your
information and which relate to the general account and the General Account
Options. These disclosures, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in prospectuses.
14
<PAGE>
GUARANTEED RATE ACCOUNTS
THE GUARANTEES. Contributions to the Guaranteed Rate Accounts (GRAs) are
credited until maturity with the interest rate in effect on the date of
receipt. The rate is expressed as an effective annual rate, reflecting daily
compounding and the deduction of asset-based fees. GRAs with maturities of
approximately three and approximately five years are available under the
Program. AMOUNTS ALLOCATED TO A GRA MAY GENERALLY NOT BE REMOVED PRIOR TO
MATURITY.
New guaranteed rates are offered each Wednesday and are available for a
seven-day period. Call the AIM System to obtain the current GRA rates.
Interest accrues from the day after your contribution or transfer is credited
through the maturity date of the GRA, which is either approximately three or
approximately five years from the end of the seven-day offering period. We
guarantee the amount of your contributions and the interest credited, subject
to any penalties applicable upon premature withdrawal. See Premature
Withdrawals and Transfers from a GRA in the SAI for a description of such
penalties and when they apply. For a discussion of maturing GRAs, see
Maturing GRAs in the SAI.
PREMATURE WITHDRAWALS AND TRANSFERS
o You may not transfer from one GRA to another or from a GRA to another
Investment Option except at maturity.
o You may transfer other amounts at any time to a GRA at the current
guaranteed rate.
o Withdrawals may be made from a GRA before maturity if: you are disabled;
you attain age 70 1/2 ; you die; or you are not self-employed and your
employment is terminated.
o You may not remove GRA funds before maturity to take a loan, hardship or
other in-service withdrawal, as a result of a trustee-to-trustee transfer, or
to receive benefits from a terminated plan.
o Certain other withdrawals prior to maturity are permitted, but may be
subject to penalty. See Procedures for Withdrawals, Distributions and
Transfers from a GRA in the SAI.
MONEY MARKET GUARANTEE ACCOUNT
THE GUARANTEES. All amounts held in the Money Market Guarantee Account are
credited with the same rate of interest. The rate changes monthly and is
expressed as an effective annual rate, reflecting daily compounding and the
deduction of asset-based fees and charges. The rate will approximate current
market rates for money market mutual funds minus these fees. Call the AIM
System to obtain the current monthly rate. On January 1 each year we set an
annual minimum rate for this Account. The minimum guaranteed interest rate
for 1995 is 2.5% (before fees).
CONTRIBUTIONS. Contributions may be made at any time and will earn the
current rate from the day after the contribution is credited through the end
of the month or, if earlier, the day of withdrawal or transfer. Balances in
the Account at the end of the month automatically begin receiving interest at
the new rate until transferred or withdrawn. We guarantee the amount of your
contributions and the interest credited.
DISTRIBUTIONS AND TRANSFERS. Distributions, withdrawals and transfers may be
made at any time assuming your employer's plan permits.
15
<PAGE>
PART IV: FUND PERFORMANCE
The following tables provide a historical view of investment performance. The
information presented includes performance results for each Fund, along with
data representing unmanaged market indices.
UNMANAGED MARKET INDICES
Benchmark indices, while providing a broader perspective on relative
performance, are only a tool for comparison. At any time, the composition of
a Fund will differ from the benchmarks presented. Also, performance data for
the unmanaged market indices do not reflect any deductions for investment
advisory, brokerage or other expenses of the type typically associated with
an actively managed fund. This effectively overstates the rate of return of
the market indices relative to that which would be available to a typical
investor, and limits the usefulness of these indices in assessing the
performance of the Funds. Since the Funds do not distribute dividends or
interest, the market indices have been adjusted to reflect reinvestment of
dividends and interest to provide comparability.
STANDARD AND POOR'S 500 (S&P 500)--an unmanaged weighted index of the
securities of 500 industrial, transportation, utility and financial companies
widely regarded by investors as representative of the stock market.
CONSUMER PRICE INDEX (URBAN CONSUMERS--NOT SEASONALLY ADJUSTED)(CPI)--an
index of inflation.
NASDAQ INDEX--an unmanaged index of all common stocks traded on the National
Association of Securities Dealers Automated Quotation System (NASDAQ). The
NASDAQ market represents over-the-counter stocks not included in the S&P 500.
LEHMAN GOVERNMENT/CORPORATE BOND INDEX (LEHMAN)--an unmanaged index widely
regarded by investors as representative of the bond market.
LEHMAN TREASURY BOND INDEX--an unmanaged bond index which includes all public
obligations of the U.S. Treasury (excluding foreign targeted issues and
estate tax anticipation bonds also known as flower bonds).
S&P 500/LEHMAN TREASURY 30/70--assumes a static mix of the two market
indices.
S&P 500/LEHMAN 70/30--assumes a static mix of the two market indices.
S&P 500/LEHMAN 50/50--assumes a static mix of the two market indices.
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX (MSCI)--an arithmetical
average weighted by market value of the performance of 1,520 companies listed
on the stock exchanges of the United States, Europe, Canada, Australia, New
Zealand and the Far East.
HOW PERFORMANCE DATA ARE PRESENTED
The following tables show Fund performance on several different bases:
percent changes in Fund Unit Values, average annual rates of return and the
total value as of December 31, 1994 of a $1,000 investment made on
16
<PAGE>
January 1, 1985. The Fund performance shown may not represent your actual
experience; nor does it reflect the effect of the record maintenance and
report or enrollment fees. The average annual rates of return are
time-weighted, assume an investment at the beginning of each period, and
include the reinvestment of investment income.
The performance figures for the Aggressive Equity and Balanced Funds
represent hypothetical performance before May 1, 1985. For a description of
how hypothetical unit values for the Aggressive Equity and Balanced Funds
were calculated, see Summary of Unit Values for the Funds in the SAI.
The Global, Conservative Investors and Growth Investors Funds became
available under the Program on July 1, 1993. The performance figures prior to
that date for these Funds reflect (1) hypothetical performance based on the
actual performance of the Global, Conservative Investors and Growth Investors
Portfolios, respectively, from the date each commenced operations and (2) the
deduction of the Program Expense Charge, the financial accounting fee and the
daily accrual of direct expenses attributable to the Growth Equity Fund.
After July 1, 1993, they reflect actual performance and, for 1993, annualized
actual expenses. See Part VII: Deductions and Charges.
17
<PAGE>
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT CHANGES IN FUND UNIT VALUES
- -----------------------------------------------------
ANNUAL PERIOD ENDING LAST
BUSINESS DAY OF 1985 1986 1987
- --------------------------- ------- ------- ------
<S> <C> <C> <C>
Growth Equity Fund 30.7% 12.1% 4.0%
- --------------------------- ------- ------- ------
Aggressive Equity Fund 16.8 0.4 -4.0
- --------------------------- ------- ------- ------
Balanced Fund 24.0 9.9 -6.9
- --------------------------- ------- ------- ------
Global Fund -- -- --
- --------------------------- ------- ------- ------
Conservative Investors Fund -- -- --
- --------------------------- ------- ------- ------
Growth Investors Fund -- -- --
- --------------------------- ------- ------- ------
S&P 500 31.7 18.7 5.3
- --------------------------- ------- ------- ------
CPI 3.8 1.1 4.4
- --------------------------- ------- ------- ------
NASDAQ 31.4 7.4 -5.3
- --------------------------- ------- ------- ------
Lehman 21.3 15.6 2.3
- --------------------------- ------- ------- ------
MSCI 40.6 41.9 16.2
- --------------------------- ------- ------- ------
S&P 500/Lehman 50/50 26.5 17.2 3.8
- --------------------------- ------- ------- ------
S&P 500/Lehman Treasury
30/70 24.2 16.5 3.0
- --------------------------- ------- ------- ------
S&P 500/Lehman 70/30 28.5 17.8 4.3
- --------------------------- ------- ------- ------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PERCENT CHANGES IN FUND UNIT VALUES
- ------------------------------------------------------------------------------------------
ANNUAL PERIOD ENDING LAST
BUSINESS DAY OF 1988 1989 1990 1991 1992 1993 1994
- --------------------------- ------- ------- -------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth Equity Fund 15.5% 43.0% -12.3% 50.4% 0.1% 18.0% -2.8%
- --------------------------- ------- ------- -------- ------- ------ ------- -------
Aggressive Equity Fund 0.7 45.2 7.5 85.1 -4.2 13.1 -5.1
- --------------------------- ------- ------- -------- ------- ------ ------- -------
Balanced Fund 13.4 24.9 -1.9 39.7 -3.9 10.8 -9.2
- --------------------------- ------- ------- -------- ------- ------ ------- -------
Global Fund 9.3 25.4 -7.4 29.1 -1.9 30.8 3.6
- --------------------------- ------- ------- -------- ------- ------ ------- -------
Conservative Investors Fund -- 1.7 5.0 18.4 4.3 9.4 -5.9
- --------------------------- ------- ------- -------- ------- ------ ------- -------
Growth Investors Fund -- 2.6 9.4 47.3 3.5 13.9 -4.8
- --------------------------- ------- ------- -------- ------- ------ ------- -------
S&P 500 16.6 31.7 -3.1 30.5 7.6 10.0 1.3
- --------------------------- ------- ------- -------- ------- ------ ------- -------
CPI 4.4 4.6 6.2 3.0 2.9 2.7 2.7
- --------------------------- ------- ------- -------- ------- ------ ------- -------
NASDAQ 15.4 19.3 -17.8 56.8 15.4 14.7 -3.2
- --------------------------- ------- ------- -------- ------- ------ ------- -------
Lehman 7.6 14.2 8.3 16.1 7.6 11.0 -3.5
- --------------------------- ------- ------- -------- ------- ------ ------- -------
MSCI 23.3 16.6 -17.0 18.3 -5.2 22.5 5.1
- --------------------------- ------- ------- -------- ------- ------ ------- -------
S&P 500/Lehman 50/50 12.1 23.0 2.6 23.3 7.6 10.5 -1.1
- --------------------------- ------- ------- -------- ------- ------ ------- -------
S&P 500/Lehman Treasury
30/70 9.9 19.6 5.0 19.8 7.3 10.5 -2.0
- --------------------------- ------- ------- -------- ------- ------ ------- -------
S&P 500/Lehman 70/30 13.7 26.5 0.4 25.9 7.5 10.2 -0.1
- --------------------------- ------- ------- -------- ------- ------ ------- -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATES OF RETURN--DECEMBER 31, 1994
- ------------------------------------------------------------------------------------
FUND 10 YEARS 5 YEARS 3 YEARS 2 YEARS 1 YEAR
- ----------------------------- ---------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Growth Equity 14.3% 8.6% 4.7% 7.1% -2.8%
- ----------------------------- ---------- --------- --------- --------- --------
Aggressive Equity 12.9 15.4 0.9 3.6 -5.1
- ----------------------------- ---------- --------- --------- --------- --------
Balanced 9.0 5.8 -1.1 0.4 -9.2
- ----------------------------- ---------- --------- --------- --------- --------
Global -- 9.7 10.0 16.4 3.6
- ----------------------------- ---------- --------- --------- --------- --------
Conservative Investors -- 5.9 2.3 1.3 -5.9
- ----------------------------- ---------- --------- --------- --------- --------
Growth Investors -- 12.6 3.9 4.1 -4.8
- ----------------------------- ---------- --------- --------- --------- --------
S&P 500 14.4 8.7 6.3 5.6 1.3
- ----------------------------- ---------- --------- --------- --------- --------
CPI 3.6 3.5 2.8 2.7 2.7
- ----------------------------- ---------- --------- --------- --------- --------
NASDAQ 11.8 10.6 8.7 5.4 -3.2
- ----------------------------- ---------- --------- --------- --------- --------
Lehman 9.8 7.7 4.9 3.5 -3.5
- ----------------------------- ---------- --------- --------- --------- --------
MSCI 14.8 3.7 6.9 13.5 5.1
- ----------------------------- ---------- --------- --------- --------- --------
S&P 500/Lehman 50/50 12.1 8.2 5.5 4.5 -1.1
- ----------------------------- ---------- --------- --------- --------- --------
S&P 500/Lehman Treasury 30/70 11.2 7.9 5.1 4.1 -2.0
- ----------------------------- ---------- --------- --------- --------- --------
S&P 500/Lehman 70/30 13.2 8.4 5.8 5.0 -0.1
- ----------------------------- ---------- --------- --------- --------- --------
</TABLE>
<TABLE>
<CAPTION>
TOTAL VALUE AS OF DECEMBER 31, 1994 OF $1,000 INVESTMENT JANUARY 1, 1985
- --------------------------------------------------------------------------------------------------------------
TOTAL VALUE AS OF S&P 500
FUND $1,000 INVESTED ON (A) DECEMBER 31, 1994 S&P 500 NASDAQ CPI LEHMAN 50/50
- ---------------------- -------------------- ----------------- --------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Growth Equity January 1, 1985 $3,806 $3,839 -- $1,424 --
- ---------------------- -------------------- ----------------- --------- -------- -------- --------------
Aggressive Equity January 1, 1985 3,364 3,839 $3,051 1,424 --
- ---------------------- -------------------- ----------------- --------- -------- -------- --------------
Balanced January 1, 1985 2,367 3,839 -- 1,424 $3,134
- ---------------------- -------------------- ----------------- --------- -------- -------- --------------
Global
- ---------------------- -------------------- ----------------- --------- -------- -------- --------------
Conservative Investors These Funds were not in existence on January 1, 1985.
- ---------------------- --------------------------------------------------------------------------------------
Growth Investors
- ---------------------- -------------------- ----------------- --------- -------- -------- --------------
(a) The Growth Equity Fund commenced operations under the NAR Program on January 1, 1968 at a Unit Value of
$10.00. The Aggressive Equity Fund commenced operations on May 1, 1969, on which date the hypothetical
Program Unit Value would have been $3.38. The Balanced Fund commenced operations on June 25, 1979, on which
date the hypothetical Program Unit Value would have been $3.68. The Global, Conservative Investors and Growth
Investors Funds became available under the Program on July 1, 1993, each at a Unit Value of $10.00. The
underlying Global Portfolio commenced operations on August 27, 1987. The underlying Conservative Investors
and Growth Investors Portfolios commenced operations on October 2, 1989.
</TABLE>
PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE PERFORMANCE. NO PROVISIONS
HAVE BEEN MADE FOR THE EFFECT OF TAXES ON INCOME AND GAINS OR UPON
DISTRIBUTION.
18
<PAGE>
INVESTMENT OF CONTRIBUTIONS IN THE FUNDS
PURCHASE OF FUND UNITS
Amounts allocated to a Fund are used to purchase Units. Your interest in each
Fund is represented by the value of your Units in that Fund. The number of
Units you purchase in a Fund is calculated by dividing the amount allocated
by the Unit Value calculated as of the close of business on the day your
purchase is made. The number of Units credited will not vary because of any
subsequent fluctuation in the Unit Value; however, the value of the Unit
fluctuates with the investment experience of the Fund. Such experience
reflects the investment income and realized and unrealized capital gains and
losses of that Fund, and the deductions and charges we make to the Fund.
BUSINESS DAY
A business day is any day both we and the New York Stock Exchange are open.
Contributions, transfers, and allocation changes are effective on the
business day they are received. Distribution requests are also effective on
the business day they are received unless, as in the Master Plans, there are
plan provisions to the contrary. However, we may have to delay the processing
of any transaction which is not accompanied by a properly completed form or
which is not mailed to the correct address. An Account Executive will
generally be available to speak with you each business day from 9 a.m. to 5
p.m. eastern time. We may, however, close due to emergency conditions. If we
close unexpectedly for such reasons, only properly completed transactions
received on our AIM System will be processed.
HOW WE DETERMINE THE UNIT VALUE
We determine the Unit Value at the end of each business day. The Unit Value
for each Fund is determined by first calculating a gross unit value
reflecting only investment performance and then adjusting it for Program
expenses to obtain the Fund Unit Value. We calculate the gross unit value by
multiplying the gross unit value for the preceding business day by the net
investment factor for that subsequent business day and, for the Growth
Equity, Aggressive Equity and Balanced Funds, then deducting audit and
custodial fees. We calculate the net investment factor as follows:
o First, we take the value of the Fund's assets at the close of business on
the preceding business day.
o Next, we add the investment income and capital gains, realized and
unrealized, that are credited to the assets of the Fund during the business
day for which we are calculating the net investment factor.
o Then we subtract the capital losses, realized and unrealized, charged to
the Fund during that business day.
o Finally, we divide this amount by the value of the Fund's assets at the
close of the preceding business day.
The Fund Unit Value is calculated on every business day by multiplying the
Fund Unit Value for the last business day of the previous month by the net
change factor for that business day. The net change factor for each business
day is equal to (a) minus (b) where
(a) is the gross unit value for that business day divided by the gross unit
value for the last business day of the previous month; and
(b) is the charge to the Fund for that month for the daily accrual of fees
and expenses times the number of days since the end of the preceding month.
For information on the valuation of assets of the Funds, see How We Value the
Assets of the Funds in the SAI.
The value of the investments of the Global, Conservative Investors and Growth
Investors Funds in the corresponding Hudson River Trust Portfolios is
calculated by multiplying the number of shares held by Separate Account No.
51 in each Portfolio by the net asset value per share of that Portfolio
determined as of the close of business on the same day as the respective Unit
Values of the Global, Conservative Investors and Growth Investors Funds are
determined.
19
<PAGE>
PART V: EQUITABLE LIFE AND THE INVESTMENT MANAGERS
EQUITABLE LIFE
Equitable Life is a New York stock life insurance company with our Home
Office at 787 Seventh Avenue, New York, New York 10019. Founded in 1859, we
are one of the largest life insurance companies in the United States, with
total assets under management at December 31, 1994 of approximately $174.5
billion.
Equitable Life is a wholly-owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). The largest stockholder of the Holding
Company is AXA, a French insurance holding company. AXA currently owns 60.5%
of the Holding Company's outstanding common stock as well as $392.2 million
stated value of its issued and outstanding Series F Convertible Preferred
Stock. Under its investment arrangements with Equitable Life and the Holding
Company, AXA is able to exercise significant influence over the operations
and capital structure of the Holding Company and its subsidiaries, including
Equitable Life. AXA is the principal holding company for most of the
companies in one of the largest insurance groups in Europe. The majority of
AXA's stock is controlled by a group of five French mutual insurance
companies.
THE SEPARATE ACCOUNTS
Separate accounts are used to fund benefits under group annuity contracts and
other agreements for tax-deferred retirement programs we administer. The
separate accounts which hold the Growth Equity, Aggressive Equity and
Balanced Funds were established pursuant to the Insurance Law of the State of
New York in 1968, 1969 and 1979, respectively. The separate account which
holds the Global, Conservative Investors and Growth Investors Funds was
established in 1993. The assets of the separate accounts are our property.
However, you have a claim under the group annuity contract equal to the value
of your accumulation in each Fund. Income, gains and losses, whether or not
realized, from assets allocated to the Funds are, in accordance with the
group annuity contract, credited to or charged against the Fund without
regard to our other income, gains or losses. The portion of each Fund's
assets we hold on your behalf may not be used to satisfy obligations that may
arise out of any other business we conduct. We may transfer amounts owed to
us, such as fees and expenses, to our general account at any time.
INVESTMENT MANAGEMENT OF THE FUNDS
We use the personnel and facilities of Alliance Capital Management L.P.
("Alliance") for portfolio management, securities selection and transaction
services in managing the assets of the Funds. Alliance is also the investment
adviser of The Hudson River Trust. The Global, Conservative Investors and
Growth Investors Funds are divisions of our Separate Account No. 51 and
invest in corresponding Portfolios of The Hudson River Trust.
Alliance is a publicly-traded limited partnership which is indirectly
majority-owned by Equitable Life. Equitable Life and Alliance are registered
investment advisers under the Investment Advisers Act of 1940. As of December
31, 1994, Alliance had total assets under management of $121.3 billion.
Alliance acts as an investment adviser to various separate accounts and
general accounts of Equitable Life and other affiliated insurance companies.
Alliance also provides management and consulting services to mutual funds,
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing
plans, foundations and tax-exempt organizations. Alliance's main office is
located at 1345 Avenue of the Americas, New York, New York 10105.
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The securities held in the Growth Equity, Aggressive Equity and Balanced
Funds must be authorized or approved by the Investment Committee of our Board
of Directors. Subject to the Investment Committee's broad supervisory
authority, our investment officers and managers have complete discretion over
the assets of these Funds and have been given discretion as to sales and,
within specified limits, purchases of stocks, other equity securities and
certain debt securities. When an investment opportunity arises that is
consistent with the objectives of more than one account, investment
opportunities are allocated among accounts in an impartial manner based on
certain factors such as investment objective and current investment and cash
positions.
We own Donaldson, Lufkin & Jenrette, Inc. (DLJ). A DLJ subsidiary, Donaldson,
Lufkin & Jenrette Securities Corporation, is one of the nation's largest
investment banking and securities firms. Another DLJ subsidiary, Autranet,
Inc., is a securities broker that markets independently originated research
to institutions. Through the Pershing Division of Donaldson, Lufkin &
Jenrette Securities Corporation, DLJ supplies correspondent services,
including order execution, securities clearance and other centralized
financial services, to numerous independent regional securities firms and
banks.
To the extent permitted by law and consistent with the Fund transaction
practices discussed in this prospectus, and subject to the consent of Fund
contractholders, the Funds may engage in securities and other transactions
with the above entities or may invest in shares of the investment companies
with which those entities have affiliations. In 1994, there were no such
transactions through DLJ subsidiaries.
VOTING RIGHTS
No voting rights apply to any of the Separate Accounts or to the General
Account Options. As legal owner of the shares of the Hudson River Trust held
in Separate Account No. 51 which invests in units of the Global, Conservative
Investors and Growth Investors Funds, we do, however, have the right to vote
on certain matters. The Hudson River Trust is not required to hold annual
meetings of shareholders and may elect not to do so. If a meeting of
shareholders is held, they may vote on such matters as election of directors
and any other matters requiring a vote by shareholders under the 1940 Act.
Equitable Life will vote the shares of The Hudson River Trust allocated to
the Global, Conservative Investors and Growth Investors Funds in accordance
with instructions received from employers, participants or trustees, as the
case may be, in the respective Funds. Each participant for whom we maintain
records and, in other cases, the employer or trustee, will be allowed to
instruct us on how to vote shares of The Hudson River Trust in proportion to
their interest in the Global, Conservative Investors and Growth Investors
Funds as of the record date for the shareholder meeting. If we do not receive
instructions in time from all shareholders, we will vote the shares for which
no instructions have been received in the same proportion as we vote shares
for which we have received instructions. If you invest in The Hudson River
Trust, you will receive periodic reports relating to The Hudson River Trust
and proxy material, together with a voting instruction form, in connection
with shareholder meetings.
Currently, we control The Hudson River Trust. Trust shares are held by other
separate accounts of ours and by separate accounts of insurance companies
affiliated and unaffiliated with us. Shares held by these separate accounts
will generally be voted according to the instructions of the owners of
insurance policies and contracts funded through those separate accounts, thus
diluting the effect of your voting instructions.
PART VI: PROVISIONS OF THE CONTRACT AND SERVICES WE PROVIDE
ADOPTION OF THE PROGRAM BY EMPLOYERS
To adopt a Members Retirement Program, you as the employer or trustee must
complete the appropriate Participation Agreement. If you would like to
discuss enrollment in the Program, call our Retirement Program Specialists.
They can help you complete the Participation Agreement for review by your tax
advisor.
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For our prototype self-directed plan, you as the employer must use the
prototype plan adoption agreement. You must also adopt the Pooled Trust and
must also arrange separately for plan level recordkeeping and brokerage
services. We will provide recordkeeping services only for assets held in the
Pooled Trust. You can use any plan recordkeeper of your choice or you can
arrange through us to hire Trust Consultants, Inc. at a special rate. In
addition, you can arrange through us brokerage services from our affiliate,
Pershing Discount Brokerage Services, at special rates or use any other
broker of your choice.
EMPLOYER RESPONSIBILITIES
If you are an employer and you adopt our Members Retirement Plan, you as the
employer and plan administrator will have certain responsibilities relating
to the administration and qualification of your plan. See Your
Responsibilities as Employer in the SAI for a list of responsibilities which
you will have if you adopt the Members Retirement Plan. If you, as an
employer, have an individually designed plan, you already have these
responsibilities, which will not be increased in any way by your adoption of
the Pooled Trust for investment only. If you utilize our prototype
self-directed plan, you will have responsibilities as the plan administrator
and will also have to appoint a plan trustee; these responsibilities will be
greater than those required by the adoption of the Members Retirement Plan.
(You should consult your legal adviser for an understanding of your legal
responsibilities under the self-directed plan.) If you use an individually
designed plan, it is your responsibility to determine that the terms of your
plan are consistent with the provisions of the Pooled Trust and our practices
described in this prospectus and the SAI. We try in this prospectus to make
it clear which actions you are to take as employer and which you are to take
as participant. We will give you guidance and assistance in the performance
of your responsibilities. The ultimate responsibility, however, rests with
you.
CONTRIBUTIONS
EMPLOYER RESPONSIBILITIES
Employers should send contribution checks or money orders payable to
Equitable Life to the address shown under Corresponding With the Program. All
contributions must be allocated by the participant and must be accompanied by
a properly completed Contribution Remittance form. Contributions are credited
on the day of receipt. Failure to use the proper form, or to complete the
form properly, however, may result in a delay in crediting contributions for
the entire business. Employers should not permit employees to send post-tax
contributions directly to the Program. See Your Responsibilities as Employer
in the SAI.
ALLOCATION OF CONTRIBUTIONS BY PARTICIPANTS
o You may allocate your contribution among as many Investment Options as you
wish.
o You may change your allocation instructions as often as you wish by
calling the AIM System. Your new instructions become effective on the
business day we receive them; provided that is before 4 p.m. eastern time.
Current participants should refer to their AIM System brochures.
o You may allocate employer contributions in different percentages than your
employee contributions. The allocation percentages you elect for employer
contributions will automatically apply to 401(k) qualified non-elective
contributions, qualified matching contributions and matching contributions.
The allocation percentages you elect for employee contributions will
automatically apply to both your post-tax employee contributions and your
401(k) salary deferral contributions.
o If we have not received valid instructions, we will allocate your
contributions to the Money Market Guarantee Account.
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Under the Members Retirement Plan, participants make all investment
allocations. Under an individually designed plan or our self-directed
prototype plan, either the participant or the trustee makes investment
allocations, depending on the terms of the plan.
TRANSFERS AMONG INVESTMENT OPTIONS
GENERAL RULES
o Generally, amounts may be transferred to or from the Investment Options at
any time. However, no transfers from the Guaranteed Rate Accounts are
permitted prior to maturity.
o There is no charge for transfers and no tax liability.
o To make a transfer, give us instructions through the AIM System.
o All transfers are made as of the close of business on the day we receive
your instructions, provided we receive your request by 4:00 p.m. eastern
time. Transfers by phone must be made and confirmed by 4:00 p.m. eastern
time. Transfer requests completed after that time or on a non-business day
will be processed as of the close of business on the following business day.
To transfer by telephone, you must have a Personal Security Code (PSC)
number, which you obtain by completing a Telephone Transfer Authorization
form. You must have a touch-tone telephone to make transfers on the AIM
System. Procedures have been established by Equitable Life that are
considered to be reasonable and are designed to confirm that instructions
communicated by telephone are genuine. Such procedures include requiring
certain personal identification information prior to acting on telephone
instructions and providing written confirmation of instructions communicated
by telephone. If Equitable Life does not employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, it may be
liable for any losses arising out of any action on its part or any failure or
omission to act as a result of its own negligence, lack of good faith, or
willful misconduct. In light of the procedures established, Equitable Life
will not be liable for following telephone instructions that it reasonably
believes to be genuine. We may discontinue the telephone transfer service at
any time without notice.
PAYMENTS OR WITHDRAWALS FROM THE FUNDS
Payments or withdrawals out of the Funds ordinarily will be made promptly
upon request in accordance with Plan provisions. However, we can defer
payments, applications and withdrawals from the Funds for any period during
which the New York Stock Exchange is closed for trading, sales of securities
are restricted or determination of the fair market value of assets of the
Funds is not reasonably practicable because of an emergency.
DISTRIBUTIONS AND BENEFIT PAYMENT OPTIONS
PARTICIPANT BENEFITS: RETIREMENT, DISABILITY AND TERMINATION OF EMPLOYMENT
Under the Members Retirement Plan or our self-directed prototype plan, you
are eligible for benefits upon retirement, death or disability, or upon
termination of employment with a vested benefit. ("Vested" refers to the
nonforfeitable portion of your benefits under the plan.) If you are a
participant in an individually designed plan, your eligibility for retirement
benefits depends on the terms of that plan. Generally, you must begin to
receive your benefits no later than April 1 of the year after you reach age
70 1/2 . There may be an exemption if you filed a special contrary election
with your employer before January 1, 1984.
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The Program is flexible as to how and when you can receive your benefits, but
you are also subject to extremely complicated legal requirements. Certain
plan distributions may result in penalty or excise taxes. A general
explanation of the federal income tax treatment of distributions and benefit
payment options is provided in Federal Income Tax Considerations in both this
prospectus and the SAI. If you retire, become disabled or terminate your
employment, you should discuss the available options with your financial
advisor. Our Account Executives can be of assistance.
PARTICIPANT WITHDRAWALS PRIOR TO RETIREMENT
o You may withdraw all or part of your Account Balance under the Members
Retirement Plan attributable to post-tax employee contributions at any time,
provided that you withdraw at least $300 at a time (or, if less, your entire
post-tax Account Balance). See Part VIII: Federal Income Tax Considerations.
o If you are married, your spouse must generally consent in writing before
you can make any type of withdrawal, except for the purchase of a Qualified
Joint and Survivor Annuity.
o Self-employed persons may generally not receive a distribution prior to
age 59 1/2 .
o Employees may generally not receive a distribution prior to separation
from service.
o Hardship withdrawals before age 59 1/2 may be permitted under 401(k) and
certain other profit sharing plans.
Under an individually designed plan and our self-directed plan, the
availability of pre-retirement withdrawals depends on the terms of the plan.
We suggest that you ask your employer what types of withdrawals are available
under your plan. See Procedures for Withdrawals, Distributions and Transfers
in the SAI for a more detailed discussion of these general rules.
Generally you may not make withdrawals from the Guaranteed Rate Accounts
prior to maturity. See The Guaranteed Rate Accounts in Part III.
PARTICIPANT DEATH BENEFITS
o If you die before the entire benefit due you has been paid, the remainder
of your benefits will be paid to your beneficiary.
o The law requires your entire benefit to be distributed no more than five
years after your death. There are two exceptions--(1) if your benefit is paid
to your spouse, your spouse may elect to receive benefits over his/her life
or a period certain which does not exceed his or her life expectancy
beginning any time up to the date you would have attained age 70 1/2 or, if
later, one year after your death, and (2) a beneficiary who is not your
spouse may elect payments over his/her life or a fixed period which does not
exceed the beneficiary's life expectancy, provided payments begin within one
year of your death.
o If at your death you were already receiving annuity benefits, your
beneficiary will receive the survivor benefits, if any, under the form of the
annuity selected. If an annuity benefit was not selected, your beneficiary
can continue to receive benefits based on the payment option you selected or
can select a different payment option so long as payments are made at least
as rapidly as with the payment option you originally selected.
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o To designate a beneficiary or to change an earlier designation, have your
employer send us your completed beneficiary designation form. Your spouse
must consent in writing to a designation of any non-spouse beneficiary, as
explained in Procedures for Withdrawals, Distributions and Transfers--Spousal
Consent Requirements in the SAI.
If you are a participant in the Members Retirement Plan and you die without
designating a beneficiary, your vested benefit will automatically be paid to
your spouse or, if you are not married, to the first surviving class of (a)
your children, (b) your parents and (c) your brothers and sisters. If none of
them survive you, your vested benefit will be paid to your estate. If you are
a participant in our prototype self-directed plan and you die without
designating a beneficiary, your vested benefit will automatically be paid to
your spouse or, if you are not married, to the first surviving class of (a)
your children, (b) your grandchildren, (c) your parents, (d) your brothers
and sisters and (e) your nephews and nieces. If none of them survive you,
your vested benefit will be paid to your estate.
Under the Members Retirement Plan, on the day we receive proof of your death,
we automatically transfer your Account Balance in the Funds to the Money
Market Guarantee Account unless your beneficiary instructs otherwise. All
amounts in the Money Market Guarantee Account are held until your beneficiary
requests a distribution or transfer. Our Account Executives can explain these
and other requirements affecting death benefits.
BENEFIT PAYMENT OPTIONS
Once you are eligible to receive benefits you may, if your plan permits,
select one or more of the following forms of distribution:
o Qualified Joint and Survivor Annuity
o Installment Payments
o Lump Sum Payment
o Life Annuity
o Life Annuity--Period Certain
o Joint and Survivor Annuity
o Joint and Survivor Annuity--Period Certain
o Cash Refund Annuity
See Types of Benefits in the SAI for detailed information regarding each of
the above options.
If you are married and the value of your account balance or vested benefits
is greater than $3,500, federal law generally requires you to receive a
Qualified Joint and Survivor Annuity payable to you for life and then to your
surviving spouse for life, unless you and your spouse have properly waived
that form of payment in advance. Certain self-directed prototypes and
individually designed plans are not subject to this requirement. See
Procedures for Withdrawals, Distributions and Transfers--Spousal Consent
Requirements in the SAI.
The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, an annuity administrative charge of $350 will be deducted
from the amount used to purchase the annuity. If we give any group pension
client with a qualified plan a better annuity purchase rate than those
currently guaranteed under the Program, we will also make those rates
available to Program participants. The annuity administrative charge may be
greater than $350 in that case.
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LOANS TO PARTICIPANTS
The Members Retirement Plan permits you to borrow a portion (not to exceed
$50,000) of your vested Account Balance in all your plans, if your employer
has elected this feature. Your employer can tell you whether loans are
available under your plan. If you are a sole proprietor, partner who owns
more than 10% of the business, or a shareholder-employee of an S Corporation
who owns more than 5% of the business (including family members of these
prohibited individuals), you presently may not borrow from your vested
Account Balance without first obtaining a prohibited transaction exemption
from the Department of Labor. Consult with your attorney or tax advisor
regarding the advisability and procedures for obtaining such an exemption.
Loans are also available under our self-directed prototype plan and under an
individually designed plan if the terms of your plan allow them.
You, the participant, must pay interest on your loan; the interest paid may
not be deductible. All interest that you pay will be added to your Account
Balance and will be taxable upon distribution. Loans are subject to
restrictions under federal tax laws, and all plans of the employer are
aggregated for purposes of these restrictions. You should apply for a loan
through your employer. Loan kits containing all necessary forms, along with
an explanation of how to set interest rates, are available from our Account
Executives. YOU MAY NOT TAKE A LOAN FROM THE GUARANTEED RATE ACCOUNTS PRIOR
TO MATURITY. IF YOU ARE MARRIED, YOUR SPOUSE MUST CONSENT IN WRITING BEFORE
YOU CAN TAKE A LOAN.
PART VII: DEDUCTIONS AND CHARGES
No deductions are made from contributions or withdrawals for sales expenses.
Fees and charges apply to amounts held for each plan. Asset-based fees are
charged against the assets of each Fund. The Unit Values of the Funds are
reduced to reflect the deduction of those fees. Rates announced for
Guaranteed Rate Accounts opened on or after May 1, 1991 and for the Money
Market Guarantee Account reflect the deduction of applicable asset-based
fees. Unless otherwise noted, fees which are set in fixed dollar amounts are
deducted by reducing the number of Units in the appropriate Funds and the
number of dollars in each General Account Option. The amount allocable to the
three-year or five-year Guaranteed Rate Account will be taken from your most
recent GRA in that Account.
MEMBERS RETIREMENT PLAN (PENSION AND PROFIT SHARING),
PROTOTYPE SELF-DIRECTED PLAN AND INVESTMENT ONLY FEES
RECORD MAINTENANCE AND REPORT FEE. At the end of each calendar quarter, we
deduct a record maintenance and report fee of $3.75 from your Account
Balance. We reserve the right to charge additional fees if you request
special mailings, reports, and services.
ENROLLMENT FEE. There is a non-refundable one-time enrollment fee of $25 for
each participant. If the enrollment fee is not paid by your employer, it may
be deducted from contributions or from your Account Balance. We may waive
this fee under certain circumstances. If we do not maintain individual
participant records under the Pooled Trust, the employer is instead charged
$25 for each plan or trust.
PROTOTYPE SELF-DIRECTED PLAN FEES. An employer who participates in our
prototype self-directed plan will incur additional fees not payable to us,
such as brokerage and administration fees.
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PROGRAM EXPENSE CHARGE. A daily charge at an annual rate of 1.00% is made
against your account balance. All investment returns and interest rates
reflect the deduction of this charge, except for GRAs purchased before May 1,
1991.
This fee is applied toward the cost of maintenance of the Investment Options,
promotion of the Program, commissions, administrative costs, such as
enrollment and answering participant inquiries, and overhead expenses such as
salaries, rent, postage, telephone, travel, legal, actuarial and accounting
costs, office equipment and stationery. During 1994, we received $1,038,965
under the Program Expense Charge.
INVESTMENT MANAGEMENT AND ACCOUNTING FEES. These charges apply only to assets
in the Funds. These charges are reflected in the computation of the Unit
Values applicable for each Fund.
We receive fees for investment management services for the Growth Equity,
Aggressive Equity and Balanced Funds. The investment management and financial
accounting fee covers the investment management and financial accounting
services we provide for these Funds, as well as a portion of our related
administrative costs. This fee is charged daily at an effective annual rate
of .50% of the net assets of the Growth Equity and Balanced Funds and an
effective annual rate of .65% for the Aggressive Equity Fund.
We receive fees for financial accounting services for the Global,
Conservative Investors and Growth Investors Funds. This fee is charged daily
at an effective annual rate of .20% of the net assets of these Funds.
HUDSON RIVER TRUST ANNUAL EXPENSES. The Global, Conservative Investors and
Growth Investors Funds are indirectly subject to investment advisory and
other expenses charged against assets of the corresponding Portfolios of The
Hudson River Trust. These expenses are described in The Hudson River Trust
prospectus accompanying this prospectus.
OTHER EXPENSES. Certain costs and expenses are charged directly to the Funds.
These may include transfer taxes, Securities and Exchange Commission filing
fees and certain related expenses including printing of SEC filings,
prospectuses and reports, proxy mailings, other mailing costs, legal expenses
and (for the Global, Conservative Investors and Growth Investors Funds only)
custodians' fees and outside auditing expenses.
ANNUITY ADMINISTRATIVE CHARGE. If a participant elects an annuity option, a
$350 charge will usually be deducted from the amount used to purchase the
annuity to reimburse us for administrative expenses associated with
processing the application for the annuity and with issuing each month's
annuity payment. If we give any group pension client with a qualified plan a
better annuity purchase rate than those currently guaranteed for the Program,
we will also make those better rates available to Program participants. The
annuity administrative charge may be greater than $350 in that case. See
Distributions and Benefit Payment Options in Part VI for details.
PREMIUM TAXES. In certain jurisdictions, amounts used to purchase an annuity
are subject to a premium tax (rates currently range up to 5%). Taxes depend,
among other things, on your place of residence, applicable laws and the
retirement benefit you select. We will deduct premium taxes based on your
place of residence at the time distributions under the Program begin.
FEES PAID TO ASSOCIATIONS. We may pay associations a fee for enabling the
Program to be made available to their memberships. The fee may be based on
the number of employers whom we solicit, the number who participate in the
Program, and/or the value of Program assets. We make these payments without
any additional deduction or charge under the Program.
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GENERAL. We will give you written notice of any change in the fees and
charges. We may also establish a separate fee schedule for requested
non-routine administrative services. During 1994 we received total fees and
charges under the Program of $1,673,803.
PART VIII: FEDERAL INCOME TAX CONSIDERATIONS
The provisions of the Internal Revenue Code (Code) relating to distributions
under qualified retirement plans are outlined briefly below. The Code
provisions relating to contributions are outlined briefly in the SAI under
Provisions of the Members Retirement Plan. For purposes of this outline we
have assumed that you are not a participant in any other qualified retirement
plan. We have not attempted to discuss other provisions of the Code that
govern participation, vesting, funding or prohibited transactions, although
some information on these subjects appears here and in the SAI; nor do we
discuss the reporting and disclosure or fiduciary requirements of the
Employee Retirement Income Security Act. In addition, we do not discuss the
effect, if any, of state tax laws that may apply. For information on these
matters, we suggest that you consult your tax advisor.
The Internal Revenue Service does not have to approve your adoption of the
Pooled Trust. If you adopt the Members Retirement Plan, you will not need IRS
approval unless you adopt certain provisions. We will tell you whether it is
desirable for you to submit your plan to the Internal Revenue Service for
approval. If you make such a submission, you will have to pay an IRS user's
fee.
DISTRIBUTIONS: TAX CONSEQUENCES
In this section, the word "you" refers to the plan participant.
Amounts distributed to a participant from a qualified plan are generally
subject to federal income tax as ordinary income when benefits are
distributed to you or your beneficiary. Generally speaking, only your
post-tax contributions, if any, are not taxed when distributed.
LUMP SUM DISTRIBUTIONS. If your benefits are distributed to you in a lump sum
after you have participated in the plan for at least five taxable years, you
may be able to use five-year averaging. Under this method, the tax on the
lump sum distribution is calculated separately from taxes on any other income
you may have during the year. The tax is calculated at ordinary income tax
rates in the year of the distribution, but as if it were your only income in
each of five years. The tax payable is the sum of the five years'
calculations. To qualify for five-year averaging, the distribution must
consist of your entire balance in the plan and must be made in one taxable
year of the recipient after you have attained age 59 1/2 . Five-year
averaging is available only for one lump sum distribution.
If you were born before 1936, you may elect to have special rules apply to
one lump sum distribution. These special rules are available if the
distribution is made after attainment of age 59 1/2 or on account of death or
disability. If you are an employee, the special rules may also apply if the
distribution results from termination of employment. Under these special
rules, you may elect either ten-year averaging using 1986 rates or five-year
averaging using then current rates. In addition, you may elect separately to
have the portion of your distribution attributable to pre-1974 contributions
taxed at a flat 20% rate.
ELIGIBLE ROLLOVER DISTRIBUTIONS. Many types of distributions from qualified
plans are "eligible rollover distributions" that can be transferred directly
to another qualified plan or individual retirement arrangement ("IRA"), or
rolled over to another plan or IRA within 60 days of the receipt of the
distribution. If a distribution is an "eligible rollover distribution," 20%
mandatory federal income tax withholding will apply unless the distribution
is directly transferred to a qualified plan or IRA. See Eligible Rollover
Distributions and Federal Income Tax Withholding in the SAI for a more
detailed discussion.
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ANNUITY OR INSTALLMENT PAYMENTS; COST BASIS. Each payment you receive is
treated as ordinary income except where you have a "cost basis" in the
benefit. Your cost basis is equal to the amount of your post-tax employee
contributions, plus any employer contributions you were required to include
in gross income in prior years. A portion of each annuity or installment
payment you receive will be excluded from gross income to reflect the
recovery of your cost basis. The excludable portion is based on the ratio of
your cost basis in the annuity on the annuity starting date to the expected
return under the annuity as of such date. Under an annuity with a life
contingency, the expected return is based on your life expectancy, that is,
the number of annuity payments anticipated to be made during your lifetime.
In the case of a joint and survivor annuity, the expected return is based on
the joint life expectancy, that is, the number of payments anticipated to be
made during you and your joint annuitant's lifetimes. An adjustment will be
required in computing the expected return of the annuity with a life
contingency if payments are to be made for any period certain. If annuity
payments cease because you die before all investment is recovered, a
deduction is available for the unrecovered investment.
IN-SERVICE WITHDRAWALS; HARDSHIP WITHDRAWALS. Some plans allow in-service
withdrawals of after-tax contributions. The portion of each in-service
withdrawal attributable to cost basis is received income tax-free. The
portion that is attributable to earnings will be included in your gross
income. Amounts contributed before January 1, 1987 to employer plans which on
May 5, 1986 permitted such withdrawals are taxable withdrawals only to the
extent that they exceed the amount of your cost basis. Other amounts are
treated as partly a return of cost basis with the remaining portion treated
as earnings. Amounts included in gross income under this rule may also be
subject to the additional 10% penalty tax on premature distributions
described below. In addition, 20% mandatory federal income tax withholding
may also apply.
PREMATURE DISTRIBUTIONS. You may be liable for an additional 10% penalty tax
on all taxable amounts distributed before age 59 1/2 unless the distribution
falls within a specified exception or is rolled over into an IRA or other
qualified plan.
The exceptions to the penalty tax include (a) distributions made on account
of your death or disability, (b) distributions in the form of a life annuity
or installments over your life expectancy (or the joint lives or life
expectancies of you and your beneficiary), (c) distributions due to
separation from active service after age 55 and (d) distributions used to pay
deductible medical expenses.
EXCESS DISTRIBUTIONS. You may be liable for a 15% excise tax on all
distributions in excess of a threshold amount. All distributions you receive
from qualified plans, IRAs and Section 403(b) tax deferred annuities are
aggregated for this purpose, even if those plans were maintained by unrelated
employers.
For installment and annuity payments, the threshold amount is $150,000 in
1995. If you elect special averaging for a lump sum distribution received in
1995, you will owe the excise tax only to the extent your distribution
exceeds five times the threshold for excess distributions ($750,000 in 1995).
WITHHOLDING. Under the Members Plans, 20% mandatory income tax withholding
will apply to all "eligible rollover distributions" that are not directly
rolled over to a qualified plan or IRA. If a distribution is not an eligible
rollover distribution, income tax will be withheld from all taxable payments
unless the recipient elects otherwise. See Eligible Rollover Distributions
and Federal Income Tax Withholding in the SAI. Under an individually designed
plan or our prototype self-directed plan that uses the Pooled Trust for
investment only, we will pay the full amount of the distribution to the
plan's trustee. The trustee is responsible for withholding federal income tax
upon distributions to you or your beneficiary.
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PART IX: MISCELLANEOUS
CHANGE OR DISCONTINUANCE OF THE PROGRAM. The group annuity contract has been
amended from time to time, and may be amended in the future. No future change
can affect annuity benefits in the course of payment. Provided certain
conditions are met, we may terminate the offer of any of the Investment
Options and offer new ones with different terms.
We may terminate the contract at any time. If the contract is terminated, we
will not accept any further contributions. We will continue to hold amounts
allocated to the Guaranteed Rate Accounts until maturity. Amounts already
invested in the Investment Options may remain in the Program and you may also
elect payment of benefits through us.
DISQUALIFICATION OF PLAN. If your plan is found not to qualify under the
Internal Revenue Code, we may return the plan's assets to the employer, as
the plan administrator, or we may disallow future investments in the separate
accounts.
REPORTS. We send reports annually to employers showing the aggregate Account
Balances of all participants and information necessary to complete annual IRS
filings.
TRUSTEE. The sole responsibility of The United States Trust Company of New
York is to serve as a party to the group annuity contract. It has no
responsibility for the administration of the Program or for any distributions
or duties under the group annuity contract.
REGULATION. We are subject to regulation and supervision by the Insurance
Department of the State of New York, which periodically examines our affairs.
We are also subject to the insurance laws and regulations of all
jurisdictions in which we are authorized to do business. This regulation does
not, however, involve any supervision of the investment policies of the Funds
or of the selection of any investments except to determine compliance with
the law of New York. We are required to submit annual statements of our
operations, including financial statements, to the insurance departments of
the various jurisdictions in which we do business for purposes of determining
solvency and compliance with local insurance laws and regulations.
LEGAL PROCEEDINGS. We are engaged in litigation of various kinds which in our
judgment is not of material importance in relation to our total assets. None
of the litigation now in progress is expected to affect any assets of the
Funds.
ADDITIONAL INFORMATION. A registration statement relating to the offering
described in this prospectus has been filed with the Securities and Exchange
Commission under the Securities Act of 1933. Certain portions of the
Registration Statement have been omitted from this prospectus and the SAI
pursuant to the rules and regulations of the Commission. The omitted
information may be obtained by requesting a copy of the registration
statement from the Commission's principal office in Washington, D.C., and
paying the Commission's prescribed fees.
EXPERTS. The financial statements as of December 31, 1994 and for each of the
two years in the period then ended included in the SAI for Separate Account
Nos. 3, 4, 10, and 51 and the condensed financial information for each of the
two years in the period ended December 31, 1994 included in this prospectus
and the financial statements as
30
<PAGE>
of December 31, 1994 and 1993 and for each of the two years in the period
ended December 31, 1994 included in the SAI for Equitable Life have been so
included in reliance upon the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
For the year ended December 31, 1992, the financial statements of Equitable
Life included in the Statement of Additional Information have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report that
appears in the Statement of Additional Information and have been so included
in reliance upon their report given upon the authority of Deloitte & Touche
LLP as experts in accounting and auditing.
ACCEPTANCE. The employer or plan sponsor, as the case may be, is solely
responsible for determining whether the Program is a suitable funding vehicle
and should, therefore, carefully read the prospectus and installation
materials before entering into a Participation Agreement.
31
<PAGE>
TABLE OF CONTENTS
OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Contract .................................. SAI-2
Your Responsibilities as Employer ............. SAI-2
Procedures for Withdrawals, Distributions
and Transfers ................................ SAI-3
Types of Benefits ............................. SAI-6
Provisions of the Members Retirement Plan .... SAI-8
Investment Restrictions Applicable to the
Growth Equity, Aggressive Equity and
Balanced Funds ............................... SAI-11
How We Value the Assets of the Funds ......... SAI-12
Summary of Unit Values for the Funds ......... SAI-14
Fund Transactions ............................. SAI-15
Investment Management and Financial
Accounting Fee ............................... SAI-16
Underwriter ................................... SAI-17
Our Management ................................ SAI-17
Financial Statements .......................... SAI-19
</TABLE>
CLIP AND MAIL TO US TO RECEIVE A
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------------------------------------------------
To: The Equitable Life Assurance Society
of the United States
Box 2468 G.P.O.
New York, NY 10116
Please send me a copy of the Statement of Additional Information for the
Members Retirement Program Prospectus dated May 1, 1995.
Name:
----------------------------------------------------------------
Address:
----------------------------------------------------------------
----------------------------------------------------------------
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- ---------------------------------------------------------------------------
32
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1995
MEMBERS RETIREMENT PROGRAM OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
Separate Account Units of interest under a group annuity contract with THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, 787 Seventh Avenue,
New York, New York 10019, which funds the Members Retirement Program.
Toll-free telephone number 1-800-526-2701.
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the prospectus dated May 1, 1995 for the Members
Retirement Program of The Equitable Life Assurance Society of the United
States.
A copy of the prospectus to which this Statement of Additional Information
relates is available at no charge by writing to Equitable Life at Box 2468
G.P.O., New York, New York 10116 or by calling our toll-free telephone
number.
The following information is contained primarily in the prospectus:
Investment Objectives and Policies
Investment Advisory Services
Certain of the cross references in this Statement of Additional Information
are contained in the prospectus dated May 1, 1995 to which this Statement of
Additional Information relates.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Contract ............................................... SAI-2
Your Responsibilities as Employer .......................... SAI-2
Procedures for Withdrawals, Distributions and
Transfers ................................................. SAI-3
Pre-Retirement Withdrawals ............................... SAI-3
Benefit Distributions .................................... SAI-3
Spousal Consent Requirements ............................. SAI-4
Eligible Rollover Distributions and Federal Income Tax
Withholding ............................................... SAI-4
Premature Withdrawals and Transfers from a GRA ........ SAI-5
Maturing GRAs ............................................ SAI-6
Types of Benefits .......................................... SAI-6
Provisions of the Members Retirement Plan .................. SAI-8
Plan Eligibility Requirements ............................ SAI-8
Contributions to Qualified Plans ......................... SAI-8
Contributions to the Members
Retirement Plan ......................................... SAI-9
The Members Retirement Plan and Section
404(c) of ERISA ......................................... SAI-10
Vesting .................................................. SAI-10
Investment Restrictions Applicable to the Growth Equity,
Aggressive Equity and Balanced Funds ...................... SAI-11
How We Value the Assets of the Funds ....................... SAI-12
Summary of Unit Values for the Funds ....................... SAI-14
Fund Transactions .......................................... SAI-15
Investment Management and Financial Accounting
Fee ....................................................... SAI-16
Underwriter ................................................ SAI-17
Our Management ............................................. SAI-17
Financial Statements ....................................... SAI-19
</TABLE>
Copyright 1995 by The Equitable Life Assurance Society of The United
States. All rights reserved.
<PAGE>
ADDITIONAL INFORMATION ABOUT THE PROGRAM
THE CONTRACT
The Program is funded through a group annuity contract with The Equitable
Life Assurance Society of the United States (Equitable Life). The contract
governs the Investment Options that are offered under the Program. Equitable
Life has the right to terminate the contract. See Part IX:
Miscellaneous--Change or Discontinuance of the Program in the prospectus. The
Trustee holds the contract for the benefit of employers and participants in
the Program.
YOUR RESPONSIBILITIES AS EMPLOYER
If you adopt the Members Retirement Plan, you as the employer and plan
administrator will have certain responsibilities, including:
o sending us your contributions at the proper time and in the proper form;
o maintaining all personnel records necessary for administering your plan;
o determining who is eligible to receive benefits;
o forwarding to us all the forms your employees are required to submit;
o distributing summary plan descriptions and participant annual reports
to your employees and former employees;
o distributing our prospectuses and confirmation notices to your
employees and, in some cases, former employees, if under your plan they
can direct the investment of their account balances;
o filing an annual information return for your plan with the Internal
Revenue Service, if required;
o providing us the information with which to run special
non-discrimination tests, if you have a 401(k) plan or your plan accepts
post-tax employee or employer matching contributions;
o determining the amount of all contributions for each participant in the
plan;
o forwarding salary deferral and post-tax employee contributions to us; and
o selecting interest rates and monitoring default procedures, if you
elect the loan provisions in the plan.
If you, as an employer, have an individually designed plan, your
responsibilities will not be increased in any way by your adoption of the
Pooled Trust. If you adopt our self-directed prototype plan, you will be
completely responsible for administering the plan and complying with all of
the reporting and disclosure requirements applicable to qualified plans, with
the assistance of the recordkeeper of your choice.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you. If
you have questions about any of your obligations, you can contact our Account
Executives at 1-800-526-2701 or write to the Members Retirement Program at
Box 2468 G.P.O., New York, New York 10116.
SAI-2
<PAGE>
PROCEDURES FOR WITHDRAWALS, DISTRIBUTIONS AND TRANSFERS
PRE-RETIREMENT WITHDRAWALS. Under the Members Retirement Plan, self-employed
persons may generally not receive a distribution prior to age 59 1/2 , and
employees may generally not receive a distribution prior to separation from
service. However, if your employer maintains the Members Retirement Plan as a
profit sharing plan, you may request distribution of benefits after you reach
age 59 1/2 even if you are still working. In addition, if your employer has
elected to make hardship withdrawals available under your plan, you may
request distribution before age 59 1/2 in the case of financial hardship (as
defined in your plan). In a 401(k) plan, the plan's definition of hardship
applies to employer contributions but not to your 401(k)
contributions--including employee pre-tax contributions, employer qualified
non-elective contributions and qualified matching contributions. To withdraw
your own 401(k) contributions, plus interest earned on these amounts prior to
1989, you must demonstrate financial hardship within the meaning of
applicable Income Tax Regulations. Each withdrawal must be at least $1,000
(or, if less, your entire Account Balance or the amount of your hardship
withdrawal under a profit sharing or 401(k) plan). If your employer
terminates the plan, all amounts (subject to GRA restrictions) may be
distributed to participants at that time.
YOU MAY WITHDRAW ALL OR PART OF YOUR ACCOUNT BALANCE UNDER THE MEMBERS
RETIREMENT PLAN ATTRIBUTABLE TO POST-TAX EMPLOYEE CONTRIBUTIONS AT ANY TIME,
SUBJECT TO ANY WITHDRAWAL RESTRICTIONS APPLICABLE TO THE INVESTMENT OPTIONS,
provided that you withdraw at least $300 at a time (or, if less, your Account
Balance attributable to post-tax employee contributions). See Federal Income
Tax Considerations in the prospectus.
All benefit payments (including withdrawals due to plan terminations) will be
paid in accordance with the rules described below under Benefit
Distributions. All other withdrawals will be effected as of the close of
business on the day we receive the properly completed form.
If you are married, your spouse must consent in writing before you can make
any type of withdrawal, except for the purchase of a Qualified Joint and
Survivor Annuity. See Spousal Consent Requirements below.
Under the self-directed prototype plan you may receive a distribution upon
attaining normal retirement age as specified in the plan, or upon separation
from service. If your employer maintains the self-directed prototype plan as
a profit sharing plan, an earlier distribution of funds that have accumulated
after two years is available if you incur a financial hardship, as defined in
the plan. In addition, if you are married, your spouse may have to consent in
writing before you can make any type of withdrawal, except for the purchase
of a Qualified Joint and Survivor Annuity. See Spousal Consent Requirements
below.
Under an individually designed plan the availability of pre-retirement
withdrawals depends on the terms of the plan. We suggest that you ask your
employer what types of withdrawals are available under your plan.
PLEASE NOTE THAT GENERALLY YOU MAY NOT MAKE WITHDRAWALS FROM THE GUARANTEED
RATE ACCOUNTS PRIOR TO MATURITY EVEN IF THE EMPLOYER PLAN PERMITS WITHDRAWALS
PRIOR TO THAT TIME. (SEE PREMATURE WITHDRAWALS AND TRANSFERS FROM A GRA).
Benefit Distributions. In order for you to begin receiving benefits under the
Members Retirement Plan, your employer must send us your properly completed
Election of Benefits form and, if applicable, Beneficiary Designation form.
If we receive your properly completed forms on or before the 15th of the
month, your benefits will commence as of the close of business on the first
business day of the next month; if your forms arrive after the 15th, your
benefits will commence as of the close of business on the first business day
of the second following month.
Under an individually designed plan and our self-directed prototype plan,
your employer must send us a Request for Disbursement Form. We will send
single sum payments to your plan's trustee as of the close of business on the
day we receive a properly completed form. If you wish to receive annuity
payments, your plan's trustee may purchase an annuity contract from us.
Annuity payments will be paid directly to you and will commence as of the
close of business
SAI-3
<PAGE>
on the first business day of the next month if we receive your properly
completed forms on or before the 15th of the month. If we receive your
properly completed forms after the 15th, annuity payments will commence as of
the close of business on the first business day of the second following
month.
Please note that we use the value of your vested benefits at the close of
business on the day payment is due to determine the amount of benefits you
receive. We will not, therefore, begin processing your check until the
following business day. You should expect your check to be mailed within five
days after processing begins. Annuity checks can take longer. If you are
withdrawing more than $50,000 and you would like expedited delivery at your
expense, you may elect to do so on your Election of Benefits Form.
Distributions under a qualified retirement plan such as yours are subject to
extremely complicated legal requirements. When you are ready to retire, we
suggest that you discuss the available payment options with your employer.
Our Account Executives can provide you or your employer with information.
SPOUSAL CONSENT REQUIREMENTS. Under the Members Retirement Plan and the
self-directed prototype plan, you may designate a non-spouse beneficiary any
time after the earlier of the first day of the plan year in which you attain
age 35 or the date on which you separate from service with your employer. If
you designate a beneficiary other than your spouse prior to your reaching age
35, your spouse must consent to the designation and, upon reaching age 35,
must give his or her consent or the designation will lapse. In order for you
to make a withdrawal, elect a form of benefit other than a Qualified Joint
and Survivor Annuity or designate a non-spouse beneficiary, your spouse must
consent to your election in writing within the 90 day period before your
annuity starting date. To consent, your spouse must sign the appropriate line
on your election of benefits or beneficiary designation form. Your spouse's
signature must be witnessed by a notary public or plan representative.
If you change your mind, you may revoke your election and elect a Qualified
Joint and Survivor Annuity or designate your spouse as beneficiary, simply by
filing the appropriate form. Your spouse's consent is not required for this
revocation.
It is also possible for your spouse to sign a blanket consent form. By
signing this form, your spouse consents not just to a specific beneficiary
or, with respect to the waiver of the Qualified Joint and Survivor Annuity,
the form of distribution, but gives you the right to name any beneficiary or,
if applicable, form of distribution you want. Once you file such a form, you
may change your election whenever you want, even without spousal consent. No
spousal consent to a withdrawal or benefit in a form other than a Qualified
Joint and Survivor Annuity is required under certain self-directed prototype
profit sharing plans that do not offer life annuity benefits.
ELIGIBLE ROLLOVER DISTRIBUTIONS AND FEDERAL INCOME TAX WITHHOLDING. All
"eligible rollover distributions" are subject to mandatory federal income tax
withholding of 20% unless the Participant elects to have the distribution
directly rolled over to a qualified plan or individual retirement arrangement
(IRA). An "eligible rollover distribution" is a distribution of the taxable
portion of a Participant's benefit (other than a required minimum
distribution made pursuant to the Code) unless the distribution is one of a
series of substantially equal periodic payments made (not less frequently
than annually) (1) for the life (or life expectancy) of the plan Participant
or the joint lives (or joint life expectancies) of the plan Participant and
his or her designated beneficiary, or (2) for a specified period of 10 years
or more. In addition, applicable income tax regulations provide that the
following are not eligible rollover distributions subject to mandatory 20%
withholding:
o certain corrective distributions under Code Section401(k) plans;
o certain defaulted loans that are treated as distributions under Code
Section 72(p); and
o a distribution to a beneficiary other than to a surviving spouse or a
current or former spouse under a qualified domestic relations order.
SAI-4
<PAGE>
If a distribution is made to a Participant's surviving spouse, or to a
current or former spouse under a qualified domestic relations order, the
distribution may be an eligible rollover distribution, subject to mandatory
20% withholding, unless one of the exceptions described above applies.
If a distribution is not an "eligible rollover distribution" income tax will
be withheld from all taxable payments unless the recipient elects not to have
income tax withheld.
PREMATURE WITHDRAWALS AND TRANSFERS FROM A GRA. You may transfer amounts from
other Investment Options to a GRA at any time. Transfers may not be made from
one GRA to another or from a GRA to one of the other Investment Options until
the maturity date of the GRA. Likewise, you may not remove amounts from a GRA
prior to maturity in order to obtain a plan loan or make a hardship or
in-service withdrawal. If your plan's assets are transferred to another
funding vehicle from the Program or if your plan is terminated, we will
continue to hold your money in GRAs until maturity. All such GRAs will be
held in the Pooled Trust under the investment-only arrangement. See Transfers
Among Investment Options in Part VI of the Prospectus.
Withdrawals are not permitted prior to maturity unless they are permitted
under your plan and are Exempt or Qualified, as explained below. Exempt
Withdrawals may be made without penalty at any time. Qualified Withdrawals
are subject to a penalty. No Qualified Withdrawals are permitted from a
five-year GRA during the first two years after the end of its offering
period; this rule does not apply if the amount of the applicable penalty is
less than the interest you have accrued. If you have more than one GRA and
you are taking a partial withdrawal or installments, amounts held in your
most recently purchased three-year or five-year GRA will be used first to
make withdrawal or installment payments.
Exempt Withdrawal. Amounts may be withdrawn without penalty from a GRA prior
to its maturity if:
o you are a professional age 59 1/2 or older and you elect an installment
payout of at least three years or an annuity benefit;
o you are not a professional and you attain age 59 1/2 ;
o you are not a professional and you terminate employment (including
retirement);
o you are disabled;
o you attain age 70 1/2 ; or
o you die.
If you are a participant under a plan which was adopted by an employer which
is not a member of a professional association which makes the Program
available as a benefit of membership, the above rules will be applied
substituting the term "highly compensated" for "professional" and "non-highly
compensated" for "not a professional." For this purpose, "highly compensated"
shall have the meaning set forth under Provisions of the Members
Plans--Contributions to the Members Retirement Plan below.
Qualified Withdrawal. You may withdraw amounts with a penalty from a GRA
prior to its maturity if you are a professional and you take a payment upon
retirement after age 59 1/2 under a distribution option of less than 3 years
duration. The interest paid to you upon withdrawal will be reduced by an
amount calculated as follows:
(i) the amount by which the three-year GRA rate being offered on the
date of withdrawal exceeds the GRA rate from which the withdrawal is made,
times
(ii) the years and/or fraction of a year until maturity, times
(iii) the amount withdrawn from the GRA.
We will make this calculation based on GRA rates without regard to deductions
for the applicable Program expense charge. If the three-year GRA is not being
offered at the time of withdrawal, the adjustment will be based on then
current rates on U.S. Treasury notes or for a comparable option under the
Program.
SAI-5
<PAGE>
Your original contributions will never be reduced by this adjustment. No
adjustment is made if the current three-year GRA rate is equal to or less
than the rate for the GRA from which the Qualified Withdrawal is being made.
A separate adjustment is calculated for each GRA. If the interest accumulated
in one GRA is insufficient to recover the amount calculated under the
formula, the excess may be deducted as necessary from interest accumulated in
other same duration GRAs in the same Guaranteed Rate Account.
EXAMPLE: You contribute $1,000 to a three-year GRA on January 1 with a rate
of 4%. Two years later you make a Qualified Withdrawal. Your GRA balance is
$1,082. The current GRA rate is 6%; (i) 6%-4%=2%, (ii) 2% x 1 year = 2%,
(iii) 2% x $1,082 = $21.64. The withdrawal proceeds would be $1,082-$21.64 =
$1,060.36.
MATURING GRAS
o Your confirmation notice lists the maturity date for each GRA you hold.
o You may arrange in advance for the reinvestment of your maturing GRAs by
filing a GRA maturity form or by using the Account Investment Management
(AIM) System. (Instructions must be received at least 4 days before the GRA
matures.)
o The instructions you give us remain in effect until you change them (again,
at least 4 days before you want the change to go into effect).
o You may have different instructions for your GRAs attributable to employer
contributions than for your GRAs attributable to employee contributions.
o If you reinvest a maturing GRA in a new GRA, the reinvestment date is the
date of maturity.
o If you have never provided GRA maturity instructions, your maturing GRAs
will be allocated to the Money Market Guarantee Account.
TYPES OF BENEFITS
Under the Members Retirement Plan, and under most self-directed prototype
plans, except as provided below, you may select one or more of the following
forms of distribution once you are eligible to receive benefits. Please see
Benefit Distributions under Procedures for Withdrawals, Distributions and
Transfers. Not all of these distribution forms may be available to you, if
your employer has adopted an individually designed plan or a self-directed
prototype profit sharing plan that does not offer annuity benefits. We
suggest you ask your employer what types of benefits are available under your
plan.
QUALIFIED JOINT AND SURVIVOR ANNUITY. An annuity providing equal monthly
payments for your life and, after your death, for your surviving spouse's
life. No payments will be made after you and your spouse die, even if you
have received only one payment. THE LAW GENERALLY REQUIRES THAT IF THE VALUE
OF YOUR VESTED BENEFITS EXCEEDS $3,500, YOU MUST RECEIVE A QUALIFIED JOINT
AND SURVIVOR ANNUITY UNLESS YOUR SPOUSE CONSENTS IN WRITING TO A CONTRARY
ELECTION. Please see Spousal Consent Requirements under Procedures for
Withdrawals, Distributions and Transfers for an explanation of the procedures
for electing not to receive a Qualified Joint and Survivor Annuity.
LUMP SUM PAYMENT. A single payment of all or part of your vested benefits. If
you take a lump sum payment of only part of your balance, it must be at least
$1,000. If you have more than one GRA, amounts held in your most recent GRA
will first be used to make payment. IF YOUR VESTED BENEFIT IS $3,500 OR LESS,
YOU WILL RECEIVE A LUMP SUM PAYMENT OF THE ENTIRE AMOUNT.
SAI-6
<PAGE>
Periodic Installments. Monthly, quarterly, semi-annual or annual payments
over a period of at least three years, where the initial payment on a monthly
basis is at least $300. You can choose either a time-certain payout, which
provides variable payments over a specified period of time, or a
dollar-certain payout, which provides level payments over a variable period
of time. During the installment period, your remaining Account Balance will
be invested in whatever Options you designate; each payment will be drawn pro
rata from all the Options you have selected. If you have more than one GRA,
amounts held in your most recently purchased three-year or five-year GRA will
first be used to make installment payments. If you die before receiving all
the installments, we will make the remaining payments to your beneficiary. We
do not offer installments for benefits under individually designed plans or
under our self-directed prototype plan.
LIFE ANNUITY. An annuity providing monthly payments for your life. No
payments will be made after your death, even if you have received only one
payment.
LIFE ANNUITY--PERIOD CERTAIN. An annuity providing monthly payments for your
life or, if longer, a specified period of time. If you die before the end of
that specified period, payments will continue to your beneficiary until the
end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years; the longer the specified period, the
smaller the monthly payments will be.
JOINT AND SURVIVOR ANNUITY. An annuity providing monthly payments for your
life and that of your beneficiary. You may specify the percentage of the
annuity payment to be made to your beneficiary. Subject to legal limitations,
that percentage may be 100%, 75%, 50%, or any percentage you specify.
JOINT AND SURVIVOR ANNUITY--PERIOD CERTAIN. An annuity providing monthly
payments for your life and that of your beneficiary or, if longer, a
specified period of time. If you and your beneficiary both die before the end
of the specified period, payments will continue to your contingent
beneficiary until the end of the period. Subject to legal limitations, you
may specify a minimum payment period of 5, 10, 15 or 20 years and the
percentage of the annuity payment to be made to your beneficiary (as noted
above under Joint and Survivor Annuity); the longer the specified period, the
smaller the monthly payments will be.
CASH REFUND ANNUITY. An annuity providing equal monthly payments for your
life with a guarantee that the sum of those payments will be at least equal
to the portion of your vested benefits used to purchase the annuity. If upon
your death the sum of the monthly payments to you is less than that amount,
your beneficiary will receive a lump sum payment of the remaining guaranteed
amount.
The cost of the fixed annuity is determined from tables in the group annuity
contract which show the amounts necessary to purchase each $1 of monthly
payment (after deduction of any applicable taxes and the annuity
administrative charge described below). Payments depend on the annuity
selected, your age, and the age of your beneficiary if you select a joint and
survivor annuity. We may change the tables in the contract no more than once
every five years.
The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, an annuity administrative charge of $350 will be deducted
from the amount used to purchase the annuity. If we give any group pension
client with a qualified profit sharing plan a better annuity purchase rate
than those currently available for the Program, we will also make those rates
available to Program participants. The annuity administrative charge may be
greater than $350 in that case.
Under a Qualified Joint and Survivor Annuity or a Cash Refund Annuity, the
amount of the monthly payments is fixed at retirement and remains level
throughout the distribution period. Under the Life Annuity, Life
Annuity--Period Certain, Joint and Survivor Annuity and Joint and Survivor
Annuity--Period Certain, you may select either fixed or variable payments.
The variable payments reflect the investment performance of the Growth Equity
Fund. If you are interested in a variable annuity, when you are ready to
select your benefit please ask our Account Executives for our variable
annuity prospectus supplement.
SAI-7
<PAGE>
The chart below shows the relative financial value of the different annuity
options, based on our current rates for fixed annuities. This chart is
provided as a sample. The numbers provided in the Rate per $1.00 of Annuity
column, which are used to calculate the monthly annuity provided, are subject
to change. The example assumes the annuitant's age is 65 1/2 years, the joint
annuitant's age is the same and the amount used to purchase the annuity is
$100,000. The annuity administrative charge of $350 is deducted from the
purchase price of $100,000, leaving a total of $99,650 to be applied to
purchase the annuity. Certain legal requirements may limit the forms of
annuity available to you.
<TABLE>
<CAPTION>
AMOUNT TO BE
APPLIED ON RATE PER MONTHLY
ANNUITY FORM $1.00 OF ANNUITY
ANNUITY FORM ELECTED ANNUITY PROVIDED
- -------------------------------------------- -------------- ---------- ----------
<S> <C> <C> <C>
Life ........................................ $99,650 $143.06 $696.56
Cash Refund ................................. 99,650 150.82 660.72
5 Year Certain Life ......................... 99,650 144.62 689.05
10 Year Certain Life ........................ 99,650 148.55 670.82
15 Year Certain Life ........................ 99,650 153.87 647.62
100% Joint & Survivor Life .................. 99,650 168.01 593.12
75% Joint & Survivor Life ................... 99,650 161.16 618.33*
50% Joint & Survivor Life ................... 99,650 155.13 642.36*
100% Joint & Survivor--5 Year Certain Life** 99,650 168.04 593.01
100% Joint & Survivor--10 Year Certain
Life** ..................................... 99,650 168.27 592.20
100% Joint & Survivor--15 Year Certain
Life** ..................................... 99,650 168.91 589.96
100% Joint & Survivor--20 Year Certain
Life** ..................................... 99,650 170.10 585.83
</TABLE>
* Represents the amount payable to the primary annuitant. A surviving
joint annuitant would receive the applicable percentage of the amount
paid to the primary annuitant.
** You may also elect a Joint and Survivor Annuity--Period Certain with a
monthly benefit payable to the surviving joint annuitant in any
percentage you specify.
PROVISIONS OF THE MEMBERS RETIREMENT PLAN
PLAN ELIGIBILITY REQUIREMENTS. Under the Members Retirement Plan, the
employer specifies the eligibility requirements for its plan in the
Participation Agreement. The employer may exclude any employee who has not
attained a specified age (not to exceed 21) and completed a specified number
of years (not to exceed two) in each of which he completed 1,000 hours of
service. No more than one year of eligibility service may be required for a
401(k) arrangement.
The Members Retirement Plan provides that a sole proprietor, partner or
shareholder may, upon commencement of employment or upon first becoming
eligible to participate in any qualified plan of the employer, make a
one-time irrevocable election not to participate in the plan or to make a
reduced contribution. This election applies to all plans of the employer, now
and in the future, and should be discussed with your tax advisor.
CONTRIBUTIONS TO QUALIFIED PLANS. The provisions of the Internal Revenue Code
(Code) relating to contributions under qualified retirement plans are
outlined briefly below. For purposes of this outline we have assumed that you
are not a participant in any other qualified retirement plan.
The employer's contributions to the plan are deductible in the year for which
they are made. As a general rule, employer contributions must be made for any
year by the due date (including extensions) for filing the employer's federal
income tax return for that year. However, participants' salary deferrals
under a 401(k) plan must be contributed by the employer as soon as
practicable after the payroll period for which the deferral is made.
If the employer contributes more to the plan than is deductible under the
rules described below, the employer may be liable for a 10% penalty tax on
that nondeductible amount and may risk disqualifying the plan.
SAI-8
<PAGE>
CONTRIBUTIONS TO THE MEMBERS RETIREMENT PLAN. The employer makes annual
contributions to its plan based on the plan's provisions.
An employer that adopts the Members Retirement Plan as a profit sharing plan
makes contributions in discretionary amounts to be determined annually. The
aggregate employer contribution to the plan, including participants' salary
deferrals under a 401(k) arrangement, is limited to 15% of all participants'
compensation for the plan year. For plan purposes, compensation for
self-employed persons does not include deductible plan contributions made on
behalf of the self-employed person.
A 401(k) arrangement is available as part of the profit sharing plan. Under a
401(k) arrangement, employees are permitted to make contributions to the plan
on a pre-tax basis. The maximum amount that may be contributed by
highly-compensated employees is limited depending upon the amount that is
contributed by non-highly compensated employees and the amount the employer
designates as a nonforfeitable 401(k) contribution. A "highly compensated"
employee for this purpose is (a) an owner of more than 5% of the business, or
(b) anyone with earnings of more than $100,000 from the business, or (c)
anyone with earnings of more than $66,000 from the business who is among the
highest-paid 20% of employees, or (d) an officer of the business with
earnings of at least $60,000. Participants who have "highly-compensated
employee" status during the previous year are also treated as
highly-compensated employees for the current year. In any event, the maximum
amount each employee may defer is limited to $9,240 for 1995 reduced by that
employee's salary reduction contributions to simplified employee pensions
(SEPs) and employee contributions to tax deferred (Section 403(b)) annuities,
and contributions deductible by the employee under a trust described under
Section 501(c)(18) of the Code.
If the employer adopts the Members Retirement Plan as a defined contribution
pension plan, its contribution is equal to the percentage of each
participant's compensation that is specified in the Participation Agreement.
Under either type of plan, compensation in excess of $150,000 must be
disregarded in making contributions. Contributions may be integrated with
Social Security which means that contributions with respect to each
participant's compensation in excess of the integration level may exceed
contributions made with respect to compensation below the integration level,
within limits imposed by the Code. Your Account Executive can help you
determine the legally permissible contribution.
Except in the case of certain non-top heavy plans, contributions on behalf of
non-key employees must be at least 3% of compensation (or, under the profit
sharing plan, the percentage contributed on behalf of key employees, if less
than 3%). A "key employee" means (a) an owner of one of the ten largest (but
more than 1/2 %) interests in the business with earnings of more than
$30,000, or (b) an officer of the business with earnings of more than $60,000
or (c) an owner of more than 5% of the business, or (d) an owner of more than
1% of the business with earnings of more than $150,000. For purposes of (b),
no more than 50 employees (or, if less, the greater of 3 or 10% of the
employees) shall be treated as officers.
Certain plans may also permit participants to make post-tax contributions. We
will maintain a separate account to reflect each participant's post-tax
contributions and the earnings (or losses) thereon. Post-tax contributions
are now subject to complex rules under which the maximum amount that may be
contributed by highly compensated employees is limited, depending on the
amount contributed by non-highly compensated employees. IF THE EMPLOYER
PERMITS HIGHLY-COMPENSATED EMPLOYEES TO MAKE POST-TAX CONTRIBUTIONS, THE
EMPLOYER SHOULD MAKE SURE THAT ALL NON-DISCRIMINATION TESTS ARE PASSED. If an
employer employs only "highly compensated" employees (as defined above),
post-tax contributions may not be made to the plan. In addition, the employer
may make matching contributions to certain plans, i.e., contributions which
are based upon the amount of post-tax or pre-tax 401(k) contributions made by
plan participants. Special non-discrimination rules also apply to matching
contributions and may limit the amount of matching contributions that may be
made on behalf of highly compensated employees.
SAI-9
<PAGE>
Contributions on behalf of each participant are limited to the lesser of
$30,000 and 25% of his earnings (excluding, in the case of self-employed
persons, all deductible plan contributions). The participant's post-tax
contributions are taken into account for purposes of applying this
limitation.
Each participant's Account Balance equals the sum of the amounts accumulated
in each Investment Option. We will maintain separate records of each
participant's interest in each of the Investment Options attributable to
employer contributions, 401(k) non-elective contributions, 401(k) elective
contributions, post-tax employee contributions and employer matching
contributions. Any amounts rolled over from the plan of a previous employer
will also be accounted for separately. Our records will also reflect each
participant's degree of vesting (see below) in his Account Balance
attributable to employer contributions and employer matching contributions.
The participant will receive an individual confirmation of each transaction
(including the deduction of record maintenance and report fees). The
participant will also receive an annual statement showing his Account Balance
in each Investment Option attributable to each type of contribution. Based on
information supplied by you, we will run the required special
non-discrimination tests (Actual Deferral Percentage and Actual Contribution
Percentage) applicable to 401(k) plans and plans that accept post-tax
employee contributions or employer matching contributions.
Elective deferrals to a 401(k) plan are subject to applicable FICA (Social
Security) and FUTA (unemployment) taxes.
THE MEMBERS RETIREMENT PLAN AND SECTION 404(C) OF ERISA. The Members
Retirement Plan is a participant directed individual account plan designed to
comply with the requirements of Section 404(c) of ERISA. Section 404(c) of
ERISA, and the related Department of Labor (DOL) regulation, provide that if
a Participant or beneficiary exercises control over the assets in his or her
plan account, plan fiduciaries will not be liable for any loss that is the
direct and necessary result of the Participant's or beneficiary's exercise of
control. This means that if the employer plan complies with Section 404(c)
and the DOL regulation thereunder, participants can make and are responsible
for the results of their own investment decisions.
Section 404(c) plans must, among other things, make a broad range of
investment choices available to Participants and beneficiaries and must
provide them with enough information to make informed investment decisions.
The Members Retirement Plan provides the broad range of investment choices
and information that are needed in order to meet the requirements of Section
404(c). Our suggested summary plan descriptions, annual reports,
prospectuses, and confirmation notices provide the required investment
information; it is the employer's responsibility, however, to see that this
information is distributed in a timely manner to participants and
beneficiaries. You should read this information carefully before making your
investment decisions.
VESTING. Vesting refers to the nonforfeitable portion of a participant's
Account Balance attributable to employer contributions under the Members
Retirement Plan. The participant's Account Balance attributable to 401(k)
contributions, post-tax employee contributions and rollover contributions is
nonforfeitable at all times.
A participant will become fully vested in all benefits if still employed at
death, disability, attainment of normal retirement age or upon termination of
the plan. If the participant terminates employment before that time, any
benefits that have not yet become vested under the plan's vesting schedule
will be forfeited. The normal retirement age is 65 under the Members
Retirement Plan.
SAI-10
<PAGE>
Except as described below in the case of certain non-top heavy plans,
benefits must vest in accordance with any of the schedules below or one at
least as favorable to participants:
<TABLE>
<CAPTION>
SCHEDULE A SCHEDULE B SCHEDULE C
YEARS OF VESTED VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE PERCENTAGE
- ---------- ------------ ------------ ------------
<S> <C> <C> <C>
1 0% 0% 0%
2 100 20 0
3 100 40 100
4 100 60 100
5 100 80 100
6 100 100 100
</TABLE>
If the plan requires more than one year of service for participation, it must
use Schedule A or one at least as favorable to participants.
Provided the employer plan is not "top-heavy," within the meaning of Section
416 of the Code, and provided that the plan does not require more than one
year of service for participation, an employer may, in accordance with
provisions of the Members Retirement Plan, instead elect one of the following
vesting schedules or one at least as favorable to participants:
<TABLE>
<CAPTION>
SCHEDULE F SCHEDULE G
YEARS OF VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE
- ------------- ------------ ------------
<S> <C> <C>
less than 3 0% 0%
3 20 0
4 40 0
5 60 100
6 80 100
7 100 100
</TABLE>
INVESTMENT RESTRICTIONS APPLICABLE TO THE GROWTH EQUITY, AGGRESSIVE EQUITY
AND BALANCED FUNDS
For an explanation of the investment restrictions applicable to the Global,
Conservative Investors and Growth Investors Funds, see Investment
Restrictions in The Hudson River Trust prospectus which appears behind The
Members Retirement Program prospectus.
None of the Growth Equity, Aggressive Equity and Balanced Funds will:
o trade in foreign exchange (except transactions incidental to the
settlement of purchases or sales of securities for a Fund);
o make an investment in order to exercise control or management over a
company;
o underwrite the securities of other companies, including purchasing
securities that are restricted under the 1933 Act or rules or regulations
thereunder (restricted securities cannot be sold publicly until they are
registered under the 1933 Act), except as stated below;
o make short sales, except when the Fund has, by reason of ownership of
other securities, the right to obtain securities of equivalent kind and
amount that will be held so long as they are in a short position;
o trade in commodities or commodity contracts (except the Balanced Fund
is not prohibited from entering into hedging transactions through the use
of stock index or interest rate future contracts, as described in the
prospectus);
SAI-11
<PAGE>
o purchase real estate or mortgages, except as stated below. The Funds
may buy shares of real estate investment trusts listed on stock exchanges
or reported on the National Association of Securities Dealers, Inc.
automated quotation system ("NASDAQ");
o have more than 5% of its assets invested in the securities of any one
registered investment company. A Fund may not own more than 3% of an
investment company's outstanding voting securities. Finally, total
holdings of investment company securities may not exceed 10% of the value
of the Fund's assets;
o purchase any security on margin or borrow money except for short-term
credits necessary for clearance of securities transactions;
o make loans, except loans through the purchase of debt obligations or
through entry into repurchase agreements; or
o invest more than 10% of its total assets in restricted securities, real
estate investments, or portfolio securities not readily marketable.
The Growth Equity and Balanced Funds will not make an investment in an
industry if that investment would make the Fund's holding in that industry
exceed 25% of its assets. The United States government, and its agencies and
instrumentalities, are not considered members of any industry.
The Growth Equity and Aggressive Equity Funds will not purchase or write puts
and calls (options).
HOW WE VALUE THE ASSETS OF THE FUNDS
The assets of the Funds are valued as follows:
o STOCKS listed on national securities exchanges or traded on the NASDAQ
national market system are valued at the last sale price. If on a
particular day there is no sale, they are valued at the latest available
bid price reported on a composite tape. Other unlisted securities reported
on the NASDAQ system are valued at inside (highest) quoted bid prices.
o FOREIGN SECURITIES not traded directly, or in American Depository
Receipt (ADR) form, in the United States, are valued at the last sale
price in the local currency or an exchange in the country of origin.
Foreign currency is converted into dollars at current exchange rates.
o UNITED STATES TREASURY SECURITIES and other obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities are valued at representative quoted prices.
o LONG-TERM PUBLICLY TRADED CORPORATE BONDS (i.e., maturing in more than
a year) are valued at prices obtained from a bond pricing service of a
major dealer in bonds when such prices are available; however, in
circumstances where it is deemed appropriate to do so, an over-the-counter
or exchange quotation may be used.
o CONVERTIBLE PREFERRED STOCKS listed on national securities exchanges
are valued at their last sale price or, if there is no sale, at the latest
available bid price.
o CONVERTIBLE BONDS and UNLISTED CONVERTIBLE PREFERRED STOCKS are valued
at bid prices obtained from one or more major dealers in such securities;
where there is a discrepancy between dealers, values may be adjusted based
on recent premium spreads to the underlying common stock.
SAI-12
<PAGE>
o SHORT-TERM DEBT SECURITIES that mature in more than 60 days are valued
at representative quoted prices. Short-term securities that mature in 60
days or less are valued at amortized cost, which approximates market
value. The Funds may also acquire short-term debt securities through units
in our Separate Account No. 2A. These unit values are calculated in the
same way as Fund Units. The assets of Separate Account No. 2A are valued
as described above.
o OPTION CONTRACTS listed on organized exchanges are valued at last sale
prices or closing asked prices, in the case of calls, and at quoted bid
prices, in the case of puts. The market value of a put or call will
usually reflect, among other factors, the market price of the underlying
security. When a Fund writes a call option, an amount equal to the premium
received by the Fund is included in the Fund's financial statements as an
asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the
option written. The current market value of a traded option is the last
sale price or, in the absence of a sale, the last offering price. When an
option expires on its stipulated expiration date or a Fund enters into a
closing purchase or sales transaction, the Fund realizes a gain or loss
without regard to any unrealized gain or loss on the underlying security,
and the liability related to such option is extinguished. When an option
is exercised, the Fund realizes a gain or loss from the sale of the
underlying security, and the proceeds of the sale are increased by the
premium originally received, or reduced by the price paid for the option.
Our investment officers determine in good faith the fair market value of
securities and other assets that do not have a readily available market price
in accordance with accepted accounting practices and applicable laws and
regulations.
SAI-13
<PAGE>
SUMMARY OF UNIT VALUES FOR THE FUNDS
Set forth below are Unit Values for the Funds, computed to the nearest cent
on the last business day of the periods specified. The value of a Growth
Equity Fund Unit was established at $10.00 on January 1, 1968, for the
National Association of Realtors Members Retirement Program (NAR Program),
which was merged into the Members Retirement Program on December 27, 1984.
The Aggressive Equity Fund and Balanced Fund Unit Values under the Program
were established at $10.00 on May 1, 1985, the date on which the Funds were
first made available under the Program. The Global, Conservative Investors
and Growth Investors Unit Values under the Program were established at $10.00
on July 1, 1993, the date on which these Funds were first made available
under the Program.
Hypothetical Unit Values have been approximated for the Aggressive Equity and
Balanced Funds for periods prior to the availability of those Funds under the
Program by using the actual performance of each Fund for those periods and
making adjustments to reflect an approximation of the asset-based charges
that would have applied under the Program during those periods. In order to
approximate the historical effect of those charges, we applied the ratio of
expenses to average net assets actually experienced by the Growth Equity Fund
under the NAR Program during these periods to the historical investment
experience of the Aggressive Equity and Balanced Funds. The Global,
Conservative Investors and Growth Investors Fund Unit Values before July 1,
1993 reflect hypothetical performance based on (1) the actual performance of
the Global Portfolio since August 27, 1987 and the Conservative Investors and
Growth Investors Portfolios since October 2, 1989, respectively, the dates
each commenced operations, and (2) the deduction of the Program Expense
Charge, the financial accounting fee and the daily accrual of direct expenses
attributable to the Growth Equity Fund. Since July 1, 1993, they reflect
actual performance. See Deductions and Charges in the prospectus for a
description of the charges which will apply.
UNIT VALUES OF THE FUNDS
<TABLE>
<CAPTION>
CONSERVATIVE GROWTH
LAST BUSINESS GROWTH EQUITY AGGRESSIVE BALANCED GLOBAL INVESTORS INVESTORS
DAY OF FUND EQUITY FUND(1) FUND(1) FUND(2) FUND(2) FUND(2)
- --------------- ------------- -------------- ---------- -------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1985 ........... 55.34 11.18 11.57 -- -- --
1986 ........... 62.04 11.22 12.71 -- -- --
1987 ........... 64.52 10.77 11.84 5.25 -- --
1988 ........... 74.54 10.85 13.42 5.74 -- --
1989 ........... 106.57 15.75 16.76 7.20 7.23 5.52
1990 ........... 93.41 16.93 16.45 6.67 7.59 6.04
1991 ........... 140.45 31.33 22.97 8.61 8.99 8.90
1992 ........... 140.51 30.01 22.07 8.45 9.38 9.21
1993 ........... 165.88 33.95 24.45 11.05 10.22 10.49
1994 ........... 161.15 32.21 22.19 11.45 9.62 9.98
March 1995 ..... 171.89 34.08 22.98 11.42 9.99 10.43
</TABLE>
(1) Unit Values reflect hypothetical performance through April 30, 1985
and actual performance thereafter.
(2) Unit Values reflect hypothetical performance through July 1, 1993 and
actual performance thereafter.
SAI-14
<PAGE>
FUND TRANSACTIONS
The Growth Equity, Aggressive Equity and Balanced Funds are charged for
securities brokers' commission, transfer taxes and other fees relating to
securities transactions. Transactions in equity securities for each of these
Funds are executed primarily through brokers that receive a commission paid
by the Fund. The brokers are selected by Alliance Capital Management L.P.
("Alliance") and Equitable Life. For 1994, 1993 and 1992, the Growth Equity
Fund paid $4,738,796, $3,407,006 and $2,299,390, respectively, in brokerage
commissions; the Aggressive Equity Fund paid $908,990, $616,015 and $314,464,
respectively, in brokerage commissions; and the Balanced Fund paid $801,704,
$820,212 and $630,428, respectively, in brokerage commissions. Similar fees
are paid by the corresponding Hudson River Trust Portfolios in which the
Global, Conservative Investors and Growth Investors Funds invest.
Alliance and Equitable Life seek to obtain the best price and execution of
all orders placed for the portfolios of the Funds, considering all the
circumstances. If transactions are executed in the over-the-counter market,
they will deal with the principal market makers, unless more favorable prices
or better execution is otherwise obtainable. There are occasions on which
portfolio transactions for the Funds may be executed as part of concurrent
authorizations to purchase or sell the same security for certain other
accounts or clients advised by Alliance and Equitable Life. These concurrent
authorizations potentially can be either advantageous or disadvantageous to
the Funds. When these concurrent authorizations occur, the objective is to
allocate the executions among the Funds and the other accounts in a fair
manner.
We also consider the amount and quality of securities research services
provided by a broker. Typical research services include general economic
information and analyses and specific information on and analyses of
companies, industries and markets. Factors in evaluating research services
include the diversity of sources used by the broker and the broker's
experience, analytical ability, and professional stature. The receipt of
research services from brokers tends to reduce our expenses in managing the
Funds. This is taken into account when setting the expense charges.
Brokers who provide research services may charge somewhat higher commissions
than those who do not. However, we will select only brokers whose commissions
we believe are reasonable in all the circumstances. Of the brokerage
commissions paid by the Growth Equity, Aggressive Equity and Balanced Funds
during 1994, $1,206,667, $236,873 and $227,738, respectively, were paid to
brokers providing research services on transactions of $583,622,157,
$62,548,119 and $99,502,914, respectively.
We periodically evaluate the services provided by brokers and prepare
internal proposals for allocating among those various brokers business for
all the accounts we manage or advise. That evaluation involves consideration
of the overall capacity of the broker to execute transactions, its financial
condition, its past performance and the value of research services provided
by the broker in servicing the various accounts advised or managed by us. We
have no binding agreements with any firm as to the amount of brokerage
business which the firm may expect to receive for research services or
otherwise. There may, however, be understandings with certain firms that we
will continue to receive services from such firms only if such firms are
allocated a certain amount of brokerage business. We may try to allocate such
amounts of business to such firms to the extent possible in accordance with
the policies described above.
Research information obtained by us may be used in servicing all accounts
under our management, including our general account. Similarly, not all
research provided by a broker or dealer with which the Funds transact
business will necessarily be used in connection with those Funds.
Transactions for the Funds in the over-the-counter market are normally
executed as principal transactions with a dealer that is a principal
market-maker in the security, unless a better price or better execution can
be obtained from another source. Under these circumstances, the Funds pay no
commission. Similarly, portfolio transactions in money market and debt
securities will normally be executed through dealers or underwriters under
circumstances where the Fund pays no commission.
SAI-15
<PAGE>
When making securities transactions for Funds that do not involve paying a
brokerage commission (such as the purchase of short-term debt securities), we
seek to obtain prompt execution in an effective manner at the best price.
Subject to this general objective, we may give orders to dealers or
underwriters who provide investment research. None of the Funds will pay a
higher price, however, and the fact that we may benefit from such research is
not considered in setting the expense charges.
In addition to using brokers and dealers to execute portfolio securities
transactions for accounts we manage, we may enter into other types of
business transactions with brokers or dealers. These other transactions will
be unrelated to allocation of the Funds' portfolio transactions.
INVESTMENT MANAGEMENT AND FINANCIAL ACCOUNTING FEE
The table below shows the amount we received under the investment management
and financial accounting fee under the Program during each of the last three
years. See Part VII: Deductions and Charges in the prospectus.
<TABLE>
<CAPTION>
FUND 1994 1993 1992
- ---------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Growth Equity ......... $171,628 $155,398 $132,106
Aggressive Equity .... 56,470 48,194 32,848
Balanced .............. 50,964 46,319 35,655
Global ................ 5,753 880(1) --
Conservative Investors 3,816 1,227(1) --
Growth Investors ...... 3,901 772(1) --
</TABLE>
[FN]
- --------------
(1) Represents financial accounting fees only, from July 1, 1993, when
these Funds were first offered under the Program, to December 31, 1993.
SAI-16
<PAGE>
UNDERWRITER
Equico Securities, Inc. (Equico), a wholly-owned subsidiary of Equitable
Life, may be deemed to be the principal underwriter of separate account units
under the group annuity contract. Equico is registered with the SEC as a
broker-dealer under the 1934 Act and is a member of the National Association
of Securities Dealers, Inc. Equico's principal business address is 1755
Broadway, New York, NY 10019. The offering of the units under the contract is
continuous. No underwriting commissions have been paid during any of the last
three fiscal years with respect to units of interest under the contract. See
Part VII: Deductions and Charges in the prospectus.
OUR MANAGEMENT
Equitable Life is managed by a Board of Directors which is elected by its
shareholders. Its directors and certain of its executive officers and their
principal occupations are as follows:
<TABLE>
<CAPTION>
DIRECTORS
NAME PRINCIPAL OCCUPATION
- ----------------------------- -------------------------------------------------------------------------------
<S> <C>
Claude Bebear Chairman and Chief Executive Officer, AXA
Christopher Brocksom Chief Executive Officer, AXA Equity & Law Life Assurance Society
Francoise Colloc'h Executive Vice President--Culture--Management--Communications, AXA
*Henri de Castries Executive Vice President, Finance, AXA
Joseph L. Dionne Chairman and Chief Executive Officer, McGraw-Hill, Inc.
*William T. Esrey Chairman, President and Chief Executive Officer, Sprint Corporation
Jean-Rene Fourtou Chairman and Chief Executive Officer, Rhone Paulenc, S.A.
Norman C. Francis President, Xavier University of Louisiana
Donald J. Greene Counselor-at-Law, Partner, Le Boeuf, Lamb, Greene & MacRae
John T. Hartley Chairman and Chief Executive Officer, Harris Corporation
*John H. F. Haskell, Jr. Director and Managing Director, Dillon, Read & Co., Inc.
*W. Edwin Jarmain President, Jarmain Group Inc.
Don Johnston Retired Chairman and Chief Executive Officer, JWT Group, Inc.
*Winthrop Knowlton Chairman, Knowlton Associates
Arthur L. Liman Counselor-at-Law, Partner, Paul, Weiss, Rifkind, Wharton & Garrison
George T. Lowy Counselor-at-Law, Partner, Cravath, Swaine & Moore
Didier Pineau-Valencienne Chairman and Chief Executive Officer, Schneider, S.A.
*George J. Sella, Jr. Retired Chairman of the Board and Chief Executive Officer, American Cyanamid
Company
*Dave H. Williams Chairman and Chief Executive Officer, Alliance Capital Management, L.P.
</TABLE>
[FN]
- --------------
*Member of Equitable Life's Investment Committee.
SAI-17
<PAGE>
Unless otherwise indicated, the following persons have been involved in the
management of Equitable Life in various executive positions during the last
five years.
<TABLE>
<CAPTION>
OFFICER-DIRECTORS
NAME PRINCIPAL OCCUPATION
- ------------------------- ------------------------------------------------------------------------------------
<S> <C>
*Richard H. Jenrette Chairman of the Board and Chief Executive Officer, The Equitable Companies
Incorporated; Chairman of the Executive Committee, Equitable Life; Chairman of the
Board, Donaldson, Lufkin & Jenrette, Inc.
*Joseph J. Melone President and Chief Operating Officer, The Equitable Companies Incorporated;
Chairman of the Board and Chief Executive Officer, Equitable Life; prior thereto,
President, The Prudential Insurance Company of America
James M. Benson President and Chief Operating Officer, Equitable Life; prior thereto, President,
Management Compensation Group
Jerry M. de St. Paer Executive Vice President and Chief Financial Officer
Robert E. Garber Executive Vice President and General Counsel
William T. McCaffrey Executive Vice President and Chief Administrative Officer
Brian S. O'Neil Executive Vice President and Chief Investment Officer
Jose Suquet Executive Vice President and Chief Agency Officer
Gordon G. Dinsmore Senior Vice President
Alvin H. Fenichel Senior Vice President and Controller
J. Thomas Liddle, Jr Senior Vice President
Kevin R. Byrne Vice President and Treasurer
Paul J. Flora Vice President and Auditor
Molly K. Heines Vice President and Secretary
</TABLE>
[FN]
- -------------
* Member of Equitable Life's Investment Committee.
SAI-18
<PAGE>
FINANCIAL STATEMENTS
The financial statements of Equitable Life included in this Statement of
Additional Information should be considered only as bearing upon the ability
of Equitable Life to meet its obligations under the group annuity contract.
They should not be considered as bearing upon the investment experience of
the Funds. The financial statements of Separate Account Nos. 3 (Pooled), 4
(Pooled), 10 (Pooled) and 51 (Pooled) reflect applicable fees, charges and
other expenses under the Program as in effect during the periods covered, as
well as the charges against the accounts made in accordance with the terms of
all other contracts participating in the respective separate accounts, if
applicable.
<TABLE>
<CAPTION>
<S> <C>
Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51 (Pooled):
Report of Independent Accountants--Price Waterhouse LLP ........................................... SAI-20
Separate Account No. 3 (Pooled) (The Aggressive Equity Fund):
Statement of Assets and Liabilities, December 31, 1994 ............................................ SAI-21
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1994 and 1993 ....................................................................... SAI-22
Portfolio of Investments, December 31, 1994 ....................................................... SAI-23
Separate Account No. 4 (Pooled) (The Growth Equity Fund):
Statement of Assets and Liabilities, December 31, 1994 ............................................ SAI-27
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1994 and 1993 ....................................................................... SAI-28
Portfolio of Investments, December 31, 1994 ....................................................... SAI-29
Separate Account No. 10 (Pooled) (The Balanced Fund):
Statement of Assets and Liabilities, December 31, 1994 ............................................ SAI-34
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1994 and 1993 ....................................................................... SAI-35
Portfolio of Investments, December 31, 1994 ....................................................... SAI-36
Separate Account No. 51 (Pooled) (The Global, Conservative Investors and Growth Investors Funds):
Statement of Assets and Liabilities, December 31, 1994 ............................................ SAI-40
Statements of Operations and Changes in Net Assets for the year ended December 31, 1994
and the period July 1, 1993 through December 31, 1993 ............................................ SAI-41
Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51 (Pooled):
Notes to Financial Statements ..................................................................... SAI-42
The Equitable Life Assurance Society of the United States:
Report of Independent Accountants--Price Waterhouse LLP ........................................... SAI-46
Independent Auditors' Report--Deloitte & Touche LLP ............................................... SAI-47
Consolidated Balance Sheets, December 31, 1994 and 1993 ........................................... SAI-48
Consolidated Statements of Earnings Years Ended
December 31, 1994, 1993 and 1992 ................................................................. SAI-49
Consolidated Statement of Shareholder's Equity Years Ended
December 31, 1994, 1993 and 1992 ................................................................. SAI-50
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992 ................................................................. SAI-51
Notes to Consolidated Financial Statements ........................................................ SAI-52
</TABLE>
SAI-19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors of
The Equitable Life Assurance Society of the United States
and the Participants in the
Association Members Retirement Program
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and changes in net assets present fairly, in all material
respects, the financial position of Separate Account Nos. 3, 4 and 10, and
Global Fund, Conservative Investors Fund and Growth Investors Fund
(constituting Separate Account No. 51, hereafter referred to as "Separate
Account No. 51") of The Equitable Life Assurance Society of the United States
("Equitable") at December 31, 1994 and each of their results of operations
and changes in net assets for each of the two years in the period then ended
for Separate Account Nos. 3, 4 and 10, and for the period ended December 31,
1994 and the period from July 1, 1993 (commencement of operations) through
December 31, 1993 for Separate Account No. 51, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Equitable's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which 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, assessing
the accounting principles used an significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1994 by
correspondence with the custodian and brokers, the application of alternative
auditing procedures where confirmations from brokers were not received and
confirmation of shares owned in The Hudson River Trust, provide a reasonable
basis for the opinion expressed above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The selected per unit information
(appearing under "Condensed Financial Information" in the prospectus) is
presented for the purpose of satisfying regulatory reporting requirements and
is not a required part of the basic financial statements. Such selected per
unit information has been subjected to auditing procedures applied during the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken
as a whole.
PRICE WATERHOUSE LLP
New York, New York
March 15, 1995
SAI-20
<PAGE>
Separate Account No. 3 (Pooled) (The Aggressive Equity Fund)
of The Equitable Life Assurance Society of the United States
Statement of Assets and Liabilities
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $264,068,264) ...... $306,610,630
Participation in Separate Account No. 2A--at
amortized cost, which approximates market value,
equivalent to 33,078 units at $227.94 ........... 7,539,960
Cash .............................................. 528,733
Receivables:
Securities sold ................................... 664,845
Dividends ......................................... 76,098
--------------------------------------------------- --------------
Total assets .................................... 315,420,266
--------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased .............................. 467,720
Due to Equitable Life's General Account ........... 5,413,617
Investment management fees payable ................ 2,599
Accrued expenses .................................. 143,033
--------------------------------------------------- --------------
Total liabilities ............................... 6,026,969
--------------
NET ASSETS ........................................ $309,393,297
=================================================== ==============
</TABLE>
See Notes to Financial Statements.
SAI-21
<PAGE>
Separate Account No. 3 (Pooled)
of The Equitable Life Assurance Society of the United States
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993
- ------------------------------------------------------------------------ --------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld--1994: $19,204 and 1993:
$13,359) ............................................................... $ 1,382,831 $ 1,350,949
Interest ................................................................ 262,574 727,701
- ------------------------------------------------------------------------ --------------- ---------------
Total ................................................................... 1,645,405 2,078,650
EXPENSES -- (NOTE 4) .................................................... (4,244,367) (3,549,846)
- ------------------------------------------------------------------------ --------------- ---------------
NET INVESTMENT LOSS ..................................................... (2,598,962) (1,471,196)
- ------------------------------------------------------------------------ --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain (loss) from security transactions ......................... (7,572,930) 18,767,162
- ------------------------------------------------------------------------ --------------- ---------------
Unrealized appreciation (depreciation) of investments:
Beginning of year ...................................................... 46,444,593 28,511,137
End of year ............................................................ 42,542,366 46,444,593
- ------------------------------------------------------------------------ --------------- ---------------
Change in unrealized appreciation/depreciation .......................... (3,902,227) 17,933,456
- ------------------------------------------------------------------------ --------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................. (11,475,157) 36,700,618
- ------------------------------------------------------------------------ --------------- ---------------
Increase (decrease) in net assets attributable to operations ........... (14,074,119) 35,229,422
- ------------------------------------------------------------------------ --------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ........................................................... 213,517,834 170,864,879
Withdrawals ............................................................. (179,711,235) (143,807,823)
- ------------------------------------------------------------------------ --------------- ---------------
Increase in net assets attributable to contributions and withdrawals ... 33,806,599 27,057,056
- ------------------------------------------------------------------------ --------------- ---------------
INCREASE IN NET ASSETS .................................................. 19,732,480 62,286,478
NET ASSETS -- BEGINNING OF YEAR ......................................... 289,660,817 227,374,339
- ------------------------------------------------------------------------ --------------- ---------------
NET ASSETS -- END OF YEAR ............................................... $ 309,393,297 $ 289,660,817
======================================================================== =============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-22
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1994
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
- -------------------------------------------- ----------- ------------
<S> <C> <C>
COMMON STOCKS: BASIC MATERIALS (0.5%) Steel
A.K. Steel Holding Corp.* ................... 52,800 $ 1,623,600
------------
BUSINESS SERVICES Printing, Publishing &
Broadcasting (8.6%)
IVI Publishing, Inc.* ....................... 44,700 514,050
Playboy Enterprises, Inc.* .................. 77,200 810,600
Viacom Inc. (Class B)* ...................... 623,445 25,327,453
------------
26,652,103
------------
PROFESSIONAL SERVICES (4.2%)
ADT Ltd.* ................................... 624,500 6,713,375
ADVO, Inc. .................................. 163,175 2,814,769
Catalina Marketing Corp.* ................... 62,700 3,487,687
------------
13,015,831
------------
TRUCKING, SHIPPING (0.7%)
Airborne Freight Corp. ...................... 98,800 2,025,400
------------
TOTAL BUSINESS SERVICES (13.5%) ............. 41,693,334
------------
CAPITAL GOODS (0.3%) Building Materials &
Forest Products
Universal Forest Products, Inc. ............. 126,600 822,900
------------
CONSUMER CYCLICALS Apparel, Textile (4.2%)
Nine West Group, Inc.* ...................... 230,400 6,537,600
Phillips Van Heusen Corp. ................... 132,300 2,017,575
Tommy Hilfiger Corp.* ....................... 100,700 4,544,087
------------
13,099,262
------------
AUTO-RELATED (1.1%)
Superior Industries International, Inc. .... 133,400 3,518,425
------------
FOOD SERVICES, LODGING (1.7%)
Hospitality Franchise Systems* .............. 143,800 3,810,700
Host Marriott Corp.* ........................ 164,900 1,587,162
------------
5,397,862
------------
HOUSEHOLD FURNITURE, APPLIANCES (4.1%)
Ethan Allen Interiors, Inc.* ................ 72,600 1,760,550
Heilig Meyers Co. ........................... 152,562 3,852,190
Industrie Natuzzi (ADR) ..................... 204,900 6,966,600
------------
12,579,340
------------
LEISURE-RELATED (5.8%)
CUC International, Inc.* .................... 401,700 13,456,950
Heritage Media Corp. (Class A)* ............. 138,175 3,713,453
Marker International* ....................... 50,500 378,750
Savoy Pictures Entertainment, Inc.* ........ 61,500 399,750
------------
17,948,903
</TABLE>
SAI-23
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- -------------------------------------------- ----------- ------------
<S> <C> <C>
RETAIL-GENERAL (5.2%)
Bombay Co., Inc.* ........................... 422,500 $ 4,277,812
Home Shopping Network, Inc.* ................ 205,200 2,052,000
Office Depot, Inc.* ......................... 400,850 9,620,400
------------
15,950,212
------------
TOTAL CONSUMER CYCLICALS (22.1%) ............ 68,494,004
------------
CONSUMER NONCYCLICALS Hospital Supplies &
Services (13.0%)
Bard (C.R.), Inc. ........................... 113,400 3,061,800
Boston Scientific Corp.* .................... 444,100 7,716,237
Coastal Healthcare Group* ................... 98,000 2,682,750
Guidant Corp.* .............................. 132,000 2,112,000
Healthwise of America, Inc.* ................ 83,445 2,753,685
Incontrol, Inc.* ............................ 70,000 717,500
National Health Laboratories Holdings, Inc. 697,500 9,241,875
Saint Jude Medical, Inc. .................... 90,400 3,593,400
Sun Healthcare Group, Inc.* ................. 133,200 3,379,950
Surgical Care Affiliates, Inc. .............. 242,900 4,918,725
------------
TOTAL CONSUMER NONCYCLICALS (13.0%) ........ 40,177,922
------------
CREDIT-SENSITIVE Banks (4.0%)
Mellon Bank Corp. ........................... 405,255 12,410,934
------------
FINANCIAL SERVICES (0.5%)
Edwards (A.G.), Inc. ........................ 94,100 1,693,800
------------
INSURANCE (4.4%)
CNA Financial Corp.* ........................ 208,800 13,545,900
------------
TOTAL CREDIT-SENSITIVE (8.9%) ............... 27,650,634
------------
ENERGY Coal & Gas Pipelines (0.8%)
Cabot Oil and Gas Corp. ..................... 76,900 1,115,050
Questar Corp. ............................... 46,300 1,273,250
------------
2,388,300
------------
OIL-DOMESTIC (4.5%)
Diamond Shamrock, Inc. ...................... 241,200 6,241,050
Louisiana Land & Exploration Co. ............ 62,800 2,284,350
Nuevo Energy Company* ....................... 129,300 2,327,400
Snyder Oil Corp. ............................ 82,700 1,230,162
Tosco Corp. ................................. 59,700 1,738,763
------------
13,821,725
------------
OIL-INTERNATIONAL (0.5%)
Arethusa Ltd.* .............................. 128,600 1,438,712
------------
</TABLE>
SAI-24
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
<TABLE>
<CAPTION>
NUMBER OF VALUE (NOTE
SHARES 3)
- -------------------------------------------- ----------- ------------
<S> <C> <C>
OIL-SUPPLIES & CONSTRUCTION (7.0%)
BJ Services Co. ............................. 54,500 $ 919,687
Coflexip .................................... 137,500 3,196,875
Global Marine, Inc.* ........................ 1,747,800 6,335,775
Noble Drilling Corp.* ....................... 453,300 2,663,138
Reading & Bates Corp.* ...................... 193,700 1,162,200
Rowan Cos., Inc.* ........................... 1,010,300 6,188,088
Sonat Offshore Drilling, Inc. ............... 82,900 1,471,475
------------
21,937,238
------------
TOTAL ENERGY (12.8%) ........................ 39,585,975
------------
TECHNOLOGY ELECTRONICS (11.4%)
Altera Corp.* ............................... 32,800 1,373,500
American Superconductor Corp.* .............. 104,900 2,596,275
Applied Materials, Inc.* .................... 66,600 2,813,850
Bay Networks, Inc.* ......................... 66,803 1,970,689
Cisco Systems, Inc.* ........................ 85,000 2,985,625
EMC Corp.* .................................. 459,100 9,928,038
Lam Research Corp.* ......................... 64,500 2,402,625
LSI Logic Corp.* ............................ 25,900 1,045,713
Sensormatic Electronics Corp. ............... 284,250 10,233,000
------------
35,349,315
------------
OFFICE EQUIPMENT (0.7%)
Symantec Corp.* ............................. 120,300 2,105,250
------------
OFFICE EQUIPMENT SERVICES (0.9%)
Informix Corp.* ............................. 12,000 385,500
Lotus Development Corp.* .................... 54,100 2,218,100
------------
2,603,600
------------
TELECOMMUNICATIONS (15.0%)
American Satellite Network-Warrants* ....... 9,550 0
BCE Mobile Communications, Inc.* ............ 110,028 3,490,462
Cellular Communications, Inc. (Class A)* ... 175,700 9,399,950
DSC Communications Corp.* ................... 66,700 2,392,863
Mannesmann AG (ADR) ......................... 41,200 11,165,200
MFS Communications Co., Inc.* ............... 53,800 1,761,950
Millicom International Cellular S.A.* ...... 142,060 4,279,558
Qualcomm, Inc.* ............................. 80,800 1,939,200
Scientific Atlanta, Inc. .................... 336,200 7,060,200
United States Cellular Corp.* ............... 107,400 3,517,350
Vanguard Cellular Systems, Inc. (Class A)* . 58,150 1,497,363
------------
46,504,096
------------
TOTAL TECHNOLOGY (28.0%) .................... 86,562,261
------------
TOTAL COMMON STOCKS (99.1%)
(Cost $264,068,264) ........................ 306,610,630
------------
</TABLE>
SAI-25
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE (NOTE 3)
- --------------------------------------------------- --------------
<S> <C>
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A, at
amortized cost, which approximates market value,
equivalent to 33,078 units at $227.94 each (2.4%) $ 7,539,960
--------------
TOTAL INVESTMENTS (101.5%)
(Cost/Amortized Cost $271,608,224) ................ 314,150,590
CASH AND RECEIVABLES LESS LIABILITIES (-1.5%) ..... (4,757,293)
--------------
NET ASSETS (100.0%) ................................ $309,393,297
==============
</TABLE>
[FN]
- -------------
*Non-income producing. .............................
See Notes to Financial Statements.
SAI-26
<PAGE>
Separate Account No. 4 (Pooled) (The Growth Equity Fund)
of The Equitable Life Assurance Society of the United States
Statement of Assets and Liabilities
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $1,562,978,777) ........................................... $1,606,904,907
Long-term debt securities--at value (amortized cost: $40,495,793) ........................ 38,401,875
Participation in Separate Account No. 2A--at amortized cost, which approximates market
value, equivalent to 4 units at $227.94 ................................................ 947
Cash ..................................................................................... 22,265,687
Receivables:
Securities sold .......................................................................... 20,460,855
Dividends ................................................................................ 3,937,217
Interest ................................................................................. 75,222
------------------------------------------------------------------------------------------ ---------------
Total assets ........................................................................... 1,692,046,710
------------------------------------------------------------------------------------------ ---------------
LIABILITIES:
Payables:
Securities purchased ..................................................................... 18,781,582
Due to Equitable Life's General Account .................................................. 7,281,318
Investment management fees payable ....................................................... 5,913
Accrued expenses ......................................................................... 393,013
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) ..................... 992,535
------------------------------------------------------------------------------------------ ---------------
Total liabilities ...................................................................... 27,454,361
------------------------------------------------------------------------------------------ ---------------
Net Assets (Note 1):
Net assets attributable to participants' accumulations ................................... 1,647,814,162
Reserves and other contract liabilities attributable to annuity benefits ................. 16,778,187
------------------------------------------------------------------------------------------ ---------------
NET ASSETS ............................................................................... $1,664,592,349
========================================================================================== ===============
</TABLE>
See Notes to Financial Statements.
SAI-27
<PAGE>
Separate Account No. 4 (Pooled)
of The Equitable Life Assurance Society of the United States
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993
- -------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld--1994: $280,079 and 1993:
$359,029) ................................................................ $ 18,981,135 $ 19,131,412
Interest .................................................................. 120,286 852,538
- -------------------------------------------------------------------------- -------------- ---------------
Total ..................................................................... 19,101,421 19,983,950
EXPENSES -- (NOTE 4) ...................................................... (14,943,802) (14,099,401)
- -------------------------------------------------------------------------- -------------- ---------------
NET INCOME ................................................................ 4,157,619 5,884,549
- -------------------------------------------------------------------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ............ 121,640,003 286,492,193
- -------------------------------------------------------------------------- -------------- ---------------
Unrealized appreciation (depreciation) of investments and foreign currency
transactions:
Beginning of year ........................................................ 211,185,607 197,094,156
End of year .............................................................. 41,831,973 211,185,607
- -------------------------------------------------------------------------- -------------- ---------------
Change in unrealized appreciation/depreciation ............................ (169,353,634) 14,091,451
- -------------------------------------------------------------------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................... (47,713,631) 300,583,644
- -------------------------------------------------------------------------- -------------- ---------------
Increase (decrease) in net assets attributable to operations ............. (43,556,012) 306,468,193
- -------------------------------------------------------------------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................. 435,940,867 408,026,090
Withdrawals ............................................................... (528,069,361) (623,196,599)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in net assets attributable to contributions and withdrawals ..... (92,128,494) (215,170,509)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in accumulated amount retained by Equitable Life in Separate
Account No. 4 (Note 1) ................................................... 449,257 534,157
- -------------------------------------------------------------------------- -------------- ---------------
INCREASE (DECREASE) IN NET ASSETS ......................................... (135,235,249) 91,831,841
NET ASSETS -- BEGINNING OF YEAR ........................................... 1,799,827,598 1,707,995,757
- -------------------------------------------------------------------------- -------------- ---------------
NET ASSETS -- END OF YEAR ................................................. $1,664,592,349 $1,799,827,598
========================================================================== ============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-28
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1994
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (0.3%)
CHEMICALS--SPECIALTY
Morton International, Inc. ............................... 200,000 $ 5,700,000
---------------
BUSINESS SERVICES ENVIRONMENTAL CONTROL (0.4%)
Rollins Environmental Services, Inc.* .................... 1,254,700 6,116,663
---------------
PRINTING, PUBLISHING & BROADCASTING (1.4%)
Grupo Televisa S.A. (ADR) ................................ 20,000 635,000
IVI Publishing, Inc.* .................................... 150,000 1,725,000
Viacom, Inc. (Class B)* .................................. 520,000 21,125,000
---------------
23,485,000
---------------
TOTAL BUSINESS SERVICES (1.8%) ........................... 29,601,663
---------------
CAPITAL GOODS
BUILDING & CONSTRUCTION (1.2%)
Acme Landis Holdings ..................................... 3,000,000 360,581
Royal Plastics Group Ltd.* ............................... 945,500 7,414,365
Stone & Webster, Inc. .................................... 350,000 11,637,500
---------------
19,412,446
---------------
ELECTRICAL EQUIPMENT (0.1%)
Johnson Electric Holdings ................................ 1,000,000 2,294,023
---------------
TOTAL CAPITAL GOODS (1.3%) ............................... 21,706,469
---------------
CONSUMER CYCLICALS
AIRLINES (1.0%)
Southwest Airlines Co. ................................... 750,000 12,562,500
UAL Corp.* ............................................... 41,800 3,652,275
---------------
16,214,775
---------------
FOOD SERVICES, LODGING (0.2%)
Au Bon Pain, Inc.* ....................................... 200,000 3,200,000
---------------
HOUSEHOLD FURNITURE, APPLIANCES (1.3%)
Industrie Natuzzi (ADR) .................................. 612,200 20,814,800
Semi Tech Global Ltd. .................................... 603,466 1,017,800
---------------
21,832,600
---------------
LEISURE-RELATED (0.8%)
Mirage Resorts, Inc.* .................................... 600,000 12,300,000
Shun Tak Enterprises Corp. ............................... 1,500,000 1,066,236
---------------
13,366,236
---------------
RETAIL-GENERAL (0.8%)
May Department Stores Co. ................................ 20,000 675,000
Office Depot, Inc.* ...................................... 450,000 10,800,000
Toys R Us, Inc.* ......................................... 40,000 1,220,000
Westcorp. ................................................ 78,000 711,750
---------------
13,406,750
---------------
TOTAL CONSUMER CYCLICALS (4.1%) .......................... 68,020,361
---------------
</TABLE>
SAI-29
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
CONSUMER NONCYCLICALS
DRUGS (1.0%)
Astra AB Series A ........................................ 325,000 $ 8,397,738
Gensia Pharmaceuticals, Inc.* ............................ 1,241,800 5,277,650
Merck & Co., Inc. ........................................ 75,000 2,859,375
---------------
16,534,763
---------------
FOODS (0.0%)
Pokphand (CP) Co. ........................................ 550,000 128,659
---------------
HOSPITAL SUPPLIES & SERVICES (5.6%)
Boston Scientific Corp.* ................................. 182,600 3,172,675
Columbia HCA Healthcare Corp. ............................ 540,000 19,710,000
Surgical Care Affiliates, Inc. ........................... 2,500,000 50,625,000
United Healthcare Corp. .................................. 425,000 19,178,125
---------------
92,685,800
---------------
TOBACCO (11.1%)
Loews Corp. .............................................. 1,700,000 147,687,500
Philip Morris Cos., Inc. ................................. 660,000 37,950,000
---------------
185,637,500
---------------
TOTAL CONSUMER NONCYCLICALS (17.7%) ...................... 294,986,722
---------------
CREDIT-SENSITIVE
BANKS (3.1%)
J.P. Morgan & Co., Inc. .................................. 915,600 51,273,600
---------------
FINANCIAL SERVICES (5.4%)
Autofinance Group, Inc.* ................................. 1,350,000 11,812,500
Edwards (A.G.), Inc. ..................................... 220,000 3,960,000
Legg Mason, Inc. ......................................... 825,000 17,531,250
Morgan Stanley Group, Inc. ............................... 720,000 42,480,000
Charles Schwab Corp. ..................................... 350,000 12,206,250
Student Loan Marketing Association ....................... 80,000 2,600,000
---------------
90,590,000
---------------
INSURANCE (14.3%)
American International Group, Inc. ....................... 200,000 19,600,000
CNA Financial Corp.* ..................................... 2,180,000 141,427,500
Life Re Corporation ...................................... 625,000 11,015,625
NAC Re Corp. ............................................. 400,000 13,400,000
Progressive Corp. ........................................ 250,000 8,750,000
Travelers, Inc. .......................................... 1,234,700 40,127,750
Zenith National Insurance Corp. .......................... 129,000 2,934,750
---------------
237,255,625
---------------
REAL ESTATE (2.5%)
AMLI Residential Property Trust .......................... 200,000 3,750,000
CBL & Associates Properties, Inc. ........................ 250,000 5,156,250
First Industrial Realty Trust, Inc. ...................... 100,000 1,950,000
JP Realty, Inc. .......................................... 300,000 6,300,000
Macerich Co. ............................................. 265,000 5,664,375
Paragon Group, Inc. ...................................... 50,000 950,000
</TABLE>
SAI-30
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Spieker Properties, Inc. ................................. 300,000 $ 6,112,500
Summit Properties, Inc. .................................. 150,000 2,887,500
Tucker Properties Corp. .................................. 73,200 933,300
Walden Residential Properties, Inc. ...................... 400,000 7,150,000
---------------
40,853,925
---------------
UTILITY-GAS (0.6%)
ENRON Corp. .............................................. 328,600 10,022,300
---------------
UTILITY-TELEPHONE (5.2%)
Sprint Corp. ............................................. 700,000 19,337,500
Telefonos de Mexico, L ................................... 80,000 3,280,000
Telephone & Data Systems, Inc. ........................... 1,400,000 64,575,000
---------------
87,192,500
---------------
TOTAL CREDIT-SENSITIVE (31.1%) ........................... 517,187,950
---------------
ENERGY
COAL & GAS PIPELINES (0.1%)
Abraxas Petroleum Corp.* ................................. 100,000 925,000
Enserch Corp. ............................................ 76,200 1,000,125
---------------
1,925,125
---------------
OIL-DOMESTIC (1.2%)
Enron Oil and Gas Co. .................................... 702,800 13,177,500
Murphy Oil Corp. ......................................... 121,500 5,163,750
Wainoco Oil Corp.* ....................................... 500,000 2,375,000
---------------
20,716,250
---------------
OIL-INTERNATIONAL (2.4%)
Imperial Oil Ltd. ........................................ 550,000 18,150,000
YPF Sociedad Anonima (ADR) ............................... 1,000,000 21,375,000
---------------
39,525,000
---------------
OIL-SUPPLIES & CONSTRUCTION (7.5%)
Baker Hughes, Inc. ....................................... 1,500,000 27,375,000
Camco International, Inc. ................................ 320,000 6,040,000
Energy Service, Inc.* .................................... 1,365,900 16,732,275
Global Marine, Inc.* ..................................... 1,000,000 3,625,000
Parker Drilling Co.* ..................................... 5,500,000 26,125,000
Reading & Bates Corp.* ................................... 1,390,100 8,340,600
Rowan Cos., Inc.* ........................................ 3,750,000 22,968,750
Schlumberger Ltd. ........................................ 125,000 6,296,875
Seagull Energy Corp.* .................................... 150,000 2,868,750
Western Atlas, Inc.* ..................................... 138,600 5,214,825
---------------
125,587,075
---------------
RAILROADS (0.3%)
Southern Pacific Rail Corp.* ............................. 250,000 4,531,250
---------------
UTILITY-GAS (0.6%)
Renaissance Energy Ltd.* ................................. 478,000 9,243,094
---------------
TOTAL ENERGY (12.1%) ..................................... 201,527,794
---------------
</TABLE>
SAI-31
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
TECHNOLOGY
ELECTRONICS (4.5%)
American Superconductor Corp.* ........................... 80,000 $ 1,980,000
General Instrument Corp.* ................................ 1,950,000 58,500,000
Sensormatic Electronics Corp. ............................ 420,000 15,120,000
---------------
75,600,000
---------------
OFFICE EQUIPMENT (0.0%)
Compaq Computer Corp.* ................................... 10,000 395,000
---------------
OFFICE EQUIPMENT SERVICES (0.2%)
Quarterdeck Office Systems* .............................. 840,000 2,625,000
---------------
TELECOMMUNICATIONS (23.4%)
American Satellite Network-Warrants* ..................... 70,000 0
Associated Group, Inc. (Class A)* ........................ 18,475 434,163
Associated Group, Inc. (Class B)* ........................ 25,650 602,775
BCE Mobile Communications, Inc.* ......................... 850,000 26,964,890
Bolt Beranek & Newman, Inc.* ............................. 113,600 1,689,800
Cellular Communications, Inc. (Class A) .................. 1,122,000 60,027,000
Cellular Communications Puerto Rico, Inc.* ............... 310,000 10,385,000
International Cabletel, Inc.* ............................ 120,000 3,330,000
Mannesmann AG ............................................ 80,000 21,682,315
Mannesmann AG (ADR) ...................................... 345,000 93,495,000
Millicom International Cellular S.A.* .................... 700,000 21,087,500
Qualcomm, Inc.* .......................................... 240,000 5,760,000
Rogers Cantel Mobile Communications, Inc. (Class B)
(ADR)* .................................................. 1,060,000 30,905,625
Royal PTT Nederland NV (ADR) ............................. 16,000 538,000
Scientific Atlanta, Inc. ................................. 1,000,000 21,000,000
Teleglobe, Inc. .......................................... 115,000 1,557,655
United States Cellular Corp.* ............................ 1,724,900 56,490,475
Vanguard Cellular Systems, Inc. (Class A)* ............... 1,305,000 33,603,750
---------------
389,553,948
---------------
TOTAL TECHNOLOGY (28.1%) ................................. 468,173,948
---------------
TOTAL COMMON STOCKS (96.5%)
(Cost $1,562,978,777) .................................. 1,606,904,907
---------------
PRINCIPAL
AMOUNT
------------
LONG-TERM DEBT SECURITIES:
ENERGY (0.1%)
Oil-Domestic
Apache Corp.
6.0% Conv., 2002 ....................................... $ 2,000,000 2,045,000
---------------
TECHNOLOGY
ELECTRONICS (2.2%)
General Instrument Corp.
5.0% Conv., 2000 ....................................... 24,850,000 33,236,875
Lam Research Corp.
6.0% Conv. Sub. Deb., 2003 ............................ 2,000,000 3,120,000
---------------
TOTAL TECHNOLOGY (2.2%) ................................. 36,356,875
---------------
TOTAL LONG-TERM DEBT SECURITIES (2.3%)
(Amortized Cost $40,495,793) ........................... 38,401,875
---------------
</TABLE>
SAI-32
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1994
<TABLE>
<CAPTION>
VALUE
(NOTE 3)
- --------------------------------------------------------------------------- --------------
<S> <C>
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates market value, equivalent to 4 units
at $227.94 each (0.0%).................................................... $ 947
--------------
TOTAL INVESTMENTS (98.8%)
(Cost/Amortized Cost $1,603,475,517) ...................................... 1,645,307,729
CASH AND RECEIVABLES LESS LIABILITIES (1.2%) ............................... 20,277,155
AMOUNT RETAINED BY EQUITABLE LIFE IN SEPARATE ACCOUNT NO. 4 (0.0%) (NOTE 1)
(992,535)
--------------
NET ASSETS (100.0%) (NOTE 1) ............................................... $1,664,592,349
==============
Reserves attributable to participants' accumulations ....................... $1,647,814,162
Reserves and other contract liabilities attributable to annuity benefits .. 16,778,187
--------------
NET ASSETS (100%) .......................................................... $1,664,592,349
- -------------
*Non-income producing. .....................................................
</TABLE>
See Notes to Financial Statements.
SAI-33
<PAGE>
SEPARATE ACCOUNT NO. 190
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $208,250,460) .................. $203,629,188
Long-term debt securities--at value (amortized cost:
$66,051,222) ................................................ 62,493,835
Participation in Separate Account No. 2A--at amortized cost,
which approximates market value, equivalent to 522,312 units
at $227.94 .................................................. 119,058,254
Receivables:
Securities sold ............................................... 12,837,230
Interest ...................................................... 1,616,443
Dividends ..................................................... 563,115
--------------------------------------------------------------- --------------
Total assets ................................................ 400,198,065
--------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased .......................................... 247,801
Due to Equitable Life's General Account ....................... 5,454,343
Due to custodian .............................................. 25,713
Investment management fees payable ............................ 4,125
Accrued expenses .............................................. 202,389
--------------------------------------------------------------- --------------
Total liabilities ........................................... 5,934,371
--------------------------------------------------------------- --------------
NET ASSETS .................................................... $394,263,694
=============================================================== ==============
</TABLE>
See Notes to Financial Statements.
SAI-34
<PAGE>
Separate Account No. 10 (Pooled)
of The Equitable Life Assurance Society of the United States
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993
- ------------------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Interest ....................................................................... $ 10,445,862 $ 9,954,862
Dividends ...................................................................... 3,797,850 4,554,141
- ------------------------------------------------------------------------------- --------------- --------------
Total .......................................................................... 14,243,712 14,509,003
EXPENSES -- (NOTE 4) ........................................................... (6,108,541) (6,017,919)
- ------------------------------------------------------------------------------- --------------- --------------
NET INVESTMENT INCOME .......................................................... 8,135,171 8,491,084
- ------------------------------------------------------------------------------- --------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain (loss) from security transactions ................................ (2,337,066) 28,255,994
- ------------------------------------------------------------------------------- --------------- --------------
Unrealized appreciation (depreciation) of investments:
Beginning of year ............................................................. 41,745,407 30,061,120
End of year ................................................................... (8,178,659) 41,745,407
- ------------------------------------------------------------------------------- --------------- --------------
Change in unrealized appreciation/depreciation ................................. (49,924,066) 11,684,287
- ------------------------------------------------------------------------------- --------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ......................... (52,261,132) 39,940,281
- ------------------------------------------------------------------------------- --------------- --------------
Increase (decrease) in net assets attributable to operations ................... (44,125,961) 48,431,365
- ------------------------------------------------------------------------------- --------------- --------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions .................................................................. 104,824,794 103,317,451
Withdrawals .................................................................... (138,822,093) (86,920,475)
- ------------------------------------------------------------------------------- --------------- --------------
Increase (decrease) in net assets attributable to contributions and withdrawals (33,997,299) 16,396,976
- ------------------------------------------------------------------------------- --------------- --------------
INCREASE (DECREASE) IN NET ASSETS .............................................. (78,123,260) 64,828,341
NET ASSETS -- BEGINNING OF YEAR ................................................ 472,386,954 407,558,613
- ------------------------------------------------------------------------------- --------------- --------------
NET ASSETS -- END OF YEAR ...................................................... $ 394,263,694 $472,386,954
=============================================================================== =============== ==============
</TABLE>
See Notes to Financial Statements.
SAI-35
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1994
<TABLE>
<CAPTION>
NUMBER OF VALUE (NOTE
SHARES 3)
- ------------------------------------------ ----------- ------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
METALS & MINING (1.1%)
American Barrick Resources Corp. .......... 100,700 $ 2,240,575
Wolverine Tube, Inc.* ..................... 94,400 2,242,000
------------
TOTAL BASIC MATERIALS (1.1%) .............. 4,482,575
------------
BUSINESS SERVICES Environmental Control
(2.0%)
Air & Water Technologies Corp. (Class A)* 129,600 777,600
Thermo Instrument Systems, Inc.* .......... 221,500 7,032,625
------------
7,810,225
------------
PRINTING, PUBLISHING & BROADCASTING (2.1%)
Clear Channel Communications, Inc.* ...... 81,500 4,136,125
Infinity Broadcasting (Class A)* .......... 129,600 4,082,400
------------
8,218,525
------------
PROFESSIONAL SERVICES (0.6%)
Loewen Group, Inc. ........................ 99,100 2,626,150
------------
TOTAL BUSINESS SERVICES (4.7%) ............ 18,654,900
------------
CAPITAL GOODS
MACHINERY (1.3%)
Deere & Co. ............................... 42,600 2,822,250
Solectron Corporation* .................... 84,100 2,312,750
------------
TOTAL CAPITAL GOODS (1.3%) ................ 5,135,000
------------
CONSUMER CYCLICALS
AUTOS & TRUCKS (1.5%)
Ek Chor China Motorcycle Co. .............. 114,000 1,553,250
Paccar, Inc. .............................. 101,200 4,478,100
------------
6,031,350
------------
FOOD SERVICES, LODGING (3.5%)
Brinker International, Inc.* .............. 252,500 4,576,562
Luby's Cafeterias, Inc. ................... 162,200 3,629,225
Outback Steakhouse, Inc.* ................. 77,750 1,827,125
Spaghetti Warehouse, Inc.* ................ 119,500 582,563
Taco Cabana, Inc. (Class A)* .............. 336,200 3,067,825
------------
13,683,300
------------
HOUSEHOLD FURNITURE, APPLIANCES (2.2%)
Heilig Meyers Co. ......................... 168,100 4,244,525
Leggett & Platt, Inc. ..................... 131,000 4,585,000
------------
8,829,525
------------
LEISURE-RELATED (4.6%)
Aldila, Inc.* ............................. 264,700 3,044,050
Callaway Golf Co. ......................... 62,500 2,070,313
Coastcast Corp.* .......................... 121,000 1,421,750
Cobra Golf, Inc.* ......................... 43,000 1,537,250
Coleman Co., Inc.* ........................ 104,600 3,674,075
Gaylord Entertainment Co. (Class A) ...... 275,300 6,263,075
------------
18,010,513
------------
</TABLE>
SAI-36
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- ------------
<S> <C> <C>
RETAIL-GENERAL (2.4%)
Eckerd Corp.* ............................. 80,000 $ 2,390,000
May Department Stores Co. ................. 80,000 2,700,000
Walgreen Co. .............................. 98,000 4,287,500
------------
9,377,500
------------
TOTAL CONSUMER CYCLICALS (14.2%) .......... 55,932,188
------------
CONSUMER NONCYCLICALS
CONTAINERS (0.6%)
Bemis, Inc. ............................... 98,100 2,354,400
------------
DRUGS (2.2%)
Merck & Co., Inc. ......................... 66,300 2,527,687
Mylan Laboratories, Inc. .................. 230,900 6,234,300
------------
8,761,987
------------
FOODS (2.4%)
McCormick & Co. ........................... 199,500 3,640,875
------------
Wrigley (Wm.), Jr. Co. .................... 120,500 5,949,688
------------
9,590,563
------------
HOSPITAL SUPPLIES & SERVICES (1.3%)
Surgical Care Affiliates, Inc. ............ 253,000 5,123,250
------------
RETAIL-FOOD (1.0%)
Sysco Corp. ............................... 150,000 3,862,500
------------
SOAPS & TOILETRIES (1.2%)
Clorox Co. ................................ 33,000 1,942,875
Gillette Corp. ............................ 36,000 2,691,000
------------
4,633,875
------------
TOTAL CONSUMER NONCYCLICALS (8.7%) ....... 34,326,575
------------
CREDIT-SENSITIVE
FINANCIAL SERVICES (1.2%)
Mercury Finance Co. ....................... 351,000 4,563,000
------------
INSURANCE (0.5%)
American International Group, Inc. ....... 20,000 1,960,000
------------
REAL ESTATE (1.1%)
Irvine Apartment Communities, Inc. ....... 30,000 491,250
Oasis Residential, Inc. ................... 164,000 4,018,000
------------
4,509,250
------------
UTILITY-ELECTRIC (0.8%)
Duke Power Co. ............................ 45,000 1,715,625
Southern Co. .............................. 80,000 1,600,000
------------
3,315,625
------------
UTILITY-GAS (0.5%)
ENRON Corp. ............................... 67,600 2,061,800
------------
UTILITY-TELEPHONE (1.5%)
Telephone & Data Systems, Inc. ............ 68,000 3,136,500
U.S. West, Inc. ........................... 74,000 2,636,250
------------
5,772,750
------------
TOTAL CREDIT-SENSITIVE (5.6%) ............. 22,182,425
------------
</TABLE>
SAI-37
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- ------------
<S> <C> <C>
ENERGY
COAL & GAS PIPELINES (1.2%)
Questar Corp. ............................. 179,000 $ 4,922,500
------------
OIL-DOMESTIC (3.4%)
Anadarko Petroleum Corp. .................. 112,400 4,327,400
Apache Corp. .............................. 60,000 1,500,000
Enron Oil and Gas Co. ..................... 66,400 1,245,000
Phillips Petroleum Co. .................... 118,400 3,877,600
Valero Energy Corp. ....................... 150,900 2,546,437
------------
13,496,437
------------
OIL-INTERNATIONAL (0.6%)
YPF Sociedad Anonima (ADR) ................ 117,200 2,505,150
------------
OIL-SUPPLIES & CONSTRUCTION (2.4%)
Seitel, Inc.* ............................. 85,000 1,827,500
Smith International, Inc.* ................ 180,000 2,250,000
Tidewater, Inc. ........................... 126,000 2,331,000
Western Atlas, Inc.* ...................... 81,000 3,047,625
------------
9,456,125
------------
RAILROADS (3.1%)
Illinois Central Corp. .................... 381,100 11,718,825
------------
TOTAL ENERGY (10.7%) ...................... 42,099,037
------------
TECHNOLOGY
ELECTRONICS (3.3%)
Sensormatic Electronics Corp. ............. 322,650 11,615,400
Sun Television and Appliances, Inc. ...... 160,600 1,345,025
------------
12,960,425
------------
TELECOMMUNICATIONS (2.0%)
AirTouch Communications, Inc. * ........... 126,000 3,669,750
Vodafone Group PLC (ADR) .................. 124,500 4,186,313
------------
7,856,063
------------
TOTAL TECHNOLOGY (5.3%) ................... 20,816,488
------------
TOTAL COMMON STOCKS (51.6%) (Cost
$208,250,460) ............................ 203,629,188
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
LONG-TERM SECURITIES:
CREDIT-SENSITIVE (13.8%)
U.S. GOVERNMENT
U.S. Treasury 6.25% Bond,
2023 ....................... $66,900,000 54,335,310
--------------
ENERGY (0.4%)
COAL & GAS PIPELINES
California Energy Co., Inc.
5.0% Conv. Sub. Deb., 2000 1,820,000 1,537,900
--------------
</TABLE>
SAI-38
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ------------ -------------
<S> <C> <C>
TECHNOLOGY (1.7%)
ELECTRONICS
General Instrument Corp. 5.0% Conv., 2000 $4,950,000 $ 6,620,625
-------------
TOTAL LONG-TERM DEBT SECURITIES (15.9%)
(Amortized Cost $66,051,222) ............. 62,493,835
-------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 522,312,
units at $227.94 each (30.2%) ............ 119,058,254
-------------
TOTAL INVESTMENTS (97.7%) (Cost/Amortized
Cost $393,359,936) ....................... 385,181,277
CASH AND RECEIVABLES LESS LIABILITIES
(2.3%) ................................... 9,082,417
-------------
NET ASSETS (100.0%) ....................... $394,263,694
=============
* Non-income producing.
</TABLE>
See Notes to Financial Statements.
SAI-39
<PAGE>
Separate Account No. 51 (Pooled)
of The Equitable Life Assurance Society of the United States
Statement of Assets and Liabilities
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH
CONSERVATIVE INVESTORS
GLOBAL FUND INVESTORS FUND FUND
- --------------------------------------------------- ------------- -------------- ------------
<S> <C> <C> <C>
ASSETS:
Investments in shares of The Hudson River Trust, at
value (Cost:
Global Portfolio -- $12,476,410;
Conservative Investors Portfolio -- $2,943,022;
Growth Investors Portfolio -- $6,386,055 (Note 1) $12,008,553 $2,726,435 $6,122,358
Due from Equitable Life's General Account ......... 41,177 3,569 24,189
- --------------------------------------------------- ------------- -------------- ------------
Total assets .................................... 12,049,730 2,730,004 6,146,547
- --------------------------------------------------- ------------- -------------- ------------
LIABILITIES:
Payable for The Hudson River Trust shares purchased 36,240 2,617 22,051
Accrued expenses ................................... 9,986 3,787 4,935
- --------------------------------------------------- ------------- -------------- ------------
Total liabilities ............................... 46,226 6,404 26,986
- --------------------------------------------------- ------------- -------------- ------------
NET ASSETS ......................................... $12,003,504 $2,723,600 $6,119,561
=================================================== ============= ============== ============
</TABLE>
See Notes to Financial Statements.
SAI-40
<PAGE>
Separate Account No. 51 (Pooled)
of The Equitable Life Assurance Society of the United States
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL FUND CONSERVATIVE INVESTORS FUND
- -------------------------------------------- ------------------------------- -------------------------------
YEAR ENDED JULY 1, 1993* YEAR ENDED JULY 1, 1993*
DECEMBER 31, TO DECEMBER 31, DECEMBER 31, TO DECEMBER 31,
1994 1993 1994 1993
- -------------------------------------------- -------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME -- Dividends from The
Hudson River Trust (Note 2) ................ $ 84,653 $ 9,628 $ 105,562 $ 35,645
EXPENSES (NOTE 4) ........................... (68,052) (5,946) (37,272) (8,414)
- -------------------------------------------- -------------- --------------- -------------- ---------------
NET INVESTMENT INCOME ....................... 16,601 3,682 68,290 27,231
- -------------------------------------------- -------------- --------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) from share transactions 2,308 11,707 (66,443) 800
Realized gain distribution from The Hudson
River Trust ................................ 238,966 138,048 -- 88,214
- -------------------------------------------- -------------- --------------- -------------- ---------------
NET REALIZED GAIN (LOSS) .................... 241,274 149,755 (66,443) 89,014
- -------------------------------------------- -------------- --------------- -------------- ---------------
Unrealized appreciation (depreciation) of
investments:
Beginning of period ........................ (72,115) -- (98,372) --
End of period .............................. (467,857) (72,115) (216,587) (98,372)
- -------------------------------------------- -------------- --------------- -------------- ---------------
Change in unrealized
appreciation/depreciation .................. (395,742) (72,115) (118,215) (98,372)
- -------------------------------------------- -------------- --------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ................................ (154,468) 77,640 (184,658) (9,358)
- -------------------------------------------- -------------- --------------- -------------- ---------------
Increase (decrease) in net assets
attributable to operations ................. (137,867) 81,322 (116,368) 17,873
- -------------------------------------------- -------------- --------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................... 12,404,705 1,695,092 1,652,385 2,171,759
Withdrawals ................................. (1,857,754) (181,994) (920,352) (81,697)
- -------------------------------------------- -------------- --------------- -------------- ---------------
Increase in net assets attributable to
contributions and withdrawals .............. 10,546,951 1,513,098 732,033 2,090,062
- -------------------------------------------- -------------- --------------- -------------- ---------------
INCREASE IN NET ASSETS ...................... 10,409,084 1,594,420 615,665 2,107,935
NET ASSETS -- BEGINNING OF PERIOD ........... 1,594,420 -- 2,107,935 --
- -------------------------------------------- -------------- --------------- -------------- ---------------
NET ASSETS -- END OF PERIOD ................. $12,003,504 $1,594,420 $2,723,600 $2,107,935
============================================ ============== =============== ============== ===============
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
GROWTH INVESTORS FUND
- -------------------------------------------- -------------------------------
YEAR ENDED JULY 1, 1993*
DECEMBER 31, TO DECEMBER 31,
1994 1993
- -------------------------------------------- -------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME -- Dividends from The
Hudson River Trust (Note 2) ................ $ 113,283 $ 16,428
EXPENSES (NOTE 4) ........................... (41,929) (5,262)
- -------------------------------------------- -------------- ---------------
NET INVESTMENT INCOME ....................... 71,354 11,166
- -------------------------------------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) from share transactions (14,850) 3,241
Realized gain distribution from The Hudson
River Trust ................................ -- 82,567
- -------------------------------------------- -------------- ---------------
NET REALIZED GAIN (LOSS) .................... (14,850) 85,808
- -------------------------------------------- -------------- ---------------
Unrealized appreciation (depreciation) of
investments:
Beginning of period ........................ (56,176) --
End of period .............................. (263,697) (56,176)
- -------------------------------------------- -------------- ---------------
Change in unrealized
appreciation/depreciation .................. (207,521) (56,176)
- -------------------------------------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ................................ (222,371) 29,632
- -------------------------------------------- -------------- ---------------
Increase (decrease) in net assets
attributable to operations ................. (151,017) 40,798
- -------------------------------------------- -------------- ---------------
GROWTH INVESTORS FUND
- -------------------------------------------- -------------------------------
YEAR ENDED JULY 1, 1993*
DECEMBER 31, TO DECEMBER 31,
1994 1993
- -------------------------------------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................... 5,339,146 1,614,295
Withdrawals ................................. (622,957) (100,704)
- -------------------------------------------- -------------- ---------------
Increase in net assets attributable to
contributions and withdrawals .............. 4,716,189 1,513,591
- -------------------------------------------- -------------- ---------------
INCREASE IN NET ASSETS ...................... 4,565,172 1,554,389
NET ASSETS -- BEGINNING OF PERIOD ........... 1,554,389 --
- -------------------------------------------- -------------- ---------------
NET ASSETS -- END OF PERIOD ................. $6,119,561 $1,554,389
============================================ ============== ===============
<FN>
*Commencement of operations.
</TABLE>
See Notes to Financial Statements.
SAI-41
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED) (AGGRESSIVE EQUITY FUND), 4 (POOLED) (GROWTH
EQUITY FUND), 10 (POOLED) (BALANCED FUND) AND 51 (POOLED) (GLOBAL,
CONSERVATIVE INVESTORS AND GROWTH INVESTORS FUNDS)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
- -----------------------------------------------------------------------------
Notes to Financial Statements
1. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51
(Pooled) (the Funds) of The Equitable Life Assurance Society of the United
States (Equitable Life), a wholly-owned subsidiary of The Equitable Companies
Incorporated, were established in conformity with the New York State
Insurance Law. Pursuant to such law, to the extent provided in the applicable
contracts, the net assets in the Funds are not chargeable with liabilities
arising out of any other business of Equitable Life. The excess of assets
over reserves and other contract liabilities amounting to $992,535 as shown
in the Statement of Assets and Liabilities in Separate Account No. 4 may be
transferred to Equitable Life's general account.
Separate Account No. 51 was established as of the opening of business on
July 1, 1993, to fund the Association Members Retirement Plan and Trusts.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account Nos. 3 (Pooled), 4 (Pooled) and 10
(Pooled) aggregated $48,123,292 (15.6%), $184,086,304 (11.1%) and $20,002,961
(5.1%), respectively, at December 31, 1994 and $43,232,604 (14.9%),
$179,616,502 (10.0%) and $21,591,374 (4.6%), respectively, at December 31,
1993, of the net assets in these Funds.
Equitable Life is the investment manager for the Funds. Prior to July 22,
1993, Equitable Capital Management Corporation (Equitable Capital) served as
the investment adviser to Equitable Life with respect to the management of
Separate Account Nos. 3, 4 and 10 (the Equitable Funds). On July 22, 1993,
Alliance Capital Management L.P. (Alliance) acquired the business and
substantially all of the assets of Equitable Capital and became the
investment adviser to Equitable Life. Alliance is a publicly-traded limited
partnership which is indirectly majority-owned by Equitable Life.
Separate Account No. 51 has nine investment funds which invest in shares
of corresponding portfolios of The Hudson River Trust (Trust). The
Association Members Retirement Plan and Trusts invest in the following funds
of the account: Global, Conservative Investors and Growth Investors. The
Trust is an open-end, diversified management investment company that invests
the assets of separate accounts of insurance companies. Alliance is the
investment adviser to the Trust.
Equitable Life and Alliance seek to obtain the best price and execution of
all orders placed for the portfolios of the Equitable Funds considering all
circumstances. In addition to using brokers and dealers to execute portfolio
security transactions for accounts under their management, Equitable Life and
Alliance may also enter into other types of business and securities
transactions with brokers and dealers, which will be unrelated to allocation
of the Equitable Funds' portfolio transactions.
2. Security transactions are recorded on the trade date. Amortized cost of
debt securities consists of cost adjusted, where applicable, for amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
SAI-42
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Continued)
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold. For Separate
Account No. 51, realized gains and losses on investments include gains and
losses on redemptions of the Trust's shares (determined on the identified
cost basis) and capital gain distribution from the Trust. Dividends and
realized gain distributions from The Hudson River Trust are recorded on
ex-date.
Transactions denominated in foreign currencies are recorded at the rate
prevailing when earned or incurred. Asset and liability accounts that are
denominated in a foreign currency are adjusted to reflect the current
exchange rate at the end of period. Transaction gains or losses resulting
from changes in the exchange rate during the reporting period or upon
settlement of the foreign currency transactions are reflected under "Realized
and Unrealized Gain (Loss) on Investments" in the Statements of Operations
and Changes in Net Assets.
Equitable Life's internal short-term investment account, Separate Account
No. 2A, was established to provide a more flexible and efficient vehicle to
combine and invest temporary cash positions of certain eligible accounts
(Participating Funds) under Equitable Life's management. Separate Account No.
2A invests in debt securities maturing in sixty days or less from the date of
acquisition. At December 31, 1994, the amortized cost of investments held in
Separate Account No. 2A consists of the following:
<TABLE>
<CAPTION>
AMORTIZED COST %
- ----------------------------------------------------------------------- -------------- --------
<S> <C> <C>
Bank Notes, 6.03% due 1/30/95 through 1/31/95 .......................... $ 25,999,386 3.6%
Bankers Acceptances, 6.09% due 2/21/95 ................................. 16,850,457 2.3
Certificates of Deposit, 6.08% due 1/20/95 ............................. 15,000,000 2.0
Commercial Paper, 5.62%-6.2% due 1/3/95 through 2/17/95 ................ 562,891,837 77.0
Variable Rate Commercial Paper, 6.259%-6.359% due 2/8/95 through
6/15/95 ............................................................... 35,000,000 4.8
Variable Rate LIBOR, 6.188% due 6/16/95 ................................ 10,000,000 1.4
Variable Rate Securities, 5.82%-5.97% due 1/4/95 through 4/26/95 ...... 64,499,342 8.8
- ----------------------------------------------------------------------- -------------- --------
Total Investments ...................................................... 730,241,022 99.9
Cash and Receivables Less Liabilities .................................. 1,053,134 0.1
- ----------------------------------------------------------------------- -------------- --------
Net Assets ............................................................. $731,294,156 100.0%
======================================================================= ============== ========
Units Outstanding ...................................................... 3,208,208
Unit Value ............................................................. $ 227.94
- ----------------------------------------------------------------------- --------------
</TABLE>
Participating Funds purchase or redeem units depending on each
participating account's excess cash availability or cash needs to meet its
liabilities. Separate Account No. 2A is not subject to investment management
fees. Short-term debt securities may also be purchased directly by the
Equitable Funds.
SAI-43
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Continued)
For 1994 and 1993, investment security transactions, excluding short-term
debt securities, were as follows:
<TABLE>
<CAPTION>
SEPARATE
SEPARATE ACCOUNT NO. 3 ACCOUNT NO. 4
------------------------------
COST OF NET PROCEEDS COST OF
PURCHASES OF SALES PURCHASES
---------------------------- -------------- -------------- -----------
<S> <C> <C> <C>
Stocks and long-term
corporate debt securities:
1994 ...................... $314,667,935 $272,832,266 $1,556,068,225
1993 ...................... 229,810,388 192,736,750 1,394,550,892
U.S. Government obligations:
1994 ...................... -- -- --
1993 ...................... -- -- --
- ---------------------------- -------------- -------------- --------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SEPARATE ACCOUNT NO. 10
------------------------------
NET PROCEEDS COST OF NET PROCEEDS
OF SALES PURCHASES OF SALES
- ---------------------------- -------------- ----------- ---------------
<S> <C> <C> <C>
Stocks and long-term
corporate debt securities:
1994 ..................... $1,644,508,525 $205,954,001 $260,871,268
1993 ...................... 1,610,595,838 299,089,236 269,287,921
U.S. Government obligations:
1994 ...................... -- 153,502,598 195,600,942
1993 ...................... -- 150,871,110 123,354,806
- ---------------------------- -------------- ----------- ---------------
</TABLE>
No activity is shown for Separate Account No. 51 since it trades
exclusively in shares of corresponding portfolios of The Hudson River Trust.
3. Investment securities for the Equitable Funds are valued as follows:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the National Association of Securities
Dealers, Inc. Automated Quotation (NASDAQ) national market system are valued
at the last sale price, or, if no sale, at the latest available bid price.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) form in the United States are valued at the last sale price in the
local currency on an exchange in the country of origin. Foreign currency is
converted into its U.S. dollar equivalent at current exchange rates.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
are valued at representative quoted prices.
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where Equitable Life and Alliance deem
it appropriate to do so, an over-the-counter or exchange quotation may be
used.
Convertible preferred stocks listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more major dealers in such securities; where
there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stock.
Other assets that do not have a readily available market price, are valued
at fair value as determined in good faith by Equitable Life's investment
officers.
The value of the investments of the Global, Conservative Investors and
Growth Investors Funds in the corresponding Hudson River Trust Portfolios is
calculated by multiplying the number of shares held by Separate Account No.
51 in each Portfolio by the net asset value per share of that Portfolio
determined as of the close of business on the same day as the respective unit
values of the Global, Conservative Investors and Growth Investors Funds are
determined.
SAI-44
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Concluded)
Separate Account No. 2A is valued daily at amortized cost, which
approximates market value. Short-term debt securities purchased directly by
the Equitable Funds which mature in 60 days or less are valued at amortized
cost. Short-term debt securities which mature in more than 60 days are valued
at representative quoted prices.
4. Charges and fees relating to the Funds are deducted in accordance with
the terms of the various contracts which participate in the Funds. With
respect to the Members Retirement Plan and Trust, these expenses consist of
investment management and accounting fees, program expense charge, direct
expenses and record maintenance and report fees. These charges and fees are
paid to Equitable Life and are recorded as expenses in the accompanying
Statements of Operations and Changes in Net Assets.
5. No Federal income tax based on net income or realized and unrealized
capital gains was applicable to contracts participating in the Funds for the
two years ended December 31, 1994, by reason of applicable provisions of the
Internal Revenue Code and no Federal income tax payable by Equitable Life for
such years will affect such contracts. Accordingly, no Federal income tax
provision is required.
SAI-45
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors and Shareholders of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and of cash
flows present fairly, in all material respects, the financial position of The
Equitable Life Assurance Society of the United States and its subsidiaries
("Equitable Life") at December 31, 1994 and 1993, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of Equitable Life's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally
accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Note 2 to the consolidated financial statements, Equitable
Life changed its methods of accounting for postemployment benefits in 1994
and for investment securities and for reinsurance in 1993.
PRICE WATERHOUSE LLP
New York, New York
February 8, 1995
SAI-46
<PAGE>
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
The Board of Directors of The Equitable Life Assurance Society of the United
States:
We have audited the consolidated statements of earnings, shareholder's equity
and cash flows of The Equitable Life Assurance Society of the United States
("Equitable Life") for the year ended December 31, 1992. These consolidated
financial statements are the responsibility of Equitable Life's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit 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 audit provides a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated results of operations and consolidated
cash flows of The Equitable Life Assurance Society of the United States for
the year ended December 31, 1992 in conformity with generally accepted
accounting principles.
As discussed in Note 2 to the consolidated financial statements, in 1992
Equitable Life changed its method of accounting for foreclosed assets, income
taxes and postretirement benefits other than pensions.
Deloitte & Touche LLP
New York, New York
February 16, 1993
SAI-47
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
----------- -----------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Held to maturity, at amortized cost ........................ $ 5,223.0 $ 5,659.1
Available for sale, at estimated fair value ................ 7,586.0 7,829.3
Mortgage loans on real estate ............................... 4,018.0 4,592.1
Equity real estate .......................................... 4,446.4 4,452.6
Policy loans ................................................ 1,731.2 1,549.1
Other equity investments .................................... 678.5 851.0
Investment in and loans to affiliates ....................... 560.2 533.0
Other invested assets ....................................... 489.3 374.2
----------- -----------
Total investments .......................................... 24,732.6 25,840.4
Cash and cash equivalents ..................................... 693.6 593.4
Deferred policy acquisition costs ............................. 3,221.1 2,858.8
Amounts due from discontinued GIC Segment ..................... 2,108.6 2,125.9
Other assets .................................................. 2,078.6 1,900.8
Closed Block assets ........................................... 8,105.5 8,084.3
Separate Accounts assets ...................................... 20,469.5 19,684.1
----------- -----------
TOTAL ASSETS .................................................. $61,409.5 $61,087.7
===========
LIABILITIES
Policyholders' account balances ............................... $21,238.0 $21,499.1
Future policy benefits and other policyholders' liabilities .. 3,840.8 3,753.6
Short-term and long-term debt ................................. 1,337.4 1,659.5
Other liabilities ............................................. 2,300.1 2,450.3
Closed Block liabilities ...................................... 9,069.5 9,143.4
Separate Accounts liabilities ................................. 20,429.3 19,631.2
----------- -----------
Total liabilities ........................................... 58,215.1 58,137.1
----------- -----------
Commitments and contingencies (Notes 10, 12, 13, 14, 15 and 23)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized,
issued and outstanding ...................................... 2.5 2.5
Capital in excess of par value ................................ 2,913.6 2,613.6
Retained earnings ............................................. 484.0 217.6
Net unrealized investment (losses) gains ...................... (203.0) 131.9
Minimum pension liability ..................................... (2.7) (15.0)
----------- -----------
Total shareholder's equity .................................. 3,194.4 2,950.6
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY .................... $61,409.5 $61,087.7
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-48
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee income $ 715.0 $ 644.5 $ 571.7
Premiums .................................................... 625.6 599.1 1,185.3
Net investment income ....................................... 2,030.9 2,599.3 2,689.5
Investment gains, net ....................................... 91.8 533.4 371.8
Commissions, fees and other income .......................... 845.4 1,717.2 1,407.4
Contribution from the Closed Block .......................... 151.0 128.3 59.3
--------- --------- ---------
Total revenues ............................................ 4,459.7 6,221.8 6,285.0
--------- --------- ---------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances ....... 1,201.3 1,330.0 1,440.8
Policyholders' benefits ..................................... 920.6 1,003.9 1,755.7
Other operating costs and expenses .......................... 1,943.1 3,584.2 3,095.7
--------- --------- ---------
Total benefits and other deductions ....................... 4,065.0 5,918.1 6,292.2
--------- --------- ---------
Earnings (loss) before Federal income taxes, extraordinary
item and cumulative effect of accounting changes .......... 394.7 303.7 (7.2)
Federal income taxes ........................................ 101.2 91.3 19.2
--------- --------- ---------
Earnings (loss) before extraordinary item and cumulative
effect of accounting changes ............................... 293.5 212.4 (26.4)
Extraordinary charge for demutualization expenses .......... -- -- (93.8)
Cumulative effect of accounting changes, net of Federal
income taxes ............................................... (27.1) -- 4.9
--------- --------- ---------
Net Earnings (Loss) ......................................... $ 266.4 $ 212.4 $ (115.3)
========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-49
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning of year ........ $ 2.5 $ 2.0 $ --
Issuance of common stock .............................. -- -- 2.0
Increase in par value ................................. -- .5 --
---------- ---------- -----------
Common stock, at par value, end of year ............... 2.5 2.5 2.0
---------- ---------- -----------
Capital in excess of par value, beginning of year .... 2,613.6 2,273.9 --
Additional capital in excess of par value ............. 300.0 340.2 2,273.9
Increase in par value ................................. -- (.5) --
---------- ---------- -----------
Capital in excess of par value, end of year .......... 2,913.6 2,613.6 2,273.9
---------- ---------- -----------
Retained earnings, beginning of year .................. 217.6 5.2 1,290.0
Net loss before demutualization ....................... -- -- (120.5)
Demutualization transaction ........................... -- -- (1,169.5)
Net earnings after demutualization .................... 266.4 212.4 5.2
---------- ---------- -----------
Retained earnings, end of year ........................ 484.0 217.6 5.2
---------- ---------- -----------
Net unrealized investment gains, beginning of year ... 131.9 78.8 65.5
Change in unrealized investment (losses) gains ....... (334.9) (9.5) 13.3
Effect of adopting new accounting standard ............ -- 62.6 --
---------- ---------- -----------
Net unrealized investment (losses) gains, end of year (203.0) 131.9 78.8
---------- ---------- -----------
Minimum pension liability, beginning of year ......... (15.0) --
Change in minimum pension liability ................... 12.3 (15.0)
---------- ----------
Minimum pension liability, end of year ................ (2.7) (15.0)
---------- ----------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR ............... $3,194.4 $2,950.6 $ 2,359.9
========== ========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-50
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
----------- ------------ -----------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings (loss) ................................ $ 266.4 $ 212.4 $ (115.3)
Adjustments to reconcile net earnings (loss) to net
cash provided (used) by operating activities:
Net change in trading activities and broker-dealer
related receivables/payables ................... -- (4,177.8) (2,872.9)
Increase in matched resale agreements ............ -- (2,900.5) (1,692.4)
Increase in matched repurchase agreements ........ -- 2,900.5 1,692.4
Investment gains, net of dealer and trading gains (91.8) (160.8) (101.6)
Change in amounts due from discontinued GIC
Segment ........................................ 57.3 47.8 76.4
General Account policy charges ................... (711.9) (623.4) (542.9)
Interest credited to policyholders' account
balances ....................................... 1,201.3 1,330.0 1,440.8
Changes in Closed Block assets and liabilities,
net ............................................ (95.1) (73.3) (156.6)
Change in postretirement benefits liability ...... .5 (8.5) 386.7
Other, net ....................................... 7.3 (407.6) 60.9
----------- ------------ -----------
Net cash provided (used) by operating activities .. 634.0 (3,861.2) (1,824.5)
----------- ------------ -----------
Cash flows from investing activities:
Maturities and repayments ........................ 2,319.7 3,479.6 2,395.8
Sales ............................................ 5,661.9 7,399.2 5,947.1
Return of capital from joint ventures and limited
partnerships ................................... 39.0 119.5 216.7
Purchases ........................................ (7,417.6) (11,184.2) (9,009.5)
Net increase in loans to discontinued GIC Segment (40.0) (880.0) (1,448.6)
Cash received on sale of 61% interest in DLJ ..... -- 346.7 --
Other, net ....................................... (371.1) (317.0) 287.6
----------- ------------ -----------
Net cash provided (used) by investing activities .. 191.9 (1,036.2) (1,610.9)
----------- ------------ -----------
Cash flows from financing activities:
Policyholders' account balances:
Deposits ....................................... 2,082.7 2,410.7 2,411.6
Withdrawals .................................... (2,887.4) (2,433.5) (2,912.0)
Net (decrease) increase in short-term financings . (173.0) 4,717.2 1,786.3
Additions to long-term debt ...................... 51.8 97.7 477.3
Repayments of long-term debt ..................... (199.8) (64.4) (281.4)
Proceeds from issuance of Alliance units ......... 100.0 -- --
Capital contribution from the Holding Company .... 300.0 -- 177.8
----------- ------------ -----------
Net cash (used) provided by financing activities .. (725.7) 4,727.7 1,659.6
----------- ------------ -----------
Change in cash and cash equivalents ................ 100.2 (169.7) (1,775.8)
Cash and cash equivalents, beginning of year ...... 593.4 763.1 2,538.9
----------- ------------ -----------
Cash and Cash Equivalents, End of Year ............. $ 693.6 $ 593.4 $ 763.1
=========== ============ ===========
Supplemental cash flow information
Interest Paid .................................... $ 34.9 $ 1,437.2 $ 1,244.0
=========== ============ ===========
Income Taxes Paid (Refunded) ..................... $ 49.2 $ 41.0 $ (21.3)
=========== ============ ===========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-51
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") converted to a stock life insurance company on July 22, 1992 and
became a wholly owned subsidiary of The Equitable Companies Incorporated (the
"Holding Company"). In connection with the conversion, Equitable Life's
eligible policyholders received cash, policy credits or common stock of the
Holding Company. The costs incurred in connection with the demutualization
have been presented as an extraordinary charge.
At conversion, on July 22, 1992, AXA Group ("AXA") became the owner of 49%
of the Holding Company's common shares outstanding.
On December 19, 1994, the Holding Company exchanged all its outstanding
redeemable preferred stock and substantially all of its convertible preferred
stock for common stock, a new series of convertible preferred stock and
convertible debentures. As a result of this transaction, AXA's ownership of
the Holding Company increased to 60.5% (63.6% assuming conversion of
Convertible Preferred Stock held by AXA and 54.1% if all securities
convertible into, or options on, common stock were to be converted or
exercised).
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
After July 22, 1992, Equitable Life commenced preparing its general
purpose financial statements in conformity with generally accepted accounting
principles ("GAAP") for stock life insurance companies. Such principles have
been applied retroactively in the preparation of these consolidated financial
statements for all periods prior to conversion.
The accompanying consolidated financial statements include the accounts of
Equitable Life and its wholly owned life insurance subsidiaries
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance Capital Management L.P. ("Alliance"), an investment
advisory subsidiary and Equitable Real Estate Investment Management, Inc.
("EREIM"), a real estate investment management subsidiary; and those
partnerships and joint ventures (collectively, including its consolidated
subsidiaries the "Company") in which the Company has control and a majority
economic interest. The consolidated statements of earnings and cash flows for
the years ended December 31, 1993 and 1992 include the results of operations
and cash flows of Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), an investment
banking and brokerage affiliate, on a consolidated basis through December 15,
1993, the date of sale (see Note 21). Subsequent to the date of sale, DLJ is
accounted for on the equity basis. The Closed Block assets and liabilities
and results of operations subsequent to demutualization are presented in the
consolidated financial statements as single line items. Prior to
demutualization such amounts were presented line by line in the consolidated
financial statements (see Note 6). Unless specifically stated, all
disclosures contained herein supporting the consolidated financial statements
exclude the Closed Block related amounts.
All significant intercompany transactions and balances have been
eliminated in consolidation other than intercompany transactions and balances
with the Closed Block and the discontinued Guaranteed Interest Contract
("GIC") Segment (see Note 7).
Certain reclassifications have been made in the amounts presented for
prior periods to conform those periods with the 1994 presentation.
SAI-52
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Closed Block
As of July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain classes of individual participating policies for which
Equitable Life had a dividend scale payable in 1991 and which were in force
on that date. Assets were allocated to the Closed Block in an amount which,
together with anticipated revenues from policies included in the Closed
Block, was reasonably expected to be sufficient to support such business,
including provision for payment of claims, certain expenses and taxes, and
for continuation of dividend scales payable in 1991, assuming the experience
underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
holders of policies included in the Closed Block and will not revert to the
benefit of Equitable Life's shareholder. The plan of demutualization
prohibits the reallocation, transfer, borrowing or lending of assets between
the Closed Block and other portions of Equitable Life's General Account, any
of its Separate Accounts or to any affiliate of Equitable Life without the
approval of the New York Superintendent of Insurance. Closed Block assets and
liabilities are carried on the same basis as similar assets and liabilities
held in the General Account.
The excess of Closed Block liabilities over Closed Block assets represents
the expected future post-tax contribution from the Closed Block which would
be recognized in income over the period the policies and contracts in the
Closed Block remain in force.
If the actual contribution from the Closed Block in any given period
equals or exceeds the expected contribution for such period as determined at
the establishment of the Closed Block, the expected contribution would be
recognized in income for that period. Any excess of the actual contribution
over the expected contribution would also be recognized in income to the
extent that the aggregate expected contribution for all prior periods
exceeded the aggregate actual contribution. Any remaining excess of actual
contribution over expected contributions would be accrued in the Closed Block
as a liability for future dividends to be paid to the Closed Block
policyholders.
If, over the period the policies and contracts in the Closed Block remain
in force, the actual contribution from the Closed Block is less than the
expected contribution from the Closed Block, only such actual contribution
would be recognized in income.
Discontinued Operations
In 1991, the Company's management adopted a plan to discontinue the
business operations of the GIC Segment, consisting of the Guaranteed Interest
Contract and Group Non-Participating Wind-Up Annuities lines of business. The
Company established a pre-tax provision for the estimated future losses of
the GIC line of business and a premium deficiency reserve for the Group
Non-Participating Wind-Up Annuities. Losses incurred subsequently have been
charged to the allowance for future losses and the premium deficiency
reserve. Total allowances are based upon management's best judgment and there
is no assurance that the ultimate losses will not differ.
Accounting Changes
In the fourth quarter of 1994 (effective as of January 1, 1994), the
Company adopted Statement of Financial Accounting Standards ("SFAS") No. 112,
Employers' Accounting for Postemployment Benefits,
SAI-53
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
which requires employers to recognize the obligation to provide
postemployment benefits. Implementation of this statement resulted in a
charge for the cumulative effect of accounting change of $27.1 million, net
of a Federal income tax benefit of $14.6 million. The current year impact
from the implementation of this statement had no material effect on the 1994
consolidated statements of earnings.
In the first quarter of 1993, the Company adopted SFAS No. 113,
"Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration
Contracts," which establishes the conditions for reinsurance accounting. With
the adoption of this statement, certain reinsurance contracts were
reclassified in 1993 and are presented on a gross basis. Implementation of
this statement had no material effect on the Company's consolidated financial
statements.
At December 31, 1993, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which expanded the use of
fair value accounting for those securities that a company does not have
positive intent and ability to hold to maturity. Implementation of this
statement increased consolidated shareholder's equity by $62.6 million net of
deferred policy acquisition costs, amounts attributable to participating
group annuity contracts and deferred Federal income tax.
In the fourth quarter of 1992 (effective as of January 1, 1992), the
Company adopted SFAS No. 109, "Accounting for Income Taxes," and SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions."
The cumulative effect of accounting changes of $4.9 million is comprised of a
credit of $252.3 million related to the income tax statement and a charge of
$247.4 million, net of a Federal income tax benefit of $130.9 million,
related to the postretirement benefit statement.
In 1992, effective in the fourth quarter, the Company changed its method
of accounting for foreclosed assets to comply with AICPA Statement of
Position No. 92-3, "Accounting for Foreclosed Assets." This change resulted
in a charge of $34.5 million which is reflected in investment gains, net.
New Accounting Pronouncements
In the first quarter of 1995, the Company intends to adopt SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan." This statement applies to
all creditors and addresses the accounting for impairment of a loan by
specifying how allowances for credit losses should be determined. The
statement also applies to all loans that are restructured in a troubled debt
restructuring involving a modification of terms. It requires that impaired
loans that are within the scope of this statement be measured based on the
present value of expected future cash flows discounted at the loan's
effective interest rate or, as a practical expedient, at the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. The Company is currently providing for impairment of
loans through an allowance for possible losses, and the implementation of
this statement is not expected to have a significant effect on the level of
this allowance. As a result, there should be no material effect on the
Company's consolidated statements of earnings or shareholder's equity upon
adoption.
Valuation of Investments
Fixed maturities which the Company has both the ability and the intent to
hold to maturity are stated principally at amortized cost. For publicly
traded fixed maturities and for directly negotiated fixed maturities the
amortized cost is adjusted for impairments in value deemed to be other than
temporary. Fixed maturities which have been identified as available for sale
are reported at estimated fair value.
SAI-54
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Mortgage loans on real estate are stated at unpaid principal balances, net
of unamortized discounts and valuation allowances. The valuation allowances
are based on losses expected by management to be realized on transfers of
mortgage loans to real estate (upon foreclosure or in-substance foreclosure),
on the disposition or settlement of mortgage loans and on mortgage loans
which management believes may not be collectible in full. In establishing
valuation allowances, management considers, among other things, the estimated
fair value of the underlying collateral.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired in
satisfaction of debt is valued at estimated fair value. Valuation allowances
on real estate held for the production of income are computed using the
forecasted cash flows of the respective properties discounted at a rate equal
to the Company's cost of funds; valuation allowances on real estate available
for sale are computed using the lower of estimated current fair value or
depreciated cost, net of disposition costs.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control and a majority economic interest are reported using the equity
basis of accounting and are included with either equity real estate or other
equity investments, as appropriate.
Equity securities, comprised of common stock and non-redeemable preferred
stocks, are carried at estimated fair value and are included in other equity
investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
Cash and cash equivalents included cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity of
three months or less.
All securities are recorded in the consolidated financial statements on a
trade date basis.
Investment Results and Unrealized Investment Gains (Losses)
Net investment income excludes net investment income of Separate Accounts
on which the Insurance Group does not bear the investment risk. Net
investment income and realized investment gains and losses (collectively,
"investment results") related to certain participating group annuity
contracts are passed through to the contractholders as interest credited to
policyholders' account balances.
Realized investment gains and losses, other than those related to Separate
Accounts on which the Insurance Group does not bear the investment risk, are
determined by specific identification and are presented as a component of
revenue. Valuation allowances are netted against the asset categories to
which they apply and changes in the valuation allowances are included in
investment gains or losses.
Unrealized investment gains and losses on fixed maturities available for
sale and equity securities held by the Company are accounted for as a
separate component of shareholder's equity, net of related deferred Federal
income taxes, amounts attributable to the discontinued GIC Segment, Closed
Block, participating group annuity contracts and deferred policy acquisition
costs related to universal life and investment-type products.
SAI-55
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Recognition of Insurance Income and Related Expenses
Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenues from these contracts
consist of amounts assessed during the period against policyholders' account
balances for mortality charges, policy administration charges and surrender
charges. Policy benefits and claims that are charged to expense include
benefit claims incurred in the period in excess of related policyholders'
account balances.
Premiums from traditional life and annuity policies with life
contingencies are recognized generally as income when due. Benefits and
expenses are matched with such income so as to result in the recognition of
profits over the life of the contracts. This match is accomplished by means
of the provision for liabilities for future policy benefits and the deferral
and subsequent amortization of policy acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period over
which benefits are provided, premiums are recorded as income when due with
any excess profit deferred and recognized in income in a constant
relationship to insurance in force or, for annuities, the amount of expected
future benefit payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with and
are primarily related to the production of new business, are deferred.
Deferred policy acquisition costs are subject to recoverability testing at
the time of policy issue and loss recognition testing at the end of each
accounting period.
For universal life and investment-type products, deferred policy
acquisition costs are amortized over the expected average life of the
contracts (periods ranging from 15 to 35 years and 5 to 17 years,
respectively) as a constant percentage of estimated gross profits arising
principally from investment results, mortality and expense margins and
surrender charges based on historical and anticipated future experience,
updated at the end of each accounting period. The effects of revisions to
experience on previous amortization of deferred policy acquisition costs are
reflected in earnings and change in unrealized investment gains (losses) in
the period estimated gross profits are revised.
For traditional life and annuity policies with life contingencies,
deferred policy acquisition costs are amortized in proportion to anticipated
premiums. Assumptions as to anticipated premiums are estimated at the date of
policy issue and are consistently applied during the life of the contracts.
Deviations from estimated experience are reflected in earnings in the period
such deviations occur. For these contracts, the amortization periods
generally are for the estimated life of the policy.
For individual health benefit insurance, deferred policy acquisition costs
are amortized over the expected average life of the contracts (10 years for
major medical policies and 20 years for disability income products) in
proportion to anticipated premium revenue at time of issue.
SAI-56
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Policyholders' Account Balances and Future Policy Benefits
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account values
represent an accumulation of gross premium payments plus credited interest
less expense and mortality charges and withdrawals.
For traditional life insurance policies, future policy benefit and
dividend liabilities are computed using a net level premium method on the
basis of actuarial assumptions as to mortality, persistency and interest
established at policy issue. Assumptions established at policy issue as to
mortality and persistency are based on the Insurance Group's experience
which, together with interest and expense assumptions, provide a margin for
adverse deviation. When the liabilities for future policy benefits plus the
present value of expected future gross premiums are insufficient to provide
for expected future policy benefits and expenses, unrecoverable deferred
policy acquisition costs are written off and thereafter, if required, a
premium deficiency reserve is established by a charge to earnings. Benefit
liabilities for traditional annuities during the accumulation period are
equal to accumulated contractholders' fund balances and after annuitization
are equal to the present value of expected future payments. Interest rates
used in establishing such liabilities range from 2.25% to 11.5% for life
insurance liabilities and from 2.25% to 13.5% for annuity liabilities.
Individual health benefit liabilities for active lives are calculated
using the net level premium method, and assumptions as to future morbidity,
withdrawals and interest which provide a margin for adverse deviation.
Benefit liabilities for disabled lives are calculated using the present value
of benefits method and experience assumptions as to claim terminations,
expenses, and interest which also provide a margin for adverse deviation.
Claim reserves and associated liabilities for individual disability income
and major medical policies were $291.3 million, $402.2 million, $529.3
million and $570.6 million at January 1, 1992, December 31, 1992, 1993 and
1994, respectively. Incurred benefits (benefits paid plus changes in claim
reserves) and benefits paid for individual disability income and major
medical policies are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1994 1993 1992
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year $188.6 $193.1 $183.0
Incurred benefits related to prior years 28.7 106.1 67.3
-------- -------- --------
Total Incurred Benefits .................. $217.3 $299.2 $250.3
======== ========
Benefits paid related to current year ... $ 43.7 $ 48.9 $ 39.7
Benefits paid related to prior years .... 132.3 123.1 99.7
-------- -------- --------
Total Benefits Paid ...................... $176.0 $172.0 $139.4
======== ======== ========
</TABLE>
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by Equitable
Life's Board of Directors. The aggregate amount of policyholders' dividends
is related to actual interest, mortality, morbidity and expense experience
for the year and judgment as to the appropriate level of statutory surplus to
be retained by Equitable Life.
SAI-57
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Equitable Life is subject to limitations on the amount of statutory
profits which can be retained by Equitable Life with respect to certain
classes of individual participating policies that were in force on July 22,
1992 which are not included in the Closed Block and with respect to
participating policies issued subsequent to July 22, 1992. Excess statutory
profits, if any, will be distributed over time to such policyholders and will
not be available to Equitable Life's shareholder. Earnings in excess of
limitations are accrued as policyholders' dividends.
At December 31, 1994, participating policies including those in the Closed
Block represent approximately 31.0% ($64.4 billion) of direct written life
insurance in force, net of amounts ceded. Participating policies represent
substantially all of the premium income as reflected in the consolidated
statements of earnings and in the results of the Closed Block.
Federal Income Taxes
Equitable Life and its life insurance and non-life insurance subsidiaries
file a consolidated Federal income tax return with the Holding Company and
its non-life insurance subsidiaries. Current Federal income taxes are charged
or credited to operations based upon amounts estimated to be payable or
recoverable as a result of taxable operations for the current year. Effective
January 1, 1992, deferred income tax assets and liabilities are recognized
based on the difference between financial statement carrying amounts and
income tax bases of assets and liabilities using enacted income tax rates and
laws.
Separate Accounts
Separate Accounts are established in conformity with the New York State
Insurance Law and are generally not chargeable with liabilities that arise
from any other business of the Insurance Group. Separate Accounts assets are
subject to General Account claims only to the extent the value of such assets
exceeds the Separate Accounts liabilities.
Assets and liabilities of the Separate Accounts, representing net deposits
and accumulated net investment earnings less fees, held primarily for the
benefit of contractholders, are shown as separate captions in the
consolidated balance sheets. The Insurance Group bears the investment risk on
assets held in one Separate Account, therefore, such assets are carried on
the same basis as similar assets held in the General Account portfolio.
Assets held in the other Separate Accounts are carried at quoted market
values or, where quoted values are not available, at estimated fair values as
determined by the Insurance Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate Accounts
liabilities. For the years ended December 31, 1994, 1993 and 1992, investment
results of such Separate Accounts were $676.3 million, $1,676.5 million and
$1,447.4 million, respectively.
The investment results of a Separate Account on which the Insurance Group
bears the investment risk and which are included in revenues, amounted to
$13.7 million, $12.6 million and $14.5 million for the years ended December
31, 1994, 1993 and 1992, respectively.
SAI-58
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Deposits to all Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges of all Separate Accounts are included in
revenues.
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------- ------------ ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
- -----------------------------------
Fixed Maturities:
Held to Maturity:
Corporate ........................ $4,661.0 $67.9 $233.8 $4,495.1
U.S. Treasury securities and
U.S. government and agency
securities ...................... 428.9 4.6 44.2 389.3
States and political subdivisions 63.4 .9 3.7 60.6
Foreign governments .............. 69.7 4.2 2.0 71.9
----------- ------------ ------------ ------------
Total Held to Maturity ............. $5,223.0 $77.6 $283.7 $5,016.9
=========== ============ ============ ============
Available for Sale:
Corporate ........................ $5,663.4 $34.6 $368.0 $5,330.0
Mortgage-backed .................. 686.0 2.9 44.8 644.1
U.S. Treasury securities and
U.S. government and agency
securities ...................... 1,519.3 6.7 71.9 1,454.1
States and political subdivisions 23.4 .1 .7 22.8
Foreign governments .............. 43.8 .3 4.2 39.9
Redeemable preferred stock ...... 108.4 .4 13.7 95.1
----------- ------------ ------------ ------------
Total Available for Sale ........... $8,044.3 $45.0 $503.3 $7,586.0
=========== ============ ============ ============
Equity Securities:
Common stock ...................... $ 126.4 $31.2 $ 23.5 $ 134.1
=========== ============ ============ ============
</TABLE>
SAI-59
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------- ------------ ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
December 31, 1993
- -----------------------------------
Fixed Maturities:
Held to Maturity:
Corporate ........................ $5,155.0 $390.7 $17.7 $5,528.0
Mortgage-backed .................. 89.1 4.3 .1 93.3
U.S. Treasury securities and
U.S. government and agency
securities ...................... 91.2 16.8 -- 108.0
States and political subdivisions 274.7 29.4 .1 304.0
Foreign governments .............. 49.1 5.3 -- 54.4
----------- ------------ ------------ ------------
Total Held to Maturity ............. $5,659.1 $446.5 $17.9 $6,087.7
=========== ============ ============ ============
Available for Sale:
Corporate ........................ $4,909.0 $218.2 $31.0 $5,096.2
Mortgage-backed .................. 1,093.7 34.8 1.4 1,127.1
U.S. Treasury securities and
U.S. government and agency
securities ...................... 881.0 44.1 1.7 923.4
States and political subdivisions 590.6 26.5 1.6 615.5
Foreign governments .............. 40.0 1.8 .2 41.6
Redeemable preferred stock ...... 31.1 .1 5.7 25.5
----------- ------------ ------------ ------------
Total Available for Sale ........... $7,545.4 $325.5 $41.6 $7,829.3
=========== ============ ============ ============
Equity Securities:
Common stock ...................... $ 110.0 $ 78.8 $ 2.8 $ 186.0
Non-redeemable preferred stock ... 6.9 .3 .5 6.7
----------- ------------ ------------ ------------
Total Equity Securities ............ $ 116.9 $ 79.1 $ 3.3 $ 192.7
=========== ============ ============ ============
</TABLE>
For publicly traded fixed maturities and equity securities, estimated fair
value is determined using quoted market prices. For fixed maturities without
a readily ascertainable market value, the Company has determined an estimated
fair value using a discounted cash flow approach, including provisions for
credit risk, generally based upon the assumption that such securities will be
held to maturity. Estimated fair value for equity securities, substantially
all of which do not have a readily ascertainable market value, has been
determined by the Company. Such estimated fair values do not necessarily
represent the values for which these securities could have been sold at the
dates of the consolidated balance sheets. At December 31, 1994 and 1993,
securities without a readily ascertainable market value having an amortized
cost of $3,854.0 million and $4,751.5 million, respectively, had estimated
fair values of $3,724.6 million and $5,016.6 million, respectively.
SAI-60
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The contractual maturity of bonds at December 31, 1994 is shown below:
<TABLE>
<CAPTION>
HELD TO MATURITY AVAILABLE FOR SALE
------------------------- -------------------------
AMORTIZED ESTIMATED AMORTIZED ESTIMATED
COST FAIR VALUE COST FAIR VALUE
----------- ------------ ----------- ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Due in one year or less ..... $ 216.2 $ 216.1 $ 214.9 $ 214.8
Due in years two through five 1,442.1 1,419.1 1,895.2 1,855.0
Due in years six through ten 1,733.5 1,634.3 2,763.8 2,549.7
Due after ten years .......... 1,831.2 1,747.4 2,376.0 2,227.3
Mortgage-backed securities .. -- -- 686.0 644.1
----------- ------------ ----------- ------------
Total ........................ $5,223.0 $5,016.9 $7,935.9 $7,490.9
=========== ============ =========== ============
</TABLE>
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year ..................... $ 355.6 $ 512.0 $ 565.1
Additions charged to income ..................... 51.0 92.8 265.0
Deductions for writedowns and asset dispositions (121.7) (249.2) (239.3)
Transfers of allowances to discontinued GIC
Segment and Closed Block ....................... -- -- (78.8)
--------- --------- ---------
Balances, End of Year ........................... $ 284.9 $ 355.6 $ 512.0
========= ========= =========
Balances, end of year comprise:
Mortgage loans on real estate .................. $ 64.2 $ 144.4 $ 198.3
Equity real estate ............................. 220.7 211.2 195.1
Fixed maturities ............................... -- -- 118.6
--------- --------- ---------
Total ........................................... $ 284.9 $ 355.6 $ 512.0
========= ========= =========
</TABLE>
Deductions for writedowns and asset dispositions for 1993 include an $87.1
million writedown of fixed maturity investments at December 31, 1993 as a
result of adopting a new accounting statement for the valuation of these
investments that requires specific writedowns instead of valuation
allowances.
At December 31, 1994, the carrying values of investments held for the
production of income which were non-income producing for the twelve months
preceding the consolidated balance sheet date were $33.7 million of fixed
maturities, $42.5 million of mortgage loans on real estate and $.9 million of
equity real estate.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged buyout
transactions. The Insurance Group seeks to minimize the higher than normal
credit risks associated with such securities by monitoring the total
investments in any single issuer or total
SAI-61
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
investment in a particular industry group. Certain of these corporate high
yield securities are classified as other than investment grade by the various
rating agencies, i.e., a rating below Baa or an NAIC (National Association of
Insurance Commissioners) designation of 3 (medium grade), 4 or 5 (below
investment grade) or 6 (in or near default). At December 31, 1994,
approximately 12.4% of the $13,017.0 million aggregate amortized cost of
bonds held by the Insurance Group were considered to be other than investment
grade.
In addition to its holdings of corporate high yield securities, the
Insurance Group is an equity investor in limited partnership interests which
invest primarily in securities considered to be other than investment grade.
The Company has restructured or modified the terms of certain fixed
maturity investments. The fixed maturity portfolio, based on amortized cost,
includes $30.5 million and $55.3 million at December 31, 1994 and 1993,
respectively, of such restructured securities. These amounts include fixed
maturities which are in default as to principal and/or interest payments, are
to be restructured pursuant to commenced negotiations or where the borrowers
went into bankruptcy subsequent to acquisition (collectively, "problem fixed
maturities") of $9.7 million and $32.7 million as of December 31, 1994 and
1993, respectively. Gross interest income that would have been recorded in
accordance with the original terms of restructured fixed maturities amounted
to $7.5 million, $11.7 million and $35.4 million in 1994, 1993 and 1992,
respectively. Gross interest income on these fixed maturities included in net
investment income aggregated $6.8 million, $9.7 million and $28.2 million in
1994, 1993 and 1992, respectively.
At December 31, 1994 and 1993, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more past
due or in foreclosure (collectively, "problem mortgage loans on real estate")
had an amortized cost of $96.9 million (2.3% of total mortgage loans on real
estate) and $292.1 million (6.2% of total mortgage loans on real estate),
respectively.
The payment terms of mortgage loans on real estate may from time to time
be restructured or modified. The investment in restructured mortgage loans on
real estate, based on amortized cost, amounted to $447.9 million and $508.4
million at December 31, 1994 and 1993, respectively. These amounts include
$1.0 million and $28.1 million of problem mortgage loans on real estate at
December 31, 1994 and 1993, respectively. Gross interest income on
restructured mortgage loans on real estate that would have been recorded in
accordance with the original terms of such loans amounted to $44.9 million,
$51.8 million and $59.8 million in 1994, 1993 and 1992, respectively. Gross
interest income on these loans included in net investment income aggregated
$32.8 million, $46.0 million and $44.9 million in 1994, 1993 and 1992,
respectively.
At December 31, 1994, investments owned of any one issuer, including its
affiliates, that aggregate 10% or more of total shareholder's equity were
$596.0 million, principally in mortgage loans, to Trammell Crow and
affiliates (including holdings of the Closed Block and the discontinued GIC
Segment). The amount includes restructured mortgage loans on real estate and
potential problem mortgage loans on real estate with amortized costs of $4.9
million and $294.0 million, respectively. Partnerships affiliated with
Trammell Crow, which are borrowers pursuant to commercial mortgage loans with
an amortized cost of $294.0 million at December 31, 1994, filed for Chapter
11 bankruptcy on January 3, 1995. The loan package consists of first mortgage
interests in 48 properties. The borrowing groups consist of 46 individual
partnerships and the loans are substantially cross-collateralized.
SAI-62
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At December
31, 1994 and 1993, the carrying value of equity real estate available for
sale amounted to $447.8 million and $402.5 million, respectively. At December
31, 1994 and 1993, the Company owned $1,086.9 million and $947.0 million,
respectively, of real estate acquired in satisfaction of debt.
Depreciation of real estate is computed using the straight-line method
over the estimated useful lives of the properties, which generally range from
40 to 50 years. Accumulated depreciation on real estate was $703.1 million
and $624.7 million at December 31, 1994 and 1993, respectively. Depreciation
expense on real estate totaled $117.0 million, $115.3 million and $117.7
million for the years ended December 31, 1994, 1993 and 1992, respectively.
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information of real estate joint ventures
(47 and 53 individual ventures as of December 31, 1994 and 1993,
respectively) and of limited partnership interests accounted for under the
equity method, in which the Company has an investment of $10.0 million or
greater and an equity interest of 10% or greater is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN MILLIONS)
<S> <C> <C>
FINANCIAL POSITION
Investments in real estate, at depreciated cost ........................ $2,786.7 $3,160.2
Investments in securities, generally at estimated fair value .......... 3,071.2 3,633.6
Cash and cash equivalents .............................................. 359.8 195.0
Other assets ........................................................... 398.7 753.8
----------- -----------
Total assets ........................................................... 6,616.4 7,742.6
----------- -----------
Funds borrowed -- third party .......................................... 1,759.6 1,826.5
Funds borrowed -- the Company .......................................... 238.0 594.1
Other liabilities ...................................................... 987.7 1,041.0
----------- -----------
Total liabilities ...................................................... 2,985.3 3,461.6
----------- -----------
Partners' Capital ...................................................... $3,631.1 $4,281.0
=========== ===========
Equity in partners' capital included above ............................. $ 964.2 $1,044.1
Equity in limited partnership interests not included above ............ 224.6 259.3
(Deficit) excess of equity in partners' capital over investment cost
and equity earnings .................................................. (1.8) 18.1
Notes receivable from joint venture .................................... 6.1 38.7
Negative equity in certain joint ventures presented as other
liabilities .......................................................... -- 57.1
----------- -----------
Carrying Value ......................................................... $1,193.1 $1,417.3
=========== ===========
</TABLE>
SAI-63
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures .................... $ 537.7 $ 602.7 $ 719.0
Revenues of other limited partnership interests .......... 103.4 319.1 270.1
Interest expense -- third party ........................... (114.9) (118.8) (119.8)
Interest expense -- the Company ........................... (36.9) (52.1) (83.4)
Other expenses ............................................ (430.9) (531.7) (592.1)
--------- --------- ---------
Net Earnings .............................................. $ 58.4 $ 219.2 $ 193.8
========= ========= =========
Equity in net earnings included above ..................... $ 18.9 $ 71.6 $ 40.6
Equity in net earnings of limited partnerships not
included above ........................................... 25.3 46.3 50.9
Excess of earnings in joint ventures over equity ownership
percentage and amortization of differences in bases ..... 1.8 9.2 5.7
Interest on notes receivable .............................. -- .5 3.3
--------- --------- ---------
Total Equity in Net Earnings .............................. $ 46.0 $ 127.6 $ 100.5
========= ========= =========
</TABLE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1994 1993 1992
---------- ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities .............................. $1,024.5 $ 981.7 $1,061.4
Trading account securities .................... -- 709.3 474.3
Securities purchased under resale agreements . -- 533.8 543.2
Mortgage loans on real estate ................. 384.3 457.4 646.1
Equity real estate ............................ 561.8 539.1 396.5
Other equity investments ...................... 35.7 110.4 104.8
Policy loans .................................. 122.7 117.0 183.2
Broker-dealer related receivables ............. -- 292.2 276.3
Other investment income ....................... 336.3 304.9 297.9
---------- ---------- ----------
Gross investment income ...................... 2,465.3 4,045.8 3,983.7
---------- ---------- ----------
Interest expense to finance short-term trading
instruments .................................. -- 983.4 918.4
Other investment expenses ..................... 434.4 463.1 375.8
---------- ---------- ----------
Investment expenses .......................... 434.4 1,446.5 1,294.2
---------- ---------- ----------
Net Investment Income ......................... $2,030.9 $2,599.3 $2,689.5
========== ========== ==========
</TABLE>
SAI-64
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Investment gains, net, including changes in the valuation allowances, are
summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1994 1993 1992
--------- -------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities .................... $(14.1) $123.1 $ 49.1
Mortgage loans on real estate ...... (43.1) (65.1) (148.9)
Equity real estate .................. 20.6 (18.5) (48.1)
Other equity investments ............ 76.0 119.5 246.2
Dealer and trading gains ............ -- 372.5 272.0
Sales of newly issued Alliance units 52.4 -- --
Other ............................... -- 1.9 1.5
--------- -------- ---------
Investment Gains, Net ............... $ 91.8 $533.4 $ 371.8
========= ======== =========
</TABLE>
Gross gains of $116.8 million, $188.5 million and $141.0 million and gross
losses of $100.1 million, $145.0 million and $123.4 million were realized on
sales of investments in fixed maturities for the years ended December 31,
1994, 1993 and 1992, respectively. In addition, writedowns of fixed
maturities amounted to $30.8 million, $5.4 million and $13.6 million for the
years ended December 31, 1994, 1993 and 1992, respectively.
For the year ended December 31, 1994, proceeds received on sales of fixed
maturities classified as available for sale amounted to $5,253.9 million.
Gross gains of $63.8 million and gross losses of $59.1 million were realized
on these sales. The increase in unrealized investment losses related to fixed
maturities classified as available for sale for the year ended December 31,
1994 amounted to $742.2 million.
During the year ended December 31, 1994, one security classified as held
to maturity was sold and six securities so classified were transferred to the
available for sale portfolio. These actions were taken as a result of a
significant deterioration in creditworthiness. The amortized cost of the
security sold was $19.9 million with a related investment gain of $.8 million
recognized; the aggregate amortized cost of the securities transferred was
$42.8 million with gross unrealized investment losses of $3.1 million charged
to consolidated shareholder's equity.
Investment gains from other equity investments include gains generated by
DLJ's involvement in long-term corporate development investments amounting to
$79.9 million and $195.9 million for the years ended December 31, 1993 and
1992, respectively.
For the years ended December 31, 1994, 1993 and 1992, investment results
passed through to certain participating group annuity contracts as interest
credited to policyholders' account balances amounted to $175.8 million,
$243.2 million and $286.8 million, respectively.
In 1994, Alliance sold 4.96 million newly issued units to third parties at
prevailing market prices. The sales decreased the Company's ownership of
Alliance's publicly traded units from 63.2% to 59.2%. In addition, the
Company continues to hold its 1% general partnership interest in Alliance.
The Company recognized an investment gain of $52.4 million as a result of
these transactions.
SAI-65
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The unrealized investment gains (losses), included in the consolidated
balance sheets as a component of equity and the changes for the corresponding
years, are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1993 1992
---------- --------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year ...................... $ 131.9 $ 78.8 $ 65.5
Changes in unrealized investment (losses) gains (823.8) (14.1) 6.0
Effect of adopting SFAS No. 115 ................. -- 283.9 --
Changes in unrealized investment (gains) losses
attributable to:
Participating group annuity contracts ........ 40.8 (36.2) 19.4
Deferred policy acquisition costs ............. 269.5 (150.5) --
Deferred Federal income taxes ................. 178.6 (30.0) (12.1)
---------- --------- --------
Balance, End of Year ............................ $(203.0) $ 131.9 $ 78.8
========== ========= ========
Balance, end of year comprises:
Unrealized investment (losses) gains on:
Fixed maturities .............................. $(461.3) $ 283.9 $ (3.9)
Other equity investments ...................... 7.7 75.8 81.6
Other ......................................... 14.5 25.0 37.2
---------- --------- --------
Total ........................................ (439.1) 384.7 114.9
Amounts of unrealized investment (gains) losses
attributable to:
Participating group annuity contracts ....... 5.9 (34.9) 1.3
Deferred policy acquisition costs ............ 119.0 (150.5) --
Deferred Federal income taxes ................ 111.2 (67.4) (37.4)
---------- --------- --------
Total ........................................... $(203.0) $ 131.9 $ 78.8
========== ========= ========
</TABLE>
SAI-66
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
6) CLOSED BLOCK
Summarized financial information of the Closed Block is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1994 1993
---------- ----------
(IN MILLIONS)
<S> <C> <C>
Assets
Fixed Maturities:
Held to maturity, at amortized cost (estimated fair value,
$1,785.0 and $1,971.5) ................................. $1,927.8 $1,871.5
Available for sale, at estimated fair value (amortized
cost, $1,270.3 and $984.4) ............................. 1,197.0 1,030.6
Mortgage loans on real estate .............................. 1,543.7 1,692.3
Policy loans ............................................... 1,827.9 1,877.1
Cash and other invested assets ............................. 442.5 426.2
Deferred policy acquisition costs .......................... 878.1 940.3
Other assets ............................................... 288.5 246.3
---------- ----------
Total Assets ............................................... $8,105.5 $8,084.3
==========
Liabilities
Future policy benefits and policyholders' account balances $8,965.3 $9,067.3
Other liabilities .......................................... 104.2 76.1
---------- ----------
Total Liabilities .......................................... $9,069.5 $9,143.4
========== ==========
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED JULY 22
DECEMBER 31, THROUGH
------------------- DECEMBER 31,
1994 1993 1994
--------- --------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other revenue ...................... $ 798.1 $ 860.2 $303.7
Investment income (net of investment expenses of
$19.0, $17.3 and $2.7) ......................... 523.0 526.5 209.7
Investment losses, net .......................... (24.0) (15.0) (2.4)
--------- --------- --------
Total revenues ................................ 1,297.1 1,371.7 511.0
--------- --------- --------
Benefits and Other Deductions
Policyholders' benefits and dividends ........... 1,075.6 1,141.4 402.3
Other operating costs and expenses .............. 70.5 102.0 49.4
--------- --------- --------
Total benefits and other deductions ........... 1,146.1 1,243.4 451.7
--------- --------- --------
Contribution from the Closed Block .............. $ 151.0 $ 128.3 $ 59.3
========= ========= ========
</TABLE>
The fixed maturity portfolio, based on amortized cost, includes $23.8
million and $22.0 million at December 31, 1994 and 1993, respectively, of
restructured securities which includes problem fixed maturities of $6.4
million and $10.4 million, respectively.
SAI-67
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
At December 31, 1994 and 1993, problem mortgage loans on real estate had
an amortized cost of $27.6 million and $130.0 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had an amortized cost of $179.2 million and $199.9 million,
respectively. At December 31, 1994 and 1993, the restructured mortgage loans
on real estate amount included $.7 million and $9.7 million, respectively, of
problem mortgage loans on real estate.
Valuation allowances amounted to $46.2 million and $72.2 million on
mortgage loans on real estate and $2.6 million and $.6 million on equity real
estate at December 31, 1994 and 1993, respectively. Writedowns of fixed
maturities amounted to $15.9 million and $1.7 million for the years ended
December 31, 1994 and 1993, respectively, and $2.2 million for the period
July 22, 1992 to December 31, 1992.
Implementation of a new accounting statement for the valuation of fixed
maturities at December 31, 1993, resulted in the recognition of a deferred
dividend liability of $49.6 million.
Many expenses related to Closed Block operations are charged to operations
outside of the Closed Block; accordingly, the contribution from the Closed
Block does not represent the actual profitability of the Closed Block
operations. Operating costs and expenses outside of the Closed Block are,
therefore, disproportionate to the business outside of the Closed Block.
7) DISCONTINUED OPERATIONS
Summarized financial information of the GIC Segment is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1994 1993
---------- ----------
(IN MILLIONS)
<S> <C> <C>
Assets
Mortgage loans on real estate ...... $1,730.5 $2,076.0
Equity real estate .................. 1,194.8 1,445.2
Other invested assets ............... 978.8 1,132.4
Other assets ........................ 529.5 660.3
---------- ----------
Total Assets ........................ $4,433.6 $5,313.9
========== ==========
Liabilities
Policyholders' liabilities .......... $1,924.0 $2,698.5
Allowance for future losses ......... 185.6 236.4
Amounts due to continuing operations 2,108.6 2,125.9
Other liabilities ................... 215.4 253.1
---------- ----------
Total Liabilities ................... $4,433.6 $5,313.9
========== ==========
</TABLE>
SAI-68
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Investment income (net of investment expenses of
$174.0, $175.8 and $117.4) ..................... $368.4 $526.4 $ 559.1
Investment gains (losses), net .................. 26.8 (22.6) (21.7)
Policy fees, premiums and other income ......... .3 8.7 3.4
--------- --------- ---------
Total revenues .................................. 395.5 512.5 540.8
Benefits and other deductions ................... 417.2 537.2 701.7
--------- --------- ---------
Losses Charged to Allowance for Future Losses .. $(21.7) $(24.7) $(160.9)
========= ========= =========
</TABLE>
In 1991, the Company established a pre-tax provision of $396.7 million for
the estimated future losses of the GIC Segment. In 1992, implementation of a
new accounting statement for income taxes resulted in a benefit which was
offset by a pre-tax $33.6 million addition to the allowance for future
losses. Additionally, at December 31, 1993, implementation of a new
accounting statement for the valuation of fixed maturities resulted in a
benefit of $13.1 million which was offset by a corresponding addition to the
allowance for future losses.
The amounts due to continuing operations at December 31, 1994 and 1993
consist of $3,324.0 million and $3,284.0 million, respectively, borrowed by
the GIC Segment from continuing operations, offset by $1,215.4 million and
$1,158.1 million, respectively, representing an obligation of continuing
operations to provide assets to fund the accumulated deficit of the GIC
Segment.
In January 1995, continuing operations transferred $1,215.4 million in
cash to the GIC Segment in settlement of its obligation. Subsequently, the
GIC Segment remitted $1,155.4 million in cash to continuing operations in
partial repayment of borrowings by the GIC Segment. No gains or losses were
recognized on these transactions.
Investment income includes $88.2 million, $97.7 million and $94.2 million
of interest income in 1994, 1993 and 1992, respectively, on amounts due from
continuing operations. Benefits and other deductions includes $193.1 million,
$188.4 million and $132.8 million of interest expense related to amounts
borrowed from continuing operations in 1994, 1993 and 1992, respectively.
Valuation allowances amounted to $50.2 million and $61.4 million on
mortgage loans on real estate and $74.7 million and $61.5 million on equity
real estate at December 31, 1994 and 1993, respectively. Writedowns of fixed
maturities amounted to $17.8 million, $1.1 million and $5.2 million for the
years ended December 31, 1994, 1993 and 1992, respectively.
The fixed maturity portfolio, based on amortized cost, includes $43.3
million and $59.8 million at December 31, 1994 and 1993, respectively, of
restructured securities. These amounts include problem fixed maturities of
$9.7 million and $21.3 million at December 31, 1994 and 1993, respectively.
At December 31, 1994 and 1993, problem mortgage loans on real estate had
amortized costs of $14.9 million and $64.8 million, respectively, and
mortgage loans on real estate for which the payment
SAI-69
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
terms have been restructured had amortized costs of $371.2 million and $373.3
million, respectively. At December 31, 1993, the restructured mortgage loans
on real estate amount included $.2 million of problem mortgage loans on real
estate.
At December 31, 1994 and 1993, the GIC Segment had $312.2 million and
$325.9 million, respectively, of real estate acquired in satisfaction of
debt.
8) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1994 1993
---------- ---------
(IN MILLIONS)
<S> <C> <C>
Short-term debt ................................. $ 20.0 $ 200.7
---------- ---------
Long-term debt:
Equitable Life:
Eurodollar notes, 10.375% due 1995 ............. 34.6 66.0
Eurodollar notes, 10.5% due 1997 ............... 76.2 76.2
Zero coupon note, 11.25% due 1997 .............. 107.8 96.6
Other .......................................... 48.7 37.4
---------- ---------
Total Equitable Life .......................... 267.3 276.2
---------- ---------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 3.89% - 12.75% due through 2019 1,046.2 1,073.2
---------- ---------
Alliance:
Direct placement notes ........................ -- 105.0
Other ......................................... 3.9 4.4
---------- ---------
Total Alliance ............................... 3.9 109.4
---------- ---------
Total long-term debt ............................ 1,317.4 1,458.8
---------- ---------
Total Short-term and Long-term Debt ............. $1,337.4 $1,659.5
========== =========
</TABLE>
Short-term Debt
On July 11, 1994, Equitable Life established a three-year $350.0 million
bank credit facility which replaced a similar $550.0 million credit facility
scheduled to mature in August 1994. This facility is available to fund
short-term working capital needs and to facilitate the securities settlement
process. The credit facility consists of two types of borrowing options with
varying interest rates. The interest rates are based on external indices
dependent on the type of borrowing and at December 31, 1994 range from 5.5%
(the Federal Funds rate plus 50 basis points) to 8.5% (the prime rate). No
amounts have been borrowed under this bank credit facility at December 31,
1994.
Equitable Life has a commercial paper program with an issue limit of up to
$500.0 million. This program is available for general corporate purposes used
to support Equitable Life's liquidity needs and
SAI-70
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
is supported by Equitable Life's existing $350.0 million three-year bank
credit facility. No amounts have been borrowed under this program through
December 31, 1994.
Alliance established a $100.0 million revolving credit facility with
several banks during 1994. On March 31, 1997, the revolving credit facility
converts into a term loan payable quarterly in equal installments through
March 31, 1999. Outstanding borrowings generally bear interest at the
Eurodollar rate plus .875% per annum through March 31, 1997 and at the
Eurodollar rate plus 1.125% per annum after conversion through March 31,
1999. In addition, a quarterly commitment fee of .25% per annum is paid on
the average daily unused amount. At December 31, 1994, there were no amounts
outstanding under the facility.
During 1994, Alliance authorized a $100.0 million commercial paper program
and entered into a three-year $100.0 million revolving credit facility with a
group of commercial banks to support commercial paper to be issued under the
program. Amounts outstanding under the facility bear interest at an annual
rate ranging from the Eurodollar rate plus .225% to the Eurodollar rate plus
.2875%. A fee of .1250% per annum is paid quarterly on the entire facility.
At December 31, 1994, Alliance had not issued any commercial paper and there
were no amounts outstanding under the revolving credit facility.
During 1994, EREIM established two bank lines of credit totaling $30.0
million of which $20.0 million was outstanding at December 31, 1994.
Long-term Debt
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other matters.
The Company is in compliance with all debt covenants.
During 1994, Alliance repaid the direct placement notes.
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $1,744.4 million and $1,855.6 million at December 31, 1994 and
1993, respectively, as collateral for certain long-term debt.
At December 31, 1994, aggregate maturities of the long-term debt based on
required principal payments at maturity for 1995 and the succeeding four
years are $39.9 million, $124.6 million, $467.2 million, $301.3 million and
$15.3 million, respectively, and $414.0 million thereafter.
9) FEDERAL INCOME TAXES
A summary of the Federal income tax expense (benefit) in the consolidated
statements of earnings is shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1994 1993 1992
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense
(benefit):
Current ............................ $ 4.0 $115.8 $ 30.7
Deferred ........................... 97.2 (24.5) (11.5)
-------- -------- --------
Total .............................. $101.2 $ 91.3 $ 19.2
======== ======== ========
</TABLE>
SAI-71
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings (loss) from
operations before Federal income taxes by the expected Federal income tax
rate (35% for 1994 and 1993 and 34% for 1992).
The sources of the difference and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense (benefit) $138.1 $106.3 $(2.4)
Differential earnings amount ................. (16.8) (23.2) 6.4
Adjustment of tax audit reserves ............. (4.6) 22.9 22.5
Tax rate adjustment .......................... -- (5.0) --
Other ........................................ (15.5) (9.7) (7.3)
--------- --------- ---------
Federal Income Tax Expense ................... $101.2 $ 91.3 $19.2
========= ========= =========
</TABLE>
Prior to the date of demutualization, Equitable Life, as a mutual company,
reduced its deduction for policyholder dividends by the differential earnings
amount. This amount was computed, for each tax year, by multiplying Equitable
Life's average equity base, as determined for tax purposes, by an estimate of
the excess of an imputed earnings rate for stock life insurance companies
over the average mutual life insurance companies' earnings rate. The
differential earnings amount for each tax year was subsequently recomputed
when actual earnings rates were published by the Internal Revenue Service. As
a stock life insurance company, Equitable Life is no longer required to
reduce its policyholder dividend deduction by the differential earnings
amount, but differential earnings amounts for pre-demutualization years are
still being recomputed.
The Internal Revenue Service is in the process of examining Equitable
Life's Federal income tax returns for the years 1984 through 1988. Management
believes these audits will have no material adverse effect on the Company's
consolidated results of operations.
The components of the net deferred Federal income tax asset are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
------------------------ ------------------------
ASSETS LIABILITIES ASSETS LIABILITIES
--------- ------------- --------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Deferred policy acquisition costs,
reserves and reinsurance ......... $-- $220.3 $ -- $200.9
Investments ....................... -- 18.7 -- 126.4
Compensation and related benefits 307.3 -- 288.5 --
Other ............................. -- 5.8 66.6 --
--------- ------------- --------- -------------
Total ............................. $307.3 $244.8 $355.1 $327.3
========= ============= ========= =============
</TABLE>
SAI-72
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The deferred Federal income tax expense (benefit) impacting operations
reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. The sources of these temporary
differences and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1994 1993 1992
-------- ---------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Deferred policy acquisition costs, reserves and
reinsurance ................................... $ 13.0 $(46.7) $ 26.9
Investments .................................... 89.3 60.4 (41.0)
Compensation and related benefits .............. 10.0 (50.1) (2.4)
Other .......................................... (15.1) 11.9 5.0
-------- ---------- --------
Deferred Federal Income Tax Expense (Benefit) . $ 97.2 $(24.5) $(11.5)
======== ========== ========
</TABLE>
10) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. The effect of reinsurance (excluding Group Life and Health) is
summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
--------------------
1994 1993
--------- ---------
(IN MILLIONS)
<S> <C> <C>
Direct premiums .......................................... $476.7 $458.8
Reinsurance assumed ...................................... 180.5 169.9
Reinsurance ceded ........................................ (31.6) (29.6)
--------- ---------
Premiums ................................................. $625.6 $599.1
========= =========
Universal Life and Investment- type Product Policy Fee
Income Ceded ............................................ $ 27.5 $ 33.7
========= =========
Policyholders' Benefits Ceded ............................ $ 20.7 $ 72.3
========= =========
Interest Credited to Policyholders' Account Balances
Ceded ................................................... $ 25.4 $ 24.1
========= =========
</TABLE>
For the year ended December 31, 1992, reinsurance premiums assumed totaled
$151.0 million and reinsurance premiums ceded totaled $16.6 million.
Prior to 1993, the Insurance Group generally reinsured mortality risks in
excess of $10.0 million on any single life. In February 1993, management
established a practice limiting the risk retention on new policies issued by
the Insurance Group to a maximum of $5.0 million. In addition, effective
January 1, 1994, all in force business between $5.0 million and $10.0 million
was reinsured. The Insurance Group also reinsures the entire risk on certain
substandard underwriting risks as well as in certain other cases.
The Insurance Group cedes 100% of its Group Life and Health business to
CIGNA. Premiums ceded to CIGNA totaled $241.0 million, $895.1 million and
$1,126.7 million for the years ended
SAI-73
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
December 31, 1994, 1993 and 1992, respectively. Ceded death and disability
benefits totaled $235.5 million and $787.8 million for the years ended
December 31, 1994 and 1993, respectively. Insurance liabilities ceded totaled
$833.4 million and $1,130.3 million at December 31, 1994 and 1993,
respectively.
11) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified part-time
employees), managers and agents. The pension plans are non-contributory and
benefits are based on a cash balance formula or years of service and final
average earnings, if greater, under certain grandfathering rules in the
plans. The Company's funding policy is to make the minimum contribution
required by the Employee Retirement Income Security Act of 1974.
Components of net periodic pension cost for the qualified and
non-qualified plans is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1994 1993 1992
--------- --------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost .................................. $ 30.3 $ 29.8 $ 30.6
Interest cost on projected benefit obligations 111.0 108.0 104.2
Actual return on assets ....................... 24.4 (178.6) (52.6)
Net amortization and deferrals ................ (142.5) 55.3 (67.4)
--------- --------- --------
Net Periodic Pension Cost ..................... $ 23.2 $ 14.5 $ 14.8
========= ========= ========
</TABLE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1994 1993
---------- ----------
(IN MILLIONS)
<S> <C> <C>
Actuarial present value of obligations:
Vested .............................................................. $1,295.5 $1,403.5
Non-vested .......................................................... 8.7 10.4
---------- ----------
Accumulated Benefit Obligation ....................................... $1,304.2 $1,413.9
======== ==========
Plan assets at fair value ............................................ $1,193.5 $1,259.5
Projected benefit obligation ......................................... 1,403.4 1,488.9
---------- ----------
Projected benefit obligation in excess of plan assets ................ (209.9) (229.4)
Unrecognized prior service cost ...................................... (33.2) (39.0)
Unrecognized net loss from past experience different from that
assumed ............................................................. 298.9 309.8
Unrecognized net asset at transition ................................. (20.8) (34.2)
Additional minimum liability ......................................... (37.8) (56.8)
---------- ----------
Accrued Pension Cost ................................................. $ (2.8) $ (49.6)
========== ==========
</TABLE>
SAI-74
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The discount rate and rate of increase in future compensation levels used
in determining the actuarial present value of projected benefit obligations
were 8.75% and 4.88% at December 31, 1994 and 7.5% and 4% at December 31,
1993, respectively. As of January 1, 1994 and 1993, the expected long-term
rate of return on assets for the retirement plan was 10%.
The Company recorded, as a reduction of shareholder's equity, an
additional minimum pension liability of $2.7 million, net of Federal income
taxes, at December 31, 1994 representing the excess of the accumulated
benefit obligation over the fair value of plan assets and accrued pension
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, real estate, U.S. Treasury bonds and shares of
Alliance mutual funds.
As of December 31, 1993, the Company changed the method of estimating the
market-related value of plan assets, from fair value to a calculated value.
This change in estimate had no material effect on the Company's consolidated
financial position or statements of earnings.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non- participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $38.1 million,
$39.9 million and $41.6 million for the years ended December 31, 1994, 1993
and 1992, respectively.
The Company provides certain medical and life insurance benefits
("postretirement benefits") for qualifying employees, managers and agents
retiring from the Company on or after attaining age 55 who have at least 10
years of service. The life insurance benefits are related to age and salary
at retirement. The costs of postretirement benefits are recognized in
accordance with the provisions of SFAS No. 106. The Company continues to fund
postretirement benefits costs on a pay-as-you-go basis and, for the years
ended December 31, 1994, 1993 and 1992, the Company made estimated
postretirement benefits payments of $29.8 million, $29.7 million and $31.6
million, respectively.
The following table sets forth the postretirement benefits plan's status,
reconciled to amounts recognized in the Company's consolidated financial
statements:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1994 1993 1992
------- ------- ------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost ............................... $ 3.9 $ 5.3 $ 6.0
Interest cost on accumulated postretirement
benefits obligation ....................... 28.6 29.2 31.9
Unrecognized prior service cost ............ (3.9) (6.9) --
Net amortization and deferrals ............. -- 1.5 --
------- ------- ------
Net Periodic Postretirement Benefits Costs $28.6 $29.1 $37.9
======= ======= ======
</TABLE>
SAI-75
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1994 1993
---------- ----------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation:
Retirees ......................................... $(300.4) $(283.4)
Fully eligible active plan participants .......... (33.0) (38.7)
Other active plan participants ................... (44.0) (75.1)
---------- ----------
(377.4) (397.2)
Unrecognized benefit of plan amendments ............ (3.2) --
Unrecognized prior service cost .................... (61.9) (66.6)
Unrecognized net loss from past experience
different from that assumed and from changes in
assumptions ...................................... 64.7 85.5
---------- ----------
Accrued Postretirement Benefits Cost ............... $(377.8) $(378.3)
========== ==========
</TABLE>
In 1993, the Company amended the cost sharing provisions of postretirement
medical benefits. As of January 1, 1994, medical benefits available to
retirees under age 65 are the same as those offered to active employees and
medical benefits will be limited to 200% of 1993 costs for all participants.
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefits obligation was 10% in 1994, gradually declining to 5%
in the year 2004 and in 1993 was 13%, gradually declining to 6% in the year
2007. The weighted average discount rate used in determining the accumulated
postretirement benefits obligation was 8.75%, 7.5% and 8.5% at December 31,
1994, 1993 and 1992, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1994 would
be increased 6.6%. The effect of this change on the sum of the service cost
and interest cost would be an increase of 8.6%.
12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest swap transactions are on an accrual
basis. Gains and losses related to hedge transactions are amortized as yield
adjustments for the remaining life of the underlying hedged item. Income and
expense resulting from derivative activities are reflected in net investment
income. The notional amount of matched interest rate swaps outstanding at
December 31, 1994 was $1,906.6 million. The average unexpired terms at
December 31, 1994 range from 2.2 to 2.9 years. At December 31, 1994, the cost
of terminating outstanding matched swaps in a loss position was $79.8 million
and the unrealized gain on outstanding matched swaps in a gain position was
$17.6 million. The Company has no intention of terminating these contracts
prior to maturity. During 1994, 1993 and 1992, net (losses) gains of $(.2)
million, $-0- million and $2.2 million, respectively, were recorded in
connection with interest rate swap activity.
SAI-76
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Fair Value of Financial Instruments
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases where
quoted market prices are not available, fair values are estimated using
present value or other valuation techniques. The fair value estimates are
made at a specific point in time, based on available market information and
judgments about the financial instrument, including estimates of timing,
amount of expected future cash flows and the credit standing of
counterparties. Such estimates do not reflect any premium or discount that
could result from offering for sale at one time the Company's entire holdings
of a particular financial instrument, nor do they consider the tax impact of
the realization of unrealized gains or losses. In many cases, the fair value
estimates cannot be substantiated by comparison to independent markets, nor
can the disclosed value be realized in immediate settlement of the
instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts. Fair
market value of off-balance-sheet financial instruments of the Insurance
Group was not material at December 31, 1994 and 1993.
Fair value for mortgage loans on real estate are estimated by discounting
future contractual cash flows using interest rates at which loans with
similar characteristics and credit quality would be made. Fair values for
foreclosed mortgage loans and problem mortgage loans are limited to the
estimated fair value of the underlying collateral if lower.
The estimated fair values for the Company's liabilities under GIC and
association plan contracts are estimated using contractual cash flows
discounted based on the T. Rowe Price GIC Index Rate for the appropriate
duration. For durations in excess of the published index rate, the
appropriate Treasury rate is used plus a spread equal to the longest duration
GIC rate spread published.
The estimated fair values for those group annuity contracts which are
classified as investment contracts are measured at the estimated fair value
of the underlying assets. Deposit administration contracts (included with
group annuity contracts) classified as insurance contracts are measured at
estimated fair value of the underlying assets. The estimated fair values for
single premium deferred annuities ("SPDA") are estimated using projected cash
flows discounted at current offering rates. The estimated fair values for
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain are derived using discounted cash flows based upon the
estimated current offering rate.
Fair value for long-term debt is determined using published market values,
where available, or contractual cash flows discounted at market interest
rates. The estimated fair values for non-recourse mortgage debt are
determined by discounting contractual cash flows at a rate which takes into
account the level of current market interest rates and collateral risk. The
estimated fair values for recourse mortgage debt are determined by
discounting contractual cash flows at a rate based upon current interest
rates of other companies with credit ratings similar to the Company. The
Company's fair value of short-term borrowings approximates their carrying
value.
SAI-77
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following table discloses carrying value and estimated fair value for
financial instruments not otherwise disclosed in Notes 3 and 6:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------
1994 1993
------------------------ ------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
---------- ------------ ---------- ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
- -----------------------------------
Mortgage loans on real estate ..... $4,018.0 $3,919.4 $4,592.1 $4,889.6
Other joint ventures ............... 544.4 544.4 658.3 658.3
Policy loans ....................... 1,731.2 1,676.6 1,549.1 1,622.3
Risk based Separate Account assets 269.8 269.0 283.4 283.6
Policyholders' account balances:
Association plans ................. 141.0 141.0 242.0 247.0
Group annuity contracts ........... 2,450.0 2,469.0 2,902.0 2,995.0
SPDA .............................. 1,744.3 1,732.7 2,129.5 2,143.0
Annuity certain and SCNILC ....... 599.1 624.7 580.4 632.6
Long-term debt ..................... 1,317.4 1,249.2 1,458.8 1,299.1
Closed Block Financial Instruments:
- -----------------------------------
Mortgage loans on real estate ..... 1,543.7 1,477.8 1,692.3 1,796.1
Other equity investments ........... 179.5 179.5 210.5 210.5
Policy loans ....................... 1,827.9 1,721.9 1,877.1 1,961.5
SCNILC liability ................... 39.5 37.0 45.0 45.8
GIC Segment Financial Instruments:
- -----------------------------------
Mortgage loans on real estate ..... 1,730.5 1,743.7 2,076.0 2,259.6
Fixed maturities ................... 219.3 219.3 373.0 373.0
Other equity investments ........... 591.8 591.8 711.0 711.0
Guaranteed interest contracts ..... 835.0 855.0 1,601.8 1,717.2
Long-term debt ..................... 134.8 127.9 142.8 137.4
</TABLE>
13) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements include
commitments by the Company, under certain conditions: to make liquidity
advances to cover delinquent principal and interest and property protection
expenses with respect to loan servicing agreements for securitized mortgage
loans which at December 31, 1994 totaled $1.9 billion (as of December 31,
1994, $2.0 million has been advanced under these commitments); to make
capital contributions of up to $249.5 million to affiliated real estate joint
ventures; to advance payments of interest and outstanding balances with
respect to certain commercial mortgage loans sold by the Company with
outstanding balances at December 31, 1994 of $25.9 million; to guarantee
interest on non-recourse debt on investments in real estate; to guarantee
$54.4 million of loans at December 31, 1994 made directly to real estate
partnerships in which the Company has an
SAI-78
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
ownership interest; to provide equity financing to certain limited
partnerships of $67.5 million at December 31, 1994, under existing loan or
loan commitment agreements; and to fund its participation in various
partnerships which at December 31, 1994 totaled $3.3 million. Management
believes the Company will not incur any material losses as a result of these
commitments.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance companies
and beneficiaries. To satisfy its obligations under these agreements,
Equitable Life owns single premium annuities issued by previously wholly
owned life insurance subsidiaries. Equitable Life has directed payment under
these annuities to be made directly to the beneficiaries under the structured
settlement agreements. A contingent liability exists with respect to these
agreements should the previously wholly owned subsidiaries be unable to meet
their obligations. Management believes the satisfaction of those obligations
by Equitable Life is remote.
At December 31, 1994, two money market fund portfolios ("Portfolios")
sponsored by Alliance owned $30.0 million principal amount of Tax and Revenue
Anticipation Notes Series A issued by Orange County, California due July 19,
1995 ("Orange County Obligations"). On December 6, 1994, Orange County filed
a petition in bankruptcy under Chapter 9 of the Federal Bankruptcy Code.
Alliance arranged for the issuance of letters of credit by a commercial bank
in favor of the Portfolios which allow the Portfolios to draw down an
aggregate of up to $31.4 million if Orange County fails to pay principal and
interest due at maturity. Alliance is required to pay the bank, on demand,
all amounts drawn down by the Portfolios under the letters of credit. The
letters of credit will be reduced to reflect any sales of Orange County
Obligations by the Portfolios. The Company believes that its loss, if any,
resulting from the Orange County Obligations will not be material.
14) LITIGATION
The Company is a defendant in connection with various legal actions and
proceedings of a character normally incident to its business. Some of the
actions and proceedings have been brought on behalf of various alleged
classes of claimants and certain of these claimants seek damages of
unspecified amounts. While the ultimate outcome of such litigation cannot be
predicted with certainty, management believes, after consultation with
counsel responsible for such litigation, that the resolution of these actions
and proceedings will not result in losses that would have a material effect
on the consolidated financial statements.
15) LEASES
The Company has entered into operating leases for office space and certain
other assets, principally data processing equipment and office furniture and
equipment. Future minimum payments under noncancelable leases for 1995 and
the succeeding four years are $125.6 million, $103.7 million, $77.8 million,
$64.5 million, $53.4 million and $372.6 million thereafter. Minimum future
sublease rental income on these noncancelable leases for 1995 and the
succeeding four years are $9.1 million, $6.8 million, $6.4 million, $5.9
million, $3.9 million and $3.6 million thereafter.
At December 31, 1994, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1995 and the
succeeding four years are $306.9 million, $283.9 million, $254.6 million,
$223.1 million and $192.8 million and $876.1 million thereafter.
SAI-79
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
16) SUPPLEMENTAL CASH FLOW INFORMATION
For the years ended December 31, 1994, 1993 and 1992, respectively, real
estate of $189.8 million, $261.8 million and $208.5 million was acquired in
satisfaction of debt.
On January 1, 1992, net assets of $517.6 million were transferred to the
discontinued GIC Segment. The transfer included investment assets at
amortized cost of $611.3 million and valuation allowances of $17.7 million.
In connection with the demutualization, certain significant non-cash
transactions occurred as follows: assets aggregating $7,714.5 million and
liabilities aggregating $8,889.5 million were transferred to the Closed Block
(additional detail is provided in Note 6); secured and surplus notes
aggregating $1.0 billion issued to AXA were exchanged for 69.8 million shares
of the Holding Company's common stock, 2.5 million shares of convertible
preferred stock and 2.989 million shares of the Holding Company's redeemable
preferred stock; policyholders received 22.6 million shares of common stock
for policyholders' membership interest and retained earnings of $1,089.4
million were transferred to common stock and capital in excess of par; and
policy credits of $48.5 million were credited to certain policyholders and
$19.7 million were accrued or paid to certain policyholders with such policy
credits and cash payments being charged to retained earnings.
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1994 1993 1992
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs ........................ $ 690.0 $1,452.3 $1,302.2
Commissions ............................... 313.0 551.1 491.5
Short-term debt interest expense .......... 19.0 317.1 176.1
Long-term debt interest expense ........... 98.3 86.0 166.0
Amortization of policy acquisition costs . 318.1 275.9 144.7
Capitalization of policy acquisition costs (410.9) (397.8) (409.0)
Rent expense, net of sub-lease income .... 128.9 159.5 213.7
Other ..................................... 786.7 1,140.1 1,010.5
----------- ----------- -----------
Total ..................................... $1,943.1 $3,584.2 $3,095.7
=========== =========== ===========
</TABLE>
During the years ended December 31, 1994, 1993 and 1992, the Company
restructured certain operations in connection with cost reduction programs
and recorded pre-tax provisions of $20.4 million, $96.4 million and $24.8
million, respectively. The amounts paid during 1994, associated with the 1994
cost reduction program, totaled $5.0 million. At December 31, 1994, the
liabilities associated with the 1994 cost reduction program amounted to $15.4
million. The 1994 cost reduction program included costs associated with the
termination of operating leases and employee severance benefits in connection
with the consolidation of 16 insurance agencies. The 1993 cost reduction
program primarily reflected severance benefits of terminated employees in
connection with the combination of a wholly owned subsidiary of the Company
with Alliance.
SAI-80
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends to
the Holding Company. Under the New York Insurance Law, the New York
Superintendent has broad discretion to determine whether the financial
condition of a stock life insurance company would support the payment of
dividends to its shareholders. The New York Insurance Department has
established informal guidelines for the Superintendent's determinations which
focus upon, among other things, the overall financial condition and
profitability of the insurer under statutory accounting practices. For the
years ended December 31, 1994, 1993 and 1992, statutory earnings (loss)
totaled $67.5 million, $324.0 million and $(288.6) million, respectively. No
amounts are expected to be available for dividends from Equitable Life to the
Holding Company in 1995.
At December 31, 1994, the Insurance Group, in accordance with various
government and state regulations, had $17.5 million of securities deposited
with such government or state agencies.
Accounting practices used to prepare statutory financial statements for
regulatory filings of stock life insurance companies differ in certain
instances from GAAP. The following reconciles the Company's net change in
statutory surplus and capital stock and statutory surplus and capital stock
determined in accordance with accounting practices prescribed by the New York
Insurance Department with net earnings (loss) and equity on a GAAP basis.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1994 1993 1992
--------- --------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Net change in statutory surplus and capital stock ..... $ 292.4 $ 190.8 $ 534.2
Change in asset valuation reserves ..................... (285.2) 639.1 81.2
--------- --------- -----------
Net change in statutory surplus, capital stock and
asset valuation reserves .............................. 7.2 829.9 615.4
Adjustments:
Future policy benefits and policyholders' account
balances ........................................... (11.0) (171.0) (72.1)
Deferred policy acquisition costs .................... 92.8 121.8 264.3
Deferred Federal income taxes ........................ (59.7) (57.5) 394.2
Valuation of investments ............................. 45.2 202.3 (37.0)
Valuation of investment subsidiary ................... 396.6 (464.9) (37.8)
Limited risk reinsurance ............................. 74.9 85.2 (20.7)
Sale of subsidiary and joint venture ................. -- (366.5) --
Surplus note ......................................... -- -- 250.0
Contribution from the Holding Company ................ (300.0) -- --
Demutualization transaction .......................... -- -- (1,129.3)
Postretirement benefits .............................. 17.1 23.8 (357.5)
Other, net ........................................... (44.0) 60.3 (30.9)
GAAP adjustments of Closed Block ..................... 4.5 (16.0) (7.4)
GAAP adjustments of discontinued GIC Segment ......... 42.8 (35.0) 53.5
--------- --------- -----------
Net Earnings (Loss) .................................. $ 266.4 $ 212.4 $ (115.3)
========= ========= ===========
</TABLE>
SAI-81
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------
1994 1993 1992
---------- ---------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory surplus and capital stock ................. $2,124.8 $1,832.4 $ 1,641.6
Asset valuation reserves ............................ 980.2 1,265.4 626.3
---------- ---------- -----------
Statutory surplus, capital stock and asset valuation
reserves ........................................... 3,105.0 3,097.8 2,267.9
Adjustments:
Future policy benefits and policyholders' account
balances ........................................ (949.5) (938.5) (747.0)
Deferred policy acquisition costs ................. 3,221.1 2,858.8 2,887.5
Deferred Federal income taxes ..................... (26.8) (137.8) (52.9)
Valuation of investments .......................... (794.1) (29.8) (507.5)
Valuation of investment subsidiary ................ (476.5) (873.1) (408.2)
Limited risk reinsurance .......................... (845.9) (920.8) (1,006.0)
Postretirement benefits ........................... (316.6) (333.7) (357.5)
Other, net ........................................ (79.2) (81.9) (67.4)
GAAP adjustments of Closed Block .................. 578.8 574.2 577.0
GAAP adjustments of discontinued GIC Segment ...... (221.9) (264.6) (226.0)
---------- ---------- -----------
Total Shareholder's Equity ........................ $3,194.4 $2,950.6 $ 2,359.9
========== ========== ===========
</TABLE>
19) BUSINESS SEGMENT INFORMATION
The Company has three major business segments: Individual Insurance and
Annuities; Investment Services and Group Pension. Consolidation/elimination,
principally includes debt not specific to any business segment. Net assets of
$1,924.6 million at December 31, 1993 held within the Insurance Group and
previously presented in Consolidation/elimination are now presented as
Attributed Insurance Capital within insurance operations. Attributed
Insurance Capital represents net assets and related revenues and earnings of
the Insurance Group not assigned to the insurance segments. Interest expense
related to debt not specific to any business segment is presented within
Corporate interest expense. Information for all periods is presented on a
comparable basis.
Effective January 1, 1993, management changed the methodology for
determining the capital requirements of the Company's insurance business
segments. This new methodology requires the annual transfer of cash and cash
equivalents to and from Attributed Insurance Capital and the Individual
Insurance and Annuities and Group Pension segments to result in the insurance
business segments having assets equal to adjusted liabilities plus equity
maintained at Equitable Life and its life insurance subsidiaries determined
in accordance with statutory accounting practices. Had this methodology been
in place at January 1, 1992, investment income for the Individual Insurance
and Annuities and Group Pension segments would have been reduced by $80.4
million and $4.5 million, respectively, and other operating costs and
expenses for Attributed Insurance Capital would have been decreased by $84.9
million for the year ended December 31, 1992.
SAI-82
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Individual Insurance and Annuities segment offers a variety of
traditional, variable and interest-sensitive life insurance products,
disability income, annuity products and mutual fund and other investment
products to individuals and small groups. This segment includes Separate
Accounts for certain individual insurance and annuity products.
The Investment Services segment provides investment fund management,
primarily to institutional clients. This segment includes Separate Accounts
which provide various investment options for group clients through pooled or
single group accounts.
Intersegment investment advisory and other fees of approximately $135.3
million, $128.6 million and $131.2 million for 1994, 1993 and 1992,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to the discontinued GIC
Segment of $27.4 million, $17.0 million and $19.0 million for 1994, 1993 and
1992, respectively, are eliminated in consolidation.
The Group Pension segment administers traditional participating group
annuity contracts with conversion features, generally for corporate qualified
pension plans, and association plans which provide full service retirement
programs for individuals affiliated with professional and trade associations.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1994 1993 1992
---------- ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Individual insurance and annuities .................... $3,110.7 $2,981.5 $3,479.6
Group pension ......................................... 359.1 426.6 512.0
Attributed insurance capital .......................... 79.4 61.6 85.2
---------- ---------- ----------
Insurance operations ................................. 3,549.2 3,469.7 4,076.8
Investment services ................................... 935.2 2,792.6 2,314.4
Consolidation/elimination ............................. (24.7) (40.5) (106.2)
---------- ---------- ----------
Total ................................................. $4,459.7 $6,221.8 $6,285.0
========== ========== ==========
Earnings (loss) before Federal income taxes,
extraordinary item and cumulative effect of
accounting changes
Individual insurance and annuities .................... $ 245.5 $ 76.2 $ (148.0)
Group pension ......................................... 15.8 2.0 16.2
Attributed insurance capital .......................... 69.8 49.0 (17.2)
---------- ---------- ----------
Insurance operations ................................. 331.1 127.2 (149.0)
Investment services ................................... 177.5 302.1 289.8
Consolidation/elimination ............................. .3 .5 4.6
---------- ---------- ----------
Subtotal ............................................ 508.9 429.8 145.4
Corporate interest expense ............................ (114.2) (126.1) (152.6)
---------- ---------- ----------
Total ................................................. $ 394.7 $ 303.7 $ (7.2)
========== ========== ==========
</TABLE>
SAI-83
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Assets
Individual insurance and annuities $44,063.4 $42,667.1
Group pension ..................... 4,222.8 4,928.4
Attributed insurance capital ..... 2,609.8 2,852.4
----------- -----------
Insurance operations ............. 50,896.0 50,447.9
Investment services ............... 12,127.9 12,229.1
Consolidation/elimination ......... (1,614.4) (1,589.3)
----------- -----------
Total ............................. $61,409.5 $61,087.7
=========== ===========
</TABLE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for the years ended December 31, 1994,
1993 and 1992, are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED,
-----------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
---------- ---------- -------------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1994
- ----------------------------
Total Revenues .............. $1,107.4 $1,075.0 $1,153.8 $1,123.5
Earnings before Cumulative
Effect of Accounting Change $ 64.0 $ 68.4 $ 89.1 $ 72.0
Net Earnings ................ $ 36.9 $ 68.4 $ 89.1 $ 72.0
1993
- ----------------------------
Total Revenues .............. $1,502.2 $1,539.7 $1,679.4 $1,500.5
========== ========== ============== =============
Net Earnings ................ $ 32.3 $ 47.1 $ 68.8 $ 64.2
========== ========== ============== =============
1992
- ----------------------------
Total Revenues .............. $1,781.7 $1,647.7 $1,484.4 $1,371.2
========== ========== ============== =============
(Loss) Earnings before
Extraordinary Item and
Cumulative Effect of
Accounting Changes ......... $ (3.6) $ (18.9) $ 25.0 $ (28.9)
========== ========== ============== =============
Net Loss .................... $ (18.6) $ (44.7) $ (23.1) $ (28.9)
========== ========== ============== =============
Net Earnings (Loss) After
Demutualization ............ $ 34.1 $ (28.9)
============== =============
</TABLE>
SAI-84
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
21) INVESTMENT IN DLJ
On December 15, 1993, the Company sold a 61% interest in DLJ to the
Holding Company for $800.0 million in cash and securities. The excess of the
proceeds over the book value in DLJ at the date of sale of $340.2 million has
been reflected as a capital contribution. The results of operations and cash
flows of DLJ through the date of sale are included in the consolidated
statements of earnings and cash flows for the years ended December 31, 1993
and 1992. For the period subsequent to the date of sale, the results of
operations of DLJ are accounted for on the equity basis and are included in
commissions, fees and other income in the consolidated statements of
earnings. The Company's carrying value of DLJ is included in investment in
and loans to affiliates in the consolidated balance sheets.
Summarized balance sheets information for DLJ, reconciled to the Company's
carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value ............... $ 8,970.0 $11,589.8
Securities purchased under resale agreements .............. 10,476.4 11,547.7
Broker-dealer related receivables ......................... 11,784.8 13,745.2
Other assets .............................................. 1,884.9 1,884.0
----------- -----------
Total Assets .............................................. $33,116.1 $38,766.7
=========== ===========
Liabilities:
Securities sold under repurchase agreements ............... $18,356.7 $20,923.5
Broker-dealer related payables ............................ 10,618.0 13,450.3
Short-term and long-term debt ............................. 1,956.5 2,321.7
Other liabilities ......................................... 1,139.6 1,095.9
----------- -----------
Total liabilities ......................................... 32,070.8 37,791.4
Total shareholders' equity ................................ 1,045.3 975.3
----------- -----------
Total Liabilities, Cumulative Exchangeable Preferred Stock
and Shareholders' Equity ................................. $33,116.1 $38,766.7
=========== ===========
DLJ's equity as reported .................................. $ 1,045.3 $ 975.3
Unamortized cost in excess of net assets acquired in 1985 50.8 53.9
Reclassification of Cumulative Exchangeable Preferred
Stock .................................................... (225.0) (225.0)
The Holding Company's equity ownership in DLJ ............. (532.1) (490.6)
----------- -----------
The Company's Carrying Value of DLJ ....................... $ 339.0 $ 313.6
=========== ===========
</TABLE>
SAI-85
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)
Summarized statements of earnings information for DLJ reconciled to the
Company's equity earnings of DLJ is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1994
--------------
(IN MILLIONS)
<S> <C>
Commission, fees and other income .............................. $ 953.5
Net investment income .......................................... 791.9
Dealer, trading and investment gains, net ...................... 263.3
--------------
Total Revenues ................................................. 2,008.7
Total Expenses ................................................. 1,885.7
--------------
Net Earnings ................................................... $ 123.0
DLJ's net earnings as reported ................................. $ 123.0
Amortization of cost in excess of net assets acquired in 1985 . (3.1)
Reclassification of Cumulative Exchange Preferred Stock
Dividend ...................................................... (20.9)
The Holding Company's equity in DLJ's earnings ................. (60.9)
--------------
The Company's Equity in DLJ's Earnings ......................... $ 38.1
==============
</TABLE>
22) RELATED PARTY TRANSACTIONS
On August 31, 1993, the Company sold $661.0 million of primarily privately
placed below investment grade fixed maturities to EQ Asset Trust 1993, a
limited purpose business trust, wholly owned by the Holding Company. The
Company recognized a $4.1 million gain net of related deferred policy
acquisition costs, deferred Federal income tax and amounts attributable to
participating group annuity contracts. In conjunction with this transaction,
the Company received $200.0 million of Class B Notes issued by EQ Asset Trust
1993. These notes have interest rates ranging from 6.85% to 9.45%. The Class
B Notes are reflected in investments in and loans to affiliates on the
consolidated balance sheets.
23) SUBSEQUENT EVENTS
In early 1995, seven complaints were filed by various groups of
shareholders of the Alliance North American Government Income Trust, Inc.
(the "Fund") alleging violations of Federal securities laws, fraud,
negligence, negligent misrepresentations and omissions, breach of fiduciary
duty and breach of contract in connection with the Fund's investments in
Mexican and Argentine securities. Each of the actions is brought against the
Fund, Alliance, which is the investment advisor to the Fund, and Alliance
Capital Management Corporation, a wholly owned subsidiary of the Company
which owns the 1% general partnership interest in Alliance. Other entities
and persons are named as defendants in certain of the complaints. Each of the
actions seeks to have a plaintiff class certified consisting of all
shareholders of the Fund who purchased or owned shares in the Fund at varying
times between February 1992 and December 1994. It is possible that one or
more additional actions making similar allegations may be filed against
Alliance and certain of the other entities and persons noted above. The
actions seek an unspecified amount of damages, costs and attorneys' fees.
Alliance believes that the allegations in each of the actions are without
merit and intends to vigorously defend against the claims in the actions.
While the ultimate results of these actions cannot be determined, management
of Alliance does not expect that these actions will have a material adverse
effect on Alliance's business.
SAI-86
Supplement dated May 1, 1995 to Prospectus dated May 1, 1995
__________________________________________________________________________
MEMBERS RETIREMENT PROGRAMS
funded under contracts with
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
787 Seventh Avenue, New York, New York 10019
Toll-Free Telephone 800-223-5790
______________________________
VARIABLE ANNUITY BENEFITS
_______________________________
This Prospectus Supplement should be read and retained for
future reference by Participants in the Members
Retirement Programs who are considering variable
annuity payment benefits after retirement.
This Prospectus Supplement is not authorized for
distribution unless accompanied or preceded by
the Prospectus dated May 1, 1995 for the
appropriate Members
Retirement Program
__________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
__________________________________________________________________________
RETIREMENT BENEFITS
When you become eligible to receive benefits under an Members Retirement
Program, you may select one or more of the following forms of distribution,
which are available in variable or fixed form. The law requires that if the
value of your Account Balance is more than $3,500, you must receive a Qualified
Joint and Survivor Annuity unless your Spouse consents to a different election.
Life Annuity - an annuity providing monthly payments for your life. No
payments will be made after your death, even if you have received only one
payment.
Life Annuity - Period Certain - an annuity providing monthly payments
for your life or, if longer, a specified period of time. If you die before the
end of that specified period, payments will continue to your beneficiary until
the end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years; the longer the specified period, the
smaller the monthly payments will be.
Joint and Survivor Annuity - Period Certain - an annuity providing
monthly payments for your life and that of your beneficiary or, if longer, a
specified period of time. If you and your beneficiary both die before the end of
the specified period, payments will continue to your contingent beneficiary
until the end of the period. Subject to legal limitations, you may specify a
minimum payment period of 5, 10, 15 or 20 years; the longer the specified
period, the smaller the monthly payments will be.
How Annuity Payments Are Made
When your distribution of benefits under an annuity begins, your Units
in the Funds are redeemed. Part or all of the proceeds, plus part or all of your
Account Balance in the General Account Options, may be used to purchase an
annuity. The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, a $350 charge will be deducted from the amount used to purchase
the annuity to reimburse us for administrative expenses associated with
processing the application and with issuing each month's annuity payment.
Applicable premium taxes will also be deducted.
Annuity payments may be fixed or variable.
FIXED ANNUITY PAYMENTS. Fixed annuity payments are determined from our annuity
rate tables in effect at the time the first annuity payment is made. The
minimum amount of the fixed payments is determined from tables in our contract
with the Trustees, which show the amount of proceeds necessary to purchase each
$1 of monthly annuity payments (after deduction of any applicable taxes and the
annuity administrative charge). These tables are designed to determine the
2
amounts required to pay for the annuity selected, taking into account our
administrative and investment expenses and mortality and expense risks. The
size of your payment will depend upon the form of annuity chosen, your age and
the age of your beneficiary if you select a joint and survivor annuity. If our
current group annuity rates for payment of proceeds would produce a larger
payment, those rates will apply instead of the minimums in the contract tables.
If we give any group pension client with a qualified plan a better annuity rate
than those currently available for the Program, we will also make those rates
available to Program participants. The annuity administrative charge may be
greater than $350 in that case. Under our contract with the Trustees, we may
change the tables but not more frequently than once every five years. Fixed
annuity payments will not fluctuate during the payment period.
VARIABLE ANNUITY PAYMENTS. Variable annuity payments are funded through our
Separate Account No. 4 (Pooled) (the "Fund"), through the purchase of Annuity
Units. The investment policies and objectives of the Fund are set forth below.
The number of Annuity Units purchased is equal to the amount of the first
annuity payment divided by the Annuity Unit Value for the due date of the first
annuity payment. The amount of the first annuity payment is determined in the
same manner for a variable annuity as it is for a fixed annuity. The number of
Annuity Units stays the same throughout the payment period for the variable
annuity but the Annuity Unit Value changes to reflect the investment income and
the realized and unrealized capital gains and losses of the Fund, after
adjustment for an assumed base rate of return of 5-3/4%, described below.
The amounts of variable annuity payments are determined as follows.
Payments normally start as of the first day of the second calendar month
following our receipt of the proper forms. The first two monthly payments are
the same.
Payments after the first two will vary according to the investment
performance of the Fund. Each monthly payment will be calculated by multiplying
the number of Annuity Units credited to you by the Annuity Unit Value for the
first business day of the calendar month before the due date of the payment.
The Annuity Unit Value was set at $1.1553 as of July 1, 1969, the first
day that Separate Account No. 4 (Pooled) was operational. For any month after
that date, it is the Annuity Unit Value for the preceding month multiplied by
the change factor for the current month. The change factor gives effect to the
assumed annual base rate of return of 5-3/4% and to the actual investment
experience of the Fund.
Because of the adjustment for the assumed base rate of return, the
Annuity Unit Value rises and falls depending on whether the actual rate of
investment return is higher or lower than 5-3/4%.
3
Illustration of Changes in Annuity Payments. To show how we determine
variable annuity payments from month to month, assume that the amount you
applied to purchase an annuity is enough to fund an annuity with a monthly
payment of $363 and that the Annuity Unit Value for the due date of the first
annuity payment is $1.05. The number of annuity units credited under your
certificate would be 345.71 (363 1.05 = 345.71). If the third monthly payment
is due on March 1, and the Annuity Unit Value for February 1 was $1.10, the
annuity payment for March would be the number of units (345.71) times the
Annuity Unit Value ($1.10), or $380.28. If the Annuity Unit Value was $1.00 on
March 1, the annuity payment for April would be 345.71 times $1.00 or $345.71.
Summary of Annuity Unit Values for the Fund
This table shows the Annuity Unit Values with an assumed base rate of
return of 5-3/4%.
<TABLE>
<CAPTION>
First Business Day of Annuity Unit Value
- --------------------- ------------------
<S> <C>
October 1985 $2.6068
October 1986 $3.4330
October 1987 $4.3934
October 1988 $3.5444
October 1989 $4.8357
October 1990 $3.8569
October 1991 $5.4677
October 1992 $5.1818
October 1993 $6.3886
October 1994 $6.1563
</TABLE>
THE FUND
The Fund (Separate Account No. 4 (Pooled)) was established pursuant to
the Insurance Law of the State of New York in 1969. It is an investment account
used to fund benefits under group annuity contracts and other agreements for
tax-deferred retirement programs administered by us.
The assets of the Fund are our property. The Contract provides that the
portion of the Fund's assets we hold on your behalf may not be used to satisfy
obligations that may arise out of any other business we conduct. You have a
claim against us under the contract for the portion of the Funds' assets we hold
on your behalf. Income, gains and losses, whether or not realized, from assets
allocated to the Fund are credited or charged against the Fund without regard to
our other income, gains and losses.
4
We may permit our own money, such as fees and charges owed to us, to
stay in the Fund and accumulate, and we participate in the Fund proportionally.
These accumulated amounts and other assets of the Fund in excess of the
reserves and other contract liabilities may be transferred to our general
account.
INVESTMENT OBJECTIVE AND POLICIES OF THE FUND
Before you decide whether to select a variable annuity which varies in
value with the performance of the Fund, you should understand the Fund's
investment objective and policies. There is no assurance that the objective of
the Fund will be met.
OBJECTIVE. The Fund seeks to achieve long-term growth of capital by
investing in the securities of carefully selected companies we believe will
share in the growth of our nation's economy -- and those of other leading
industrialized countries -- over a long period.
INVESTMENT POLICIES. The Fund invests primarily in common stocks.
Smaller amounts may be invested in other equity-type securities (such as
convertible preferred stocks or convertible debt instruments).
The Fund may use its assets to make non-equity investments. These could
include non-participating and non-convertible preferred stocks, bonds and
debentures. Some non-equity investments may carry certain equity features such
as conversion or exchange rights or warrants for the acquisition of stocks of
the same or different issuers or participations based on revenues, sales or
profits. If, in light of economic conditions and the general level of stock
prices, it appears that the Fund's investment objectives will not be met by
buying equities, non-equity investment may be substantial. The Fund may invest
up to 10% of its total assets in securities which are restricted as to resale
under federal securities law (generally referred to as "restricted
securities").
The Fund may make temporary investments in government obligations,
short-term commercial paper and other money market instruments. It may buy
these directly or acquire units in our Separate Account No. 2A. We established
Separate Account No. 2A in 1983 to provide a more efficient means for our
separate accounts to invest cash positions on a pooled basis at no additional
cost. Separate Account No. 2A seeks to obtain a high level of current income,
preserve its assets and maintain liquidity. It invests only in short-term
securities which mature in 60 days or less from the date of purchase or which
are subject to a repurchase agreement requiring repurchases in 60 days or less.
Units in Separate Account No. 2A are not registered under the Securities Act of
1933.
While equity investments will be made primarily in securities of U.S.
companies or foreign companies doing substantial business here, a limited
portion of the Fund's investments may be made in the securities of established
foreign companies without substantial business here. The amount of these
investments will not generally exceed
5
15% of the value of the Fund's assets. For many foreign securities, there are
dollar-denominated American Depository Receipts (ADRs), which are traded in the
United States on exchanges or over-the-counter, and are issued by domestic
banks. The Fund may invest in foreign securities directly and through ADRs and
may hold some foreign securities outside the U.S. The Fund intends to invest in
foreign securities only when the potential benefits to the Fund are deemed to
outweigh the risks.
SPECIAL RISKS. In addition to the risks inherent in any equity
investment, the Fund is subject to the risk of investment in foreign securities
and restricted securities. Foreign investments may involve risks not present in
domestic investments, such as changes in the political or economic climate of
countries in which portfolio companies do business. Foreign securities may be
less liquid or subject to greater price volatility than securities of domestic
issuers, and foreign accounting, auditing and disclosure standards may differ
from domestic standards. There may be less regulation in foreign countries of
stock exchanges, brokers, banks and listed companies than in the United States.
The value of foreign investments may rise or fall because of changes in
currency exchange rates or exchange controls. ADRs do not lessen the foreign
exchange risk inherent to investing in the securities of foreign issuers.
However, by investing in ADRs rather than directly in foreign issuers' stock,
the Fund will avoid currency risks during the settlement period for either
purchases or sales. Restricted securities are generally less liquid than
registered securities and market quotations for such securities may not be
readily available. The Fund may not be able to sell restricted securities
except pursuant to registration under applicable Federal and State securities
laws or pursuant to Securities and Exchange Commission rules which limit their
sale to certain purchasers and may require that they be held by the Fund for a
specified period of time prior to resale. Because of these restrictions, at
times the Fund may not be readily able to sell them at fair market value.
6
Investment Restrictions Applicable to the Fund
The Fund will not:
o trade in foreign exchange (except transactions incidental to
the settlement of purchases or sales of securities for a Fund);
o make an investment in order to exercise control or management
over a company;
o underwrite the securities of other companies, including
purchasing securities that are restricted under the 1933 Act or
rules or regulations thereunder (restricted securities cannot
be sold publicly until they are registered under the 1933 Act),
except as stated below;
o make short sales, except when the Fund has, by reason of
ownership of other securities, the right to obtain securities
of equivalent kind and amount that will be held so long as they
are in a short position;
o trade in commodities or commodity contracts; purchase or write
puts and calls (options);
o purchase real estate or mortgages, except as stated below. The
Fund may buy shares of real estate investment trusts listed on
stock exchanges or reported on the National Association of
Securities Dealers, Inc. automatic quotation system ("NASDAQ");
o have more than 5% of its assets invested in the securities of
any one registered investment company. The Fund may not own
more than 3% of an investment company's outstanding voting
securities. Finally, total holdings of investment company
securities may not exceed 10% of the value of the Fund's
assets;
o purchase any security on margin or borrow money except for
short-term credits necessary for clearance of securities
transactions;
o make loans, except loans through the purchase of debt
obligations or through entry into repurchase agreements;
o invest more than 10% of its total assets in restricted
securities, real estate investments, or portfolio securities
not readily marketable;
o make an investment in an industry if that investment would make
the Fund's holding in that industry exceed 25% of its assets
(the United States
7
government, and its agencies and instrumentalities, are not
considered members of any industry); or
How We Value the Assets of the Fund
The assets of the Fund are valued as follows:
o Stocks listed on national securities exchanges or traded on the
NASDAQ national market system are valued at the last sale
price. If on a particular day there is no sale, they are valued
at the latest available bid price reported on a composite tape.
Other unlisted securities reported on the NASDAQ system are
valued at inside (highest) quoted bid prices.
o Foreign securities not traded directly, or in ADR form, in the
United States, are valued at the last sale price in the local
currency on an exchange in the country of origin. Foreign
currency is converted into dollars at current exchange rates.
o United States Treasury securities and other obligations issued
or guaranteed by the United States Government, its agencies or
instrumentalities are valued at representative quoted prices.
o Long-term publicly traded corporate bonds (i.e., maturing in
more than one year) are valued at prices obtained from a bond
pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where it is deemed
appropriate to do so, an over-the-counter or exchange quotation
may be used.
o Convertible preferred stocks listed on national securities
exchanges are valued at their last sale price or, if there is
no sale, at the latest available bid price.
o Convertible bonds and unlisted convertible preferred stocks are
valued at bid prices obtained from one or more major dealers in
such securities; where there is a discrepancy between dealers,
values may be adjusted based on recent premium spreads to the
underlying common stock.
o Short-term debt securities that mature in more than 60 days are
valued at representative quoted prices. Short-term debt
securities that mature in 60 days or less are valued at
amortized cost, which approximates market value. The Fund may
also acquire short-term debt securities through units in our
Separate Account No. 2A. These unit values are calculated in
the same way as Fund Units The assets of Separate Account No.
2A are valued as described above.
8
Our investment officers determine in good faith the fair value of
securities and other assets that do not have a readily available market price
in accordance with accepted accounting practices and applicable laws and
regulations.
INVESTMENT MANAGER
The Manager
We, Equitable Life, act as Investment Manager to the Fund. As such, we
have complete discretion over Fund assets and we invest and reinvest these
assets in accordance with the investment policies described under "Investment
Objectives and Policies of the Fund" above.
We are a New York stock life insurance company with our Home Office at
787 Seventh Avenue, New York, New York 10019. Founded in 1859, we are one of
the largest insurance companies in the United States. We, our parent and our
subsidiaries managed assets of approximately $ 174.5 billion as of December 31,
1994.
Investment Management
In providing investment management to the Funds, we currently use the
personnel and facilities of Alliance Capital Management L.P. ("Alliance"), for
portfolio selection and transaction services. Alliance, a publicly-traded
limited partnership, is indirectly majority-owned by Equitable Life. Investment
research, securities analysis and management of the Funds' portfolios are
carried on by Alliance's staff of investment officers and analysts. Alliance
recommends the investments to be purchased and sold for each Fund and arranges
for the execution of portfolio transactions. Alliance coordinates related
accounting and bookkeeping functions with us.
Alliance is a registered investment adviser under the Investment
Advisers Act of 1940.
Alliance acts as an investment adviser to various separate accounts and
general accounts of Equitable Life and other affiliated insurance companies.
Alliance also provides management and consulting services to mutual funds,
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing plans,
foundations and tax-exempt organizations. Alliance's main office is located at
1345 Avenue of Americas, New York, New York 10105.
The securities held in each Fund must be authorized or approved by the
Investment Committee of our Board of Directors. Subject to the Investment
Committee's broad supervisory authority, our investment officers and managers
have been given discretion as to sales and, within specified limits, purchases
of stocks, other equity securities and certain debt securities. When an
investment opportunity arises that is
9
consistent with the objectives of more than one account, investment
opportunities are allocated among accounts in an impartial manner based on
certain factors such as the accounts' investment objectives and their then-
current investment and cash positions.
Fund Transactions
The Fund is charged for securities brokers commissions, transfer taxes
and other fees relating to securities transactions. Transactions in equity
securities for the Fund are executed primarily through brokers which are
selected by Alliance/Equitable Life and receive commissions paid by the Fund.
For 1994 and 1993, the Fund paid $4,738,796 and $3,407,006, respectively, in
brokerage commissions.
Alliance and Equitable Life seek to obtain the best price and execution
of all orders placed for the portfolio of the Fund, considering all the
circumstances. If transactions are executed in the over-the-counter market it
will deal with the principal market makers, unless more favorable prices or
better execution is otherwise obtainable. There are occasions on which
portfolio transactions for the Fund may be executed as part of concurrent
authorizations to purchase or sell the same security for certain other accounts
or clients advised by Alliance and Equitable Life. These concurrent
authorizations potentially can be either advantageous or disadvantageous to the
Fund. When these concurrent authorizations occur, the objective is to allocate
the executions among accounts in a fair manner.
We also consider the amount and quality of securities research services
provided by a broker. Typical research services include general economic
information and analyses and specific information on and analyses of companies,
industries, and markets. Factors in evaluating research services include the
diversity of sources used by the broker and the broker's experience, analytical
ability, and professional stature. The receipt of research services from
brokers tends to reduce our expenses in managing the Fund. This is taken into
account when setting the expense charges.
Brokers who provide research services may charge somewhat higher
commissions than those who do not. However, we will select only brokers whose
commissions we believe are reasonable in all the circumstances. Of the
brokerage commissions paid by the Fund during 1994, $1,206,667 was paid to
brokers providing research services on transactions of $583,662,157.
We periodically evaluate the services provided by brokers and prepare
internal proposals for allocating among those various brokers business for all
the accounts we manage or advise. That evaluation involves consideration of the
overall capacity of the broker to execute transactions, its financial
condition, its past performance and the value of research services provided by
the broker in servicing the various accounts advised or managed by us. We have
no binding agreements with any firm as to the amount of brokerage business
which the firm may expect to receive for research services or otherwise. There
may, however, be understandings with certain firms that we will
10
continue to receive services from such firms only if such firms are allocated a
certain amount of brokerage business. We may try to allocate such amounts of
business to such firms to the extent possible in accordance with the policies
described above.
Research information obtained by us may be used in servicing all
accounts under our management, including our General Account. Similarly, not
all research provided by a broker or dealer with which the Fund transacts
business will necessarily be used in connection with the Fund.
Transactions for the Fund in the over-the-counter market are normally
executed as principal transactions with a dealer that is a principal market-
maker in the security, unless a better price or better execution can be
obtained from another source. Under these circumstances, the Fund pays no
commission. Similarly, portfolio transactions in money market and debt
securities will normally be executed through dealers or underwriters under
circumstances where the Fund pays no commission.
When making securities transactions for the Fund that do not involve
paying a brokerage commission (such as the purchase of short-term debt
securities), we seek to obtain prompt execution in an effective manner at the
best price. Subject to this general objective, we may give orders to dealers or
underwriters who provide investment research. The Fund will not pay a higher
price, however, and the fact that we may benefit from such research is not
considered in setting the expense charges.
In addition to using brokers and dealers to execute portfolio
securities transactions for accounts we manage, we may enter into other types
of business transactions with brokers or dealers. These other transactions will
be unrelated to allocation of the Fund's portfolio transactions.
Our parent, The Equitable Companies Incorporated owns own Donaldson,
Lufkin & Jenrette, Inc. ("DLJ"). A DLJ subsidiary, Donaldson, Lufkin & Jenrette
Securities Corporation, is one of the nation's largest investment banking and
securities firms. Another DLJ subsidiary, Autranet, Inc., is a securities
broker that markets independently originated research to institutions. Through
the Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation,
DLJ supplies correspondent services, including order execution, securities
clearance and other centralized financial services, to numerous independent
regional securities firms and banks.
To the extent permitted by law, and consistent with the Fund
transaction practices discussed in this prospectus, and subject to the consent
of fund contractholders, the Funds may engage in securities and other
transactions with the above entities or may invest in shares of the investment
companies with which those entities have affiliations. The Fund engaged in no
such transactions during 1994.
11
FINANCIAL STATEMENTS
The financial statement of Separate Account No. 4 (Pooled) reflect
applicable fees, charges and other expenses under the Members Programs as in
effect during the periods covered, as well as the charges against the account
made in accordance with the terms of all other contracts participating in the
account.
Separate Account No. 4 (Pooled): Page
Report of Independent Accountants - Price Waterhouse LLP 13
Statement of Assets and Liabilities,
December 31, 1994 14
Statements of Operations and Changes in Net
Assets for the Years Ended December 31,
1994 and 1993 15
Portfolio of Investments
December 31, 1994 16
Notes to Financial Statements 21
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of The Equitable Life Assurance Society of the
United States and the Participants in the Members Retirement Programs:
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and changes in net assets present fairly, in all material
respects, the financial position of Separate Account No. 4 of The Equitable
Life Assurance Society of the United States ("Equitable") at December 31,
1994 and its results of operations and changes in net assets for each of the
two years in the period then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Equitable's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which 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, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1994 by
correspondence with the custodian and brokers and application of alternative
auditing procedures where confirmations from brokers were not received,
provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
March 15, 1995
13
<PAGE>
Separate Account No. 4 (Pooled) (The Growth Equity Fund)
of The Equitable Life Assurance Society of the United States
Statement of Assets and Liabilities
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $1,562,978,777) ........................................... $1,606,904,907
Long-term debt securities--at value (amortized cost: $40,495,793) ........................ 38,401,875
Participation in Separate Account No. 2A--at amortized cost, which approximates market
value, equivalent to 4 units at $227.94 ................................................ 947
Cash ..................................................................................... 22,265,687
Receivables:
Securities sold .......................................................................... 20,460,855
Dividends ................................................................................ 3,937,217
Interest ................................................................................. 75,222
------------------------------------------------------------------------------------------ ---------------
Total assets ........................................................................... 1,692,046,710
------------------------------------------------------------------------------------------ ---------------
LIABILITIES:
Payables:
Securities purchased ..................................................................... 18,781,582
Due to Equitable Life's General Account .................................................. 7,281,318
Investment management fees payable ....................................................... 5,913
Accrued expenses ......................................................................... 393,013
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) ..................... 992,535
------------------------------------------------------------------------------------------ ---------------
Total liabilities ...................................................................... 27,454,361
------------------------------------------------------------------------------------------ ---------------
Net Assets (Note 1):
Net assets attributable to participants' accumulations ................................... 1,647,814,162
Reserves and other contract liabilities attributable to annuity benefits ................. 16,778,187
------------------------------------------------------------------------------------------ ---------------
NET ASSETS ............................................................................... $1,664,592,349
========================================================================================== ===============
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
Separate Account No. 4 (Pooled)
of The Equitable Life Assurance Society of the United States
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993
- -------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld--1994: $280,079 and 1993:
$359,029) ................................................................ $ 18,981,135 $ 19,131,412
Interest .................................................................. 120,286 852,538
- -------------------------------------------------------------------------- -------------- ---------------
Total ..................................................................... 19,101,421 19,983,950
EXPENSES -- (NOTE 4) ...................................................... (14,943,802) (14,099,401)
- -------------------------------------------------------------------------- -------------- ---------------
NET INCOME ................................................................ 4,157,619 5,884,549
- -------------------------------------------------------------------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ............ 121,640,003 286,492,193
- -------------------------------------------------------------------------- -------------- ---------------
Unrealized appreciation (depreciation) of investments and foreign currency
transactions:
Beginning of year ........................................................ 211,185,607 197,094,156
End of year .............................................................. 41,831,973 211,185,607
- -------------------------------------------------------------------------- -------------- ---------------
Change in unrealized appreciation/depreciation ............................ (169,353,634) 14,091,451
- -------------------------------------------------------------------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................... (47,713,631) 300,583,644
- -------------------------------------------------------------------------- -------------- ---------------
Increase (decrease) in net assets attributable to operations ............. (43,556,012) 306,468,193
- -------------------------------------------------------------------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................. 435,940,867 408,026,090
Withdrawals ............................................................... (528,069,361) (623,196,599)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in net assets attributable to contributions and withdrawals ..... (92,128,494) (215,170,509)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in accumulated amount retained by Equitable Life in Separate
Account No. 4 (Note 1) ................................................... 449,257 534,157
- -------------------------------------------------------------------------- -------------- ---------------
INCREASE (DECREASE) IN NET ASSETS ......................................... (135,235,249) 91,831,841
NET ASSETS -- BEGINNING OF YEAR ........................................... 1,799,827,598 1,707,995,757
- -------------------------------------------------------------------------- -------------- ---------------
NET ASSETS -- END OF YEAR ................................................. $1,664,592,349 $1,799,827,598
========================================================================== ============== ===============
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1994
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (0.3%)
CHEMICALS--SPECIALTY
Morton International, Inc. ............................... 200,000 $ 5,700,000
---------------
BUSINESS SERVICES ENVIRONMENTAL CONTROL (0.4%)
Rollins Environmental Services, Inc.* .................... 1,254,700 6,116,663
---------------
PRINTING, PUBLISHING & BROADCASTING (1.4%)
Grupo Televisa S.A. (ADR) ................................ 20,000 635,000
IVI Publishing, Inc.* .................................... 150,000 1,725,000
Viacom, Inc. (Class B)* .................................. 520,000 21,125,000
---------------
23,485,000
---------------
TOTAL BUSINESS SERVICES (1.8%) ........................... 29,601,663
---------------
CAPITAL GOODS
BUILDING & CONSTRUCTION (1.2%)
Acme Landis Holdings ..................................... 3,000,000 360,581
Royal Plastics Group Ltd.* ............................... 945,500 7,414,365
Stone & Webster, Inc. .................................... 350,000 11,637,500
---------------
19,412,446
---------------
ELECTRICAL EQUIPMENT (0.1%)
Johnson Electric Holdings ................................ 1,000,000 2,294,023
---------------
TOTAL CAPITAL GOODS (1.3%) ............................... 21,706,469
---------------
CONSUMER CYCLICALS
AIRLINES (1.0%)
Southwest Airlines Co. ................................... 750,000 12,562,500
UAL Corp.* ............................................... 41,800 3,652,275
---------------
16,214,775
---------------
FOOD SERVICES, LODGING (0.2%)
Au Bon Pain, Inc.* ....................................... 200,000 3,200,000
---------------
HOUSEHOLD FURNITURE, APPLIANCES (1.3%)
Industrie Natuzzi (ADR) .................................. 612,200 20,814,800
Semi Tech Global Ltd. .................................... 603,466 1,017,800
---------------
21,832,600
---------------
LEISURE-RELATED (0.8%)
Mirage Resorts, Inc.* .................................... 600,000 12,300,000
Shun Tak Enterprises Corp. ............................... 1,500,000 1,066,236
---------------
13,366,236
---------------
RETAIL-GENERAL (0.8%)
May Department Stores Co. ................................ 20,000 675,000
Office Depot, Inc.* ...................................... 450,000 10,800,000
Toys R Us, Inc.* ......................................... 40,000 1,220,000
Westcorp. ................................................ 78,000 711,750
---------------
13,406,750
---------------
TOTAL CONSUMER CYCLICALS (4.1%) .......................... 68,020,361
---------------
</TABLE>
16
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
CONSUMER NONCYCLICALS
DRUGS (1.0%)
Astra AB Series A ........................................ 325,000 $ 8,397,738
Gensia Pharmaceuticals, Inc.* ............................ 1,241,800 5,277,650
Merck & Co., Inc. ........................................ 75,000 2,859,375
---------------
16,534,763
---------------
FOODS (0.0%)
Pokphand (CP) Co. ........................................ 550,000 128,659
---------------
HOSPITAL SUPPLIES & SERVICES (5.6%)
Boston Scientific Corp.* ................................. 182,600 3,172,675
Columbia HCA Healthcare Corp. ............................ 540,000 19,710,000
Surgical Care Affiliates, Inc. ........................... 2,500,000 50,625,000
United Healthcare Corp. .................................. 425,000 19,178,125
---------------
92,685,800
---------------
TOBACCO (11.1%)
Loews Corp. .............................................. 1,700,000 147,687,500
Philip Morris Cos., Inc. ................................. 660,000 37,950,000
---------------
185,637,500
---------------
TOTAL CONSUMER NONCYCLICALS (17.7%) ...................... 294,986,722
---------------
CREDIT-SENSITIVE
BANKS (3.1%)
J.P. Morgan & Co., Inc. .................................. 915,600 51,273,600
---------------
FINANCIAL SERVICES (5.4%)
Autofinance Group, Inc.* ................................. 1,350,000 11,812,500
Edwards (A.G.), Inc. ..................................... 220,000 3,960,000
Legg Mason, Inc. ......................................... 825,000 17,531,250
Morgan Stanley Group, Inc. ............................... 720,000 42,480,000
Charles Schwab Corp. ..................................... 350,000 12,206,250
Student Loan Marketing Association ....................... 80,000 2,600,000
---------------
90,590,000
---------------
INSURANCE (14.3%)
American International Group, Inc. ....................... 200,000 19,600,000
CNA Financial Corp.* ..................................... 2,180,000 141,427,500
Life Re Corporation ...................................... 625,000 11,015,625
NAC Re Corp. ............................................. 400,000 13,400,000
Progressive Corp. ........................................ 250,000 8,750,000
Travelers, Inc. .......................................... 1,234,700 40,127,750
Zenith National Insurance Corp. .......................... 129,000 2,934,750
---------------
237,255,625
---------------
REAL ESTATE (2.5%)
AMLI Residential Property Trust .......................... 200,000 3,750,000
CBL & Associates Properties, Inc. ........................ 250,000 5,156,250
First Industrial Realty Trust, Inc. ...................... 100,000 1,950,000
JP Realty, Inc. .......................................... 300,000 6,300,000
Macerich Co. ............................................. 265,000 5,664,375
Paragon Group, Inc. ...................................... 50,000 950,000
</TABLE>
17
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Spieker Properties, Inc. ................................. 300,000 $ 6,112,500
Summit Properties, Inc. .................................. 150,000 2,887,500
Tucker Properties Corp. .................................. 73,200 933,300
Walden Residential Properties, Inc. ...................... 400,000 7,150,000
---------------
40,853,925
---------------
UTILITY-GAS (0.6%)
ENRON Corp. .............................................. 328,600 10,022,300
---------------
UTILITY-TELEPHONE (5.2%)
Sprint Corp. ............................................. 700,000 19,337,500
Telefonos de Mexico, L ................................... 80,000 3,280,000
Telephone & Data Systems, Inc. ........................... 1,400,000 64,575,000
---------------
87,192,500
---------------
TOTAL CREDIT-SENSITIVE (31.1%) ........................... 517,187,950
---------------
ENERGY
COAL & GAS PIPELINES (0.1%)
Abraxas Petroleum Corp.* ................................. 100,000 925,000
Enserch Corp. ............................................ 76,200 1,000,125
---------------
1,925,125
---------------
OIL-DOMESTIC (1.2%)
Enron Oil and Gas Co. .................................... 702,800 13,177,500
Murphy Oil Corp. ......................................... 121,500 5,163,750
Wainoco Oil Corp.* ....................................... 500,000 2,375,000
---------------
20,716,250
---------------
OIL-INTERNATIONAL (2.4%)
Imperial Oil Ltd. ........................................ 550,000 18,150,000
YPF Sociedad Anonima (ADR) ............................... 1,000,000 21,375,000
---------------
39,525,000
---------------
OIL-SUPPLIES & CONSTRUCTION (7.5%)
Baker Hughes, Inc. ....................................... 1,500,000 27,375,000
Camco International, Inc. ................................ 320,000 6,040,000
Energy Service, Inc.* .................................... 1,365,900 16,732,275
Global Marine, Inc.* ..................................... 1,000,000 3,625,000
Parker Drilling Co.* ..................................... 5,500,000 26,125,000
Reading & Bates Corp.* ................................... 1,390,100 8,340,600
Rowan Cos., Inc.* ........................................ 3,750,000 22,968,750
Schlumberger Ltd. ........................................ 125,000 6,296,875
Seagull Energy Corp.* .................................... 150,000 2,868,750
Western Atlas, Inc.* ..................................... 138,600 5,214,825
---------------
125,587,075
---------------
RAILROADS (0.3%)
Southern Pacific Rail Corp.* ............................. 250,000 4,531,250
---------------
UTILITY-GAS (0.6%)
Renaissance Energy Ltd.* ................................. 478,000 9,243,094
---------------
TOTAL ENERGY (12.1%) ..................................... 201,527,794
---------------
</TABLE>
18
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------------- ------------ ---------------
<S> <C> <C>
TECHNOLOGY
ELECTRONICS (4.5%)
American Superconductor Corp.* ........................... 80,000 $ 1,980,000
General Instrument Corp.* ................................ 1,950,000 58,500,000
Sensormatic Electronics Corp. ............................ 420,000 15,120,000
---------------
75,600,000
---------------
OFFICE EQUIPMENT (0.0%)
Compaq Computer Corp.* ................................... 10,000 395,000
---------------
OFFICE EQUIPMENT SERVICES (0.2%)
Quarterdeck Office Systems* .............................. 840,000 2,625,000
---------------
TELECOMMUNICATIONS (23.4%)
American Satellite Network-Warrants* ..................... 70,000 0
Associated Group, Inc. (Class A)* ........................ 18,475 434,163
Associated Group, Inc. (Class B)* ........................ 25,650 602,775
BCE Mobile Communications, Inc.* ......................... 850,000 26,964,890
Bolt Beranek & Newman, Inc.* ............................. 113,600 1,689,800
Cellular Communications, Inc. (Class A) .................. 1,122,000 60,027,000
Cellular Communications Puerto Rico, Inc.* ............... 310,000 10,385,000
International Cabletel, Inc.* ............................ 120,000 3,330,000
Mannesmann AG ............................................ 80,000 21,682,315
Mannesmann AG (ADR) ...................................... 345,000 93,495,000
Millicom International Cellular S.A.* .................... 700,000 21,087,500
Qualcomm, Inc.* .......................................... 240,000 5,760,000
Rogers Cantel Mobile Communications, Inc. (Class B)
(ADR)* .................................................. 1,060,000 30,905,625
Royal PTT Nederland NV (ADR) ............................. 16,000 538,000
Scientific Atlanta, Inc. ................................. 1,000,000 21,000,000
Teleglobe, Inc. .......................................... 115,000 1,557,655
United States Cellular Corp.* ............................ 1,724,900 56,490,475
Vanguard Cellular Systems, Inc. (Class A)* ............... 1,305,000 33,603,750
---------------
389,553,948
---------------
TOTAL TECHNOLOGY (28.1%) ................................. 468,173,948
---------------
TOTAL COMMON STOCKS (96.5%)
(Cost $1,562,978,777) .................................. 1,606,904,907
---------------
PRINCIPAL
AMOUNT
------------
LONG-TERM DEBT SECURITIES:
ENERGY (0.1%)
Oil-Domestic
Apache Corp.
6.0% Conv., 2002 ....................................... $ 2,000,000 2,045,000
---------------
TECHNOLOGY
ELECTRONICS (2.2%)
General Instrument Corp.
5.0% Conv., 2000 ....................................... 24,850,000 33,236,875
Lam Research Corp.
6.0% Conv. Sub. Deb., 2003 ............................ 2,000,000 3,120,000
---------------
TOTAL TECHNOLOGY (2.2%) ................................. 36,356,875
---------------
TOTAL LONG-TERM DEBT SECURITIES (2.3%)
(Amortized Cost $40,495,793) ........................... 38,401,875
---------------
</TABLE>
19
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1994
<TABLE>
<CAPTION>
VALUE
(NOTE 3)
- --------------------------------------------------------------------------- --------------
<S> <C>
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates market value, equivalent to 4 units
at $227.94 each (0.0%).................................................... $ 947
--------------
TOTAL INVESTMENTS (98.8%)
(Cost/Amortized Cost $1,603,475,517) ...................................... 1,645,307,729
CASH AND RECEIVABLES LESS LIABILITIES (1.2%) ............................... 20,277,155
AMOUNT RETAINED BY EQUITABLE LIFE IN SEPARATE ACCOUNT NO. 4 (0.0%) (NOTE 1)
(992,535)
--------------
NET ASSETS (100.0%) (NOTE 1) ............................................... $1,664,592,349
==============
Reserves attributable to participants' accumulations ....................... $1,647,814,162
Reserves and other contract liabilities attributable to annuity benefits .. 16,778,187
--------------
NET ASSETS (100%) .......................................................... $1,664,592,349
==============
- -------------
*Non-income producing.
</TABLE>
[FN]
See Notes to Financial Statements.
20
SEPARATE ACCOUNT NO. 4 (POOLED) OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
1. Separate Account No. 4 (Pooled) (the "Fund") of The Equitable
Life Assurance Society of the United States (Equitable Life), a wholly-owned
subsidiary of The Equitable Companies Incorporated, was established in
conformity with the New York State Insurance Law. Pursuant to such law, to the
extent provided in the applicable contracts, the net assets of the Fund are not
chargeable with liabilities arising out of any other business of Equitable Life.
The excess of assets over reserves and other contract liabilities amounting to
$992,535 as shown in the statement of Assets and Liabilities in the Fund may be
transferred to Equitable Life's General Account.
At December 31, 1994 and 1993, interests of retirement and investment
plans for Equitable Life employees, managers, and agents in Separate Account No.
4 aggregated $184,086,304 (11.1%) and $179,616,502 (10.0%), respectively, of the
net assets in the Fund.
Equitable Life is the investment manager for the Fund. Prior to July 22,
1993, Equitable Capital Management Corporation (Equitable Capital) served as the
investment adviser to Equitable Life. On July 22, 1993, Alliance Capital
Management L.P. (Alliance) acquired the business and substantially all of the
assets of Equitable Capital and became the investment adviser to Equitable Life.
Alliance is a publicly-traded limited partnership which is indirectly majority-
owned by Equitable Life.
SEPARATE ACCOUNT NO. 4 (POOLED) OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (continued)
Equitable Life and Alliance seek to obtain the best price and execution
of all orders placed for the portfolio of the Fund, considering all
circumstances. In addition to using brokers and dealers to execute portfolio
security transactions for funds under their management, Equitable Life and
Alliance may also enter into other types of business and securities transactions
with brokers and dealers, which will be unrelated to allocation of the Fund's
portfolio transactions.
2. Security transactions are recorded on the trade date. Amortized
cost of debt securities consists of cost, adjusted where applicable, for
amortization of premium or accretion of discount. Dividend income is recorded on
the ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
Transactions denominated in foreign currencies are recorded at the rate
prevailing when earned or incurred. Asset and liability accounts that are
denominated in a foreign currency are adjusted to reflect the current exchange
rate at the end of the period. Transaction gains or losses resulting from
changes in the exchange rate during the reporting period or upon settlement of
the foreign currency transactions are reflected under "Realized and Unrealized
Gain (Loss) on Investments" in the Statements of Operations and Changes in Net
Assets.
Equitable Life's internal short-term investment account, Separate
Account No. 2A, was established to provide a more flexible and efficient vehicle
to combine and invest temporary cash positions of certain eligible accounts
("Participating Funds"), under
2
SEPARATE ACCOUNT NO. 4 (POOLED) OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (continued)
Equitable Life's management. Separate Account No. 2A invests in debt securities
maturing in sixty days or less from the date of acquisition. At December 31,
1994, the amortized cost of investments held in Separate Account No. 2A
consists of the following:
<TABLE>
<CAPTION>
Amortized
Cost %
--------- ---
<S> <C> <C>
Bank Notes,
6.03% due 1/30/95 through 1/31/95 $ 25,999,386 3.6%
Bankers Acceptances,
6.09% due 2/21/95 . . . . . . . . . . . 16,850,457 2.3
Certificates of Deposit,
6.08% due 1/20/95 . . . . . . . . . . . 15,000,000 2.0
Commercial Paper,
5.62%-6.2% due 1/3/95 through 2/17/95 . . . 562,891,837 77.0
Variable Rate Commercial Paper,
6.259%-6.359% due 2/8/95 through 6/15/95 . 35,000,000 4.8
Variable Rate LIBOR,
6.188% due 6/16/95. . . . . . . . . . . 10,000,000 1.4
Variable Rate Securities,
5.82%-5.97% due 1/4/95 through 4/26/95. . 64,499,342 8.8
------------ ------
Total Investments . . . . . . . . . . . . . . 730,241,022 99.9
Cash and Receivables Less Liabilities. . . . . . . 1,053,134 0.1
------------ ------
Net Assets. . . . . . . . . . . . . . . . . $731,294,156 100.0%
============ ======
Units Outstanding . . . . . . . . . . . . . . 3,208,208
Unit Value. . . . . . . . . . . . . . . . . $227.94
</TABLE>
Participating Funds purchase or redeem units depending on each
participating account's excess cash availability or cash needs to meet its
liabilities. Separate Account No. 2A is not subject to investment management
fees. Short-term debt securities may also be purchased directly by the Fund.
3
SEPARATE ACCOUNT NO. 4 (POOLED) OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (continued)
For 1994 and 1993, investment security transactions, excluding short-
term debt securities, were as follows:
<TABLE>
<CAPTION>
Net
Cost of Proceeds
Purchases of Sales
------------- --------------
<S> <C> <C>
Stocks and long-term corporate debt
securities:
1994. . . . . . . . . . . . . . . . . $1,556,068,225 $1,644,508,525
1993. . . . . . . . . . . . . . . . . 1,394,550,892 1,610,595,838
U.S. Government obligations:
1994. . . . . . . . . . . . . . . . . $ -- $ --
1993. . . . . . . . . . . . . . . . . -- --
</TABLE>
3. Investment securities are valued as follows:
Stocks listed on national securities exchanges and certain over-the-
counter issues traded on the National Association of Securities Dealers, Inc.
Automated Quotation (NASDAQ) national market system are valued at the last sale
price, or, if no sale, at the latest available bid price.
4
PART C
OTHER INFORMATION
Item 28. Financial Statements and Exhibits
(a) Financial Statements included in Part B.
The following are included in the Statement of Additional Information:
1. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51
(Pooled) (The Aggressive Stock, Common Stock, Balanced and
Global, Conservative Investors and Growth Investors Accounts):
- Report of Independent Accountants - Price Waterhouse LLP
2. Separate Account No. 3 (Pooled):
-Statements of Assets and Liabilities, December 31, 1994
-Statements of Operations and Changes in Net Assets for the
Years Ended December 31, 1994, and 1993
-Portfolio of Investments, December 31, 1994
3. Separate Account No. 4 (Pooled):
-Statement of Assets and Liabilities, December 31, 1994
-Statements of Operations and Changes in Net Assets for the
Years Ended December 31, 1994 and 1993
-Portfolio of Investments, December 31, 1994
4. Separate Account No. 10 (Pooled):
-Statements of Assets and Liabilities, December 31, 1994
-Statements of Operations and Changes in Net Assets for the
Years Ended December 31, 1994, and 1993
-Portfolio of Investments, December 31, 1994
5. Separate Account No. 51 (Pooled):
-Statement of Assets and Liabilities, December 31, 1994
-Statements of Operations and Changes in Net Assets for the Year
Ended December 31, 1994 and the period July 1, 1993 through
December 31, 1993
6. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51
(Pooled):
-Notes to Financial Statements
7. The Equitable Life Assurance Society of the United States:
-Report of Independent Accountants - Price Waterhouse LLP
-Independent Auditors' Report - Deloitte & Touche LLP
-Consolidated Balance Sheets, December 31, 1994 and 1993
-Consolidated Statements of Earnings for the Years Ended
December 31, 1994, 1993 and 1992
-Consolidated Statements of Equity for the Years Ended
December 31, 1994 and 1993 and 1992
-Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992
-Notes to Consolidated Financial Statements
C-1
(b) Exhibits.
The following Exhibits are filed herewith:
1. Resolutions of the Board of Directors of The Equitable Life
Assurance Society of the United States ("Equitable") authorizing the
establishment of the Registrant, incorporated by reference to Post-
Effective Amendment No. 1 on Form N-3 to Registration Statement 33-
46995, filed July 22, 1992.
2. Not Applicable.
3. Not Applicable.
4. (a) Distribution Agreement dated as of January 1, 1995 by
and between The Hudson River Trust and Equico Securities,
Inc., as previously filed with this Registration
Statement No. 33-91588 on April 26, 1995.
(b) Sales Agreement dated as of January 1, 1995 by and
among Equico Securities, Inc., Equitable, and Separate Account
A, Separate Account No. 301 and Separate Account No. 51,
as previously filed with this Registration Statement No.
33-91588 on April 26, 1995.
5. Form of Sales Agreement between Equitable Variable Life
Insurance Company and The Equitable Life Assurance Society of
the United States for itself and on behalf of its Separate
Account No. 51, incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-46995 on Form N-3 of
Registrant, filed March 2, 1993.
6 (a) Exhibit 6(e) (Copy of Group Annuity Contract AC 6059,
effective August 30, 1984, among the United States Trust
Company of New York and The Equitable Life Assurance Society of
the United States), incorporated by reference to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26, 1988.
(b) Exhibit 6(f) (Form of Rider No. 1 to Group Annuity
Contract AC 6059 between the United States Trust Company of New
York and The Equitable Life Assurance Society of the United
States), incorporated by reference to Registration No.
33-34554 on Form N-3 of Registrant, filed April 26, 1990.
(c) Exhibit 6(g) (Form of Rider No. 2 to Group Annuity
Contract AC 6059 between the United States Trust Company of New
York and The Equitable Life Assurance Society of the United
States), incorporated by reference to Registration No. 33-34554
on Form N-3 of Registrant, filed April 26, 1990.
C-2
(d) Form of Rider No. 3 to Group Annuity Contract AC 6059
between the United States Trust Company of New York and
The Equitable Life Assurance Society of the United States,
incorporated by reference to Registration No. 33-46995 on Form
N-3 of Registrant, filed April 8, 1992.
(e) Form of Rider No. 4 to Group Annuity Contract AC 6059
between the United States Trust Company of New York and The
Equitable Life Assurance Society of the United States,
incorporated by reference to Post-Effective Amendment No. 2 to
Registration No. 33-46995 on Form N-3 of Registrant, filed
March 2, 1993.
(f) Exhibit 7(k) (Form of Participation Agreement for the
standardized Profit-Sharing Plan under the Association
Members Program), incorporated by reference to Post-
Effective Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April l6,
1986.
(g) Exhibit 7(l) (Form of Participation Agreement for the
non-standardized Profit-Sharing Plan under the Association
Members Program), incorporated by reference to Post-Effective
Amendment No. 1 on Form N-3 to Registration Statement on Form
S-1 of Registrant, filed April l6, 1986.
(h) Exhibit 7(m) (Form of Participation Agreement for the
standardized Defined Contribution Pension Plan under the
Association Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April l6, 1986.
(i) Exhibit 7(n) (Form of Participation Agreement for the
non-standardized Defined Contribution Pension Plan under the
Association Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April l6, 1986.
(j) Exhibit 7(r) (Copy of Attachment to Profit Sharing
Participation Agreement under the Association Members
Retirement Plan of the Equitable Life Assurance Society of the
United States), incorporated by reference to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26, 1988.
(k) Exhibit 7(0)(2) (Form of Participant Enrollment Form
under the Association Members Program), incorporated by
reference to Post-Effective Amendment No. 2 in Form N-3 to
Registration Statement on Form S-1 of Registrant, filed April
2l, l987.
C-3
(l) Exhibit 7(t) (Form of Standardized Participation
Agreement under the Association Members Defined Benefit Pension
Plan), incorporated by reference to Registration No. 33-21417
on Form N-3 of Registrant, filed April 26, 1988.
(m) Exhibit 7(ee) (Form of Standardized Participation
Agreement for the Defined Contribution Pension Plan under the
Association Members Program, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(n) Exhibit 7(ff) (Form of Non-Standardized Participation
Agreement for the Defined Contribution Pension Plan under the
Association Members Program, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(o) Exhibit 7(gg) (Form of Standardized Participation
Agreement for the Profit-Sharing Plan under the Association
Members Program, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(p) Exhibit 7(hh) (Form of Non-Standardized Participation
Agreement for the Profit-Sharing Plan under the Association
Members Program, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(q) Exhibit 7(ii) (Form of Simplified Participation
Agreement for the Defined Contribution Pension Plan under the
Association Members Program, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(r) Exhibit 7(jj) (Form of Simplified Participation
Agreement for the Profit-Sharing Plan under the Association
Members Program, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(s) Exhibit 7(kk) (Form of Standardized (and non-
integrated) Participation Agreement for the Defined Benefit
Pension
C-4
Plan under the Association Members Program, as filed
with the Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(t) Exhibit 7(ll) (Form of Standardized (and integrated)
Participation Agreement for the Defined Benefit Pension Plan
under the Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26, 1989.
(u) Exhibit 7(mm) (Form of Non-Standardized (and non-
integrated) Participation Agreement for the Defined Benefit
Pension Plan under the Association Members Program, as filed
with the Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(v) Exhibit 7(nn) (Form of Non-Standardized (and
integrated) Participation Agreement for the Defined Benefit
Pension Plan under the Association Members Program, as filed
with the Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(w) Form of First Amendment to the Members Retirement Plan
of The Equitable Life Assurance Society of the United States
Participation Agreement, as filed with the Internal Revenue
Service on December 23, 1991, incorporated by reference to
Registration No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
8. (a) Copy of the Restated Charter of The Equitable Life
Assurance Society of the United States, adopted August 6, 1992,
incorporated by reference to Post-Effective Amendment No. 2 to
Registrant No. 33-46995 on Form N-3 of Registrant, filed March
2, 1993.
(b) By-Laws of The Equitable Life Assurance Society of the
United States, as amended through July 22, 1992, incorporated
by reference to Post-Effective Amendment No. 2 to Registration
No. 33-46995 on Form N-3 of Registrant, filed March 2, 1993.
9. Not Applicable.
10. Not Applicable.
11. (a) Exhibit 11(e)(2) (Form of Association Members
Retirement Plan, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
C-5
(b) Exhibit 11(j)(2) (Form of Association Members
Retirement Trust, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(c) Exhibit 11(k) (Copy of the Association Members Pooled
Trust for Retirement Plans, as submitted to the Internal
Revenue Service on March 3, 1987), incorporated by reference to
Post-Effective Amendment No. 2 to Registration on Form S-1 of
Registrant, filed April 2l, l987.
(d) Exhibit 11(o) (Form of Association Members Defined
Benefit Pension Plan, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(e) Form of First Amendment to the Pooled Trust for
Association Members Retirement Plans of The Equitable Life
Assurance Society of the United States, as filed with the
Internal Revenue Service on December 23, 1991, incorporated
by reference to Registration No. 33-46995 on Form N-3 of
Registrant, filed April 8, 1992.
(f) Form of First Amendment to the Association Members
Retirement Plan of The Equitable Life Assurance Society of the
United States, as filed with the Internal Revenue Service on
December 23, 1991, incorporated by reference to Registration
No. 33-46995 on Form N-3 of Registrant, filed April 8, 1992.
(g) Form of First Amendment to the Association Members
Retirement Trust of The Equitable Life Assurance Society of the
United States, as filed with the Internal Revenue
Service on December 23, 1991, incorporated by reference to
Registration No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
12. (a) Opinion and Consent of Melvin S. Altman, Esq., Vice
President and Associate General Counsel of The Equitable Life
Assurance Society of the United States, incorporated by
reference to Registration No. 33-46995 on Form N-3 of
Registrant, filed April 8, 1992.
(b) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life Assurance
Society of the United States, incorporated by reference to
Post-Effective Amendment No. 3 to Registration No. 33-46995 on
Form N-3 of Registrant, filed April 21, 1993.
C-6
(c) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life Assurance
Society of the United States incorporated by reference to
Registration No. 33-61978 on Form N-3 of Registrant, filed
May 3, 1993.
(d) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life Assurance
Society of the United States, incorporated by reference to
Registration No. 33-61978 on Form N-3 of Registrant, filed
November 16, 1993.
(e) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States, as previously
filed with this Registration Statement No. 33-91588 on
April 26, 1995.
13. (a) Consent of Melvin S. Altman (included within Exhibit
12(a)), incorporated by reference to Registration No. 33-46995
on Form N-3 of Registrant, filed April 8, 1992.
(b) Consent of Anthony A. Dreyspool (included within
Exhibit 12(b)), incorporated by reference to Post-Effective
Amendment No. 3 to Registration No. 33-46995 on Form N-3 of
Registrant, filed April 21, 1993.
(c) Consent of Anthony A. Dreyspool (included within
Exhibit 12(c)) incorporated by reference to Registration No.
33-61978 on Form N-3 of Registrant, filed May 3, 1993.
(d) Consent of Anthony A. Dreyspool (included within
Exhibit 12(d)), incorporated by reference to Registration No.
33-61978 on Form N-3 of Registrant, filed November 16, 1993.
(e) Consent of Anthony A. Dreyspool (included within
Exhibit 12(e)), as previously filed with this Registration
Statement No. 33-91588 on April 26, 1995.
(f) Consent of Price Waterhouse.
(g) Consent of Deloitte & Touche.
(h) Powers of Attorney, as previously filed with this
Registration Statement No. 33-91588 on April 26, 1995.
C-7
Item 29: Directors and Officers of Equitable.
Set forth below is information regarding the directors and
principal officers of Equitable. Equitable's address is 787 Seventh Avenue,
New York, New York 10019. The business address of the persons whose names are
preceded by an asterisk is that of Equitable.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
DIRECTORS
Claude Bebear Director Chairman and Chief Executive
AXA S.A. Officer, AXA, and various
23, Avenue Matignon positions with AXA affiliated
75008 Paris, France companies; Director, The
Equitable Companies Incorporated
("EQ") (Director of the following
non-AXA affiliated companies:
Schneider S.A., Societe Generale,
SOVAC and Rhone-Poulenc, S.A.;
Member of Supervisory Board,
Banque Paribas and Member of the
General Council of Assicurazioni
Generali S.p.A.).
Christopher Brocksom Director Chief Executive Officer, AXA
AXA Equity & Law Equity & Law Life Assurance
Amersham Road Society ("AXA Equity & Law") and
High Wycombe various directorships and
Bucks HP 13 5 AL, England officerships with AXA Equity &
Law-affiliated companies.
Francoise Colloc'h Director Executive Vice President, Culture
AXA S.A. - Management - Communications
23, Avenue Matignon (1993 to present), AXA, and
75008 Paris, France various positions with AXA
affiliated companies;
prior thereto, Senior Vice
President Management and
Communications (1992 to
1993).
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
Henri de Castries Director Executive Vice President -
AXA S.A. Financial Services and Life
23, Avenue Matignon Insurance Activities, AXA (1993
75008 Paris, France to present) and various positions with
AXA affiliated companies; prior thereto,
General Secretary (1991 to 1993);
Director, EQ (May 1994 to present),
Equitable Real Estate Investment
Management, Inc. ("Equitable Real
Estate") (June 1993 to present),
Donaldson, Lufkin & Jenrette ("DLJ")
(July 1993 to present), and Alliance
Capital Management Corporation
("Alliance") (October 1993 to present);
(Director, France Telecom).
Joseph L. Dionne Director Chairman and Chief Executive
McGraw-Hill, Inc. Officer, The McGraw-Hill
1221 Avenue of the Americas Companies; Director, EQ
New York, NY 10020 (Director, Harris Corporation and
Alexander & Alexander Services,
Inc. (1995 to present).
William T. Esrey Director Chairman and Chief Executive
Sprint Corporation Officer, Sprint Corporation, and
P.O. Box 11315 President (until March 1993);
Kansas City, MO 64112 Director, EQ; (Director,
Panhandle Eastern Corporation and
General Mills, Inc.).
Jean-Rene Fourtou Director Chairman and Chief Executive
Rhone-Poulenc, S.A. Officer, Rhone-Poulenc, S.A.;
25 Quai Paul Doumer Director, EQ; (Director, Societe
92408 Courbevoie Cedex, France Generale, Schneider S.A. and AXA).
</TABLE>
C-9
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
Norman C. Francis Director President, Xavier University of
Xavier University of Louisiana Louisiana (Chairman, Liberty Bank
7325 Palmetto Street and Trust, New Orleans, LA;
New Orleans, LA 70125 Director, New Orleans Public
Service, Inc. (until 1994), First
National Bank of Commerce, New
Orleans, LA, and Entergy
Corporation (1994 to present).
Donald J. Greene Director Counselor-at-Law; Partner,
LeBoeuf, Lamb, Greene & MacRae LeBoeuf, Lamb, Greene & MacRae;
125 West 55th Street Director, EQ.
New York, NY 10019-4513
John T. Hartley Director Chairman and Chief Executive
Harris Corporation Officer, Harris Corporation; also
1025 NASA Boulevard President (from October 1987 to
Melbourne, FL 32919 April 1993); Director, EQ;
(Director, The McGraw-Hill
Companies).
John H.F. Haskell, Jr. Director Director and Managing Director,
Dillon, Read & Co., Inc. Dillon, Read & Co., Inc.;
535 Madison Avenue Director, EQ; Chairman,
New York, NY 10028 Supervisory Board, Dillon Read
(France) Gestion; Director,
Dillon Read Limited; (Director,
Kaydon Corporation).
W. Edwin Jarmain Director President, Jarmain Group Inc.;
Jarmain Group Inc. also an officer or director of
95 Wellington Street West several affiliated companies;
Suite 805 President, Chief Executive
Toronto, Ontario M5J 2N7, Officer and Director, FCA
Canada International, Ltd. (September
1992 to December 1993),
Chairman (January 1994 to
present); Director, EQ, DLJ,
Anglo Canada General
Insurance Company, AXA
Insurance (Canada), and
Boreal Property and Casualty
Insurance Company (subsidiary
of AXA Canada) (December 1994
to present).
</TABLE>
C-10
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
Don Johnston Director Retired Chairman and Chief
184-400 Ocean Road Executive Officer JWT Group, Inc.
John's Island and J. Walter Thompson Company;
Vero Beach, FL 32963 (Director, The McGraw-Hill
Companies).
Winthrop Knowlton Director Chairman, Knowlton Brothers,
Knowlton Brothers, Inc. Inc.; President and Chief
530 Fifth Avenue Executive Officer, Knowlton
New York, NY 10036 Associates, Inc.; Director, EQ
(Managing Director, Family
Partners & Co. and Frontier
Partners, Inc.; Director,
Bethlehem Steel Corporation; and
Chairman of the Board, The
Jackson Laboratory).
Arthur L. Liman Director Counselor-at-Law; Partner, Paul,
Paul, Weiss, Rifkind, Wharton Weiss, Rifkind, Wharton &
& Garrison Garrison; Director, EQ (Director,
1285 Avenue of the Americas Continental Grain Company).
New York, NY 10019
George T. Lowy Director Counselor-at-Law; Partner,
Cravath, Swaine & Moore Cravath, Swaine & Moore.
825 Eighth Avenue
New York, NY 10019
George J. Sella, Jr. Director Retired Chairman, President and
P.O. Box 397 Chief Executive Officer, American
Newton, NJ 07860 Cyanamid Company; Director, EQ
(Director, American Cyanamid
Company (until 1994), Bush,
Boake, Allen, Inc., and
Union Camp Corporation).
Dave H. Williams Director Chairman and Chief Executive
Alliance Capital Management Officer, Alliance and various
Corporation positions with Alliance
1345 Avenue of the Americas affiliated companies; Director,
New York, NY 10105 EQ.
</TABLE>
C-11
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
OFFICERS AND DIRECTORS
*James M. Benson Director, President and Chief Operating See Column 2; prior thereto,
Officer Senior Executive Vice President
(April 1993 to February 1994); Director
and Senior Executive Vice President, EQ
(February 1994 to present); President
and Chief Operating Officer, EVLICO
(December 1993 to present), Director
(July 1993 to present), and Vice
Chairman (July 1993 to December 1993);
Director, Alliance (October 1993 to
present); (Director, Health Plans,
Inc.).
*Richard H. Jenrette Chairman of the Executive
Committee and Director See Column 2; prior thereto,
Chairman of the Board (July 1987 to
February 1994); Chief Executive Officer
(May 1990 to September 1992); Chairman
and Director and Chief Executive
Officer, EQ; Chairman of the Board, DLJ;
Director and Senior Investment Officer,
EVLICO (both until January 1995);
Director, Equitable Capital Management
Corporation ("ECMC"), ACMC, Inc., AXA,
Equitable Real Estate, and Alliance
(Director, The McGraw-Hill Companies).
</TABLE>
C-12
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
*Joseph J. Melone Director, Chairman of the Board and See Column 2; prior thereto,
Chief Executive Officer President (until February 1994);
Director, President, and Chief Operating
Officer, EQ; Chairman, President, and
Chief Executive Officer, EIC (September
1994 to present); Chairman and Chief
Executive Officer and Director, EVLICO;
Director, ACMC, Inc. and President
(until October 1993); Director, ECMC,
DLJ, Alliance, and AXA Equity & Law
(Director, Foster-Wheeler Corporation
and AT&T Capital Corporation (April 1993
to present)).
OTHER OFFICERS
*Harvey Blitz Senior Vice President and Deputy Chief See Column 2; Senior Vice
Financial Officer President, EQ; Director, The Equitable
of Colorado, Inc. ("Colorado"), Frontier
Trust Company ("Frontier"), Equitable
Distributors, Inc. ("EDI") (February
1995 to present), and Equico Securities,
Inc. ("Equico"); Director and Senior
Vice President, EquiSource, Inc. and its
subsidiaries ("EquiSource"); Director,
EVLICO, and Vice President (April 1995
to present).
</TABLE>
C-13
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
*Kevin R. Byrne Vice President and Treasurer See Column 2; prior thereto, Vice
President (from February 1989) and
Deputy Treasurer (November 1992 to
September 1993); Vice President (May
1992 to present) and Treasurer
(September 1993 to present), EQ; also
Assistant Treasurer (May 1992 to
September 1993); Treasurer, EVLICO and
Frontier; Director, Equitable Reality
Assets Corporation ("ERAC"); Vice
President and Treasurer, Equitable
Casualty Insurance Company and
EquiSource.
</TABLE>
C-14
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
*Jerry M. de St. Paer Executive Vice President and Chief See Column 2; also Treasurer
Financial Officer (February 1993 to September 1993);
Executive Vice President and Chief
Financial Officer, EQ, and Treasurer
(February 1993 to September 1993);
Director, EVLICO, DLJ (July 1993 to
present), and Equitable Real Estate
(July 1993 to present); Director (August
1993 to present) and Chairman,
President, and Chief Executive Officer
(October 1993 to present), ECMC;
Director (September 1993 to present),
and Chairman, President, and Chief
Executive Officer (October 1993 to
present), ACMC, Inc.; Director, and
Executive Vice President, Chief
Financial Officer, and Treasurer
(September 1993 to present), EIC; Vice
President, Equitable JV Holding Corp.;
Senior Investment Officer, EVLICO (April
1995 to present); Member, Advisory
Board, Peter Wodtke (U.K.) and Peter
Wodtke (U.S.) (Director, Economic
Services Corporation and Nicos Seimei
Hoken (formerly Equitable Seimei
Hoken)).
</TABLE>
C-15
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
*Gordon G. Dinsmore Senior Vice President See Column 2; Executive Vice President,
Equico (April 1994 to present); Director
and Senior Vice President, EVLICO and
Colorado; Director, FHJV Holdings, Inc.
("FHJV"), EDI (formerly Equitable
Capital Securities Corporation ("ECSC"))
(August 1993 to February 1995), and The
Equitable Foundation.
*Alvin H. Fenichel Senior Vice President and Controller See Column 2; Senior Vice President and
Controller, EQ; Treasurer, ACMC, Inc.
(December 1991 to October 1993); Vice
President, EVLICO, and Controller (June
1993 to March 1994); Vice President,
Colorado, and Controller (June 1993 to
March 1994).
*Michael E. Fisher Senior Vice President and Chief See Column 2; prior thereto,
Marketing Officer Managing Director, Bankers Trust Company
(until 1994); Director, Equico (January
1994 to present) and EDI (formerly ECSC)
(January 1994 to present); Chairman and
Chief Executive Officer, Frontier
(October 1994 to present); (Director,
Health Plans Inc.).
*Paul J. Flora Vice President and Auditor Prior thereto, Vice President and Deputy
Auditor (February 1994 to September
1994); Vice President and Auditor, EQ
(September 1994 to present); Vice
President/Auditor, National Westminster
Bank (November 1984 to June 1994).
</TABLE>
C-16
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
*Robert E. Garber Executive Vice President and
General Counsel See Column 2; prior thereto,
Senior Vice President and General
Counsel (September 1993 to September
1994), Senior Vice President and Deputy
General Counsel (until September 1993);
Executive Vice President and General
Counsel, EQ (September 1994 to present),
Senior Vice President and General
Counsel (September 1993 to September
1994); Director, Equico (March 1992 to
February 1994).
*Molly K. Heines Vice President and Secretary See Column 2; Vice President and
Secretary, EQ; Secretary, EVLICO.
*J. Thomas Liddle, Jr. Senior Vice President and Chief See Column 2; Senior Vice
Valuation Actuary President and Chief Financial Officer,
EVLICO; Director, Vice President and
Chief Financial Officer, Colorado; Vice
President and Controller, Frontier.
</TABLE>
C-17
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
*Michael S. Martin Senior Vice President See Column 2; Director, and Chairman ,
Equico; Chairman and Chief Executive
Officer, EquiSource (January 1992 to
October 1994) and Frontier (April 1992
to October 1994); Vice President, Hudson
River Trust ("HRT") (February 1993 to
February 1995); Director, Vice President
and Treasurer, EDI (formerly ECSC)
(August 1993 to February 1995), also
Chairman, President, and Chief Executive
Officer (December 1993 to February
1995); Director, Colorado (January 1995
to present).
*William T. McCaffrey Executive Vice President and Chief See Column 2; Executive Vice
Administrative Officer President and Chief Administrative
Officer, EQ (February 1994 to present);
Director, EVLICO and The Equitable
Foundation (Director, Lutheran Cemetery
and Innovir Laboratories (1994 to
present).
*Peter D. Noris Executive Vice President (and Chief See Column 2; prior thereto, Vice
Investment Officer effective 7/1/95) President/Manager, Insurance Company
Investment Strategies Group, Salomon
Brothers, Inc. (until May 1995);
Executive Vice President (May 1995 to
present) and Chief Investment Officer
(eefective 7/1/95), EQ; Director and
Senior Vice President and Chief
Investment Officer, EVLICO (June 19,
1995 to present).
</TABLE>
C-18
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINICPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
------------------ --------------------- ----------------------------
<S> <C> <C>
*Brian S. O'Neil Executive Vice President and Chief See Column 2; Executive Vice
Investment Officer (until 7/1/95) President and Chief Investment Officer,
EQ (November 1993 to present); Chairman
and President, ERAC (until May 1995);
Director and Senior Vice President and
Chief Investment Officer, EVLICO;
Director and President, FHJV (until May
1995); Director, Equitable Real Estate,
ECMC (June 1992 to August 1993),
Alliance (October 1993 to present), and
The Equitable Foundation.
*Anthony C. Pasquale Senior Vice President See Column 2; Director, ERAC, FHJV (May
1995 to present), and Equitable Agri-
Business, Inc. (August 1993 to present).
Richard V. Silver Senior Vice President and Chief Vice President and Chief
1755 Broadway, 2nd floor Compliance Officer Compliance Officer (January 1995
New York, NY 10019 to February 1995); prior thereto, Vice
President; Director, Equico, and
President and Chief Operating Officer
(until January 1995).
*Jose Suquet Executive Vice President and Chief Prior thereto, Agency/Sales
Agency Officer Manager (until August 1994); Director,
EVLICO (January 1995 to present).
</TABLE>
C-19
Item 30. Persons Controlled by or Under Common Control
with the Insurance Company or Registrant
Separate Account Nos. 3, 4, 10 and 51, of The Equitable Life
Assurance Society of the United States (the "Separate Accounts") are separate
accounts of Equitable. On July 22, 1992, Equitable converted from a New York
mutual life insurance company to a New York stock life insurance company (the
"demutualization"). At that time we became a wholly owned subsidiary of The
Equitable Companies Incorporated (the "Holding Company"), a publicly traded
Company.
The largest stockholder of the Holding Company is AXA, a French
insurance holding company. AXA beneficially owns 60.5% of the Holding
Company's outstanding common stock plus convertible preferred stock. Under
its investment arrangements with Equitable and the Holding Company, AXA is
able to exercise significant influence over the operations and capital
structure of the Holding Company and its subsidiaries, including Equitable.
AXA is the principal holding company for most of the companies in one of the
largest insurance groups in Europe. The majority of AXA's stock is controlled
by a group of five French mutual insurance companies.
C-20
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (1991) (Delaware)
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (61%) (See Addendum
for subsidiaries)
The Equitable Life Assurance Society of the United States (l859)
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
Equitable Variable Life Insurance Company (l972) (New York) (a)
FHJV Holdings, Inc. (1990) (Delaware)
Frontier Trust Company (1987) (North Dakota)
Gateway Center Buildings, Garage and Apartment Hotel, Inc.
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
Equitable Managed Assets (Delaware)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
ACMC, Inc. (1991) (Delaware) (limited partnership interests)
Alliance Capital Management L.P. (1988) (Delaware)
EVCO, Inc. (1991) (New Jersey)
Concourse, Inc. (1992) (Virginia)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
[FN]
- -----------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-21
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Fox Run, Inc. (1994)(Massachusetts)
Equitable Underwriting and Sales Agency (Bahamas) Limited (1993)
(Bahamas)
CCMI Corporation (1994) (Maryland)
FTM Corporation (1994) (Maryland)
HVM Corporation (1994) (Maryland)
STCS, Inc. (1992) (Delaware)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
Equitable Holding Corporation (1985) (Delaware)
Equico Securities, Inc. (l97l) (Delaware) (a) (b)
ELAS Securities Acquisition Corp. (l980) (Delaware)
Equitable Realty Assets Corporation (l983) (Delaware)
100 Federal Street Funding Corporation (Massachusetts)
100 Federal Street Realty Corporation (Massachusetts)
EquiSource, of New York Inc. (formerly Traditional
Equinet Business Corporation of New York) (1986) (New
York) (See Addendum for subsidiaries.)
Equitable Casualty Insurance Company (l986) (Vermont)
EREIM LP Corp. (1986) (Delaware)
EREIM LP Associates (1%)
EML Associates (.02%)
Six-Pac G.P., Inc. (1990) (Georgia)
Equitable Distributors, Inc. (1988) (Delaware) (a)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
[FN]
- -----------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-22
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Equitable JVS, Inc. (cont.)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EHC)
(Delaware) (39%) (See Addendum for subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
Equitable Investment Corporation (l97l) (New York)
Stelas North Carolina Limited Partnership
(50% limited partnership interest) (l984)
EQ Services, Inc. (1992) (Delaware)
Equitable Agri-Business, Inc. (1984) (Delaware)
Alliance Capital Management Corporation (l991)
(Delaware) (b) (See Addendum for subsidiaries)
Equitable Capital Management Corporation (l985)
(Delaware) (limited partnership interests) (b)
Alliance Capital Management L.P. (1988)
(Delaware)
Equitable JV Holding Corporation (1989)
(Delaware)
Equitable Real Estate Investment Management,
Inc. (l984) (Delaware) (b)
Equitable Realty Portfolio Management,
Inc. (1984) (Delaware)
EQK Partners (100% general
partnership interest)
EREIM, Inc. (l984) (Colorado)
Equitable Real Estate Capital Markets,
Inc. (1987) (Delaware) (a)
EQ Realty Associates-V, Inc. (1987)
(Delaware)
[FN]
- -----------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-23
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Equitable Investment Corporation (cont.)
Equitable Real Estate Investment Management, Inc. (cont.)
EPPNLP Corp. (1987) (Delaware)
Equitable Pacific Partners Corp. (1987)
(Delaware)
Equitable Pacific Partners
Limited Partnership
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P.
EML Associates, L.P. (80%)
Compass Retail, Inc. (1990) (Delaware)
Compass Management and Leasing, Inc.
(1991) (Delaware)
Column Security Associates, Inc. (1993)
(Delaware)
Column Financial, Inc. (1993)
(Delaware) (50%)
Buckhead Strategic Corp. (1994)
(Delaware)
Buckhead Strategic Fund, L.P.
BH Strategic Co. I, L.P.
CJVS, Inc. (1994) (California)
ERE European Corp. I, L.P. (1994)
(Delaware)
A/E European Associates I
Limited Partnership
C-24
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM - NON-REAL ESTATE SUBSIDIARY
OF EQUITABLE HOLDING CORPORATION
HAVING MORE THAN FIVE SUBSIDIARIES
- -------------------------------------------------------------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet Business
Corporation of New York) has the following subsidiaries that are brokerage
companies to make available to Equitable Agents within each state traditional
(non-equity) products and services not produced by Equitable:
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988)
(Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-25
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM - OTHER N0N-REAL ESTATE SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
- -------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
approximately 60 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Inc. (1985) (Delaware)
Donaldson, Lufkin & Jenrette Securities Corporation (1985)
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corporation (1985)
(Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
DLJ Real Estate, Inc.
DLJ Capital Corporation (b)
DLJ Mortgage Capital, Inc. (1988) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Alliance Capital Management Corporation has the following subsidiaries:
Alliance Capital Management Corporation (1991) (Delaware) (b)
Alliance Capital Management L.P. (1988) (Delaware) (b)
Alliance Capital Management Corporation of Delaware, Inc.
(Delaware)
Alliance Fund Services, Inc. (Delaware)
Alliance Capital Management (Japan), Inc. (formerly
Alliance Capital Mgmt. Intl.)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Oceanic Corp. (Delaware) (formerly Alliance
Capital, Ltd.)
Alliance Capital Management Australia Pty. Ltd.
(Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (99.98%)
Alliance Southern Europe Corp. (Delaware) (inactive)
Alliance Barra Research Institute, Inc. (Delaware) (50%)
Alliance Capital Management Canada, Inc. (Canada) (99.99%)
Alliance Capital Management Limited (United Kingdom)
Pastor Alliance Gestora de Fondas de Pensiones, S.A.
(Spain) (50%)
Dementional Asset Management, Ltd. (U.K.)
Dementional Trust Management, Ltd. (U.K.)
Alliance Capital Global Derivatives Corp. (Delaware)
Alliance Corporate Finance Group, Inc. (Delaware)
[FN]
- ----------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-26
January 1, 1995
AXA GROUP SIMPLIFIED CHART
AXA "societes mutuelles"* = 62.1% (75.7%)
of Finaxa and 4.6% (5.5%) of AXA
FINAXA = 60% of MIDI PATRICIPATIONS,
26.5% (16.6%) of PARIBAS and 4.4%(**)
(5.6%(**)) of AXA
MIDI PATRICIPATIONS = 42.3% (54.7%) of
AXA and 40% of GENERALI
AXA = 0.4% of Autocontrole
0 Voting power
* AXA ASSURANCES IARD MUTUELLE
AXA ASSURANCES VIE MUTUELLE
UNI EUROPE ASSURANCES MUTUELLE
ALPHA ASSURANCES IARD MUTUELLE
ALPHA ASSURANCES VIE MUTUELLE
** Including A.N.F.
C-27
<PAGE>
AXA GROUP CHART
The information listed below is dated as of January 1, 1995; percentages shown
represent voting power.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
Axa Assurances Iard France 99%
Axa Assurances Vie France 100%
Uni Europe Assurance France 100%
Uni Europe Vie France 99.15%
Alpha Assurances Vie France 100%
Direct Assurances Iard France 100%
Direct Assurance Vie France 100%
Axiva France 100%
Defense Civile France 95.04%
Societe Francaise d'Assistance France 51.23%
Monvoisin Assurances France 70.90% (99.92% including Axa mutuals)
Adis France 100% including Axa mutuals
Societe Beaujon France 100%
Lor Finance France 99.60%
Jour Finance France 100%
Axa Direct France 100%
AXA U.K. U.K. 100%
Compagnie Auxiliaire pour le Commerce et
l'Industrie France 100%
C.F.G.A. France 100% including Axa mutuals and Finaxa
Saint Bernard Diffusion France 95%
Sogarep France 95%, (100% including Axa mutuals)
Argos France N.S.
Finaxa Belgium Belgium 100%
Axa Belgium Belgium 23.28% held by Axa (SA) and 65.2% held by
Finaxa Belgium
De Kortrijske Verzekering Belgium 99.8%
</TABLE>
C-28
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
Victoire Belgium Belgium 100% held by Axa Belgium
Juris Belgium 100%
Finaxa Luxembourg Luxembourg 100%
Axa Assurance Luxembourg Luxembourg 99.4%
Axa Direkt Versicherung A.G. (ex Amnisia) Germany 100% held by Axa Direct
Axa Equity & Law Lebensversicherung Germany 99.8%
Axa Aurora Spain 50% held by Axa
Aurora Polar Spain 99.2% held by Axa Aurora
Axa Seguros Spain 99.1% held by Axa Aurora
Axa Assicurazioni Italy 100%
Eurovita Italy 30% held by Axa Assicurazioni
Axa Equity & Law UK U.K. 99.8%
U.K.
Axa Equity & Law International (Isle of Man) 100% held by Axa Equity & Law
Axa Insurance U.K. 100%
Axa Marine & Aviation U.K. 100%
Axa Equity & Law Levensverzekeringen Netherlands 99.8%
Axa Canada Canada 100%
Boreal Canada 100% held by AXA Canada
Axa Assurances Inc Canada 100% held by Axa Canada
Axa Insurance Inc Canada 100% held by Axa Canada
Anglo Canada General Insurance Cy Canada 100% held by Axa Canada
Axa Sime Axa Berhad Malaisya 27.78% held by Axa
Axa Sime Investment Holdings Pte Ltd Singapore 50%
Axa Sime Assurance Hong Kong Hong Kong 100% held by Axa Sime Invt. Holdings Pte Ltd
Axa Sime Assurance Singapour Singapore 100% held by Axa Sime Invt Holdings Pte Ltd
</TABLE>
C-29
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
Equitable Cies Incorp. U.S.A. 60% held by Axa, 44.17% Financiere 45,
8.75% and Lorfinance 7.62%
Equitable Life Assurance of the USA U.S.A. 100% held by Equitable Cies Inc
N.S.M. Vie France 40.1%
H.C.S. (holding de controle de SCOR) France 20%
Touring Assurance Courtage France 49%
Axa Re Mexico Mexico 100% held by Axa Reassurance
Axa Reassurance France 100%
Axa Re Asia Singapore 100% held by Axa Reassurance
Axa Re U.K. Plc U.K. 100% held by Axa Re U.K. Holding
Axa Re U.K. Holding U.K 100% held by Axa Reassurance
Axa Re U.S.A. U.S.A (Delaware) 100% held by Axa America
Axa America U.S.A. (Illinois) 100% held by Axa Reassurance
C.G.R.M. Monaco 100%
Paternelle Monegasque Monaco 99.7%
International Technology Underwriters Inc U.S.A.
(INTEC) (Maryland) 80% held by Axa America
Societe Technique d'Acceptation en
reassurance (STAR) France 100%
Oyak Sigorta Turquie 11% held by Axa
Axa Japan Japan 100% held by Axa
</TABLE>
C-30
<PAGE>
AXA FINANCIAL BUSINESS
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
Compagnie Financiere de Paris (C.F.P.) France 97.1%, (100% including Axa mutuals)
Axa Banque France 98.7% held by C.F.P.
Financiere 78 France 100% held by C.F.P.
Axa Credit France 65% held by C.F.P.
Axa Gestion Interessement France 100% held by C.F.P.
Compagnie Europeenne de Credit (C.E.C.) France 100% held by C.F.P.
Gecofrance France 100% held by C.E.C.
Fidei France 20.67% held by C.F.P. and 10.79% by Axamur
Fidei Banque France 100% held by Fidei
Fideicomi France 100% held by Fidei
Fideimur France 100% held by Fidei
Fide Bail France 100% held by Fidei
Colisee Murs France 100% held by Fidei
Meeschaert Rousselle France 100% held by Financiere 78
Meeschaert Rousselle Future France 100% held by Meeschaert Rousselle and M.R.
Participations
Meeschaert Rousselle Participations France 100% held by Meeschaert Rousselle
Opale Derivee Bourse France 89.4% held by M.R. Futures and Meeschaert
Rousselle
Anjou Courtage France 95% held by Meeschaert Rousselle
Axiva Gestion France 98.8% held by Axiva
Juri Creances France 99.93% held by Sefiga and 0.07% by Axa
Assurances Iard
S.P.S. France 60.15% (99.24% including Axa mutuals)
I.F.D. France 59.97% (86.30% including Axa mutuals)
Presence et Initiative France 63.7% (100% including Axa mutuals and
I.F.D.)
Vamopar France 99.80% held by Societe Beaujon
</TABLE>
C-31
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
Axa Asset Management Conseils France 100% held by Axa Asset Management Europe
Axa Asset Management Europe France 100%
Axa Asset Management Distribution France 100% held by Axa Asset Management Europe
Colisee Developpement France 100% held by Axa Asset Management Europe
Equity & Law Home Loans U.K. 100%
Equity & Law Commercial Loans U.K. 100%
Alliance Capital Management U.S.A. 63% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 60% held by ELAS
Cogefin Luxembourg 100% held by Victoire Belgium
Sotlinter Belgium 100% held by Victoire Belgium
Argovie France 65.88% held by Axiva and 33.92% by Argos SCA
Financiere 45 France 100% held by Axa
Axa Re Vie France 100% held by Axa Reassurance
Mofipar France 99.76% held by Societe Beaujon
Promothee Finance France 99.76% held by Societe Beaujon
Oria France 53.8% held by Axa Millesimes
Axa Oeuvres d'Art France 100% including Axa Mutuals
Axa Cantenac Brown France 100%
Colisee Acti Finance 1 France 100% held by Societe Beaujon
Colisee Acti Finance 2 France 100% held by Societe Beaujon
Colisee Acti Finance 3 France 100% held by Societe Beaujon
Participations 2001 France 100% held by Societe Beaujon
Finalor France 100% held by Societe Beaujon
</TABLE>
C-32
<PAGE>
AXA REAL ESTATE BUSINESS
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
C.I.P.M. France 96.83%
Fincosa France 99.69% held by C.I.P.M.
Prebail France 100% held by Societe Beaujon and C.P.P.
Axamur France 96.33% (100% including Axa mutuals)
Garantie et Patrimoine France 98% (98.09% including Axa mutuals and
S.P.S.)
Parigest France 100% including Axa mutuals and C.I.P.M.
Parimmo France 100% including Axa mutuals
S.G.C.I. France 99.97% including Axa mutuals
Transaxim France 99.4% held by S.G.C.I.
Compagnie Parisienne de Participations France 100% held by S.G.C.I.
Monte Scopeto France 100% held by C.P.P.
Matipierre France 100% held by Axa Ass. Iard and Axa Ass. Vie
Securimmo France 87.13% held by different companies and
mutuals
Delta Point du Jour France 100% held by Matipierre
Paroi Nord de l'Arche France 100% held by Matipierre
Falival France 100% held by Axa Reassurance
Immobiliere Jeanne France 99.40% held by Axa Ass Iard
Compagnie du Gaz d'Avignon France 99% held by Axa Ass Iard
Ahorro Familiar France 40.1% held by Axa Assurances Iard and
32.67% held by 3 S.C.I., = 72.8%
Shaf Hotel Guanahani France 52.36% held by different companies and
mutuals
Passy et Cie S.N.C. France 100% held by Alpha Ass. Vie and Axa Ass.
Iard
Fonciere du Val d'Oise France 99.72% held by C.P.P.
S.N.C. Saint Barth France 58.82% held by Axa Ass. Iard
Centrexpo France 87.96% held by C.P.P.
Drouot Rodin France 99.97% held by C.P.P.
Sodarec France 99.95% held by C.P.P.
</TABLE>
C-33
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
Immobiliere du Sud France 99.9% held by Axa
S.N.C. Dumont d'Urville France 50% held by Axa Ass. Iard and 50% held by
S.G.C.I.
Colisee S.C.P.I. Gestion France 99% held by Immobiliere Jeanne
Colisee Point du Jour France 100% held by different insurance companies
Axa Pierre S.C.I. France 97.92% held by different companies and
mutuals
Capimmo France 100% held by insurance companies
Drouot Pierre France 47.22% held by insurance companies 52.79%
held by Axa Pierre
Pierre Croissance France 100% held by some insurance companies,
mutuals and Axa Pierre
Plagam France 100% held by Alpha Assurance Vie Mutuelle,
Axa Assurances Vie and Pierre Croissance
Bugam France 43.91% held by Alpha Assurance Vie Mutuelle
and 56.09% by Pierre Croissance
Axa Millesimes France 50.98% (74.60% including Axa mutuals)
Chateau Suduirault France 100% held by Axa Millesimes
Diznoko Hongrie 90% held by Axa Millesimes
Finapel France 99.9% held by Axa Assurances Iard Mut et
Uni Europe Ass. Mutuelle
Compagnie Financiere Matignon France 83.5% held by different companies and
mutuals
Fonciere Wagram France 99.95% held by Finapel
Equitable Real Estate Investment U.S.A. 100% held by ELAS
Quinta do Noval Vinhos S.A. Portugal 99.9% held by Axa Millesimes
Groupement Foncier Francais France 10.08%
</TABLE>
C-34
<PAGE>
OTHER AXA BUSINESS
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------
<S> <C> <C>
A.N.F. France 95.51% held by Finaxa
Compagnie du Cambodge France 32.1% held by A.N.F.
SCAC Delmas Vieljeux France 18.68%
Societe Financiere Domaine Divonne France 14%
Galeries Lafayette France 10.50%
Rubis et Cie France 12.11%
Eurofin France 23.4% held by C.F.P.
Sogefic Belgique 50% held by Victoire Belgique
Lucia France 27.75%
Cogedim France 11.21%
</TABLE>
C-35
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
1. The year of formation or acquisition and state or country of
incorporation of each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real
estate subsidiaries, partnerships, and joint ventures formed to
operate or develop a single real estate property or a group of related
properties, and certain inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock ownership
except for (a) as noted for certain partnership interests, (b) ACMC,
Inc.'s and Equitable Capital's limited partnership interests in
Alliance Capital Management L.P., (c) as noted for certain
subsidiaries of Alliance Capital Management Corp. of Delaware, Inc.,
(d) Treasurer Robert L. Bennett's 20% interest in EREIM, Inc., (e) as
noted for certain subsidiaries of AXA, (f) The Equitable Companies
Incorporated's 61% interest in DLJ and Equitable Holding Corp's 39%
interest in same, and (g) DLJ Mortgage Capital, Inc.'s and Equitable
Real Estate Investment Management, Inc.'s ownership (50% each) in
Column Financial, Inc.
4. The operational status of the entities shown as having been formed or
authorized but "not yet fully operational" should be checked with the
appropriate operating areas, especially for those that are start-up
situations.
5. The following entities are not included in this chart because, while
they have an affiliation with The Equitable, their relationship is not
the ongoing equity-based form of control and ownership that is
characteristic of the affiliations on the chart, and, in the case of
the first two entities, they are under the direction of at least a
majority of "outside" trustees:
The Equitable Funds
The Hudson River Trust
Separate Accounts
6. This chart was last revised on June 15, 1995.
C-36
<PAGE>
Item 31. Number of Contractowners
As of May 31, 1995 the number of participants in the Association
Members Program offered by the Registrant was 7,210.
Item 32. Indemnification of Directors and Officers
To the extent permitted by the laws of the State of New York and
subject to all applicable requirements thereof, Equico Securities, Inc.
("Equico") undertook by resolution to indemnify each Director and Officer of
Equitable who is made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he or she,
is or was a director or Officer of Equico.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Directors and Officers pursuant to
the undertaking described above, or otherwise, Equitable has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in that Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Equitable of expenses incurred or paid
by a Director or Officer in the successful defense of any action, suit or
proceeding) is asserted by such Director or Officer in connection with the
interests, Equitable will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
Item 33. Business and Other Connections of Investment Adviser
The Equitable Life Assurance Society of the United States
("Equitable Life") acts as the investment manager for Separate Account Nos. 3,
4, 10, 190 and 191. With respect to Separate Account No. 191, Equitable acts as
investment manager within guidelines established by the Trustees of the American
Dental Association Members Retirement Trusts. Alliance Capital Management
L.P. ("Alliance"), a publicly-traded limited partnership, that is indirectly
majority-owned by Equitable, provides personnel and facilities for portfolio
selection and transaction services. Alliance recommends the securities
investments to be purchased and sold for Separate Account Nos. 3, 4, 10 and 190
and the portion of Separate Account No. 191 which is invested in its Separate
Account No. 2A, and arranges for the execution of portfolio transactions.
Alliance coordinates related accounting and bookkeeping functions with Equitable
Life. Both Equitable Life and Alliance are registered investment advisers under
the Investment Advisers Act of 1940.
Information regarding the directors and principal officers of
Equitable is provided in Item 29 of this Part C and is incorporated herein by
reference.
C-37
Set forth below is certain information regarding the directors and
principal officers of Alliance Capital Management Corporation ("ACMC"). The
business address of the Alliance persons whose names are preceded by an
asterisk is 1345 Avenue of the Americas, New York, New York 10105.
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH ACMC, PRINCIPAL OCCUPATION
NAME AND PRINCIPAL GENERAL PARTNER OF (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ------------------ ------------------ ----------------------
<S> <C> <C>
DIRECTORS
*Dave H. Willams Director, Chairman of the Board and See Column 2. Director - The
Chief Executive Officer Equitable Life Assurance Society of
the United States and The Equitable
Companies Incorporated.
Luis Javier Bastida Director Chief Financial Officer and a
Banco Bilbao Vizcaya member of the Executive Committee of
Gran Via 1 Banco Bilbao Vizcaya.
Planta 16 48001 Director-Finanzia and
Bilbao, Spain Privanza.
James M. Benson Director President, Chief Operating Officer
The Equitable Life and Director, The Equitable
Assurance Society Life Assurance Society
of the U.S. of the U.S.; prior thereto, Senior
787 Seventh Avenue Executive Vice President
New York, NY 10019 (April 1993-February
1994); President, The
Equitable Companies Incorporated
(February 1994 to present);
President and Chief Operating
Officer, Equitable Variable Life
Insurance Company (December 1993 to
present), Director, (July 1993 to
present) Vice Chairman (July 1993
to December 1993).
*Bruce W. Calvert Director, Vice Chairman, and Chief
Investment Officer See Column 2.
*John D. Carifa Director, President and Chief See Column 2. Chief Financial
Operating Officer Officer until December, 1994.
</TABLE>
C-38
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH ACMC, PRINCIPAL OCCUPATION
NAME AND PRINCIPAL GENERAL PARTNER OF (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ------------------ ------------------ ----------------------
<S> <C> <C>
Henri de Castries Director Executive Vice President
AXA - Financial Services
23, Avenue Matignon and Life Insurance Activities, AXA
75008, Paris, France (1993 to present) and various positions
with AXA affiliated companies; Director,
The Equitable Companies Incorporated (May 1994
to present), Director, Equitable Real Estate
Investment Management, Inc. (June
1993 to present), Donaldson, Lufkin
& Jenrette (July 1993 to present);
and The Equitable Life Assurance
Society of the U.S. (October 1993
to present); Director, France Telecom.
Kevin C. Dolan Director Senior Vice President -
AXA AXA
23, Avenue Matignon
75008, Paris, France
Alfred Harrison Director, Vice Chairman See Column 2.
Alliance Capital
Management L.P.
3600 Piper Jaffray Tower
Minneapolis, MN 55402
Jean-Pierre Hellebuyck Director Chief Investment Officer - AXA;
AXA - Gestion des Actifs Director - AXA Reassurance France,
40, rue de Colisee AXA Reinsurance UK Plc, AXA
Paris, France 75008 Reinsurance Company, Equity & Law
Plc, Equity & Law Investment
Managers Ltd., Equity & Law
Fondsmanagement GmbH, Europhenix
Management Company and
Societe Des Bourses Francaises.
</TABLE>
C-39
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH ACMC, PRINCIPAL OCCUPATION
NAME AND PRINCIPAL GENERAL PARTNER OF (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ------------------ ------------------ ----------------------
<S> <C> <C>
Benjamin D. Holloway Director Consultant to Tishman/Speyer,
Continental Companies Edward Debartolo and The
3250 Mary Street Continental Companies. Director -
Miami, Florida 33133 Rockefeller Center Properties,
Inc.; Chairman - Duke University
Management Corporation.
Henri Hottinguer Director Partner Hottinguer & Company.
Banque Hottinguer President/General
38 Rue de Provence Director - Banque Hottinguer (French bank);
Paris, France 75008 Director - Helvetia Fund, Inc. and
Donaldson, Lufkin & Jenrette, Inc.
Richard H. Jenrette Director Chairman of the
The Equitable Life Executive Committee
Assurance Society and Director - The
of the U.S. Equitable Life
787 Seventh Avenue Assurance Society
New York, NY 10019 of the United States;
prior thereto, Chairman
of the Board (July
1987 to February
1994), Chief Executive
Officer (May 1990
to September 1992);
Chairman and Director
(July 1991 to present)
and Chief Executive
Officer (May 1992
to present) EQ; Chairman
of the Board, DLJ; Director
(until January 1995)
and Senior Investment
Officer, EVLICO; Director,
Equitable Capital Management
Corporation ("ECMC"), AXA,
Equitable Real Estate, (Director,
McGraw-Hill, Inc., (January 1993 to
present)).
</TABLE>
C-40
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH ACMC, PRINCIPAL OCCUPATION
NAME AND PRINCIPAL GENERAL PARTNER OF (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ------------------ ------------------ ----------------------
<S> <C> <C>
Christophe Dupont-Madinier Director Manager, International Division -
AXA AXA; Director - Equitable Real
23, Avenue Matignon Estate Investment Management, Inc.
Paris, France 75008 and Donaldson, Lufkin & Jenrette,
Inc., Anglo Canada General
Insurance Company, AXA Insurance
Canada, AXA Assurances Canada, AXA
Insurance UK, AXA Equity & Law UK.
Joseph J. Melone Director Director, Chairman,
The Equitable Life and Chief Executive
Assurance Society Officer, The Equitable
of the U.S. Companies Incorporated
787 Seventh Avenue (September 1994 to
New York, NY 10019 present); prior thereto
President; Director,
Chairman of the Board and
Chief Executive Officer
- The Equitable Life Assurance
Society of the United States
prior thereto, President
(until February 1994);
Chairman and Chief
Executive Officer and Director, EVLICO;
Director, ECMC, DLJ, and AXA Equity
& Law (Director, Foster-Wheeler
Corporation and AT&T Capital
Corporation (April 1993 to
present)).
Brian S. O'Neil Director Executive Vice President and Chief
The Equitable Life Investment Officer, The Equitable
Assurance Society Life Assurance Society of the U.S.,
of the U.S. Executive Vice President and Chief
787 Seventh Avenue Financial Officer, EQ, (November
New York, N.Y. 10019 1993 to present); Chairman and
President and Director, ERAC;
director, and Senior Vice President
and Chief Investment Officer,
</TABLE>
C-41
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH ACMC, PRINCIPAL OCCUPATION
NAME AND PRINCIPAL GENERAL PARTNER OF (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ------------------ ------------------ ----------------------
<S> <C> <C>
EVLICO; prior thereto,
Vice President; Director
and President, FHJV;
Director, Equitable
Real Estate, ECMC
(June 1992 to August
1993), and The Equitable Foundation.
</TABLE>
C-42
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH ACMC, PRINCIPAL OCCUPATION
NAME AND PRINCIPAL GENERAL PARTNER OF (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ------------------ ------------------ ----------------------
<S> <C> <C>
Jerry M. de St. Paer Director Executive Vice President and
The Equitable Life Chief Financial Officer, The
Assurance Society Equitable Life Assurance Society
of the U.S. of the U.S.; also Treasurer
787 Seventh Avenue (February 1993 to September
New York, N.Y. 10019 1993); Executive Vice President
and Chief Financial
Officer, EQ, and Treasurer
(February 1993 to September
1993); Director, EVLICO,
DLJ (July 1993 to present),
and Equitable Real Estate
(July 1993 to present);
Director (August 1993
to present) and Chairman,
President, and Chief
Executive Officer (October 1993 to
present), ECMC; Director (September
1993 to present), and Chairman,
President, and Chief Executive
Officer (October 1993 to present),
and Executive Vice President,
Chief Financial Officer, and
Treasurer (September 1993 to
present), EIC; Vice President,
Equitable JV Holding Corp.; Senior
Investment Officer, EVLICO (April
1995 to present); Member, Advisory
Board, Peter Wodtke (U.K.) and
Peter Wodtke (U.S.) (Director,
Economic Services Corporation and
Nicos Seimei Hoken (formerly
Equitable Seimei Hoken)).
*Frank Savage Director Chairman of ACFG; Chairman of ECMC
(April 1992 to July 1993); Director
- Lockheed Corporation, and ARCO
Chemical Corporation.
</TABLE>
C-43
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES WITH ACMC, PRINCIPAL OCCUPATION
NAME AND PRINCIPAL GENERAL PARTNER OF (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ------------------ ------------------ ----------------------
<S> <C> <C>
Madelon DeVoe Talley Director Investment Consultant, Governor,
876 Park Avenue National Association of Securities
New York, NY 10021 Dealers; Vice Chairman, W.P. Carey
& Co.; Director, Corporate Property
Associates.
*Reba White Williams Director Director of Special Projects for
ACMC.
OFFICERS
*David R. Brewer Senior Vice President and General See Column 2.
Counsel
*Robert H. Joseph, Jr. Senior Vice President & Chief See Column 2. prior thereto;
Financial Officer Senior Vice President - Finance
(January 1994 to December 1994);
Senior Vice President and
Controller (until January 1994).
</TABLE>
Item 34. Principal Underwriters
(a) Equico, a wholly-owned subsidiary of Equitable, is the
principal underwriter for Equitable's Separate Account No. 301 and Separate
Account A, and for Separate Account I and Separate Account FP of Equitable
Variable Life Insurance Company. Equico's principal business
address is 1755 Broadway, New York, NY 10019.
(b) See Item 29 and 11(e).
Item 35. Location of Accounts and Records
The Equitable Life Assurance Society of the United States
135 West 50th Street
New York, New York 10020
Item 36. Management Services
Not applicable.
C-44
Item 37. Undertakings
The Registrant hereby undertakes the following:
(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that
the audited financial statements in the registration
statement are never more than sixteen months old for so
long as payments under the variable annuity contracts may
be accepted;
(b) to include (1) as part of its applications to purchase
any contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional
Information, or (2) a postcard or similar written
communication affixed to or included in the prospectus
that the applicant can remove to send for a Statement of
Additional Information; and
(c) to deliver any Statement of Additional Information and
any financial statements required to be made available
under this form promptly upon written or oral request.
C-45
SIGNATURES
As required by the Securities Act of 1933, the Registrant has caused
this amended Registration Statement to be signed on its behalf, in the City and
State of New York, on this 27th day of June, 1995.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
(Registrant)
By: /s/ Naomi J. Weinstein
---------------------------------
Naomi J. Weinstein
Vice President
As required by the Securities Act of 1933, this post-effective amendment
to the registration statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
Richard H. Jenrette Chairman of the Executive Committee and Director
Joseph J. Melone Chairman of the Board, Chief Executive Officer and
Director
James M. Benson President, Chief Operating Officer and Director
PRINCIPAL FINANCIAL OFFICER
Jerry M. de St. Paer Executive Vice President and Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel
- -----------------------
Alvin H. Fenichel Senior Vice President and
June 27, 1995 Controller
DIRECTORS:
Claude Bebear Jean-Rene Fourtou Don Johnston
James M. Benson Norman C. Francis Winthrop Knowlton
Christopher Brocksom Donald J. Greene Arthur L. Liman
Francoise Colloc'h John T. Hartley George T. Lowy
Henri de Castries John H.F. Haskell, Jr. Joseph J. Melone
Joseph L. Dionne W. Edwin Jarmain George J. Sella, Jr.
William T. Esrey Richard H. Jenrette Dave H. Williams
By: /s/ Naomi J. Weinstein
-------------------------
Naomi J. Weinstein
Attorney-in-Fact
June 27, 1995
C-46
EXHIBIT INDEX
Exhibit No. Page No.
13(f) Consent of Price Waterhouse.
13(g) Consent of Deloitte & Touche.
C-47
Consent of Independent Accountants
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 1 to the Registration
Statement No. 33-91588 on Form N-3 (the "Registration Statement") of our report
dated March 15, 1995, relating to the financial statements of the Separate
Accounts Nos. 3, 4, 10 and 51 of The Equitable Life Assurance Society of the
United States, and of our report dated February 8, 1995, relating to the
consolidated financial statements of The Equitable Life Assurance Society
of the United States, which appear in such Statement of Additional Information,
and to the incorporation by reference of our reports into the Prospectus which
constitutes part of this Registration Statement. We also consent to the use in
the Prospectus Supplement constituting part of this Registration Statement of
our report dated March 15, 1995, relating to the financial statements of
Separate Account No. 4 of The Equitable Life Assurance Society of the United
States, which appears in such Prospectus Supplement. We also consent to the
references to us under the headings "Condensed Financial Information" and
"Experts" in such Prospectus.
PRICE WATERHOUSE LLP
New York, New York
June 22, 1995
INDEPENDENT AUDITORS' CONSENT
The Equitable Life Assurance Society of the United States:
We consent to the use in Post-Effective Amendment No. 1 to Registration
Statement No. 33-91588 of The Equitable Life Assurance Society of the United
States ("Equitable Life") on Form N-3 of our report dated February 16, 1993,
relating to the consolidated financial statements of Equitable Life appearing
in the Statement of Additional Information and to the reference to us under the
heading "Experts" in the Prospectus which are part of this Registration
Statement.
Deloitte & Touche LLP
New York, New York
June 22, 1995
