<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 1995
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
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 DEPOSITOR)
787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 554-1272
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
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES BEING AMOUNT BEING OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
REGISTERED REGISTERED UNIT PRICE FEE
- ------------------------- -------------- ------------------ ------------------ ----------------------
<S> <C> <C> <C> <C>
Units of Interest Under
Group Annuity Contract $20,000,000 (1) $20,000,000 $6,896.60
- ------------------------- -------------- ------------------ ------------------ ----------------------
</TABLE>
- -----------------------------------------------------------------------------
(1) The Contract does not provide for a predetermined amount or number of
units.
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this registration statement.
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A)
OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUS
<TABLE>
<CAPTION>
FORM N-4 ITEM PROSPECTUS CAPTION
------------------------------------------------- ----------------------------------------------
<S> <C> <C>
1. Cover Page ....................................... Cover Page
2. Definitions ...................................... Not Applicable
3. Synopsis ......................................... Summary
4. Condensed Financial Information .................. Condensed Financial Information
General Description of Registrant, Depositor, and
5. Portfolio Companies .............................. Investment Options; Equitable Life and MFS
6. Deductions and Expenses .......................... Deductions and Charges; Charges Based on
Amounts Invested in the Program; Plan and
Transaction Expenses
7. General Description of Variable Annuity Contracts The Program*
8. Annuity Period ................................... The Program--Benefit Payment Options*
9. Death Benefit .................................... The Program--Benefits Payable After the Death
of a Participant*
10. Purchases and Contract Value ..................... The Funds--How We Calculate the Value of
Amounts Allocated to the Aggressive Equity
Fund; The Program--When Transactions are
Effective--Minimum Investments--Making
Contributions to the Program--Benefit Payment
Options
11. Redemptions ...................................... The Program--Distributions from the Investment
Options--Benefit Payments Options*
12. Taxes ............................................ Federal Income Tax Considerations*
13. Legal Proceedings ................................ Miscellaneous*
14. Table of Contents of the Statement of Additional Table of Contents of the Statement of
Information ...................................... Additional Information
<CAPTION>
FORM N-4 ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION
----------------------------------------- -----------------------------------------------
<S> <C> <C>
15. Cover Page ............................... Cover Page
16. Table of Contents ........................ Table of Contents
17. General Information and History .......... Not Applicable
</TABLE>
<PAGE>
Cross Reference Sheet
Showing Location of Information in
Statement of Additional Information
<TABLE>
<CAPTION>
FORM N-4 ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION
----------------------------------------- -----------------------------------------------
<S> <C> <C>
18. Services ................................. Not Applicable
19. Purchase of Securities Being Offered .... Underwriter*
20. Underwriters ............................. Underwriter*
21. Calculation of Performance Data .......... Not Applicable
22. Annuity Payments ......................... Provisions of the ADA Plan--Contributions to
Qualified Plans--Contributions to the ADA
Retirement Plan*
23. Financial Statements ..................... Financial Statements*
<FN>
* See information under this caption in the ADA Members Retirement
Program Prospectus or the related Statement of Additional
Information, each dated May 1, 1995, which are part of this
registration statement.
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 29, 1995
American Dental Association Members Retirement Program
Prospectus - November , 1995
- -----------------------------------------------------------------------------
The American Dental Association Members Retirement Program ("Program") offers
you ten investment options from which to choose. This prospectus part
describes in detail the changes to one of the seven Separate Accounts under
the group annuity contract issued by THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES: THE AGGRESSIVE EQUITY FUND. This prospectus part also
describes the MFS Emerging Growth Fund in which the Aggressive Equity Fund
will invest. The MFS Emerging Growth Fund is a mutual fund advised by
Massachusetts Financial Services Company ("MFS"). An eleventh investment
option, THE BALANCED FUND, will soon be discontinued, as described below.
At the direction of the ADA's Trustees, all amounts held in Separate Account
No. 3 (Pooled) for the Aggressive Equity Fund will be transferred to a newly
established single-client separate account, Separate Account No. 200, as of
the close of business on November 30, 1995. Separate Account No. 200 will
serve as the Aggressive Equity Fund for the Program and invest exclusively in
Class A shares of the MFS Emerging Growth Fund. As of the opening of business
on December 1, 1995, Separate Account No. 3 (Pooled) will no longer be used
under the Program.
The amounts transferred to Separate Account No. 200 will consist of cash
which will be used to purchase Class A shares in the MFS Emerging Growth
Fund. The number of outstanding Units and the Unit Value for the Aggressive
Equity Fund will remain the same between the close of business on November
30, 1995 and the opening of business on December 1, 1995.
This prospectus dated November , 1995 comprises the particular information
set forth in this prospectus part, below, regarding the Aggressive Equity
Fund, as Separate Account No. 200, and the information contained in our
prospectus dated May 1, 1995 for all other Investment Options (except the
Equity Index Fund and the Lifecycle Funds) (the "May 1, 1995 prospectus").
However, because of the change in Separate Accounts constituting the
Aggressive Equity Fund, the information contained in the May 1, 1995
prospectus regarding Separate Account No. 3 (Pooled), its fees and expenses,
condensed financial information, objective and investment policies,
investment techniques and investment performance, all as relating to the
Aggressive Equity Fund therein, will no longer be relevant except for
historical purposes.
The ADA's Trustees have also directed us to discontinue offering the Balanced
Fund, Separate Account No. 190, as an Investment Option as of the close of
business on December 8, 1995. All amounts remaining in the Balanced Fund will
then be transferred to the Lifecycle Fund--Moderate, Separate Account No.
198, which is described in detail in our separate May 1, 1995 prospectus for
that separate account. Information in the May 1, 1995 prospectus and
statement of additional information relating to the Balanced Fund will no
longer be relevant, except historically. Of course, you may transfer your
Account Balances among the ten remaining Investment Options at any time,
before or after the Balanced Fund is discontinued. Your remaining Account
Balance, if any, in the Balanced Fund at the time of its discontinuance will
be applied to acquire Units in the Lifecycle Fund--Moderate which have the
same value as your Account Balance in the Balanced Fund.
This prospectus part dated November , 1995 must be accompanied or preceded
by a copy of the May 1, 1995 prospectus, which is part of this November ,
1995 prospectus. If you are an existing Program participant you have
previously been sent a copy of the May 1, 1995 prospectus. If you have lost
or discarded that prospectus you may obtain another copy free of charge by
writing or calling as indicated below.
(Cover page continued.)
The Equitable Life Assurance Society of the United States
P.O. Box 2486 G.P.O.
New York, NY 10116
Calls for current participants:Calls for all others:
1-800-223-57901-800-523-1125
<PAGE>
Our separate prospectuses for the Investment Options and the prospectuses for
the mutual funds in which certain Investment Options invest, describe
investment objectives, policies and risks in detail and should be read
carefully and retained for future reference. Copies of these prospectuses may
be obtained by writing or calling as indicated on the preceding page. THIS
PROSPECTUS PART DESCRIBES IN DETAIL ONLY THE AGGRESSIVE EQUITY FUND AS
SEPARATE ACCOUNT NO. 200.
References herein to the Aggressive Equity Fund mean that Fund as Separate
Account No. 200 unless otherwise indicated or the context otherwise requires.
Defined terms used in this prospectus part, unless otherwise defined, have
the same meaning as defined terms in the May 1, 1995 prospectus.
This prospectus provides important information you should be aware of before
investing. Additional information is included in the Statements of Additional
Information (the "SAI") dated November , 1995 and May 1, 1995, which have
been filed with the Securities and Exchange Commission. Parts of these SAIs
have been incorporated by reference into this prospectus. A table of contents
for the SAI appears on page 15 of this prospectus. To obtain a copy of the
SAI free of charge, complete the SAI request form on page 15 and mail it to
us, or call or write at the address on the preceding page.
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE.
- -----------------------------------------------------------------------------
NONE OF THE SECURITIES DESCRIBED IN THIS PROSPECTUS HAS BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
CONTRIBUTIONS TO THE AGGRESSIVE EQUITY FUND PRIOR TO DECEMBER 1, 1995 WILL BE
ALLOCATED TO SEPARATE ACCOUNT NO. 3 (POOLED) AS DESCRIBED IN THE MAY 1, 1995
PROSPECTUS AND WILL BE TRANSFERRED TO SEPARATE ACCOUNT NO. 200 AFTER THE
CLOSE OF BUSINESS ON NOVEMBER 30, 1995.
<PAGE>
SUMMARY
THE PROGRAM
The American Dental Association Members Retirement Program offers ADA members
and other eligible persons the choice of several plans to accumulate
retirement savings for themselves and their employees.
THE INVESTMENT OPTIONS
Ten Investment Options are available under the Program (not including the
Balanced Fund which will be discontinued on December 8, 1995). Seven of the
Investment Options are Separate Accounts, or Funds, consisting of six Equity
Funds and the Real Estate Fund. The Funds operate like mutual funds in many
ways. However, because of exclusionary provisions, they are not subject to
regulation under the Investment Company Act of 1940 (the "1940 Act"). The
three additional Investment Options are guaranteed options funded through our
general account. They include two Guaranteed Rate Accounts and the Money
Market Guarantee Account.
The Investment Options are:
Separate Accounts or "Funds":
o Growth Equity Fund
o Aggressive Equity Fund
o ADA Foreign Fund
o Equity Index Fund
o Real Estate Fund
o Lifecycle Fund--Conservative
o Lifecycle Fund--Moderate
Guaranteed Options:
o 3 year Guaranteed Rate Account
o 5 year Guaranteed Rate Account
o Money Market Guarantee Account
ONLY ONE OF THESE INVESTMENT OPTIONS, THE AGGRESSIVE EQUITY FUND, IS
DESCRIBED IN DETAIL IN THIS PROSPECTUS PART DUE TO SIGNIFICANT FUND CHANGES.
FOR ADDITIONAL INFORMATION ON THE OTHER AVAILABLE INVESTMENT OPTIONS, PLEASE
REFER TO OUR SEPARATE PROSPECTUSES FOR THOSE OPTIONS.
THE AGGRESSIVE EQUITY FUND (SEPARATE ACCOUNT NO. 200)
Invests in Class A shares of the MFS Emerging Growth Fund, which in turn
seeks to achieve long-term growth of capital by investing primarily in the
common stock of small to medium-sized companies that are early in their life
cycle but which MFS believes to have the potential to become major
enterprises.
There is no assurance that the Fund will achieve its objective.
No person is authorized by Equitable Life or by MFS Emerging Growth Fund to
give any information or make any representations other than those contained
in this prospectus or in other printed or written material issued by these
companies, and you should not rely on any other information or
representation.
3
<PAGE>
AGGRESSIVE EQUITY FUND EXPENSES
TRANSACTION EXPENSES
Transaction expenses are charges you pay when you buy or sell units of the
Fund.
<TABLE>
<CAPTION>
<S> <C>
Sales Load None
Deferred Sales Charge None
Surrender Fees None
Transfer or Exchange Fee None
</TABLE>
If you annuitize your account, premium taxes and other fees may apply.
ANNUAL OPERATING EXPENSES OF THE FUNDS
Operating expenses of the Funds are paid out of their assets. Equitable Life
deducts three types of operating expenses from the assets of the Funds: a
Program expense charge to compensate Equitable Life and the ADA for the costs
incurred in connection with the Program, an Administration fee which covers
the costs related to providing administration services in connection with
offering the Funds, and other expenses--such as legal, auditing, and
accounting--borne directly by the Funds. No management fees are paid to
Equitable Life by the Aggressive Equity Fund, although, as discussed below, a
management fee is paid by the MFS Emerging Growth Fund to MFS for managing
the assets of the MFS Emerging Growth Fund. Premium taxes may also be
applicable. For a more detailed discussion of fees and charges, see
Deductions and Charges. For a discussion of the calculation of Fund unit
values, see How We Calculate the Value of Amounts Allocated to the Funds.
AGGRESSIVE EQUITY FUND. The Aggressive Equity Fund will purchase Class A
shares of the MFS Emerging Growth Fund, without any initial sales charge or
contingent deferred sales charge. These normally applicable sales charges
have been waived by MFS Emerging Growth Fund for Class A shares purchased by
the Aggressive Equity Fund. The MFS Emerging Growth Fund incurs its own
operating expenses, however, when the Aggressive Equity Fund purchases or
redeems shares.
A deduction is made from the assets of the MFS Emerging Growth Fund to
compensate MFS for managing the assets of that Fund. In addition, deductions
are made from the assets of the MFS Emerging Growth Fund to pay for expenses
borne directly by the Fund, such as the costs of printing prospectuses and
the costs related to providing various services to the Fund, such as legal,
accounting, and auditing. For a more detailed description of charges and
expenses incurred by the MFS Emerging Growth Fund, see the separate
prospectus for that Fund which may be obtained on request by calling
1-800-223-5790.
The fees and charges which are deducted from the assets of the Aggressive
Equity Fund and Class A shares of the MFS Emerging Growth Fund, as applicable
under the Program, are shown in the table presented below. An amount equal to
the 12b-1 service fees received from ADA Program assets by MFS Emerging
Growth Fund's distributor will be paid to Equitable Life, which in turn has
agreed to waive its Administration fee. This table does not reflect other
charges which are specific to the various plans participating in the Program,
such as enrollment, record maintenance and reporting fees. The expenses shown
in the table are based on average Program assets in the Aggressive Equity
Fund as Separate Account No. 3 (Pooled) during the year ended December 31,
1994, restated to reflect current applicable fees.
4
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT EXPENSE ADMINISTRATION OTHER
FEE CHARGE FEE EXPENSES 12B-1 FEE TOTAL
- ----------------- ------------ --------- -------------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Equity
Fund None 0.66% 0.15%(2) 0.17%(3) None .98%(2)
MFS Emerging
Growth Fund(1) 0.75% None None 0.33% 0.25%(2) 1.33%
TOTAL 0.75% 0.66% 0.15%(2) 0.50% 0.25%(2) 2.31%(2)
- ----------------- ------------ --------- -------------- ---------- ----------- ---------
</TABLE>
(1) Source: The MFS Emerging Growth Fund prospectus dated April 1, 1995.
(2) An amount equal to the 12b-1 service fees received by MFS Emerging
Growth Fund's distributor, MFS Fund Distributors, Inc. ("MFD"), will
be paid by MFD to Equitable Life. Equitable Life has waived the 0.15%
Administration fee applicable to the Aggressive Equity Fund and will
use the payment from MFD to defray administrative expenses associated
with the Program's operations and to fund Program enhancements. The
agreement and waiver are expected to be in effect for an indefinite
period, but these arrangements are subject to termination by either
party upon notice.
(3) Includes expenses incurred in connection with the organization of
Separate Account No. 200.
EXAMPLES
You would pay the following expenses on a $1,000 investment over the time
period indicated for the Aggressive Equity Fund, assuming a 5% annual rate of
return. The Examples include all annual Fund operating expenses described in
the table above plus an estimate of average plan and transaction charges over
the time periods indicated for a $1,000 initial investment, assuming the
account is not annuitized. The estimate is computed by aggregating all record
maintenance and report fees, and enrollment fees, divided by the average
assets for the same period. Although the Program has no minimum contribution,
the minimum amount that can be converted to an annuity is $3,500. There are
no surrender charges, so the amounts would be the same whether or not you
withdraw all or a portion of your Account Balance.
<TABLE>
<CAPTION>
1 YEAR 3 YEAR
- ---------------------- -------- --------
<S> <C> <C>
Aggressive Equity Fund $23.77 $73.15
- ---------------------- -------- --------
</TABLE>
The purpose of the table and examples is to assist you in understanding the
various costs and expenses that will be incurred, either directly or
indirectly, when amounts are invested in the Fund. FUTURE EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. IN ADDITION, THE 5% RATE OF RETURN IN THE
EXAMPLES IS NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
CONDENSED FINANCIAL INFORMATION
AGGRESSIVE EQUITY FUND: SEPARATE ACCOUNT NO. 200
Condensed financial information for the MFS Emerging Growth Fund is contained
in the prospectus for that Fund, copies of which may be obtained by calling
an Account Executive. Those financial statements, however, do not reflect any
Program expense charge, Administration fee and daily accrual of direct
expenses deducted from amounts held in the Aggressive Equity Fund. The
Aggressive Equity Fund, as Separate Account No. 200, will begin operations on
December 1, 1995. The Unit Value for an Aggressive Equity Fund Unit will be
established as of the opening of business on that date, and will be the same
Unit Value as was applicable to the Aggressive Equity Fund (as Separate
Account No. 3 (Pooled)) at the close of business on November 30, 1995.
5
<PAGE>
Accordingly, the Unit Value as of the opening of business on December 1, 1995
will reflect the Administration fee deducted from Separate Account No. 3
(Pooled), which Equitable Life has agreed to waive for the Aggressive Equity
Fund, as Separate Account No. 200. Unit Values for December 1, 1995, as of
the close of business and thereafter, will not reflect an Administration fee,
but will indirectly reflect the 12b-1 fee, investment management fee and
other expenses incurred by the Class A shares of MFS Emerging Growth Fund
purchased for the Aggressive Equity Fund.
Daily Unit Values may be obtained by calling 1-800-635-3511 (24 hours).
FULL FINANCIAL STATEMENTS. The Consolidated Financial Statements of Equitable
Life are contained in the May 1, 1995 SAI. Financial statements of Separate
Account No. 200 are not included, because that Account will have no
operations prior to December 1, 1995.
6
<PAGE>
INVESTMENT OPTIONS
Ten Investment Options are available under the Program. One of these is
discussed below: the Aggressive Equity Fund.
The Fund has an investment objective that it seeks to achieve by following
specific investment policies. The investment objective of the Fund can only
be changed by the Trustees. THERE IS NO ASSURANCE THAT THE AGGRESSIVE EQUITY
FUND'S INVESTMENT OBJECTIVE WILL BE MET.
THE AGGRESSIVE EQUITY FUND
OBJECTIVE. The Aggressive Equity Fund seeks to achieve long-term growth of
capital by investing in a mutual fund designated by the Trustees, the MFS
Emerging Growth Fund which will, in turn, invest primarily in small and
medium sized companies. There is no assurance that this objective will be
met.
INVESTMENT POLICIES. The Aggressive Equity Fund will invest 100 percent of
its assets in Class A shares of the MFS Emerging Growth Fund.
THE MFS EMERGING GROWTH FUND. The MFS Emerging Growth Fund's investment
objective is to provide long-term growth of capital. Dividend and interest
income from portfolio securities, if any, is incidental to the Fund's
investment objective of long-term growth of capital.
The Fund's policy is to invest primarily (i.e., at least 80% of its assets
under normal circumstances) in common stocks of small and medium-sized
companies that are early in their life cycle but which MFS believes have the
potential to become major enterprises (emerging growth companies). MFS
believes that such companies generally would be expected to show earnings
growth over time that is well above the growth rate of the overall economy
and the rate of inflation, and would have the products, management and market
opportunities which are usually necessary to become more widely recognized as
growth companies.
However, the Fund may also invest in more established companies whose rates
of earnings growth are expected by MFS to accelerate because of special
factors, such as rejuvenated management, new products, changes in consumer
demand, or basic changes in the economic environment.
The nature of investing in emerging growth companies involves greater risk
than is customarily associated with investments in more established
companies. Emerging growth companies often have limited product lines,
markets or financial resources, and they may be dependent on one-person
management. The securities of emerging growth companies may have limited
marketability and may be subject to more abrupt or erratic market movements
than securities of larger, more established growth companies or the market
averages in general. Shares of the Fund, therefore, are subject to greater
fluctuation in value than shares of a conservative equity fund or of a growth
fund which invests entirely in proven growth stocks.
For further information about the MFS Emerging Growth Fund, including risk
factors, see the MFS Emerging Growth Fund's prospectus and Statement of
Additional Information. Free copies of those documents either accompany this
Prospectus or may be obtained by calling an Equitable Account Executive at
1-800-223-5790. Participants and employers should carefully read the
prospectus of the MFS Emerging Growth Fund before they allocate contributions
or transfer amounts to the Aggressive Equity Fund.
The MFS Emerging Growth Fund has agreed to waive its sales load in connection
with the sale of its Class A shares to the Aggressive Equity Fund; and there
is no charge on sales or redemption of shares for the Aggressive Equity Fund.
The MFS Series Trust II ("Trust") was organized as a Massachusetts business
trust and is registered under the 1940 Act as an open-end management
investment company. As a series mutual fund, the Trust issues
7
<PAGE>
shares in different investment portfolios, one of which is the MFS Emerging
Growth Fund, a diversified series of the Trust. The investment adviser of the
MFS Emerging Growth Fund is MFS.
VOTING RIGHTS. The MFS Emerging Growth Fund does not hold annual meetings of
shareholders. If a meeting of shareholders is held, they may vote on such
matters as election of trustees and any other matters requiring a vote by
shareholders under the 1940 Act. Equitable Life will vote the shares of the
MFS Emerging Growth Fund allocated to the Aggressive Equity Fund in
accordance with instructions received from employers, participants or
trustees, as appropriate, in the Aggressive Equity Fund. Each employer,
participant or trustee, as appropriate, will be allowed to instruct Equitable
Life on how to vote shares of the MFS Emerging Growth Fund in proportion to
their interest in the Aggressive Equity Fund as of the record date for the
shareholders meeting. Equitable Life will abstain from voting shares as to
which no instructions are received. Employers, participants or trustees will
receive periodic reports relating to the MFS Emerging Growth Fund and proxy
materials together with a voting instruction form, in connection with
shareholders meetings. The costs of soliciting voting instructions from
participants will be borne by the MFS Emerging Growth Fund.
HOW WE CALCULATE THE VALUE OF AMOUNTS ALLOCATED
TO THE AGGRESSIVE EQUITY FUND
Unit Values of the Aggressive Equity Fund will be determined in the same way
as the Program's other Equity Funds. See page 20 of the May 1, 1995
prospectus. The Aggressive Equity Fund's investments in the MFS Emerging
Growth Fund will be valued at the underlying mutual fund's net asset value
for Class A shares.
SEPARATE ACCOUNTS AND MFS
THE SEPARATE ACCOUNTS
Each of the seven Funds is a separate account of Equitable Life; we own all
of the assets of the separate accounts. A separate account is a separate
investment account which we use to support our group annuity contracts, and
for other purposes permitted by applicable law. We keep the assets of each
separate account segregated from our general account and from any other
separate accounts we may have. Although the assets of the Funds are our
property, our obligation to you under the group annuity contract equals the
value of your accumulation in each Fund.
Income, gains and losses, whether or not realized, from assets invested in
the Funds are, in accordance with the group annuity contract, credited to or
charged against each 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, however, transfer amounts owed to us, such as fees and
expenses, to our general account at any time. We may make these transfers
even if the Fund in question does not have sufficient liquidity to make all
withdrawals requested by participants.
The separate account which we call Separate Account No. 200 was recently
established and will commence operations on December 1, 1995 as the
Aggressive Equity Fund. The separate account is governed by the laws and
regulations of the state of New York, where we are domiciled, and may also be
governed by laws of other states in which we do business. The Aggressive
Equity Fund is used exclusively for the ADA Program. Because of exclusionary
provisions, the separate accounts are not subject to regulations under the
1940 Act.
We do not manage the Aggressive Equity Fund. We act in accordance with the
investment policies established by the Trustees.
8
<PAGE>
MFS
MFS is a Delaware corporation that serves as the investment adviser to the
MFS Emerging Growth Fund. MFS provides a variety of investment-related
services to other funds in the MFS Family of Funds, as well as for variable
insurance and annuity products. Together with its predecessor organizations,
MFS is America's oldest mutual fund organization with a history of money
management dating back to 1924. MFS had net assets of $38.6 billion under
management at August 31, 1995.
MFS is a wholly-owned subsidiary of Sun Life of Canada (U.S.), which in turn
is a wholly-owned subsidiary of Sun Life Assurance Company of Canada. MFS'
home office is located at 500 Boylston Street, Boston, Massachusetts 02116.
INVESTMENT PERFORMANCE
MEASURING THE INVESTMENT PERFORMANCE OF THE FUNDS
We recognize that the performance of the Funds that you invest your
retirement savings in is important to you. The tables and graphs below
illustrate the hypothetical performance of the Aggressive Equity Fund, as
Separate Account No. 200, if it had been invested in shares of MFS Emerging
Growth Fund for the periods indicated.
The Class A shares of the MFS Emerging Growth Fund in which the Aggressive
Equity Fund invests have been offered for sale since 1993, whereas the Class
B shares of the MFS Emerging Growth Fund have been offered since 1986. The
only difference between the two classes of shares is in their respective fee
and expense structures. The Class B shares have generally higher
class-related expenses than the Class A shares. The investments of the two
classes of shares are identical. The Aggressive Equity Fund performance shown
reflects the net performance of the Class A shares since September 13, 1993,
when those shares were first offered for sale. From December 29, 1986, when
Class B shares were first offered, to September 13, 1993, the performance of
those shares is reflected. Because the expenses applicable to the Class B
shares are higher than the expenses applicable to the Class A shares, the
hypothetical performance shown would have been somewhat higher for periods
prior to September 13, 1993 if Class A shares had been available.
In order to create the hypothetical performance, we have applied the Program
expense charge and other expenses actually incurred by the Aggressive Equity
Fund when it participated in Separate Account No. 3 (Pooled) to the
historical investment performance of the MFS Emerging Growth Fund Class A and
Class B shares described above. The hypothetical investment results shown for
the Aggressive Equity Fund reflect the past investment performance of the MFS
Emerging Growth Fund and are not an estimate or guarantee of future
performance.
Fund performance is most often measured by the change in the value of fund
units over time. Unlike the MFS Emerging Growth Fund, which distributes
earnings annually, separate account funds reinvest all earnings. Therefore,
in calculating hypothetical performance for the Aggressive Equity Fund, we
have assumed that the Fund reinvested all income and gains distributed by the
MFS Emerging Growth Fund in additional Class A shares of the MFS Emerging
Growth Fund. Changes in the unit values can be expressed in terms of the
Fund's annual percentage change, its average annual change, or its cumulative
change over a period of years. Each of these measurements is valuable on its
own. In addition, it often is helpful to compare the Fund's performance with
the results of unmanaged market indices.
9
<PAGE>
UNMANAGED MARKET INDICES
Unmanaged market indices, or "benchmarks," while providing a broader
perspective on relative performance, are only a tool for comparison.
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 Aggressive Equity Fund. Since the
Aggressive Equity Fund does not distribute dividends or interest, the market
indices have been adjusted to reflect reinvestment of dividends and interest
to provide greater comparability.
We have presented data for the following unmanaged indices as these may be
appropriate comparative measures of performance for the Aggressive Equity
Fund.
o CONSUMER PRICE INDEX (URBAN CONSUMERS -- NOT SEASONALLY ADJUSTED) "CPI" --
an index of inflation.
o RUSSELL 2000 INDEX -- The Russell 2000 Index is an unmanaged broadly
diversified small capitalization index maintained by Frank Russell Company
consisting of approximately 2,000 common stocks. The Russell 2000 Index
consists of the approximately 2,000 smallest stocks within the Russell 3000
Index. The Russell 3000 Index consists of the largest 3,000 publicly traded
stocks of U.S. domiciled corporations and includes large, medium and small
capitalization stocks. As such, the Russell 3000 Index represents
approximately 98 percent of the total market capitalization of all U.S.
stocks that trade on the New York and American Stock Exchanges and in the
NASDAQ over-the-counter market.
HOW PERFORMANCE DATA ARE PRESENTED
The Aggressive Equity Fund (as Separate Account No. 200) is not available to
Program participants until December 1, 1995. We have shown hypothetical
performance of the Aggressive Equity Fund (as Separate Account No. 200) on
several different bases:
o The annual percentage changes in Fund Unit Values,
o The average annual percentage change in Fund Unit Values, and
o The total value as of December 31, 1994 of a $10,000 investment made on
December 29, 1986 (the date the MFS Emerging Growth Fund commenced
operations).
The hypothetical Aggressive Equity Fund performance shown does not represent
the effect of the record maintenance and report or enrollment fees. The
annual percentage change in Fund unit values represents the percentage
increase or decrease in unit values from the beginning of one year to the end
of that year. During any year unit values will, of course, increase or
decrease. 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. Hypothetical results were calculated for all periods. The
foregoing applies with respect to the calculation of performance data given
in the "Annual Percentage Change in Unit Values" chart, "Average Annual
Percentage Change in Unit Values" chart, and "Cumulative Value Examples"
given below.
10
<PAGE>
Separate Account No. 200 will have no operations before December 1, 1995. The
tables and chart below are based on investment returns earned by the MFS
Emerging Growth Fund for other investors.
HYPOTHETICAL ANNUAL PERCENTAGE CHANGE IN FUND UNIT VALUES
<TABLE>
<CAPTION>
AGGRESSIVE EQUITY CPI RUSSELL 2000
----------------- ------ --------------
<S> <C> <C> <C>
1994 4.1% 2.7% -1.8%
1993 23.5 2.7 18.9
1992 10.9 2.9 18.4
1991 86.8 3.0 46.1
1990 -3.3 6.2 -19.5
1989 26.2 4.6 16.2
1988 7.3 4.4 24.9
1987 3.8 4.4 -8.8
</TABLE>
HYPOTHETICAL AVERAGE ANNUAL PERCENTAGE CHANGE IN FUND UNIT VALUES -- YEARS
ENDING DECEMBER 31, 1994
<TABLE>
<CAPTION>
AGGRESSIVE EQUITY CPI RUSSELL 2000
----------------- ------ --------------
<S> <C> <C> <C>
1 Year 4.1% 2.7% -1.8%
3 Years 12.6 2.8 11.4
5 Years 20.8 3.5 10.2
Inception 17.4 3.8 10.1
</TABLE>
HYPOTHETICAL CUMULATIVE VALUE EXAMPLE
Although historical percentage change data is valuable in evaluating fund
performance, it is often easier to understand the information in more graphic
examples. One approach to this is the use of "mountain charts." Mountain
charts, such as the one below, illustrate the growth of a hypothetical
investment over time for the Aggressive Equity Fund as Separate Account No.
200. The chart illustrates the growth through December 31, 1994 of an
investment of $10,000 made on December 29, 1986.
GROWTH OF $10,000 INITIAL INVESTMENT
AGGRESSIVE EQUITY FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/29/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
$10,000 $10,378 $11,130 $14,043 $13,580 $25,373 $28,136 $34,759 $36,170
</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
DISTRIBUTIONS.
11
<PAGE>
DEDUCTIONS AND CHARGES
There are two general types of expenses you may incur under the Program. The
first is expenses which are based on amounts invested in the Program. These
are deducted from the assets of a particular Fund in which you invest, or
from the assets of an underlying vehicle in which such Fund invests. The
expenses deducted from the Aggressive Equity Fund are the Program expense
charge and certain other expenses. These charges are deducted regardless of
the type of plan you may have The charges also apply to amounts being
distributed under installment payout options. An Administration fee normally
charged to the Funds in the Program has been waived for the Aggressive Equity
Fund.
The expenses of the MFS Emerging Growth Fund in which the Aggressive Equity
Fund invests, include investment management fees, 12b-1 service fees, and
certain other expenses. These expenses reduce the net asset value of MFS
Emerging Growth Fund shares, and are ultimately reflected in the Unit Values
of the Aggressive Equity Fund.
The second type of charge is expenses which vary by the type of plan you have
or which are charged for specific transactions. These are typically stated in
terms of a defined dollar amount. Unless otherwise noted, fees which are set
in fixed dollar amounts are deducted by reducing the number of Units in the
Aggressive Equity Fund allocated to your Account.
No deductions are made from contributions or withdrawals for sales expenses.
The applicable deductions and charges are described in detail below.
CHARGES BASED ON AMOUNTS INVESTED IN THE PROGRAM
PROGRAM EXPENSE CHARGE
See the May 1, 1995 prospectus for information about the Program expense
charge.
ADMINISTRATION FEE
Equitable Life receives an Administration fee at the annual rate of 0.15% of
assets held in the Program's Funds. This fee covers the costs related to
providing administrative services in connection with the offering of the
Funds. Equitable Life maintains records for all portfolio transactions and
cash flow control, calculates Unit Values, and monitors compliance with the
New York Insurance Law in connection with these Funds. Equitable Life has
waived the Administration fee for the Aggressive Equity Fund in view of the
payment it will receive from MFD of an amount equal to the 12b-1 service fees
received by MFD from the Program's participation in the MFS Emerging Growth
Fund. The 12b-1 service fees received by MFD are currently at an annual rate
of 0.25% and Equitable Life will receive the amount attributable to the
Program's average daily net assets in the MFS Emerging Growth Fund. Amounts
received by us will be used to offset the Administration fee and to fund
Program enhancements.
OTHER EXPENSES BORNE DIRECTLY BY THE FUNDS
Certain costs and expenses are charged directly to the Funds, including the
Aggressive Equity Fund. These may include Securities and Exchange Commission
filing fees and certain related expenses including printing of SEC filings,
prospectuses and reports, mailing costs, financial accounting costs and
outside auditing and legal expenses. All of these costs are included as
"Other Expenses" in the tables of Annual Operating Expenses of the Funds.
12
<PAGE>
The Aggressive Equity Fund will purchase and redeem Class A shares in the MFS
Emerging Growth Fund at net asset value. The net asset value reflects charges
for 12b-1, management, audit, legal, shareholder services, transfer agent and
custodian fees. For a description of charges and expenses assessed by the MFS
Emerging Growth Fund, which are indirectly borne by the Aggressive Equity
Fund, please refer to the prospectus for that Fund.
MISCELLANEOUS
CHANGE OR DISCONTINUANCE OF INVESTMENT OPTIONS OR 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 or the Trustees may
terminate an Investment Option or the continued offer of any of the
Investment Options, and we can offer new ones with different terms. As ERISA
fiduciaries, the Trustees have an obligation to make changes in the Program
which they believe are in the interests of the participants. At the direction
of the Trustees, we may transfer the aggregate Account Balances in a
terminated or discontinued Investment Option to another Investment Option.
Our contract with the Trustees may be terminated by us or the ADA. If our
contract with the Trustees is terminated, we will not accept any further
contributions or perform recordkeeping functions after the date of
termination. At that time we would make arrangements with the Trustees as to
the disposition of the assets in the Investment Options we provide, subject
to the various restrictions related to investments in the Real Estate Fund,
Money Market Guarantee Account, and the Guaranteed Rate Accounts. For a
discussion of these restrictions, please refer to the prospectus for these
Investment Options. You may be able to continue to invest amounts in the
Investment Options we provide and elect payment of benefits through us if the
Trustees make arrangements with 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 prevent plan participants from investing 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.
REGULATION. Equitable Life is subject to regulation and supervision by the
Insurance Department of the State of New York, which periodically examines
Equitable Life's affairs. Equitable Life also is subject to the insurance
laws and regulations of all jurisdictions in which it is 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. Equitable Life is
required to submit annual statements of its operations, including financial
statements, to the insurance departments of the various jurisdictions in
which it does business for purposes of determining solvency and compliance
with local insurance laws and regulations.
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.
13
<PAGE>
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 other materials
before entering into a Participation Agreement.
Copyright 1995
The Equitable Life Assurance Society of the United States
New York, New York 10019
All rights reserved.
14
<PAGE>
TABLE OF CONTENTS
OF STATEMENT OF ADDITIONAL INFORMATION
DATED NOVEMBER , 1995
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
Procedures for Withdrawals, Distributions and Transfers ... SAI-1a
Investment Restrictions .................................... SAI-2a
How We Value the Assets of the Fund ........................ SAI-2a
</TABLE>
CLIP AND MAIL TO US TO RECEIVE A
STATEMENT OF ADDITIONAL INFORMATION
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
To: The Equitable Life Assurance Society
of the United States
Box 2486 G.P.O.
New York, NY 10116
Please send me a copy of the Statements of Additional Information for the
American Dental Association Members Retirement Program Prospectus dated
November , 1995 and May 1, 1995.
Name
-----------------------------------------------------------------------
Address:
-------------------------------------------------------------------
-------------------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Copyright 1995 by The Equitable Life Assurance Society of the United States.
All rights reserved.
15
<PAGE>
American Dental Association
Members Retirement Program
Prospectus May 1, 1995
- -----------------------------------------------------------------------------
The American Dental Association Members Retirement Program offers you eleven
investment options from which to choose. This prospectus describes the eight
Separate Accounts under the group annuity contract issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES.
THE PROGRAM
The American Dental Association Members Retirement Program offers ADA members
and other eligible persons the choice of several plans to accumulate
retirement savings for themselves and their employees.
THE INVESTMENT OPTIONS
The Program allows you to choose from eleven Investment Options. The
Investment Options are:
Eight Separate Accounts or "Funds":
o Growth Equity Fund Three Guaranteed Options:
o Aggressive Equity Fund o 3 year Guaranteed Rate Account
o Balanced Fund o 5 year Guaranteed Rate Account
o ADA Foreign Fund o Money Market Guarantee Account
o Equity Index Fund
o Real Estate Fund
o Lifecycle Fund--Conservative
o Lifecycle Fund--Moderate
These investment options are summarized on page 2 of this prospectus. The ADA
Foreign Fund and the Equity Index Fund each invest in shares of a
corresponding mutual fund, the Templeton Foreign Fund and the Seven Seas S&P
500 Fund, respectively. We refer to these as the "underlying mutual funds."
The Lifecycle Funds--Conservative and Moderate ("Lifecycle Funds") each
invest in units of a corresponding group trust maintained by State Street
Bank and Trust Company ("State Street"). We refer to these trusts as the
"Lifecycle Fund Group Trusts." The prospectuses for the underlying mutual
funds and our separate prospectus for the Equity Index Fund and Lifecycle
Funds describe the investment objectives, policies and risks of those Funds
and should be read carefully and retained for future reference. Copies of
those prospectuses may be obtained by writing or calling as indicated below.
THIS PROSPECTUS DESCRIBES, IN DETAIL, ALL INVESTMENT OPTIONS EXCEPT THE
EQUITY INDEX FUND AND THE LIFECYCLE FUNDS, WHICH ARE DESCRIBED, IN DETAIL, IN
OUR SEPARATE PROSPECTUS FOR THOSE FUNDS.
This prospectus provides important information you should be aware of before
investing. Additional information is included in the Statement of Additional
Information (the "SAI") dated May 1, 1995 which has been filed with the
Securities and Exchange Commission. Parts of the SAI have been incorporated
by reference into this prospectus. A table of contents for the SAI appears at
page 55 of this prospectus. To obtain a copy of the SAI free of charge,
complete the SAI request form on page 55 and mail it to us, or call or write:
The Equitable Life Assurance Society of the United States
PO Box 2486 G.P.O.
New York, NY 10116
<TABLE>
<CAPTION>
<S> <C>
Calls for current participants: Calls for all others:
1-800-223-5790 1-800-523-1125
</TABLE>
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE.
- -----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
SUMMARY OF INVESTMENT OPTIONS
EQUITY FUNDS
THE GROWTH EQUITY FUND (Separate Account No. 4 (Pooled))
Seeks to achieve long-term growth of capital by investing primarily in common
stocks and other equity-type securities of any capitalization but primarily
in securities of large and intermediate-sized companies.
THE AGGRESSIVE EQUITY FUND (Separate Account No. 3 (Pooled))
Seeks to achieve long-term capital growth by investing primarily in
securities of medium and smaller-sized companies believed to have greater
growth potential than larger companies.
THE BALANCED FUND (Separate Account No. 190)
Seeks to achieve both appreciation of capital and current income by investing
primarily in common stocks and other equity-type securities, publicly-traded
debt securities and money market instruments, within stated ranges.
THE ADA FOREIGN FUND (Separate Account No. 191)
Invests primarily in shares of the Templeton Foreign Fund, which in turn
seeks long-term capital growth through a flexible policy of investing in
stocks and debt obligations of companies and governments outside the United
States.
THE EQUITY INDEX FUND (Separate Account No. 195)
Invests in shares of the Seven Seas S&P 500 Fund, which in turn seeks to
achieve a total return which parallels that of the Standard and Poor's 500
Composite Stock Price Index by investing in the stocks in the Index.
THE LIFECYCLE FUND--CONSERVATIVE (Separate Account No. 197)
Invests in units of the Lifecycle Fund Group Trust--Conservative, maintained
by State Street, which in turn invests in units of five underlying collective
funds ("the Underlying Funds") maintained by State Street to provide current
income and a low to moderate growth of capital.
THE LIFECYCLE FUND--MODERATE (Separate Account No. 198)
Invests in units of the Lifecycle Fund Group Trust--Moderate, maintained by
State Street, which in turn invests in units of five Underlying Funds
maintained by State Street to provide growth of capital and a reasonable
level of current income.
REAL ESTATE FUND
THE REAL ESTATE FUND (Separate Account No. 30 (Pooled))
Invests primarily in units of our Prime Property Fund, which in turn seeks to
achieve a stable rate of return over an extended period of time by investing
primarily in high-grade, income-producing real property.
There is no assurance that the Funds will achieve their respective
objectives.
GUARANTEED OPTIONS
GUARANTEED RATE ACCOUNTS
Contributions to the Guaranteed Rate Accounts will be invested through group
annuity contracts issued by a major insurance company. The Guaranteed Rate
Accounts have maturities of approximately three and five years.
MONEY MARKET GUARANTEE ACCOUNT
The Money Market Guarantee Account is credited with interest which will
approximate the average rate of money market funds considered "domestic
prime," but not less than a minimum rate which we set annually. We guarantee
the contributions and interest credited to this Account.
- -----------------------------------------------------------------------------
No person is authorized by The Equitable Life Assurance Society of the United
States to give any information or make any representations other than those
contained in this prospectus and the SAI, or in other printed or written
material issued by Equitable Life. You should not rely on any other
information or representation.
2
<PAGE>
SUMMARY OF THE PROGRAM
THE AMERICAN DENTAL ASSOCIATION MEMBERS RETIREMENT PROGRAM
The American Dental Association Members Retirement Program consists of
several types of retirement plans and two retirement plan Trusts, the Master
Trust and the Pooled Trust. Each of the Trusts invests exclusively in the
group annuity contracts described in this prospectus. The purpose of the
Program is to provide members of the American Dental Association (the "ADA")
and their employees with plans to invest, accumulate, and then distribute
funds for retirement. The Program is sponsored by the ADA, and the Trustees
under the Master and Pooled Trusts are the members of the Council on
Insurance of the ADA (the "Trustees"). The Program had 23,183 participants
and $903 million in assets at December 31, 1994.
EQUITABLE LIFE
The Equitable Life Assurance Society of the United States ("Equitable Life")
is a diversified financial services organization serving a variety of
insurance, investment management and investment banking customers. We are one
of the largest life insurance companies in the United States, and have been
in business since 1859.
THE INVESTMENT OPTIONS
Eleven Investment Options are available under the Program. Eight of the
Investment Options are Separate Accounts, or Funds, consisting of seven
Equity Funds and the Real Estate Fund. The Funds operate like mutual funds in
many ways. However, because of exclusionary provisions, the Funds are not
subject to regulation under the Investment Company Act of 1940 ("1940 Act").
The three additional Investment Options are guaranteed options. They include
two Guaranteed Rate Accounts and the Money Market Guarantee Account.
YOUR CHOICE OF RETIREMENT PLANS
As an employer, you can use the Program to adopt our profit-sharing
(including a 401(k) feature) or defined contribution pension master plan or
our self-directed prototype plan. You can also have your own
individually-designed plan and use our Pooled Trust as a funding vehicle. See
The Program for additional information on your choices.
3
<PAGE>
SUMMARY OF FUND EXPENSES
TRANSACTION EXPENSES
Transaction expenses are charges you pay when you buy or sell units of the
Funds.
<TABLE>
<CAPTION>
<S> <C>
SALES LOAD NONE
DEFERRED SALES CHARGE NONE
SURRENDER FEES NONE
TRANSFER OR EXCHANGE FEE NONE
</TABLE>
If you annuitize your account, premium taxes and other fees may apply.
ANNUAL FUND OPERATING EXPENSES
Operating expenses for the Funds are paid out of each Fund's assets. Each
Fund pays a management fee to us that varies based on its assets, except that
no management fees are paid to us by the ADA Foreign Fund, the Equity Index
Fund or the Lifecycle Funds. The Program expense charge is based on all
assets under the Program; the Administration Fee is based on Fund assets.
Each Fund also incurs other expenses for services such as printing, mailing,
legal, and similar items. All of these annual fund operating expenses are
reflected in each Fund's unit value. See How We Determine the Unit Value.
These tables illustrate the effect of the charges which are generally
applicable to the Funds. They do not include other charges which are specific
to the various plans such as enrollment fees or record maintenance and report
fees. See Deductions and Charges. Premium taxes may also be applicable. The
expenses shown are based on average Program assets in each of the Funds
during the year ended December 31, 1994, restated to reflect current
applicable fees.
Growth Equity, Aggressive Equity, Balanced and Real Estate Funds
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT EXPENSE ADMINISTRATION
FEE CHARGE FEE OTHER TOTAL
----------------- ------------ --------- -------------- ------- -------
<S> <C> <C> <C> <C> <C>
Growth Equity 0.19% 0.66% 0.15% 0.07% 1.07%
Aggressive Equity 0.35 0.66 0.15 0.07 1.23
Balanced 0.45 0.66 0.15 0.11 1.37
Real Estate 1.10 0.66 0.25 0.06 2.07
</TABLE>
ADA FOREIGN AND EQUITY INDEX FUNDS
The ADA Foreign Fund and the Equity Index Fund each invest in shares of an
underlying mutual fund. The following table combines the charges and fees
which are deducted from the Fund and the underlying mutual fund. No
transaction charges are incurred by the Funds when shares of the underlying
mutual fund are purchased or redeemed, but annual mutual fund operating
expenses are incurred. For a description of charges and expenses incurred by
the underlying mutual funds see their prospectuses.
4
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT EXPENSE ADMINISTRATION OTHER
FEE CHARGE FEE EXPENSES 12B-1 FEE TOTAL
<S> <C> <C> <C> <C> <C> <C>
ADA Foreign Fund None 0.66% 0.15%(2) 0.19%(5) None 1.00%(2)
Templeton Foreign
Fund(1) 0.63 None None 0.27 0.24 1.14%
TOTAL 0.63% 0.66% 0.15%(2) 0.46% 0.24% 2.14%(2)
- ----------------- ------------ --------- -------------- ---------- ----------- ----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Equity Index Fund None 0.66% 0.15% 0.10%(5) None 0.91%
Seven Seas S&P 500
Fund(3) 0.10(4) None 0.03 0.07 0.05 0.25%(4)
TOTAL 0.10% 0.66% 0.18% 0.17% 0.05% 1.16%(4)
- ------------------ --------- --------- -------------- ---------- ----------- ----------
</TABLE>
[FN]
(1) Source: Templeton Foreign Fund prospectus dated January 1, 1995.
(2) An amount equal to the 12b-1 fee charged by Templeton will be paid by
Templeton to Equitable Life. Equitable Life has waived the 0.15%
Administration Fee applicable to the ADA Foreign Fund and will use
the payment from Templeton to defray administrative expenses
associated with the Program's operations and to fund Program
enhancements. The agreement and waiver are expected to be in effect
for an indefinite period, but these arrangements are subject to
termination by either party upon notice.
(3) Source: Seven Seas Series Prospectus dated November 22, 1994.
(4) State Street voluntarily agrees to waive up to the full amount of its
Advisory Fee of .10% to the extent that total expenses exceed .15% on
an annual basis. This agreement will remain in effect until further
notice. (See Note 3.) If the waiver agreement is terminated, the full
amount of State Street's advisory fee may be assessed and the total
Fund expenses may increase.
(5) Includes expenses incurred in connection with the organization of
these Funds. Organizational expenses were initially paid by us and we
are being reimbursed from the Fund over a five year period. For the
ADA Foreign Fund, the organizational expenses were $46,110 and are
being amortized over the period which ends December 31, 1996. For the
Equity Index Fund, organizational expenses were $33,917 and are being
amortized over the period which ends December 31, 1998.
LIFECYCLE FUNDS
No transaction charges are incurred by the Lifecycle Funds when units of a
corresponding Lifecycle Fund Group Trust are purchased or redeemed, but
annual operating expenses are incurred by each Lifecycle Fund Group Trust. A
deduction is made from the assets of each Lifecycle Fund Group Trust to
compensate State Street for managing the assets of the Group Trust. State
Street does not receive a fee for managing the assets of the Underlying Funds
in which a Lifecycle Fund Group Trust invests. State Street may receive fees
for managing the assets of other collective investment funds in which the
Funds may be invested on a temporary basis, and for managing the mutual funds
in which assets of the Underlying Funds may be invested. State Street has
agreed to waive its management fee charged each of the Lifecycle Fund Group
Trusts to the extent of the allocable portion of any management fee State
Street charges such other collective investment funds and mutual funds.
Other expenses are deducted from the assets of each Lifecycle Fund Group
Trust and Underlying Fund to pay for costs related to services, such as legal
and auditing, provided directly to each Lifecycle Fund Group Trust. State
Street also receives an administration fee deducted from the assets of each
Lifecycle Fund Group Trust to compensate it for providing various
recordkeeping and accounting services to the Group Trust. In addition, other
expenses are deducted from the assets of the Underlying Funds for custodial
services provided to those Funds.
5
<PAGE>
The fees and charges which are deducted from the assets of the Lifecycle
Funds, the Lifecycle Fund Group Trusts and the Underlying Funds are
illustrated in the table below. This table does not reflect other charges
which are specific to the various plans participating in the Program, such as
enrollment, record maintenance and reporting fees. See Plan and Transaction
Expenses.
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT EXPENSE ADMINISTRATION OTHER
FEE CHARGE FEE EXPENSES TOTAL
- -------------------------- ------------ --------- -------------- ------------ -------
<S> <C> <C> <C> <C> <C>
Lifecycle Fund -
Conservative None 0.66% 0.15% 0.16%(1) 0.97%
Lifecycle Fund
Group Trust -
Conservative 0.17% None 0.04%(2) 0.12%(1&3) 0.33%
Underlying Funds (4):
S&P 500 Flagship Fund None None None 0.02% 0.02%
Russell 2000 Fund None None None 0.03% 0.03%
Daily EAFE Fund None None None 0.08% 0.08%
Daily Government/Corporate
Bond Fund None None None 0.03% 0.03%
Short Term Investment Fund None None None 0.01% 0.01%
- -------------------------- ------------ --------- ------------ ------------ -------
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT EXPENSE ADMINISTRATION OTHER
FEE CHARGE FEE EXPENSES TOTAL
- -------------------------- ------------ --------- -------------- ------------ -------
<S> <C> <C> <C> <C> <C>
Lifecycle Fund -
Moderate None 0.66% 0.15% 0.16%(1) 0.97%
Lifecycle Fund
Group Trust -
Moderate 0.17% None 0.04%(2) 0.12%(1&3) 0.33%
Underlying Funds (4):
S&P 500 Flagship Fund None None None 0.02% 0.02%
Russell 2000 Fund None None None 0.03% 0.03%
Daily EAFE Fund None None None 0.08% 0.08%
Daily Government/Corporate
Bond Fund None None None 0.03% 0.03%
Short Term Investment Fund None None None 0.01% 0.01%
- -------------------------- ------------ --------- ------------ ------------ -------
</TABLE>
(1) Other expenses are estimates of average expenses for 1995. These
include a charge at the annual rate of .03% of the value of the
respective assets in the Lifecycle Funds--Conservative and Moderate
to compensate Equitable Life for additional legal, accounting and
other potential expenses resulting from the inclusion of the
Lifecycle Fund Group Trusts and Underlying Funds maintained by State
Street among the Investment Options described in this prospectus and
the SAI. Other expenses also include costs incurred by Equitable Life
and State Street in connection with the organization of the Lifecycle
Funds. Organizational expenses are initially paid by Equitable Life
and State Street and will be reimbursed from the Lifecycle Funds over
a five year period. Organizational expenses are expected to be
approximately $207,000 and will be amortized over the period ending
December 31, 1999.
(2) Based on State Street's current fixed fee of $11,100 per year and
estimated average assets for 1995.
(3) Based on State Street's estimated expenses and estimated average
assets for 1995.
(4) Other expenses of the Underlying Funds are based on expenses incurred
by each Fund during 1994.
6
<PAGE>
EXAMPLES
You would pay the following expenses on a $1,000 investment over the time
period indicated for each Fund listed below, assuming a 5% annual rate of
return. The Examples include all annual fund operating expenses listed in the
tables above plus an estimate of average plan and transaction charges over
the time periods indicated for a $1,000 initial investment, assuming the
account is not annuitized. The estimate is computed by aggregating all record
maintenance and report fees and enrollment fees, divided by the average
assets for the same period. See ADA Members Retirement Plan, Prototype
Self-Directed Plan and Individually-designed Plan Fees of this prospectus.
Although the Program has no minimum contribution, the minimum amount that can
be converted to an annuity is $3,500. There are no surrender charges, so the
amounts would be the same, whether you withdraw all or a portion of your
Account Balance.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------- -------- --------- --------- ----------
<S> <C> <C> <C> <C>
Growth Equity $11.28 $35.15 $ 60.90 $134.42
Aggressive Equity 12.86 40.03 69.23 152.16
Balanced 14.32 44.51 76.86 168.27
Real Estate 21.36 65.88 112.95 242.70
ADA Foreign 21.96 67.71 116.00 248.86
Equity Index 12.13 37.78 65.39 144.01
--------- ----------
Lifecycle--Conservative 13.84 43.01
Lifecycle--Moderate 13.84 43.01
- ---------------------- -------- ---------
</TABLE>
The purpose of these tables and examples is to assist you in understanding
the various costs and expenses that will be incurred, either directly or
indirectly, when amounts are invested in the Funds. FUTURE EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. IN ADDITION, THE 5% RATE OF RETURN IN THE
EXAMPLE IS NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
7
<PAGE>
CONDENSED FINANCIAL INFORMATION
- -----------------------------------------------------------------------------
These selected per unit data and ratios for the years ended December 31, 1994
and 1993 have been audited by Price Waterhouse LLP, independent accountants,
as stated in their reports included in the SAI. For years prior to 1993, such
condensed financial information was audited by other independent accountants.
The Financial Statements of each of the Funds as well as the Consolidated
Financial Statements of Equitable Life are contained in the SAI. The report
for the Real Estate Fund (Separate Account No. 30 (Pooled)) includes an
explanatory paragraph relating to the appraised valuation of real estate
investments. Information is provided for the period that each Fund has been
available under the Program, but not longer than 10 years.
GROWTH EQUITY FUND: SEPARATE ACCOUNT NO. 4 (POOLED)
<TABLE>
<CAPTION>
------------------------------
INCOME AND EXPENSES
------------------------------
NET
YEAR ENDED EXPENSES INCOME
DEC. 31, INCOME (NOTE A) (LOSS)
<S> <C> <C> <C>
1994 $2.03 (2.03) .00
-------- ---------- --------
1993* $1.97 (1.92) .05
-------- ---------- --------
1992 $1.69 (1.75) (.06)
-------- ---------- --------
1991 $1.50 (1.52) (.02)
-------- ---------- --------
1990 $2.13 (1.16) .97
-------- ---------- --------
1989 $1.88 (1.09) .79
-------- ---------- --------
1988 $1.41 (.84) .57
-------- ---------- --------
1987 $1.35 (.89) .46
-------- ---------- --------
1986 $1.47 (.74) .73
-------- ---------- --------
1985 $1.38 (.56) .82
-------- ---------- --------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPITAL CHANGES OPERATING STATISTICS
--------------------------------------------------- ---------------------------------------------------------
NET REALIZED
AND NUMBER OF
UNREALIZED NET NET ASSET RATIO OF UNITS
GAINS INCREASE VALUE AT NET ASSET OPERATING RATIO OF NET OUTSTANDING PORTFOLIO
(LOSSES) ON (DECREASE) BEGINNING VALUE AT EXPENSES TO INCOME (LOSS) AT END OF TURNOVER
YEAR ENDED INVESTMENTS IN UNIT OF PERIOD END OF AVERAGE NET TO AVERAGE NET PERIOD (IN RATE (NOTE
DEC. 31, (NOTE B) VALUE (NOTE C) PERIOD ASSETS ASSETS 000'S) E)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 (4.23) (4.23) 187.30 $183.07 1.11% .00% 1,441 91%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1993* 29.46 29.51 157.79 $187.30 1.14% .03% 1,431 82%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1992 .92 .86 156.93 $157.79 1.17% (.04)% 1,418 68%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1991 53.07 53.05 103.88 $156.93 1.16% (.02)% 1,350 66%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1990 (14.99) (14.02) 117.90 $103.88 1.10% .92 % 1,295 93%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1989 35.17 35.96 81.94 $117.90 1.07% .78 % 1,399 113%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1988 10.89 11.46 70.48 $ 81.94 1.09% .75 % 1,587 101%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1987 2.92 3.38 67.10 $ 70.48 1.11% .58 % 1,742 121%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1986 7.07 7.80 59.30 $ 67.10 1.09% 1.09 % 1,838 102%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1985 13.32 14.14 45.16 $ 59.30 1.08% 1.58 % 1,874 92%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
</TABLE>
AGGRESSIVE EQUITY FUND: SEPARATE ACCOUNT NO. 3 (POOLED)
<TABLE>
<CAPTION>
----------------------------------
INCOME AND EXPENSES
----------------------------------
NET
INVESTMENT
YEAR ENDED EXPENSES INCOME
DEC. 31, INCOME (NOTE A) (LOSS)
-------- ---------- ------------
<S> <C> <C> <C>
1994 $.19 (.43) (.24)
-------- ---------- ------------
1993* $.27 (.42) (.15)
-------- ---------- ------------
1992 $.32 (.40) (.08)
-------- ---------- ------------
1991 $.29 (.33) (.04)
-------- ---------- ------------
1990 $.28 (.21) .07
-------- ---------- ------------
1989 $.29 (.17) .12
-------- ---------- ------------
1988 $.17 (.14) .03
-------- ---------- ------------
1987 $.18 (.17) .01
-------- ---------- ------------
1986 $.15 (.15) .00
-------- ---------- ------------
May 1- Dec.
31, $.21 (.13) .08
1985
-------- ---------- ------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPITAL CHANGES OPERATING STATISTICS
--------------------------------------------------- ---------------------------------------------------------
NET REALIZED
AND NUMBER OF
UNREALIZED NET NET ASSET RATIO OF RATIO OF NET UNITS
GAINS INCREASE VALUE AT NET ASSET OPERATING INVESTMENT OUTSTANDING PORTFOLIO
(LOSSES) ON (DECREASE) BEGINNING VALUE AT EXPENSES TO INCOME (LOSS) AT END OF TURNOVER
YEAR ENDED INVESTMENTS IN UNIT OF PERIOD END OF AVERAGE NET TO AVERAGE NET PERIOD (IN RATE (NOTE
DEC. 31, (NOTE B) VALUE (NOTE C) PERIOD ASSETS ASSETS 000'S) E)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 (1.37) (1.61) 35.30 $33.69 1.27% (.72)% 1,590 94%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1993* 4.42 4.27 31.03 $35.30 1.31% (.49)% 1,536 83%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1992 (1.15) (1.23) 32.26 $31.03 1.33% (.24)% 1,612 71%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1991 14.93 14.89 17.37 $32.26 1.28% (.17)% 1,309 63%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1990 1.22 1.29 16.08 $17.37 1.26% .46 % 644 48%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1989 4.94 5.06 11.02 $16.08 1.22% .86 % 578 92%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1988 .10 .13 10.89 $11.02 1.24% .23 % 626 103%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1987 (.36) (.35) 11.24 $10.89 1.26% .09 % 536 227%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1986 .08 .08 11.16 $11.24 1.23% .05% 398 162%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
May 1- Dec.
31, 1.08 1.16 10.00 $11.16 1.77% 1.14 % 162 76%
1985 (Note D) (Note D)
------------- ---------- ----------- ----------- ------------- --------------
</TABLE>
8
<PAGE>
CONDENSED FINANCIAL INFORMATION (CONT'D)
BALANCED FUND: SEPARATE ACCOUNT NO. 190
<TABLE>
<CAPTION>
----------------------------------
INCOME AND EXPENSES
----------------------------------
NET
YEAR ENDED EXPENSES INVESTMENT
DEC. 31, INCOME (NOTE A) INCOME
<S> <C> <C> <C>
1994 $.83 (.36) .47
-------- ---------- ------------
1993* $.86 (.37) .49
-------- ---------- ------------
1992 $.89 (.35) .54
-------- ---------- ------------
Feb. 1- Dec.
31,
1991 $.76 (.29) .47
-------- ---------- ------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPITAL CHANGES OPERATING STATISTICS
--------------------------------------------------- ---------------------------------------------------------
NET REALIZED
AND NUMBER OF
UNREALIZED NET NET ASSET RATIO OF RATIO OF NET UNITS
GAINS INCREASE VALUE AT NET ASSET OPERATING INVESTMENT OUTSTANDING
(LOSSES) ON (DECREASE) BEGINNING VALUE AT EXPENSES TO INCOME (LOSS) AT END OF PORTFOLIO
YEAR ENDED INVESTMENTS IN UNIT OF PERIOD END OF AVERAGE NET TO AVERAGE NET PERIOD (IN TURNOVER
DEC. 31, (NOTE B) VALUE (NOTE C) PERIOD ASSETS ASSETS 000'S) RATE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 (2.91) (2.44) 27.06 $24.62 1.42% 1.83% 2,568 143%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1993* 2.23 2.72 24.34 $27.06 1.44% 1.91% 2,607 104%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1992 (1.18) (.64) 24.98 $24.34 1.48% 2.28% 2,249 82%
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
Feb. 1- Dec.
31,
1991 6.44 6.91 18.07 $24.98 1.53% 2.46% 1,974 126%
(Note D) (Note D)
------------- ---------- ----------- ----------- ------------- --------------
</TABLE>
ADA FOREIGN FUND: SEPARATE ACCOUNT NO. 191
<TABLE>
<CAPTION>
----------------------------------
INCOME AND EXPENSES
----------------------------------
NET
YEAR ENDED EXPENSES INVESTMENT
DEC. 31, INCOME (NOTE A) INCOME
<S> <C> <C> <C>
1994 $.50 (.13) .37
-------- ---------- ------------
1993* $.27 (.09) .18
-------- ---------- ------------
Mar.2-
Dec. 31,
1992 $.39 (.08) .31
-------- ---------- ------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPITAL CHANGES OPERATING STATISTICS
--------------------------------------------------- ---------------------------------------------------------
NET REALIZED
AND RATIO OF NUMBER OF
UNREALIZED NET NET ASSET INVESTMENT RATIO OF NET UNITS
GAINS INCREASE VALUE AT NET ASSET OPERATING INVESTMENT OUTSTANDING
(LOSSES) ON (DECREASE) BEGINNING VALUE AT EXPENSES TO INCOME (LOSS) AT END OF PORTFOLIO
YEAR ENDED INVESTMENTS IN UNIT OF PERIOD END OF AVERAGE NET TO AVERAGE NET PERIOD (IN TURNOVER
DEC. 31, (NOTE B) VALUE (NOTE C) PERIOD ASSETS ASSETS 000'S) RATE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 (.44) (.07) 13.08 $13.01 0.98% 2.78% 5,537 N/A
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
1993* 3.09 3.27 9.81 $13.08 1.04% 2.02% 4,220 N/A
------------- ---------- ----------- ----------- ------------- -------------- ------------- -----------
Mar.2-
Dec. 31,
1992 (.50) (.19) 10.00 $ 9.81 1.05% 4.10% 1,692 N/A
(Note D) (Note D)
------------- ---------- ----------- ----------- ------------- --------------
</TABLE>
See notes on next page.
9
<PAGE>
- ------------
NOTES:
* Prior to July 22, 1993, Equitable Capital Management Corporation
(Equitable Capital) served as the investment adviser to the Funds. 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 Funds.
A. Enrollment, annual administration and actuarial and quarterly record
maintenance and report fees are not included above and did not affect
Growth Equity, Aggressive Equity, Balanced or ADA Foreign Fund Unit
Values. Defined benefit plan annual administration and actuarial and
quarterly record maintenance and report fees reduced the number of
Growth Equity, Aggressive Equity, Balanced and ADA Foreign Fund Units
credited to participants; 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) 190 and 191, which may be found in the SAI.
C. The Program became available beginning on January 1, 1968. The value
for a Growth Equity Fund Unit was established at $10.00 on that date.
The values for Aggressive Equity, Balanced and ADA Foreign Fund Units
were established at $10.00 on May 1, 1985, $18.07 on February 1,
1991, $10.00 on March 2, 1992, and $10.00 on February 1, 1994,
respectively, the dates on which those Funds were first made
available under the Program.
D. Annualized basis.
Income, expenses, gains and losses shown above pertain only to
participants' accumulations attributable to the Program. Other plans
also participate in the Growth Equity and Aggressive Equity Funds and
may have operating results and other supplementary data different
from those shown above.
10
<PAGE>
REAL ESTATE FUND: Separate Account No. 30 (Pooled)
<TABLE>
<CAPTION>
----------------------------------
INCOME AND EXPENSES
----------------------------------
NET
INVESTMENT
YEAR ENDED EXPENSES INCOME
DEC. 31, INCOME (NOTE A) (LOSS)
- ------------ -------- ---------- ------------
<S> <C> <C> <C>
1994 $0.04 (.24) (.20)
-------- ---------- ------------
1993 0.01 (.24) (.23)
-------- ---------- ------------
1992 0.01 (.25) (.24)
-------- ---------- ------------
1991 0.01 (.26) (.25)
-------- ---------- ------------
1990 0.02 (.27) (.25)
-------- ---------- ------------
1989 0.02 (.25) (.23)
-------- ---------- ------------
1988 0.02 (.24) (.22)
-------- ---------- ------------
1987 0.04 (.22) (.18)
-------- ---------- ------------
Aug. 29-
Dec. 31,
1986 $0.01 (0.07) (0.06)
-------- ---------- ------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPITAL CHANGES OPERATING STATISTICS
-------------------------------------------------- ---------------------------------------------------------
NET REALIZED
AND RATIO OF NET NUMBER OF
UNREALIZED NET UNIT VALUE RATIO OF INVESTMENT UNITS
GAINS INCREASE AT UNIT VALUE OPERATING INCOME OR OUTSTANDING PORTFOLIO
(LOSSES) ON (DECREASE) BEGINNING AT END OF EXPENSES TO (LOSS) TO AT END OF TURNOVER
YEAR ENDED INVESTMENTS IN UNIT OF PERIOD PERIOD AVERAGE NET AVERAGE NET PERIOD (IN RATE (NOTE
DEC. 31, (NOTE B) VALUE (NOTE C) (NOTE F) ASSETS ASSETS 000'S) E)
- ------------ ------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 .65 .45 $10.44 $10.89 2.26% (1.87%) 311 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
1993 .22 (.01) 10.45 10.44 2.26% (2.20%) 408 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
1992 (.38) (.62) 11.07 10.45 2.30% (2.25%) 511 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
1991 (.84) (1.09) 12.16 11.07 2.21% (2.10%) 515 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
1990 .05 (0.20) 12.36 12.16 2.14% (1.96%) 530 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
1989 1.08 0.85 11.51 12.36 2.11% (1.93%) 584 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
1988 .89 0.67 10.84 11.51 2.12% (1.98%) 787 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
1987 .85 0.67 10.17 10.84 2.13% (1.71%) 732 N/A
------------- ---------- ----------- ---------- ------------- -------------- ------------- -----------
Aug. 29-
Dec. 31,
1986 0.23 0.17 10.00 $10.17 2.06% (1.71%) 438 N/A
(Note D) (Note D)
------------- ---------- ----------- ---------- ------------- -------------- -------------
</TABLE>
[FN]
- ------------
NOTES:
A. Enrollment and quarterly record maintenance and report fees are not
included above and did not affect Real Estate Fund Unit Values. Quarterly
record maintenance and report fees reduced the number of Real Estate Fund
Units credited to participants; enrollment fees were generally deducted
from contributions to the Program.
B. The change in the value of Separate Account No. 8 units owned by the
Account and any realized gains (losses) from the redemption of such units
are included in net realized and unrealized gain on investments--see Note
2 to Financial Statements of Separate Account No. 30 (Pooled), which may
be found in the SAI.
C. The value for a Real Estate Fund Unit was established at $10.00 on August
29, 1986, the date on which the Fund commenced operations.
D. Annualized basis.
E. The Real Estate Fund invests solely in units of Equitable's Separate
Account Nos. 2A and 8 (Pooled); thus, there is no applicable portfolio
turnover rate for the Real Estate Fund.
F. The Real Estate Fund Unit Values shown above are based on the year-end
values for Separate Account Nos. 2A and 8. However, the Unit Values used
under the Program for determining Account Balances, processing
transactions and calculating performance (including Account Balances,
transactions and performance effected or reported on December 31) are
based on the last Real Estate Fund Unit Value determined in each relevant
period and, therefore, such Unit Values reflect the values of Separate
Account Nos. 2A and 8 as of dates prior to the last day of such periods.
Income, expenses, gains and losses shown above pertain only to
participants' accumulations attributable to the Program. Other plans also
participate in Separate Account No. 30 (Pooled) and may have operating
results and other supplementary data different from those shown above.
11
<PAGE>
INVESTMENT OPTIONS
Eleven INVESTMENT OPTIONS are available under the Program. Eight of the
Investment Options are Funds, the Real Estate Fund and seven which we call
the Equity Funds. The seven Equity Funds are: the Growth Equity Fund, the
Aggressive Equity Fund, the Balanced Fund, the ADA Foreign Fund, the Equity
Index Fund, the Lifecycle Fund--Conservative and the Lifecycle
Fund--Moderate. The three additional Investment Options are guaranteed
options: three and five year Guaranteed Rate Accounts and the Money Market
Guarantee Account. See our separate prospectus for a detailed description of
the Equity Index Fund and the Lifecycle Funds.
THE EQUITY FUNDS
Each of the Equity 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 and Aggressive Equity Funds, subject to the approval of the New York
State Insurance Department. The investment objectives of the Balanced, ADA
Foreign, Equity Index and the Lifecycle Funds can only be changed by the
Trustees. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES OF ANY OF THE
FUNDS WILL BE MET. See Risks and Investment Techniques--Equity Funds.
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.
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 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 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 here, 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--Equity Funds 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.
12
<PAGE>
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--Equity Funds 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. In light of 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 through investment in a
diversified portfolio of publicly-traded common stocks, other equity-type and
debt securities and short-term money market instruments. The Fund will seek
to achieve long-term growth of its capital by investments in common stocks,
other equity-type securities and longer-term fixed income securities and
current income by investments in publicly-traded debt securities and
short-term money market instruments. The Balanced Fund will maintain at least
40%, but not more than 60%, of total Fund assets in common stocks and other
equity-type instruments (including convertible securities). Conversely, the
Fund will maintain at least 40%, but not more than 60%, of total Fund assets
in nonconvertible debt securities and short-term money market instruments.
Changes in the market value of Fund investments may result in deviations from
these ranges. In that event, we will restore the mix of Fund investments to
within the stated ranges within such reasonable periods as we determine is
required to accomplish this in an orderly manner and protect the interests of
Fund participants.
INVESTMENT POLICIES. Subject to the limits set forth above, 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 equity securities invested in by the Balanced Fund
will consist of the types of securities in which the Growth Equity Fund may
invest, including equity-type securities (such as convertible preferred
stocks or convertible debt instruments). 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
13
<PAGE>
for the Growth Equity Fund. The Balanced Fund may only purchase fixed income
securities that are rated Aa or better by Moody's Investors Service
("Moody's") or AA or better by Standard & Poor's Corporation ("S&P"). The
Fund may not invest more than five percent of its assets (at cost) in fixed
income securities of any single issuer, excluding U.S. Government or agency
securities. 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, but will normally not exceed ten years. The Balanced Fund may also
realize gains on debt securities when such actions are considered
advantageous in light of existing market conditions.
See Risks and Investment Techniques--Equity Funds 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 ADA FOREIGN FUND
OBJECTIVE. The ADA Foreign Fund invests primarily in shares of the Templeton
Foreign Fund which, in turn, seeks long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments outside the United States. In addition, the ADA Foreign Fund
seeks to maintain sufficient liquidity to permit requests for transfers and
withdrawals from the ADA Foreign Fund to be effected as of the close of
business on the day of receipt. There is no assurance that these objectives
will be met. The ADA Foreign Fund's investment objective was established, and
the selection of the Templeton Foreign Fund was made, by the Trustees and can
be changed only by the Trustees.
INVESTMENT POLICIES. The ADA Foreign Fund will normally invest at least 95%
of its assets in shares of the Templeton Foreign Fund. The balance of the ADA
Foreign Fund's assets (up to 5%) may be invested in units of our Separate
Account No. 2A for the purpose of maintaining sufficient liquidity to effect
transfer and withdrawal requests from the ADA Foreign Fund prior to the
receipt of proceeds from the redemption of shares of the Templeton Foreign
Fund. The applicable 95% and 5% limitations will be based on the net asset
value of shares of the Templeton Foreign Fund and the unit value of Separate
Account No. 2A units, respectively. However, if net transfers and withdrawals
from the ADA Foreign Fund on any day exceed the amount of the ADA Foreign
Fund's investment in Separate Account No. 2A at the beginning of that day,
transfers and withdrawals in excess of the amount held in Separate Account
No. 2A may be deferred for up to seven days pending settlement of redemption
of shares of the Templeton Foreign Fund. Furthermore, cessation of trading in
Templeton Foreign Fund shares, closing of securities markets and other events
beyond our control may cause the ADA Foreign Fund portfolio temporarily to
fail to maintain the percentage limitations noted above.
TEMPLETON FOREIGN FUND. The Templeton Foreign Fund seeks long-term capital
growth through a flexible policy of investing in stocks and debt obligations
of companies and governments outside the United States. Although the
Templeton Foreign Fund generally invests in common stock, it may also invest
in preferred stock and certain debt securities, rated or unrated, such as
convertible bonds and bonds selling at a discount. The Templeton Foreign Fund
may for temporary defensive purposes invest without limit in US. Government
securities, bank time deposits in the currency of any major nation,
commercial paper and repurchase agreements with banks or broker-dealers.
The Templeton Foreign Fund is a portfolio of Templeton Funds, Inc., a series
fund which was incorporated under Maryland law in 1977 and is registered
under the 1940 Act as an open-end diversified management investment company.
As a series mutual fund, Templeton Funds, Inc. issues shares in two
investment portfolios, although the Templeton Foreign Fund is the only
Templeton fund available under the ADA program. The Templeton Foreign Fund
had total net assets of $5.3 billion as of December 31,
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1994. The investment manager of the Templeton Foreign Fund is Templeton,
Galbraith & Hansberger Ltd., Nassau, Bahamas, an indirect wholly-owned
subsidiary of Franklin Resources, Inc.
For additional information about the Templeton Foreign Fund, see the
Templeton Foreign Fund's prospectus and Statement of Additional Information.
Free copies of those documents either accompany this Prospectus or may be
obtained by calling an Equitable Life Account Executive. Participants and
employers should carefully read the prospectus of the Templeton Foreign Fund
before they allocate contributions or transfer amounts to the ADA Foreign
Fund. See Risks and Investment Techniques-- Equity Funds below for more
information on the Templeton Foreign Fund and money market investments,
including Separate Account No. 2A.
VOTING RIGHTS. Templeton Funds, Inc. is not required under state law 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 Templeton Foreign Fund allocated
to the ADA Foreign Fund in accordance with instructions received from
employers, participants or trustees, as the case may be, in the ADA Foreign
Fund. Each participant for whom we maintain records and, in other cases, the
employer or trustee, will be allowed to instruct Equitable Life on how to
vote shares of the Templeton Foreign Fund in proportion to his or her
interest in the ADA Foreign Fund as of the record date for the shareholder
meeting. Equitable Life will abstain from voting shares as to which no
instructions are received. Participants, employers or trustees, as the case
may be, in the ADA Foreign Fund will receive periodic reports relating to the
Templeton Foreign Fund and proxy material, together with a voting instruction
form, in connection with shareholder meetings. By agreement, the
responsibility for soliciting such voting instructions and the costs of
solicitation will be borne by Templeton Funds, Inc.
RISKS AND INVESTMENT TECHNIQUES--EQUITY FUNDS
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, the Balanced and
the ADA Foreign Funds are stated below. See also the prospectuses and
Statement of Additional Information for the Templeton Foreign Fund and the
Seven Seas S&P 500 Fund for additional information on the special risks of
investment in these funds through the ADA Foreign Fund and the Equity Index
Fund, respectively, and our separate prospectus for information on the
special risks of investing in the Lifecycle Group Trusts.
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 US. ADRs do not lessen the foreign exchange
risk
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<PAGE>
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.
TEMPLETON FOREIGN FUND. The ADA Foreign Fund invests 95% of its assets in the
Templeton Foreign Fund. Templeton Funds, Inc. advises their investors that as
with any investment in securities, the value of, and the income from, an
investment in the Templeton Foreign Fund can decrease as well as increase,
depending on a variety of factors which may affect the values and the income
generated by the Templeton Foreign Fund's portfolio securities, including
general economic conditions, market factors, and currency exchange rates.
Additionally, investment decisions made by the Templeton Foreign Fund
investment manager will not always be profitable or prove to have been
correct. The Templeton Foreign Fund is not intended as a complete investment
program.
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 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 medium 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 that 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,
1993, 27.55% (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.
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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 United States 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 lend 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.
MONEY MARKET INVESTMENTS. The Aggressive Equity, the Growth 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. The ADA
Foreign Fund will invest up to 5% of its assets in Separate Account No. 2A
units. We maintain Separate Account No. 2A to provide a more efficient means
for certain of 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 repurchase agreements requiring
repurchase 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
("Moodys") 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.
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THE EQUITY INDEX FUND
OBJECTIVE. The Equity Index Fund seeks to achieve a total return which
parallels that of the Standard & Poor's 500 Composite Stock Price Index (the
"S&P 500 Index") by investing in a mutual fund designated by the Trustees,
the Seven Seas Series S&P 500 Index Fund (a portfolio of The Seven Seas
Series S&P Index Fund -- "The Seven Seas Series Fund"). There is no assurance
that this objective will be met.
INVESTMENT POLICIES. The Equity Index Fund will invest 100 percent of its
assets in shares of the Seven Seas S&P 500 Index Fund.
THE SEVEN SEAS S&P 500 FUND. The Seven Seas S&P 500 Index Fund's investment
objective is to emulate the total return of the S&P 500 Index. The Seven Seas
S&P 500 Index Fund seeks to achieve its objective by investing in all 500
stocks in the S&P 500 Index in proportion to their weighting in the S&P 500
Index. To the extent that all 500 stocks cannot be purchased, the Seven Seas
S&P 500 Index Fund will purchase a representative sample of the stocks listed
in the S&P 500 Index in proportion to their weightings.
The Seven Seas Series Fund was organized as a Massachusetts business trust
and is registered under the 1940 Act as an open-end diversified management
investment company. As a series mutual fund, The Seven Seas Series Fund
issues shares in different investment portfolios, one of which is the Seven
Seas S&P 500 Index Fund. The investment adviser of the Seven Seas S&P 500
Index Fund is State Street.
"S&P 500" IS A TRADEMARK OF STANDARD & POOR'S CORPORATION THAT HAS BEEN
LICENSED FOR USE BY THE SEVEN SEAS SERIES FUND. THE SEVEN SEAS SERIES FUND IS
NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S CORPORATION,
AND STANDARD & POOR'S CORPORATION MAKES NO REPRESENTATION REGARDING THE
ADVISABILITY OF INVESTING IN THE SEVEN SEAS SERIES FUND.
The S&P 500 Index is composed of 500 common stocks which are chosen by
Standard & Poor's Corporation to best capture the price performance of a
large cross-section of the United States publicly traded stock market. The
S&P 500 Index is structured to approximate the general distribution of
industries in the United States economy. The inclusion of a stock in the S&P
500 Index in no way implies that Standard & Poor's Corporation believes the
stock to be an attractive investment, nor is Standard & Poor's a sponsor or
in any way affiliated with the Seven Seas S&P 500 Index Fund or the Equity
Index Fund. The 500 securities, most of which trade on the New York Stock
Exchange, represent approximately 75 percent of the market value of all
common stocks. Each stock in the S&P 500 Index is weighted by its market
capitalization. That is, each security is weighted by its total market value
relative to the total market values of all the securities in the S&P 500
Index. Component stocks included in the S&P 500 Index are chosen with the aim
of achieving a distribution at the index level representative of the various
components of the United States gross national product and therefore do not
represent the 500 largest companies. Aggregate market value and trading
activity are also considered in the selection process. A limited percentage
of the S&P 500 Index may include Canadian securities. No other foreign
securities are eligible for inclusion.
For further information about the Seven Seas S&P 500 Index Fund, see The
Seven Seas Series Fund's prospectus and the related statement of additional
information. Free additional copies of The Seven Seas Series Fund prospectus
and copies of the related statement of additional information may be obtained
by calling an Equitable Life Account Executive. Participants and Employers
should carefully read the prospectus of The Seven Seas Series Fund before
they allocate contributions or transfer amounts to the Equity Index Fund.
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VOTING RIGHTS: The Seven Seas Series Fund does not hold annual meetings of
shareholders. If a meeting of shareholders is held, they may vote on such
matters as election of trustees and any other matters requiring a vote by
shareholders under the 1940 Act. Equitable Life will vote the shares of the
Seven Seas S&P 500 Index Fund allocated to the Equity Index Fund in
accordance with instructions received from employers, participants or
trustees, as appropriate, in the Equity Index Fund. Each employer,
participant or trustee, as appropriate, will be allowed to instruct Equitable
Life on how to vote shares of the Seven Seas S&P 500 Index Fund in proportion
to their interest the Equity Index Fund as of the record date for the
shareholder meeting. Equitable Life will abstain from voting shares as to
which no instructions are received. Employers, participants or trustees will
receive periodic reports relating to the Seven Seas S&P 500 Index Fund and
proxy materials together with a voting instruction form, in connection with
shareholder meetings. The costs of soliciting voting instructions from
participants will be borne by the Seven Seas Series Fund.
LIFECYCLE FUNDS--CONSERVATIVE AND MODERATE
Each Lifecycle Fund is a separate account of Equitable Life. Contributions
may be made to the Lifecycle Fund--Conservative and/or the Lifecycle
Fund--Moderate. Each of the Lifecycle Funds invests in a Lifecycle Fund Group
Trust. Each such Group Trust has identical investment objectives and policies
to the Lifecycle Fund to which it relates. In turn each of the Lifecycle Fund
Group Trusts invests in a mix of Underlying Funds.
THE LIFECYCLE FUND GROUP TRUSTS
The Lifecycle Funds Group Trusts are collective investment funds maintained
by State Street. Each Lifecycle Fund Group Trust is organized as a common law
trust under Massachusetts law, and, because of exclusionary provisions, is
not subject to regulation under the 1940 Act.
There are two Lifecycle Fund Group Trusts: the Lifecycle Fund Group
Trust-Conservative and the Lifecycle Fund Group Trust-Moderate. State Street
serves as the trustee and investment manager to each of these Group Trusts.
Each of the Lifecycle Fund Group Trusts attempts to achieve its investment
objective by investing in a mix of underlying collective investment funds
(the Underlying Funds) maintained by State Street and offered exclusively to
tax exempt retirement plans.
LIFECYCLE FUND GROUP TRUST--CONSERVATIVE
OBJECTIVE. The Lifecycle Fund Group Trust--Conservative seeks to provide
current income and a low to moderate growth of capital. There is no assurance
that this objective will be met.
INVESTMENT POLICIES. The Lifecycle Group Trust--Conservative seeks to achieve
its objective by investing 100% of its assets in units of a mix of Underlying
Funds in accordance with certain target percentage weightings. The table
below shows the mix of Underlying Funds targeted by the Lifecycle Fund Group
Trust--Conservative.
<TABLE>
<CAPTION>
<S> <C>
S&P 500 Flagship Fund ...................15%
Russell 2000 Fund ....................... 5%
Daily EAFE Fund ......................... 10%
Daily Government/Corporate Bond Fund ... 50%
Short Term Investment Fund .............. 20%
</TABLE>
The target percentages shown above are reviewed annually by the ADA Trustees
and may be revised as recommended, subject to State Street's approval. State
Street, as investment manager of the Lifecycle
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Fund Group Trust--Conservative, from time to time makes adjustments in the
mix of Underlying Funds, as needed to maintain, to the extent practicable,
the target percentages in each of the Underlying Funds.
LIFECYCLE FUND GROUP TRUST--MODERATE
OBJECTIVE. The Lifecycle Fund Group Trust--Moderate seeks to provide growth
of capital and a reasonable level of current income. There is no assurance
that this objective will be met.
INVESTMENT POLICIES. The Lifecycle Fund Group Trust--Moderate seeks to
achieve its investment objective by investing 100% of its assets in units of
a mix of Underlying Funds in accordance with certain target percentage
weightings. The table below shows the mix of Underlying Funds targeted by the
Lifecycle Fund Group Trust--Moderate.
<TABLE>
<CAPTION>
<S> <C>
S&P 500 Flagship Fund ...................35%
Russell 2000 Fund ....................... 10%
Daily EAFE Fund ......................... 15%
Daily Government/Corporate Bond Fund ... 30%
Short Term Investment Fund .............. 10%
</TABLE>
The target percentages shown above are reviewed annually by the ADA Trustees
and may be revised as recommended, subject to State Street's approval. State
Street, as investment manager of the Lifecycle Fund Group Trust--Moderate,
from time to time makes adjustments in the mix of Underlying Funds, as needed
to maintain, to the extent practicable, the target percentages in each of the
Underlying Funds.
THE UNDERLYING FUNDS
Like the Lifecycle Fund Group Trusts, the Underlying Funds are collective
investment funds maintained by State Street and offered exclusively to tax
exempt retirement plans. Unlike the Lifecycle Fund Group Trusts, however,
which are available only under the ADA Program, the Underlying Funds may
receive contributions from other tax exempt retirement plans.
For a description of the Underlying Funds in which the Lifecycle Fund Group
Trusts invest, see our separate prospectus for the Lifecycle Funds --
Conservative and Moderate.
HOW WE CALCULATE THE VALUE OF AMOUNTS ALLOCATED TO THE EQUITY FUNDS
CONTRIBUTIONS AND TRANSFERS: PURCHASE OF FUND UNITS. The portion of each
contribution or transfer allocated to an Equity Fund will be used to purchase
Units. Your interest in each Fund is represented by the value of the Units
credited to your Account for that Fund. The number of Units purchased by a
contribution or transfer to a Fund is calculated by dividing the amount
allocated by the Unit Value calculated as of the close of business on the day
we receive your contribution or transfer instruction. The number of Units
credited to your Account will not vary because of any subsequent fluctuation
in the Unit Value, but the value of a Unit fluctuates with the investment
experience of the Fund. In other words, the Unit Value will reflect the
investment income and realized and unrealized capital gains and losses of
that Fund as well as the deductions and charges we make to the Fund.
HOW WE DETERMINE THE UNIT VALUE. We determine the Unit Value for each Equity
Fund at the end of each business day. The Unit Value for each Fund is
calculated by first determining a gross unit value, which reflects only
investment performance, and then adjusting it for Fund expenses to obtain the
Fund Unit Value. We determine 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 (for the Growth Equity, Aggressive Equity and
Balanced Funds, we also subtract any audit and custodial fees). We calculate
the net investment factor as follows:
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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 other expenses times the number of days since the end of the preceding
month.
For information on how we value the assets of the Equity Funds, see the SAI.
The ADA Foreign Fund's investments in the Templeton Foreign Fund and the
Equity Index Fund's investments in the Seven Seas S&P 500 Index Fund will be
valued at the underlying mutual fund's net asset value per share. The value
of the ADA Foreign Fund will also reflect the value of the amounts invested
in units of our Separate Account No. 2A.
The investments made by each of the Lifecycle Funds in units of the
corresponding Lifecycle Fund Group Trust will be valued at the net asset
value of the units of such Lifecycle Fund Group Trust. Investments made by
each Lifecycle Fund Group Trust in the Underlying Funds will be valued at the
Underlying Fund's net asset value per unit. The units of each Underlying Fund
are valued daily. For a more detailed description of how the Underlying Funds
are valued, see our separate prospectus for the Lifecycle Funds --
Conservative and Moderate.
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<PAGE>
THE REAL ESTATE FUND
REAL ESTATE FUND OBJECTIVES AND INVESTMENT POLICIES
OBJECTIVE. The Real Estate Fund, Separate Account No. 30, invests primarily,
though not exclusively, in units of our Separate Account No. 8 (the "Prime
Property Fund"), which in turn invests primarily in real property. The Prime
Property Fund seeks to achieve a stable rate of return over an extended
period of time through rental income and appreciation of real property
values. In addition, the Real Estate Fund seeks to maintain a level of
liquidity consistent with anticipated distributions and transfers. The Real
Estate Fund's liquid assets typically range from 0 to 10% of its total
assets, although the actual level of liquidity will depend on contributions,
distributions and transfers. See Special Risks Related to the Real Estate
Fund. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES OF THE REAL ESTATE
FUND OR OF PRIME PROPERTY FUND WILL BE MET.
INVESTMENT POLICIES OF PRIME PROPERTY FUND. Prime Property Fund seeks the
acquisition and long-term ownership of high-grade, income-producing real
property. Prime Property Fund seeks to invest in properties that are located
in strong rental markets and have continuous potential for resale. Properties
are located throughout the United States. The distribution of investments by
property type and by location of properties is expected to change from time
to time. For additional information about the distribution of investments,
see Prime Property Fund Investments in the SAI.
In selecting a property for Prime Property Fund, we consider its location,
potential income stream, cost, potential for increasing rental income and
capital appreciation, resale marketability and architectural and other
physical attributes. We also evaluate the risks, including environmental
risks, involved with the property, as well as the probability and potential
impact of changes in the local economy. There are no limits as to how much
Prime Property Fund can invest in any one property. Currently, however, we do
not intend to invest more than 10% of Prime Property Fund's assets in any one
property. Prime Property Fund may invest in construction and mortgage loans
receivable and notes receivable. Mortgages may be accepted as partial
consideration for properties sold.
Prime Property Fund acquires both existing and developmental properties.
Prime Property Fund will also enter into forward commitments, under which it
agrees to purchase a property upon completion of construction or leasing.
Prime Property Fund does not currently expect to invest more than 10% of its
assets in developmental properties.
Prime Property Fund participates in joint ventures, particularly with regard
to large properties. In general, co-venturers will be real estate developers,
and joint ventures with them may involve property development projects. We
seek to form joint ventures with persons and companies who, because of our
experience with them or investigation into their financial condition and
business history, we regard as experienced and financially responsible. Prime
Property Fund may issue construction and mortgage loans on a fixed or
variable rate basis in connection with joint ventures in which it
participates. If Prime Property Fund issues fixed rate loans, it may seek to
stabilize the market value of such loans by engaging in interest rate hedging
transactions, to the extent permitted under applicable regulatory
requirements.
Prime Property Fund may use mortgage financing to acquire properties, may
mortgage properties after acquisition, may acquire properties subject to
mortgages and may enter into joint ventures or other arrangements that
require mortgage financing. There is no limit on mortgage indebtedness with
respect to any one property. Prime Property Fund may also borrow money in
order to acquire new properties or improve existing investments. These
borrowings may have recourse to wholly-owned properties or may be secured by
the general credit of the Fund and thus have recourse to the entire Fund.
During the period
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from 1985 through 1994 Prime Property Fund's total borrowings secured by
wholly-owned properties ranged from 6.2% to 15.7% of the total portfolio
value. Properties held by joint ventures may also be mortgaged. For more
information regarding borrowings secured by wholly-owned properties see Prime
Property Fund Investments in the SAI. Prime Property Fund may borrow in order
to provide working capital for repairs and improvements and to meet other
cash flow requirements. Prime Property Fund does not borrow in order to meet
investors' withdrawal requests.
Consistent with Prime Property Fund's investment objectives, it may engage in
transactions and invest in properties other than or in addition to those
described above.
Prime Property Fund does not seek a specified holding period for the
properties it acquires. Prime Property Fund will buy and sell properties at
any time; in general, however, it seeks to hold properties for long-term
investment.
Most properties are managed by us or our affiliates. At December 31, 1994
independent managing and leasing agents managed properties representing
approximately 37.5% of aggregate appraised values.
INVESTMENT RISKS RELATED TO PRIME PROPERTY FUND. Prime Property Fund is
subject to the risks generally incident to the ownership of real property.
These include the uncertainty of cash flow, the need to meet fixed and other
obligations, shifts in real estate markets in general and in local markets in
particular, adverse changes in economic and social conditions, including
demographic trends, changes in operating expenses, including real estate
taxes, changes in tax, zoning, building, environmental and other laws, losses
due to nonpayment of rent, other uninsured losses and other risks beyond our
control. However, we believe that the large number of properties held in
Prime Property Fund and their geographic and use diversification provide a
measure of protection against these risks.
Investments in developmental properties are subject to additional risks,
which include cost overruns, construction delays, difficulties in finding
suitable tenants and delays in fully renting the property. Joint ventures may
be vulnerable to losses as a result of a joint venturer's financial
difficulties. In addition, the joint venturer may at times have objectives
that are contrary to those of Prime Property Fund. Construction loans may be
vulnerable to losses due to a developer's financial difficulties. In general,
construction loans will not be personal obligations of the borrower, and
Prime Property Fund will look solely to the underlying property in case of
default. Other liens such as mechanics' liens may have priority over Prime
Property Fund's security interest in the property.
INVESTMENT POLICIES RELATED TO LIQUID ASSETS. A portion of the Real Estate
Fund assets may be held in liquid assets. The portion of the Fund for which
liquidity is the investment objective may be invested in units of our
Separate Account No. 2A. See Money Market Investments under Risks and
Investment Techniques--Equity Funds. In addition, the Real Estate Fund may
invest directly in government obligations, short-term commercial paper and
other money market instruments of the types purchased by the Balanced Fund
and described above. Prime Property Fund may also invest in these short-term
securities directly or through investment in units of Separate Account No.
2A. The Real Estate Fund seeks to hold enough liquid assets to provide for
expected withdrawals. These holdings could, however, tend to reduce the
investment performance of the Fund as compared to that of Prime Property Fund
or a fund fully invested in real estate.
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SPECIAL RISKS RELATED TO THE REAL ESTATE FUND
LIQUIDITY. There is no assurance that the Real Estate Fund will have
sufficient liquidity to make distributions and transfers when requested under
the Program or when required by law. From 1991 to June 1994 the Real Estate
Fund was using substantially all of its available cash flow and liquid assets
to pay participant withdrawal requests, and withdrawals were being delayed in
accordance with the procedures described below. As of the date of this
prospectus, the Real Estate Fund has sufficient liquidity and is paying
participant withdrawals on a current basis.
IN LIGHT OF THE RISKS AND POSSIBLE ILLIQUIDITY OF AN INVESTMENT IN THE REAL
ESTATE FUND, YOU AS AN INDIVIDUAL PARTICIPANT SHOULD CONSIDER LIMITING THE
AMOUNT YOU ALLOCATE TO IT, PARTICULARLY AS YOU NEAR RETIREMENT. In
considering this matter, you should take into account the other assets in
your investment portfolio, both in your plan and elsewhere, and the
distributions you anticipate taking from your plan in the foreseeable future.
If the Real Estate Fund does not have enough liquid assets to pay all
requested withdrawals, it will withdraw some or all of its interest from
Prime Property Fund. We may postpone withdrawals from Prime Property Fund,
however, for such time as we reasonably consider necessary to obtain the
amount to be withdrawn or to protect the interests of other participants in
Prime Property Fund. Withdrawals from Prime Property Fund have been
restricted from time to time. See Procedures for Withdrawals, Distributions
and Transfers--Special Rules for Distributions and Transfers from the Real
Estate Fund in the SAI.
INSURANCE RISKS. We believe that our casualty insurance would provide
adequate compensation for accidental loss of property value. A possible
exception would be loss in California resulting from earthquake; our
insurance against such loss is limited to $80 million per occurrence and $80
million aggregate annually for all our California properties, including Prime
Property Fund properties. We believe that the amount of earthquake insurance
we carry is reasonable in light of the types of coverage available at
acceptable prices. Prime Property Fund's properties are also covered under an
umbrella liability policy that we believe is adequate for the portfolio in
view of the types of coverage currently available at acceptable prices.
CONFLICTS OF INTEREST RELATED TO PRIME PROPERTY FUND
ACQUISITION OF PROPERTIES. Our wholly-owned subsidiary, Equitable Real Estate
Investment Management, Inc. (Equitable Real Estate) is responsible for
advising us as to all our real property acquisitions, management and sales.
See Investment Management of the Real Estate Fund. We and Equitable Real
Estate make acquisitions for ourselves and for our clients, including Prime
Property Fund. Before acquisition, properties are allocated among Prime
Property Fund, our other separate accounts (both pooled and single-client
accounts), our general account, Equitable Real Estate's own account, our
investment advisory account and Equitable Real Estate's advisory accounts.
We seek to allocate properties among the accounts based on the accounts'
investment policies, size, liquidity and diversification requirements,
current availability of funds, current portfolio holdings and annually
established investment goals. Equitable Real Estate's recommendations as to
the allocation of properties are reviewed and approved by the Investment
Committee of our Board of Directors. With limited exceptions, the Investment
Committee has final authority over the acquisition and allocation of
investment properties for all of our accounts.
Two or more of those accounts may share some of those properties. Prime
Property Fund does not now share any properties with any of our other
accounts. It may do so in the future, however. Sharing real estate could give
rise to situations in which our accounts have conflicting interests.
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MANAGEMENT OF PROPERTIES. In certain cases, we or our affiliates may manage
some of the properties held in Prime Property Fund. Pursuant to an exemption
issued by the United States Department of Labor, we are permitted to charge
market level fees, including a profit, for on-site management and leasing
services we provide to properties in Prime Property Fund. During 1994,
Equitable Real Estate received payments of $6.1 million for these types of
services.
We may have interests in properties held in our general account or in other
accounts we manage that may be affected by the acquisition, operations or
sale of Prime Property Fund properties.
APPRAISAL OF PROPERTIES. The portfolio value for the Real Estate Fund depends
heavily on the estimated market values of properties held by Prime Property
Fund. Those estimates are based on our periodic reappraisals of the
properties. Our fees will tend to increase as those appraised values
increase. There is no assurance that any of the properties will ultimately be
sold for their appraised values. See How We Calculate the Value of Amounts
Allocated to the Real Estate Fund.
SALE OF PROPERTIES. We may postpone withdrawals from Prime Property Fund
under certain circumstances within our discretion (see Special Risks related
to the Real Estate Fund), which may include a reasonable determination not to
sell properties. Our fees depend on the aggregate value of net assets held in
Prime Property Fund.
HOW WE CALCULATE THE VALUE OF AMOUNTS ALLOCATED TO THE REAL ESTATE FUND
CONTRIBUTIONS AND TRANSFERS: PURCHASE OF REAL ESTATE FUND UNITS. The Real
Estate Fund accepts contributions and transfers only one day each month. All
amounts transferred from other Investment Options or contributed directly to
the Real Estate Fund will first be placed in the Money Market Guarantee
Account and designated for investment in the Real Estate Fund. On the next
day on which the Real Estate Fund accepts contributions, the amount
designated for the Real Estate Fund, plus accrued interest, will be used to
purchase Units in the Real Estate Fund. The Real Estate Fund accepts
contributions as of the day its Unit Value is determined. If you wish to
change your mind about contributing to the Real Estate Fund, you may do so
before your contribution is transferred to the Real Estate Fund by sending us
written instructions that the money being held in the Money Market Guarantee
Account is no longer designated for investment in the Real Estate Fund. You
should enclose a transfer form telling us where that money is to be
allocated. We must receive your instructions by the close of business on the
day the transfer is to occur in order for them to be effective. The transfer
date will vary from month to month; therefore, we cannot ensure that your
instructions will be effective unless we receive them by the first day of the
month.
The day on which the Real Estate Fund's Unit Value is determined depends each
month on the day on which the value of Prime Property Fund is known. Prime
Property Fund is valued only once each month, as of the last business day of
the month. However, that value is normally not known until several days later
because financial data must be calculated and reported from properties
located throughout the country. When this process is completed, Units of the
Real Estate Fund are valued. During the period between the end of the month
and the day on which the Real Estate Fund Units are valued, which normally
ranges from five to ten days, the value of Prime Property Fund real estate
assets from the end of the preceding month may change, income will accrue and
expenses will be incurred. As a result, the procedure described above will
tend to favor Real Estate Fund Units being purchased to the extent that there
have been net increases in the value of the underlying net assets between the
end of the month and the date of the valuation. It will have the opposite
effect to the extent of any decreases in the net assets during this period.
LIQUIDATION OF REAL ESTATE FUND UNITS. UNITS IN THE REAL ESTATE FUND MAY BE
LIQUIDATED ONLY AFTER THE END OF EACH CALENDAR QUARTER. The liquidation will
occur after we know the value of Prime Property Fund
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for the last day of that quarter and have determined the value of Real Estate
Fund Units, which normally occurs five to ten days into the succeeding month.
If you are taking a distribution or transfer from the Real Estate Fund, the
amount distributed will not reflect any change in the value of Prime Property
Fund assets attributable to the period between the last day of the quarter
and the day your redemption occurs. To the extent that the value increases
during that period, this will tend to disadvantage the person liquidating
Units and to favor the holders of the remaining Units.
HOW WE DETERMINE THE UNIT VALUE. We determine the Unit Value for the Real
Estate Fund once each month, generally as of the close of business on the
first business day after the day the unit value for Prime Property Fund is
known. We first determine the gross unit value, which is equal to (a) plus
(b) plus (c) divided by (d), where
(a) is the aggregate value of all units of Prime Property Fund held by the
Real Estate Fund determined as of the last business day of the preceding
month;
(b) is the aggregate value of all units of Separate Account No. 2A and cash
or cash equivalents held by the Real Estate Fund, determined as of the close
of business on the day the Real Estate Fund Unit Value is known;
(c) is the net value of all other assets and liabilities of the Real Estate
Fund, determined as of the close of business on the day the Real Estate Fund
Unit Value is known; and
(d) is the total number of Real Estate Fund Units outstanding.
To obtain the Real Estate Fund Unit Value, we then adjust this gross unit
value for Fund fees and other expenses at rates equal to 1/12 of the annual
rates. See Deductions and Charges.
Once we determine the Unit Value, it remains constant until set again the
following month. Thus, any transactions that occur between determination
dates (such as the withdrawal of fees) are processed using the Unit Value
determined earlier that month.
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THE GUARANTEED OPTIONS
Contributions allocated to the Guaranteed Rate Accounts are invested through
and guaranteed by major insurance companies. Contributions allocated to the
Money Market Guarantee Account are backed by amounts held in Separate Account
No. 43 (described below) and are guaranteed by Equitable Life's general
account. The general accounts of Equitable Life and other major insurance
companies support each company's respective insurance and annuity guarantees
as well as their general obligations. The companies' general accounts, as
part of their insurance and annuity operations, are subject to insurance laws
and regulations of all jurisdictions in which they are authorized to do
business. Because of applicable exemptive and exclusionary provisions,
interests in or guaranteed by the general accounts have not been registered
under the Securities Act of 1933 (the "1933 Act") nor are the general
accounts investment companies under the the 1940 Act. Accordingly, neither
the general accounts of Equitable Life or of any other major insurance
company 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 accounts of Equitable Life and other major insurance companies
and the Guaranteed 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.
GUARANTEED RATE ACCOUNTS
METLIFE GUARANTEES--NEW GUARANTEED RATE ACCOUNTS. For approximately a
one-year period beginning August 3, 1994, all monies allocated to the
Guaranteed Rate Accounts (GRAs) have been and will be invested through two
group annuity contracts issued to the Trustees by Metropolitan Life Insurance
Company ("MetLife"). These GRAs will remain invested with MetLife through
maturity. At the end of the one-year period the Trustees may renew the
arrangement with MetLife to provide the Program GRAs or they may arrange for
other carriers to provide them. Call your Account Executive at that time for
further information. All GRAs opened prior to August 3, 1994 will remain
invested through maturity with the carrier that provided that GRA.
Withdrawals, transfers, reallocations on maturity and benefit distributions
from GRAs provided by other carriers are subject to Equitable Life's receipt
of the proceeds of such GRA from such other carriers.
All references in this prospectus and in the SAI to "The Guaranteed Rate
Accounts" or to a "GRA" or "GRAs" shall be deemed to refer to the GRAs
provided by Equitable Life, MetLife or any other carrier which previously
provided or may in the future provide Program GRAs, as appropriate.
MetLife is a New York mutual life insurance company with its Home Office
located at One Madison Avenue, New York, New York 10010. Founded in 1868,
MetLife is the second largest insurance company in the United States, with
assets of approximately $100.2 billion held in its general account as of
December 31, 1994. MetLife and its subsidiaries had assets under management
as of December 31, 1994 of approximately $165 billion.
THE GUARANTEES. Contributions to the 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
applicable asset-based fees. See Deductions and Charges. 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. Interest accrues from the day after your contribution
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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. The amount of your contributions and the interest credited
is guaranteed; subject, however, to any penalties applicable upon premature
withdrawal. See Premature Withdrawals and Transfers from a GRA in the SAI for
a description of these penalties and when they apply. You may call us to
obtain the current GRA rates. For a discussion of maturing GRAs, see Maturing
GRAs in the SAI.
PREMATURE WITHDRAWALS AND TRANSFERS. You may transfer amounts from other
Investment Options to a GRA at the current guaranteed rate at any time. You
may not make transfers from one GRA to another or from a GRA to one of the
other Investment Options except at maturity. Likewise, you may not remove
amounts from a GRA prior to maturity in order to obtain a plan loan, to make
a hardship or in-service withdrawal, to receive benefits from a terminated
plan or to transfer amounts to a new plan. Withdrawals from GRAs may be made
before maturity if you are disabled, you attain age 70 1/2 , or you die.
Certain other withdrawals from a GRA prior to maturity are permitted, but may
be subject to a penalty. See Procedures for Withdrawals, Distributions and
Transfers--Premature Withdrawals and Transfers from a GRA in the SAI.
MONEY MARKET GUARANTEE ACCOUNT
WE GUARANTEE THE MONEY MARKET GUARANTEE ACCOUNT. We guarantee the amount of
your contributions and the interest credited to the Money Market Guarantee
Account. We maintain Separate Account No. 43 (described below) in connection
with these 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 applicable asset-based fees. The rate will approximate the
average over each calendar year of money market funds considered "domestic
prime," that is, funds with the highest quality investments offered to
investors, plus an amount which approximates the average expenses deducted
from such funds, less .15% and the applicable Program Expense Charge. See
Deductions and Charges. Call us to obtain the current monthly rate. On
January 1 each year we set an annual minimum interest rate for this Account.
The minimum guaranteed interest rate for 1995 is 2.5% (before applicable
asset-based fees).
SEPARATE ACCOUNT NO. 43. We will hold assets in Separate Account No. 43
sufficient to pay all principal and accrued interest under the Money Market
Guarantee Account option, less applicable fees, in accordance with provisions
of the New York Insurance Law which govern the operation of Separate Account
No. 43. These provisions generally require that assets held in Separate
Account No. 43 be valued at cost and not at market value. In accordance with
the New York Insurance Law, the assets which we are required to hold in
Separate Account No. 43 attributable to ADA participants will only be
available to Program participants who have allocated amounts to the Money
Market Guarantee Account and may not be used to satisfy obligations that may
arise out of any other business we conduct. We have the right to remove
assets from Separate Account No. 43 that are in excess of those attributable
to the combined account values of all ADA participants.
Your principal and accrued interest under the Money Market Guarantee Account
will not fluctuate with the value of the assets we hold in Separate Account
No. 43 and are guaranteed by us and backed by our general account assets. If
the assets in Separate Account No. 43 prove insufficient to provide for
payment of all principal and accrued interest under the Money Market
Guarantee Account, we will transfer additional assets into Separate Account
No. 43 to make up for any shortfall. Conversely, we may withdraw from
Separate Account No. 43 any excess over the amount needed to provide for
payment of all such principal and accrued interest.
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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 transfer or withdrawal. 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, WITHDRAWALS, AND TRANSFERS. Distributions, withdrawals and
transfers may be made at any time permitted under your plan. We do not charge
penalties.
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EQUITABLE LIFE AND THE INVESTMENT MANAGERS
EQUITABLE LIFE
Equitable Life is a diversified financial services organization serving a
broad spectrum of insurance, investment management and investment banking
customers. We are a New York stock life insurance company and our Home Office
is located 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. We
are authorized to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico and the Virgin Islands. We maintain local
offices throughout the United States.
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.
Equitable Life, the Holding Company and their subsidiaries managed assets of
approximately $174.5 billion as of December 31, 1994.
THE SEPARATE ACCOUNTS
Each of the eight Funds is a separate account of Equitable Life; we own all
the assets of the separate accounts. A separate account is a separate
investment account which we use to support our group annuity contracts, and
for other purposes permitted by applicable law. We keep the assets of each
separate account segregated from our general account and from any other
separate accounts we may have. Although the assets of the Funds are our
property, our obligation to you under the group annuity contract equals the
value of your accumulation in each Fund.
Income, gains and losses, whether or not realized, from assets invested in
the Funds are 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, however, transfer amounts owed to us, such
as fees and expenses, to our general account at any time. We may make these
transfers even if the Fund in question does not have sufficient liquidity to
make all withdrawals requested by participants.
The separate accounts which we call the Growth Equity, Aggressive Equity,
Balanced, ADA Foreign, Equity Index and Real Estate Funds commenced
operations on 1969, 1968, 1991, 1992, 1994, and 1986 respectively. The
Lifecycle Funds commenced operations on May 1, 1995. The Funds are governed
by the laws and regulations of the state of New York, where we are domiciled,
and may also be governed by laws of other states in which we do business. The
Balanced, Equity Index, ADA Foreign and Lifecycle Funds are used exclusively
for the ADA Members Retirement Program. The Growth Equity, Aggressive Equity
and Real Estate Funds are "pooled" funds that are used to fund benefits under
the ADA Program and other group annuity contracts, agreements, and
tax-deferred retirement programs we administer. Because of exclusionary
provisions, the separate accounts are not subject to regulation under the
1940 Act.
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INVESTMENT MANAGEMENT OF THE EQUITY FUNDS
We act as investment manager to the Growth Equity, Aggressive Equity, and
Balanced Funds. As such, we invest and reinvest these assets in accordance
with the investment policies for each of these Funds. We have limited
investment management responsibility with respect to the ADA Foreign Fund,
and no investment management responsibility for the Equity Index or the
Lifecycle Funds. In providing investment management to the Growth Equity,
Aggressive Equity and Balanced Funds, we have complete discretion over Fund
assets, within the investment policies of each Fund, and currently use the
personnel and facilities of Alliance Capital Management L.P. ("Alliance") for
portfolio management, securities selection and transaction services.
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.
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 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.
For the ADA Foreign Fund, we have limited investment management
responsibility in accordance with the investment policies established by the
Trustees. The ADA Foreign Fund is invested primarily in the Templeton Foreign
Fund, which is managed by Templeton, Galbraith & Hansberger Ltd. See The ADA
Foreign Fund.
For the Equity Index Fund, we act in accordance with the investment policies
established by the Trustees. The Equity Index Fund is invested solely in the
Seven Seas Series S&P 500 Index Fund. State Street is the investment advisor
of that Fund. See The Equity Index Fund.
For the Lifecycle Funds, we act in accordance with the investment policies
established by the Trustees. The Lifecycle Funds--Conservative and Moderate
are invested solely in units of the Lifecycle Fund Group Trusts--Conservative
and Moderate, respectively. State Street is the investment adviser of these
Group Trusts and the Underlying Funds. See Lifecycle Funds.
We, together with the Holding Company, 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.
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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.
INVESTMENT MANAGEMENT OF THE REAL ESTATE FUND
We act as investment manager to the Real Estate Fund and to Prime Property
Fund. In managing the Real Estate Fund and Prime Property Fund, we use the
services of Equitable Real Estate, a wholly-owned subsidiary. Equitable Real
Estate originates, analyzes, evaluates and recommends commercial real estate
investments for its clients, then manages and services those investments on
an ongoing basis. Equitable Real Estate provides property management services
in connection with some of the properties held in Prime Property Fund and
supervises the performance of other property managers which it retains.
Equitable Real Estate coordinates related accounting and bookkeeping
functions with us.
Equitable Real Estate advises us as to the commercial real estate assets of
all our accounts, which at December 31, 1994, represented approximately $35.3
billion in equity real estate and mortgage loan holdings.
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INVESTMENT PERFORMANCE
MEASURING THE INVESTMENT PERFORMANCE OF THE FUNDS
We recognize that the performance of the Funds that you invest your
retirement savings in is important to you. The purpose of this discussion is
to give you an overview of how our Funds have performed in the past. OF
COURSE, PAST PERFORMANCE CANNOT BE USED TO PREDICT FUTURE PERFORMANCE.
Fund performance is most often measured by the change in the value of fund
units over time. Unlike typical mutual funds, which usually distribute
earnings annually, separate account funds reinvest all earnings. As described
previously, the unit value calculations for the funds include all earnings,
including dividends and realized and unrealized capital gains. Changes in the
unit values can be expressed in terms of the Fund's annual percentage change,
its average annual change, or its cumulative change over a period of years.
Each of these measurements is valuable on its own. In addition, it is often
helpful to compare the fund's performance with the results of unmanaged
market indices.
The following tables and graphs provide a historical view of the Funds'
investment performance. The information presented includes performance
results for each Fund, along with data representing unmanaged market indices.
Performance data for the Lifecycle Funds are not presented because the Funds
first became available on May 1, 1995.
UNMANAGED MARKET INDICES
Unmanaged market indices, or "benchmarks," while providing a broader
perspective on relative performance, are only a tool for comparison.
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 greater
comparability.
We have presented data for the following unmanaged indices. One or more of
these indices may be appropriate comparative measures of performance for a
Fund.
o CONSUMER PRICE INDEX (URBAN CONSUMERS--NOT SEASONALLY ADJUSTED)
("CPI")--an index of inflation.
o STANDARD AND POOR'S 500 INDEX ("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. This index should not be confused with the performance of our
Equity Index Fund nor that of the Seven Seas Series S&P 500 Fund, which
seek to emulate the results of the S&P 500 Index. See The Equity
Funds--The Equity Index Fund for more information.
o NASDAQ INDEX ("NASDAQ")--an unmanaged index of all common stocks traded
on the National Association of Securities Dealers Automated Quotation
System. The NASDAQ market represents over-the-counter stocks not included
in the S&P 500.
o LEHMAN GOVERNMENT CORPORATE BOND INDEX ("LEHMAN")--an unmanaged index
widely regarded by investors as representative of the bond market.
o S&P 500 AND LEHMAN, 50/50--assumes a constant 50% mix of each of the two
market indices mentioned.
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o MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX ("EAFE")--an unmanaged
index of the securities of over 1,000 companies traded on the markets of
Europe, Australia, New Zealand and the Far East.
HOW PERFORMANCE DATA ARE PRESENTED
We have shown Fund performance on several different bases:
o The annual percentage change in Fund Unit Values,
o The average annual percentage change in Fund Unit Values, and
o The total value as of December 31, 1994 of a $10,000 investment made
on January 1, 1985.
THE FUND PERFORMANCE SHOWN MAY NOT REPRESENT YOUR ACTUAL EXPERIENCE AND IT
DOES NOT REPRESENT THE EFFECT OF THE RECORD MAINTENANCE AND REPORT OR
ENROLLMENT FEES. The annual percentage change in Fund unit values represents
the percentage increase or decrease in unit values from the beginning of one
year to the end of that year. During any year unit values will, of course,
increase or decrease reflecting fluctuations in the securities markets. 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.
Historical results are presented for the Funds for the periods during which
the funds were available under the Program. Hypothetical results were
calculated for prior periods. For the Equity Index Fund, no results are
presented for periods prior to 1993, as the Seven Seas S&P 500 Index Fund
began operations during 1992. See How We Calculate Performance Data. The
foregoing applies with respect to the calculation of performance data given
in the "Annual Percentage Change in Unit Values" chart, "Average Annual
Percentage Change in Unit Values" chart, and "Cumulative Value Examples"
given below. Performance data for the Lifecycle Funds are not shown, because
those Funds commenced operation on May 1, 1995.
ANNUAL PERCENTAGE CHANGE IN FUND UNIT VALUES
<TABLE>
<CAPTION>
GROWTH AGGRESSIVE
EQUITY EQUITY BALANCED
- ------ -------- ------------ ----------
<S> <C> <C> <C>
1994 -2.3% -4.5% -9.0%
- ------ -------- ------------ ----------
1993 18.7 13.7 11.2
- ------ -------- ------------ ----------
1992 0.6 -3.8 -2.6
- ------ -------- ------------ ----------
1991 51.1 85.7 41.4
- ------ -------- ------------ ----------
1990 -11.9 8.0 -1.4
- ------ -------- ------------ ----------
1989 43.9 45.9 25.6
- ------ -------- ------------ ----------
1988 16.3 1.2 14.0
- ------ -------- ------------ ----------
1987 5.0 -3.1 -6.1
- ------ -------- ------------ ----------
1986 13.2 0.7 15.3
- ------ -------- ------------ ----------
1985 31.3 16.9 24.0
- ------ -------- ------------ ----------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
S&P 500
AND
ADA EQUITY REAL LEHMAN
FOREIGN INDEX ESTATE CPI S&P 500 NASDAQ LEHMAN 50/50 EAFE
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 -0.5% 0.7% 3.6% 2.7% 1.3% -3.2% -3.5% -1.1% 7.8%
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1993 33.4 6.4 -3.2 2.7 10.0 14.7 11.0 10.5 32.6
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1992 2.6 -- -5.2 2.9 7.6 15.4 7.6 7.6 -12.2
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1991 16.9 -- -8.7 3.0 30.5 56.8 16.1 23.3 12.5
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1990 -3.3 -- 2.0 6.2 -3.1 -17.8 8.3 2.6 -23.2
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1989 28.6 -- 8.1 4.6 31.7 19.3 14.2 23.0 10.8
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1988 20.5 -- 4.9 4.4 16.6 15.4 7.6 12.1 28.6
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1987 23.0 -- 7.6 4.4 5.3 -5.3 2.3 3.8 24.9
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1986 26.9 -- 5.1 1.1 18.7 7.4 15.6 17.2 69.9
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
1985 25.2 -- 7.6 3.8 31.7 31.4 21.3 26.5 56.7
- ------ --------- -------- -------- ------ --------- -------- -------- --------- -------
</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.
34
<PAGE>
AVERAGE ANNUAL PERCENTAGE CHANGE IN FUND UNIT VALUES--
YEARS ENDING DECEMBER 31, 1994
<TABLE>
<CAPTION>
GROWTH AGGRESSIVE
EQUITY EQUITY BALANCED
- ---------- -------- ------------ ----------
<S> <C> <C> <C>
1 Year -2.3% -4.5% -9.0%
- ---------- -------- ------------ ----------
2 Years 7.7 4.2 0.6
- ---------- -------- ------------ ----------
3 Years 5.3 1.5 -0.5
- ---------- -------- ------------ ----------
5 Years 9.2 15.9 6.6
- ---------- -------- ------------ ----------
10 Years 15.0 13.4 10.2
- ---------- -------- ------------ ----------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
S&P 500
AND
ADA EQUITY REAL LEHMAN
FOREIGN INDEX ESTATE CPI S&P 500 NASDAQ LEHMAN 50/50 EAFE
- ---------- --------- -------- -------- ------ --------- -------- -------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year -0.5% 0.7% 3.6% 2.7% 1.3% -3.2% -3.5% -1.1% 7.8%
- ---------- --------- -------- -------- ------ --------- -------- -------- --------- ------
2 Years 15.2 7.2 0.1 2.7 5.6 5.4 3.5 4.5 19.5
- ---------- --------- -------- -------- ------ --------- -------- -------- --------- ------
3 Years 10.2 -- -1.7 2.8 6.3 8.7 4.9 5.6 7.9
- ---------- --------- -------- -------- ------ --------- -------- -------- --------- ------
5 Years 8.9 -- -2.4 3.5 8.7 10.6 7.7 8.2 1.5
- ---------- --------- -------- -------- ------ --------- -------- -------- --------- ------
10 Years 17.0 -- 2.0 3.6 14.4 11.8 9.8 12.1 17.6
- ---------- --------- -------- -------- ------ --------- -------- -------- --------- ------
</TABLE>
CUMULATIVE VALUE EXAMPLES
Although historical percentage change data is valuable in evaluating fund
performance, it is often easier to understand the information in more graphic
examples. One approach to this is the use of "mountain charts." Mountain
charts, such as the ones below, illustrate the growth of a hypothetical
investment over time for each of the Funds. Each chart (except the Equity
Index) illustrates the growth through December 31, 1994 of an investment of
$10,000 made on December 31, 1984.
GROWTH OF $10,000 INITIAL INVESTMENT
GROWTH EQUITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
12/31/84 $10,000
12/31/95 (31.3) $13,130
12/31/86 (13,2) $14,863
12/31/87 (5.0) $15,606
12/31/88 (16.3) $18,150
12/31/89 (43.9) $26,118
12/31/90 (-11.9) $23,010
12/31/91 (51.1) $34,768
12/31/92 (0.6) $34,977
12/31/93 (18.7) $41,518
12/31/94 (-2.3) $40,563
</TABLE>
AGGRESSIVE EQUITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
12/31/84 $10,000
12/31/85 (16.5) $11,690
12/31/86 (0.7) $11,771
12/31/87 (-3.1) $12,136
12/31/88 (1.2) $12,282
12/31/89 (45.9) $17,919
12/31/90 (8.0) $19,353
12/31/91 (85.7) $35,938
12/31/92 (-3.8) $34,572
12/31/93 (13.7) $39,308
12/31/94 (-4.5) $37,539
</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.
35
<PAGE>
BALANCED FUND
<TABLE>
<CAPTION>
<S> <C> <C>
12/31/84 $10,000
12/31/85 (24.0) $12,400
12/31/86 (15.3) $14,297
12/31/87 (-6.1) $13,425
12/31/88 (14.0) $15,304
12/31/89 (25.6) $19,222
12/31/90 (-1.4) $18,953
12/31/91 (41.4) $26,800
12/31/92 (-2.6) $26,103
12/31/93 (11.2) $29,027
12/31/94 (-9.0) $26,415
ADA FOREIGN FUND
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
12/31/84 $10,000
12/31/85 (25.2) $12,520
12/31/86 (26.9) $15,888
12/31/87 (23.0) $19,542
12/31/88 (20.3) $23,548
12/31/89 (28.6) $30,283
12/31/90 (-3.3) $29,284
12/31/91 (16.7) $34,233
12/31/92 (2.6) $35,123
12/31/93 (33.4) $46,854
12/31/94 (-0.5) $46,620
</TABLE>
EQUITY INDEX FUND
* Rate different date
<TABLE>
<CAPTION>
<S> <C> <C>
12/31/92 $10,000
12/31/93 (6.4) $10,640
12/31/94 (0.7) $10,714
</TABLE>
REAL ESTATE FUND
<TABLE>
<CAPTION>
<S> <C> <C>
12/31/84 $10,000
12/31/85 (7.6) $10,760
12/31/86 (5.1) $11,309
12/31/87 (7.6) $12,168
12/31/88 (4.9) $12,764
12/31/89 (8.1) $13,764
12/31/90 (2.0) $14,074
12/31/91 (-8.7) $12,850
12/31/92 (-5.2) $12,182
12/31/93 (-3.2) $11,792
12/31/94 (3.6) $12,217
</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.
36
<PAGE>
HOW WE CALCULATE PERFORMANCE DATA
Growth Equity Fund performance reflects actual historical investment
experience and the deduction of asset-based charges actually incurred by
Separate Account No. 4 (Pooled) under the Program during the periods
indicated.
The Aggressive Equity Fund performance reflects actual historical investment
experience and asset-based charges for Separate Account No. 3 for the period
beginning May 1, 1985. For periods prior to May 1, 1985 we reflected the
actual investment experience of Separate Account No. 3 (Pooled) reduced by
the ratio of expenses to average net assets actually experienced by the
Growth Equity Fund* during these periods.
The Balanced Fund performance shown reflects the performance of Separate
Account No. 190 for the period beginning February 1, 1991 and the performance
of its predecessor, Separate Account No. 10 (Pooled), which funded the
Balanced Fund under the Program from May 1, 1985 until January 31, 1991. For
periods prior to May 1, 1985 we reflected the actual investment experience of
Separate Account No. 10 (Pooled) reduced by the ratio of expenses to average
net assets actually experienced by the Growth Equity Fund* during these
periods. Prior to February 1, 1991, the Balanced Fund was not subject to the
limits on the ratio of debt and equity securities currently in effect.
The ADA Foreign Fund performance shown reflects the performance of Separate
Account No. 191 for the period beginning March 2, 1992. For periods prior to
March 2, 1992, hypothetical performance is shown, which reflects 95%
performance of the Templeton Foreign Fund and 5% performance of Separate
Account No. 2A. For these hypothetical calculations we have applied the
Program expense charge during those periods plus .15% in estimated other
expenses to the historical investment experience of the Templeton Foreign
Fund and Separate Account No. 2A or No. 2.
The Equity Index Fund performance shown reflects the performance of Separate
Account No. 195 for the period beginning February 1, 1994. For periods prior
to February 1, 1994, hypothetical performance is shown, which reflects
performance of the Seven Seas S&P 500 Index Fund beginning 1992, the first
full year after that Fund began operations. For these hypothetical
calculations we have applied the Program expense charge during those periods
plus .15% in estimated other expenses to the historical investment experience
of the Seven Seas Series S&P 500 Index Fund.
The Real Estate Fund performance shown reflects the performance of Separate
Account No. 30 (Pooled) for the period beginning August 29, 1986. For periods
prior to August 29, 1986, hypothetical performance is shown, which reflects
90% performance of the Prime Property Fund and 10% performance of Separate
Account No. 2A. For these hypothetical calculations we have applied an
estimate of the expenses which would have been chargeable to the Fund. These
charges include an amount equal to the average Program expense charge for
each year, plus a 1.10% investment management fee, plus the .25%
administration fee applicable to the Fund. Real Estate Fund performance
includes both current income and the effect of changes in the appraised value
of Prime Property Fund investments.
See Summary of Unit Values for the Equity Funds, and Summary of Unit Values
for the Real Estate Fund in the SAI for a more detailed description of how
the hypothetical Unit Values were calculated.
* For information about the expense ratios of the Growth Equity Fund,
see Condensed Financial Information. You should note that these
ratios generally increased during the periods shown and that
currently the investment management fees which apply to the
Aggressive Equity and Balanced Funds are greater than those
applicable to the Growth Equity Fund. See Deductions and Charges for
a description of the charges which will apply.
37
<PAGE>
THE PROGRAM
The purpose of this section is to explain the ADA Members Retirement Program
in more detail. Although we have described important aspects of the Program,
you should understand that the provisions of your plan and the Participation
Agreement will define the scope of the Program and its specific terms and
conditions. This section is for employers, and for the purposes of this
section, "you" and "your" refer to you in that role although you may also be
a participant in the plan.
EMPLOYERS WHO MAY PARTICIPATE IN THE PROGRAM
If you are a sole proprietor, a partner or a shareholder in a professional
corporation, your practice, as an employer, can adopt the Program if you or
at least one of your fellow partners or shareholders is a member of:
o the ADA,
o one of its constituent or component societies, or
o an ADA-affiliated organization whose participation in the Program has
been approved by the Council on Insurance of the ADA.
ADA constituent or component societies may also adopt the Program for their
own employees within certain limitations imposed by the Internal Revenue
Code.
CHOICES FOR THE EMPLOYER
The ADA Members Retirement Program gives you a variety of approaches to
choose from. You can:
o Adopt our Master Plan, which gives you options as to types of plans and
plan provisions. The Master Plan uses the Program Investment Options as the
exclusive investment choices.
o Adopt the Self-Directed Prototype plan, which gives additional
flexibility to choose investments, or
o Maintain your own individually-designed plan, but use the Investment
Options as an investment for your plan.
SUMMARY OF THE PLANS AND TRUSTS
THE MASTER PLAN--Under the Master Plan, you will automatically receive a full
range of services from Equitable Life, including your choice of the
Investment Options, plan-level and participant-level record- keeping, benefit
payments and tax withholding and reporting.
o The Master 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 SELF-DIRECTED PROTOTYPE PLAN--is 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 only for plan assets held in the Pooled Trust.
THE ADA MEMBERS POOLED TRUST FOR RETIREMENT PLANS--is an investment 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.
38
<PAGE>
INFORMATION ON JOINING THE PROGRAM
Our Retirement Program Specialists are available to answer your questions
about joining the Program. To reach one of our Retirement Program
Specialists, call or write to us at:
<TABLE>
<CAPTION>
<S> <C>
By Phone 1-800-523-1125, ext. 2608 From Alaska, 0-201-392-5331,
collect Specialists are available from 9 a.m. to 5 p.m.
Eastern Time, Monday through Friday.
By Regular Mail The ADA Members Retirement Program c/o Equitable Life Box
2011 Secaucus, New Jersey 07096
By Registered, Certified or The ADA Members Retirement Program c/o Equitable Life 200
Overnight Mail Plaza Drive, Second Floor Secaucus, New Jersey 07094
</TABLE>
CHOOSING THE RIGHT PLAN
Choosing the right plan depends on your own unique set of circumstances.
Although our Retirement Program Specialists can help explain the Program, you
and your tax advisors must decide which plan is best for you.
GETTING STARTED IN THE PROGRAM AFTER CHOOSING A PLAN
To adopt the Master Plan, you must complete a Participation Agreement. If you
have your own plan and wish to use the Pooled Trust as an investment option,
the trustee of your plan must complete the appropriate Participation
Agreement. Our Retirement Program Specialists can help you complete the
Participation Agreement for review by your tax advisor.
To adopt our prototype self-directed plan, you must complete the prototype
plan adoption agreement and a Participation Agreement for the Pooled Trust.
In addition, you must also arrange separately for plan level accounting and
brokerage services. We provide recordkeeping services only for plan 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.
You can also arrange through us brokerage services from our affiliate,
Pershing Discount Brokerage Services, at special rates or use the services of
any other broker.
39
<PAGE>
COMMUNICATING WITH US AFTER YOU ENROLL
<TABLE>
<CAPTION>
<S> <C>
By Phone
To Reach an Account 1-800-223-5790
Executive: (9 am to 5 pm Eastern Time,
Monday through Friday)
To Reach the Account 1-800-223-5790 (24 Hours)
Investment Management
("AIM") System:
To Receive Current Unit 1-800-635-3511 (24 Hours)
Values and Guaranteed Rates:
- --------------------------------- ----------------------------------------------
By Regular Mail (Other than The ADA Members Retirement Program
contribution checks) Box 2486 G.P.O.
New York, New York 10116
- --------------------------------- ----------------------------------------------
By Registered, Certified or The ADA Members Retirement Program
Overnight Mail c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, New Jersey 07094
- --------------------------------- ----------------------------------------------
For Contribution Checks Only The Association Members Retirement Program
P.O. Box 1599
Newark, New Jersey 07101-9764
</TABLE>
YOUR RESPONSIBILITIES AS THE EMPLOYER
Employers adopting the Master Plan are responsible for the plan and its
administration. This includes certain responsibilities relating to the
administration and continued 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 Master Plan.
If you have an individually designed plan, you already have these
responsibilities; they are not increased in any way by your adoption of the
Pooled Trust for investment purposes only. 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.
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 Master Plan. Again it is also 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.
You should consult your legal advisor for an understanding of your legal
responsibilities under the self-directed plan.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you.
40
<PAGE>
WHEN TRANSACTIONS ARE EFFECTIVE
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 Plan, 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.
MINIMUM INVESTMENTS
There is no minimum amount which must be invested if you adopt the Master
Plan, or if you have your own individually-designed plan and use the Pooled
Trust as an investment.
If you adopt our self-directed prototype plan, you must keep at least $25,000
in the Pooled Trust at all times.
MAKING CONTRIBUTIONS TO THE PROGRAM
You should send contribution checks or money orders payable to The ADA
Retirement Trust to the address shown under Communicating With Us After You
Enroll. All contributions must be accompanied by a properly completed
Contribution Remittance form which designates the amount to be allocated to
each participant. Contributions are normally credited on the business day
that we receive them.
Contributions are only accepted from the employer. Employees may not send
contributions directly to the Program.
The Real Estate Fund will accept contributions only one day a month. Any
amount allocated for investment in the Real Estate Fund will first be placed
in the Money Market Guarantee Account. On the next day on which the Real
Estate Fund accepts contributions, the amount designated for the Fund, plus
any accrued interest, will automatically be transferred to the Real Estate
Fund. For more information see The Real Estate Fund.
OUR ACCOUNT INVESTMENT MANAGEMENT (AIM) SYSTEM
We offer an automated telephone system for participants to transfer between
investment options, obtain account information and change the allocation of
future contributions and maturing GRAs. To use the AIM System, participants
must have a Personal Security Code (PSC) number.
If you have a touch-tone telephone you may make transfers on the AIM System.
Procedures have been established by Equitable Life for its AIM System 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, we may be
liable for any losses arising out of any action on our part or any failure or
omission to act as a result of our 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 we reasonably
believe to be genuine. We may discontinue the telephone transfer service at
any time without notice.
41
<PAGE>
ALLOCATING CONTRIBUTIONS AMONG THE INVESTMENT OPTIONS
Under the Master Plan, participants make all investment decisions. Under an
individually-designed plan or our self-directed prototype plan, either the
participants or the plan trustees make the investment allocation decisions,
depending on the terms of the plan.
Contributions may be allocated among any number of the Investment Options.
Allocation instructions may be changed at any time, and as often as needed,
by filing a Change of Investment Allocation form or by calling the AIM
System. New instructions become effective on the business day we receive
them. You may allocate employer contributions in different percentages than
employee contributions. IF WE HAVE NOT RECEIVED VALID INSTRUCTIONS, WE WILL
ALLOCATE YOUR CONTRIBUTIONS TO THE MONEY MARKET GUARANTEE ACCOUNT.
TRANSFERS AMONG THE INVESTMENT OPTIONS
Participants in the Master Plan may make transfers on a daily basis without
charge. Participants in other plans may make transfers whenever the plan
allows them to do so. We do not charge a fee for transfers. (If an
individually designed plan does not allow transfers by individual
participants, only you as employer or trustee may make a transfer.)
Participants may use the AIM System to transfer amounts among the investment
options. All transfers are made as of the close of business on the day we
receive the authorized instructions, provided we receive the request by 4:00
p.m. Eastern time. Transfer requests received after that time will be
processed as of the close of business on the following business day.
Transfers by mail are accomplished by completing a Request to Transfer
Between Accounts form. It is important that the form is properly completed
and sent to the appropriate address.
No transfers from the Guaranteed Rate Accounts to other Investment Options
are permitted prior to maturity. Transfers to the Guaranteed Rate Accounts,
and to or from the Money Market Guarantee Account and the Growth Equity,
Aggressive Equity and Balanced Funds, are permitted at any time. Transfers
from the ADA Foreign Fund, Equity Index Fund and Lifecycle Funds are
permitted at any time except if there is any delay in redemptions from the
underlying mutual fund or, with respect to the Lifecycle Funds, the Lifecycle
Fund Group Trusts in which they invest. See The Equity Funds--The ADA Foreign
Fund, The Equity Index Fund and The Lifecycle Funds. Transfers to and from
the Real Estate Fund are subject to special rules, which are described in
Special Rules for Distributions and Transfers from the Real Estate Fund
below, and in The Real Estate Fund.
DISTRIBUTIONS FROM THE INVESTMENT OPTIONS
There are two sets of rules that must be kept in mind when considering
distributions or withdrawals from the Program. The first are the rules and
procedures which apply to the Investment Options, exclusive of the provisions
of your plan. These are discussed in this section. The second are the rules
specific to your plan; these are discussed under When Distributions are
Available to Participants.
Amounts in the Equity Funds and the Money Market Guarantee Account are
generally available for distribution at any time, subject to the provisions
of your plan. However, there may be a delay for withdrawals from the ADA
Foreign Fund, Equity Index Fund and the Lifecycle Funds if there is any delay
in the redemptions from the underlying mutual fund or, with respect to the
Lifecycle Funds, from the Lifecycle Fund Group Trusts in which they invest.
Special rules, which are described below, apply to distributions from the
Real Estate Fund. In addition, withdrawals generally may not be taken from
the
42
<PAGE>
Guaranteed Rate Accounts prior to maturity. See Guaranteed Rate Accounts.
Please note that certain plan distributions may be subject to penalty or
excise taxes. See The Program and Federal Income Tax Considerations for more
details.
Payments or withdrawals out of the Funds and application of proceeds to an
annuity 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. See The Real Estate Fund and The Equity Funds.
SPECIAL RULES FOR DISTRIBUTIONS AND TRANSFERS FROM THE REAL ESTATE FUND
Under the Master Plan, a distribution can be obtained from the Real Estate
Fund only after the amount to be withdrawn has been transferred to another
Investment Option. A distribution of benefits may be made only after you
receive confirmation of the transfer. Participants in an
individually-designed plan or the prototype self-directed plan may receive a
distribution directly from the Real Estate Fund without first having it
transferred to another Investment Option. Distributions of all or a portion
of the balance in the Real Estate Fund directly from the Fund are payable
only in a single sum payment. See Federal Income Tax Considerations and
Procedures for Withdrawals, Distributions and Transfers--Special Rules for
Distributions and Transfers From the Real Estate Fund in the SAI.
All distributions and transfers from the Real Estate Fund are subject to a
minimum wait of one calendar quarter: they are scheduled to be made shortly
after the end of the calendar quarter following the quarter in which we
receive properly completed forms requesting the distribution or transfer. The
amount distributed will be based on the Real Estate Fund's Unit Value as of
the close of business on the date the distribution or transfer is made. See
The Real Estate Fund for more information on how we value and liquidate Real
Estate Fund Units. Withdrawals from the Real Estate Fund must be made in
amounts of at least $1,000 or, if less, your balance in the Real Estate Fund.
The Real Estate Fund may not have enough liquid assets to pay all withdrawals
when requested. If liquid assets are insufficient to pay all requested
withdrawals, withdrawal requests are prioritized according to the nature of
the distribution. Priority 1 consists of all amounts requested because of
death or disability or after age 70 1/2 . Priority 2 consists of all other
requests. The Real Estate Fund will pay all Priority 1 distributions to the
extent cash is available or can be obtained through liquidation of the Real
Estate Fund's interest in Prime Property Fund. The Real Estate Fund may also
pay some or all of the scheduled Priority 2 distributions and transfers, but
only if it can liquidate its interest in Prime Property Fund or if we believe
it has enough liquid assets to meet anticipated Priority 1 distributions. In
making this determination, we will consider anticipated future contributions
as well as the amount of cash required for anticipated Priority 1
distributions, expenses and payment of our fees. The Real Estate Fund will
satisfy all scheduled Priority 1 distribution requests before it satisfies
any Priority 2 request, even if the Priority 1 requests were received after
the Priority 2 requests.
See Special Risks Related to the Real Estate Fund in the prospectus and
Procedures for Withdrawals, Distributions and Transfers--Special Rules for
Distributions and Transfers From the Real Estate Fund in the SAI.
IN LIGHT OF THE RISKS AND POSSIBLE ILLIQUIDITY OF AN INVESTMENT IN THE REAL
ESTATE FUND, INDIVIDUAL PARTICIPANTS SHOULD CONSIDER LIMITING THE AMOUNT
ALLOCATED TO IT, PARTICULARLY AS THEY NEAR RETIREMENT. IF YOUR PLAN IS AN
EMPLOYER OR TRUSTEE-DIRECTED PLAN, YOU AS THE EMPLOYER ARE RESPONSIBLE FOR
ENSURING THAT THERE IS SUFFICIENT CASH AVAILABLE TO PAY BENEFITS.
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WHEN DISTRIBUTIONS ARE AVAILABLE TO PARTICIPANTS
In addition to the rules and procedures generally applicable to investments
in the Investment Options under the Program, there are other important rules
regarding the distribution and benefit payment options for each type of plan.
Distributions and benefit payment options under a qualified retirement plan
are subject to extremely complicated legal requirements. Certain plan
distributions may be subject to 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 a participant retires, becomes disabled or
terminates employment, the benefit payment options available should be
discussed with a qualified financial advisor. Our Account Executives can also
be of assistance.
In general, under the Master Plan or our self-directed prototype plan,
participants 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.) Participants in
an individually designed plan are eligible for retirement benefits depending
on the terms of that plan. See Benefit Payment Options and Federal Income Tax
Considerations for more details. In most cases, benefits must begin no later
than April 1 of the year after the participant reaches age 70 1/2 . A
participant (other than a more-than-10% owner in an unincorporated practice)
may be exempt from this requirement only if a special election was filed with
the employer before January 1, 1984.
Under the Master Plan, self-employed persons may generally not receive a
distribution prior to age 59 1/2 and employees generally may not receive a
distribution prior to a separation from service.
PARTICIPANT LOANS
The ADA Master Plan permits participants to borrow a portion (not to exceed
$50,000) of his or her vested Account Balance (all plans combined), if the
employer has elected this feature. If the participant is 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 (or a family member as
defined by the IRS), he or she presently may not borrow from his or her
vested Account Balance without first obtaining a prohibited transaction
exemption from the Department of Labor. Participants should consult with
their attorneys or tax advisors 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 the
plan allow them.
Generally speaking, when a loan is taken, an amount equal to the loan is
transferred out of the Investment Options and is set up as a loan account.
While the loan is outstanding, the participant must pay interest on the loan.
Any principal and interest paid will be added to the participant's loan
account balance and will be taxable on distribution. The interest paid on a
retirement plan loan may not be deductible.
Loans from the plan should be applied for through the employer. Loans are
subject to restrictions under federal tax laws and all plans of the employer
are aggregated for purposes of these restrictions. Loan kits containing all
necessary forms, along with an explanation of how interest rates are set, are
available from our Account Executives. PLEASE NOTE THAT PARTICIPANTS MAY NOT
TAKE A LOAN FROM THE REAL ESTATE FUND OR FROM THE GUARANTEED RATE ACCOUNTS
PRIOR TO MATURITY. If a participant is married, written spousal consent will
be required for a loan.
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BENEFIT PAYMENT OPTIONS
We offer a variety of benefit payment options to participants who are
eligible to receive benefits from a plan. However, many self-directed and
individually-designed plans do not allow all of these options, so you should
ask your employer for details on which of these options may be available.
Your plan may allow for one or more of the following forms of distribution to
be selected:
o Qualified Joint and Survivor Annuity
o Lump Sum Payment
o Installment Payments
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
these options, and Procedures for Withdrawals, Distributions and Transfers in
the SAI.
The annuity options may be either fixed or variable except for the Cash
Refund Annuity and the Qualified Joint and Survivor Annuity. Fixed annuities
are available from insurance companies selected by the Trustees, which meet
criteria established by the Trustees from time to time. Upon request, we will
provide fixed annuity rate quotes available from one or more such companies.
Participants may instruct us to withdraw all or part of their account balance
and forward it to the annuity provider selected. Once we have distributed
that amount to the company selected, we will have no further responsibility
to the extent of the distribution. We provide the variable annuity options.
Payments under variable annuity options reflect investment performance of the
Growth Equity Fund. The minimum amount that can be used to purchase any type
of annuity is $3,500. In most cases an annuity administrative charge of $350
will be deducted from the amount used to purchase an annuity from Equitable
Life. Annuities purchased from other providers may also be subject to fees
and charges.
SPOUSAL CONSENT RULES
If a participant is married and has an Account Balance greater than $3,500,
federal law generally requires payment of a Qualified Joint and Survivor
Annuity payable to the participant for life and then to the surviving spouse
for life, unless the participant and spouse have properly waived that form of
payment in advance. If a participant is married, the spouse must consent in
writing before any type of withdrawal can be made. See Spousal Consent
Requirements in the SAI.
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BENEFITS PAYABLE AFTER THE DEATH OF A PARTICIPANT
If a participant dies before the entire benefit has been paid, the remaining
benefits will be paid to the beneficiary. The law generally requires the
entire benefit to be distributed no more than five years after death. There
are two exceptions--(1) if the benefit is payable to the spouse, the spouse
may elect to receive benefits over his or her life or a fixed period measured
by life expectancy beginning any time up to the date the participant would
have attained age 70 1/2 or, if later, one year after the participant's
death, and (2) a beneficiary who is not the participant's spouse may elect
payments over his or her life or a fixed period measured by life expectancy,
provided payments begin within one year of death. If, at death, a participant
was already receiving benefits, the beneficiary can continue to receive
benefits based on the payment option selected by the participant. To
designate a beneficiary or to change an earlier designation, a participant
must have the employer send us a beneficiary designation form. The 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 a participant in the Master Plan dies without designating a beneficiary,
the vested benefit will automatically be paid to the spouse or, if the
participant is not married, to the first surviving class of his or her (a)
children, (b) parents and (c) brothers and sisters. If none of them survive,
the participant's vested benefit will be paid to the participant's estate. If
a participant in our prototype self-directed plan dies without designating a
beneficiary, the vested benefit will automatically be paid to the spouse or,
if the participant is not married, to the first surviving class of his or her
(a) children, (b) grandchildren, (c) parents, (d) brothers and sisters and
(e) nephews and nieces. If none of them survive, the participant's vested
benefit will be paid to the participant's estate.
Under the Master Plan, on the day we receive proof of death, we automatically
transfer the participant's Account Balance in the Equity Funds to the Money
Market Guarantee Account unless the beneficiary gives us other written
instructions. The balance in the Real Estate Fund will be treated as a
Priority 1 distribution and will be scheduled for transfer to the Money
Market Guarantee Account following the last day of the next quarter. See
Special Risks Related to the Real Estate Fund.
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DEDUCTIONS AND CHARGES
There are two general types of expenses you may incur under the Program. The
first is expenses which are applicable to all amounts invested in the
Program. These include the Program expense charge, investment management,
administration fees, and certain other expenses borne directly by the Funds.
These charges are deducted from the amount invested in the Program regardless
of the type of plan you may have. Generally speaking, these charges are
reflected as reductions in the Unit Values of the Funds or as reductions from
the rates credited to the Guaranteed Options. These charges apply to all
amounts invested in the Program, including amounts being distributed under
installment payout options.
The second type of charge is expenses which vary by the type of plan you have
or which are charged for specific transactions. These are typically stated in
terms of a defined dollar amount. 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 the Guaranteed Option. The
number of Units to be deducted from the Real Estate Fund is based on the last
Unit Value determined prior to the date of deduction. See Condensed Financial
Information and How We Calculate the Value of Amounts Allocated to The Real
Estate Funds. The amount allocable to the three-year or five-year Guaranteed
Rate Account will be taken from your most recent GRA in that Account.
No deductions are made from contributions or withdrawals for sales expenses.
CHARGES BASED ON AMOUNTS INVESTED IN THE PROGRAM
PROGRAM EXPENSE CHARGE
We assess the Program expense charge against the combined value of Program
assets in all the Investment Options. The purpose of this charge is to cover
the expenses incurred by Equitable Life and the ADA in connection with the
Program. The Unit Values of the Funds and the interest rates credited to the
Guaranteed Options reflect the deduction of this charge, except for GRAs
purchased before February 6, 1991.
The amount payable to us and the ADA is calculated as follows:
<TABLE>
<CAPTION>
ANNUAL PROGRAM EXPENSE
CHARGE
- ------------------------
VALUE OF PROGRAM ASSETS EQUITABLE LIFE ADA* TOTAL
- ------------------------ ---------------------------- ------- -------
<S> <C> <C> <C>
First $400 million .650% .025% .675%
Next $350 million .650 .020 .670
Over $750 million .650 .020 .670
</TABLE>
* Currently, this charge has been reduced to 0.01% for all asset value
levels, but the charge could in the future be increased to the levels shown
in the table.
For all Investment Options other than GRAs, the Program expense charge is
calculated based on Program assets at the end of the second previous month,
and is charged at a monthly rate of 1/12 of the relevant annual charge. For
GRAs, the program expense charge is calculated based on Program assets at the
end of the second month prior to the day on which the GRA is opened, and is
charged at a constant daily rate of 1/365 of the relevant annual charge until
maturity. Subsequent changes in the Program Expense Charge will not be
reflected in the charge against closed GRAs. In addition to the Program
expense charge, an annual investment accounting fee of 0.02% is charged on
all amounts of Program assets
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<PAGE>
invested in GRAs issued after February 1992. This fee is reflected in the
interest rates credited to the GRAs and is calculated and charged in the same
manner as the Program expense charge.
Our portion of 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. The ADA's part of this
fee covers developmental and administrative expenses incurred in connection
with the Program. The Trustees can direct us to raise or lower the ADA's part
of this fee to reflect their expenses in connection with the Program.
Currently, this fee has been reduced to 0.01% for all asset value levels.
During 1994 we received $6,340,606 and the ADA received $103,834 under the
Program expense charge then in effect.
ADMINISTRATION AND INVESTMENT MANAGEMENT FEES
The computation of the Unit Values applicable for each Fund also reflects the
deduction of charges for administration and investment management.
Equity Funds. We receive fees for investment management services we provide
for the Growth Equity, Aggressive Equity, and Balanced Funds. We also receive
an administration fee from all the Equity Funds which covers the
administrative functions related to the offering of those Funds. We maintain
records for all portfolio transactions and cash flow control, calculate Unit
Values, monitor compliance with the New York Insurance Law and supervise
custody matters for all the Funds.
Real Estate Fund. The investment management fee compensates us for managing
the Real Estate Fund as well as the underlying Prime Property Fund. The Real
Estate Fund is not charged an additional fee for our management of Prime
Property Fund. The services we provide with respect to the Real Estate Fund
include monitoring the Real Estate Fund's holdings and liquidity. The
services we provide with respect to Prime Property Fund include selecting
real properties for purchase and sale, selecting managers for those
properties and, in some cases, managing the properties ourselves, appraising
the properties, accounting for their receipts and disbursements and servicing
any loans issued by Prime Property Fund. The administration fee is to
reimburse us for the additional expenses involved in administering the Fund.
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<PAGE>
FEES. The investment management and administration fees are also based on the
Program assets in the Fund at the end of the second month prior to the day on
which the calculation is being made. The fees charged monthly are 1/12 of the
following amounts:
<TABLE>
<CAPTION>
TYPE OF FEE
VALUE OF PROGRAM INVESTMENT
FUND FUND ASSETS MANAGEMENT ADMINISTRATION TOTAL
- --------------------------- ------------------ ------------ -------------- -------
<S> <C> <C> <C> <C>
Growth Equity Fund First $175 million .20% .15% .35%
Over $175 million .17 .15 .32
-------------------------- ------------------ ------------ -------------- -------
Aggressive Equity Fund First $175 million .35 .15 .50
Over $175 million .32 .15 .47
-------------------------- ------------------ ------------ -------------- -------
Balanced Fund First $175 million .45 .15 .60
Over $175 million .42 .15 .57
-------------------------- ------------------ ------------ -------------- -------
ADA Foreign Fund All amounts -- .15* .15*
------------------ ------------ -------------- -------
Equity Index Fund All amounts -- .15 .15
------------------ ------------ -------------- -------
Lifecycle
Fund--Conservative All amounts -- .15 .15
------------------ ------------ -------------- -------
Lifecycle Fund--Moderate All amounts -- .15 .15
------------------ ------------ -------------- -------
Real Estate Fund First $50 million 1.10 .25 1.35
Next $25 million 1.00 .25 1.25
Over $75 million .95 .25 1.20
-------------------------- ------------------ ------------ -------------- -------
</TABLE>
*Equitable Life has waived the administrative fee for the ADA Foreign Fund in
view of the payment it will receive from Templeton in an amount equal to the
12b-1 fees charged by Templeton to the Templeton Foreign Fund. The 12b-1 fee
charged by Templeton is at the annual rate not to exceed 0.25% of the
Templeton Foreign Fund's assets. Amounts received by us will be used for
administrative expenses associated with the Program's operations and to fund
Program enhancements.
OTHER EXPENSES BORNE DIRECTLY BY THE FUNDS
Certain costs and expenses are charged directly to the Funds. These may
include Securities and Exchange Commission filing fees and certain related
expenses including printing of SEC filings, prospectuses and reports, mailing
costs, custodians' fees, financial accounting costs, outside auditing and
legal expenses, and other costs related to the Program. These are included as
"Other Expenses" in the tables of Annual Fund Operating Expenses and Summary
of Fund Expenses.
The ADA Foreign and Equity Index Funds purchase and sell shares in the
Templeton Foreign Fund, and Seven Seas S&P 500 Index Fund, respectively, at
net asset value. The net asset value reflects charges for management, audit,
legal, shareholder services, transfer agent and custodian fees. For a
description of charges and expenses assessed by the Templeton Foreign Fund
and the Seven Seas S&P 500 Index Fund, which are indirectly borne by the
Funds, please refer to the prospectuses for each of these funds.
The Lifecycle Funds--Conservative and Moderate purchase and sell units in the
Lifecycle Fund Group Trusts--Conservative and Moderate, respectively, at net
asset value. The net asset value reflects charges for management, audit,
legal, custodian and other fees. By agreement with the ADA Trustees,
Equitable Life imposes a charge at the annual rate of .03% of the value of
the respective assets of the Lifecycle Funds--Conservative and Moderate to
compensate it for additional legal, accounting and other potential expenses
resulting from the inclusion of the Lifecycle Fund Group Trusts and
Underlying Funds maintained by State Street among the Investment Options
described in this prospectus. For a description of charges and expenses
assessed by the Lifecycle Fund Group Trusts, which are indirectly borne by
the Lifecycle Funds, please refer to our separate prospectus for those Funds.
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<PAGE>
PLAN AND TRANSACTION EXPENSES
ADA RETIREMENT PLAN, PROTOTYPE SELF-DIRECTED PLAN AND
INDIVIDUALLY-DESIGNED PLAN FEES
RECORD MAINTENANCE AND REPORT FEE. At the end of each calendar quarter, we
deduct a record maintenance and report fee from each participant's Account
Balance. This fee is:
<TABLE>
<CAPTION>
<S> <C>
ADA Members Retirement Plan participants ....$3 per quarter
Self-Directed Prototype Plan participants ... $3 per quarter
Participants in Pooled-Trust Arrangement .... $1 per quarter
</TABLE>
ENROLLMENT FEE. The employer must pay us a non-refundable enrollment fee of
$25 for each participant enrolling under its plan. If we do not maintain
individual participant records under an individually- designed plan, the
employer is instead charged $25 for each plan or trust. If these charges are
not paid by the employer, the amount may be deducted from subsequent
contributions or from participants' Account Balances.
PROTOTYPE SELF-DIRECTED PLAN FEES. Employers who participate in our prototype
self-directed plan will incur additional fees not payable to us, such as
brokerage and administration fees.
INDIVIDUAL ANNUITY CHARGES
ANNUITY ADMINISTRATIVE CHARGE. If a participant elects a variable annuity
payment 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. Annuities purchased from other providers may
also be subject to fees and charges. See Distributions From the Investment
Options and Benefit Payment Options 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 form
or annuity benefit you select. We will deduct any premium taxes we pay based
on your place of residence at the time the annuity payments begin.
GENERAL INFORMATION ON FEES AND CHARGES
We may change our investment management fees if we give the Trustees 90 days
notice and comply with certain conditions of our group annuity contract with
them. The other fees and charges described above may be changed at any time
by the mutual consent of Equitable Life and the ADA. During 1994 we received
total fees and charges under the Program of $8,829,620.
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<PAGE>
FEDERAL INCOME TAX CONSIDERATIONS
The provisions of the Internal Revenue Code (Code) relating to adoption of
the Program and generally to distributions to participants under qualified
retirement plans are outlined briefly below. The Code provisions relating to
contributions are outlined briefly in the SAI under Provisions of the ADA
Plans. 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.
ADOPTING THE PROGRAM
If you adopt an ADA 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. The Internal
Revenue Service does not have to approve your adoption of the Pooled Trust.
INCOME TAXATION OF DISTRIBUTIONS TO QUALIFIED PLAN PARTICIPANTS
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.
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
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<PAGE>
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 (i.e., $750,000 in
1995).
WITHHOLDING. In almost all cases, 20% mandatory income tax withholding will
apply to all "eligible rollover distributions" that are not directly
transferred 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. The rate of withholding depends on the
type of distribution. See Eligible Rollover Distributions and Federal Income
Tax Withholding in the SAI. Under the ADA Master Retirement Plan, we will
withhold the tax and send you the remaining amount. 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 then responsible for withholding federal
income tax upon distributions to you or your beneficiary.
OTHER TAX CONSEQUENCES
Federal estate and gift and state and local estate, inheritance, and other
tax consequences of participation in the Program depend on the jurisdiction
and the circumstances of each participant or beneficiary. For complete
information on federal, state, local and other tax considerations, a
qualified tax advisor should be consulted.
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<PAGE>
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.
Our contract with the Trustees may be terminated by us or the ADA. If our
contract with the Trustees is terminated, we will not accept any further
contributions or perform recordkeeping functions after the date of
termination. At that time we would make arrangements with the Trustees as to
the disposition of assets in the Investment Options we provide, subject to
the following restrictions (i) transfers and withdrawals of assets allocated
to the Real Estate Fund would continue to be subject to the restrictions
described in this prospectus and in the SAI; (ii) assets allocated to the
Money Market Guarantee Account would be transferred at the direction of the
Trustees in installments over a period of time not to exceed two years;
however, during that time participants would be permitted to transfer amounts
out of the Money Market Guarantee Account to a funding vehicle provided by
another financial institution (other than a money market fund or similar
investment); and (iii) amounts allocated to the Guaranteed Rate Accounts will
be held until maturity. You may be able to continue to invest amounts in the
Investment Options we provide and elect payment of benefits through us if the
Trustees make arrangements with 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 prevent plan participants from investing 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.
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.
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<PAGE>
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, 190, 191, 30 and 8 and the condensed financial information for
Separate Account Nos. 3, 4, 190, 191 and 30 for each of the two years in the
period ended December 31, 1994 included in this prospectus and the financial
statements as 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 such 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 other materials
before entering into a Participation Agreement.
54
<PAGE>
TABLE OF CONTENTS
OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Contracts ................................ SAI-2
Your Responsibilities as Employer ............ SAI-2
Procedures for Withdrawals, Distributions and
Transfers ................................... SAI-3
Types of Benefits ............................ SAI-8
Provisions of the Master Plan ................ SAI-10
Prime Property Fund Investments .............. SAI-13
Investment Restrictions Applicable to
the Funds ................................... SAI-17
How We Value the Assets of the Funds ........ SAI-18
Summary of Unit Values for the Funds ........ SAI-19
Growth Equity, Aggressive Equity
and Balanced Fund Transactions .............. SAI-22
Investment Management Fee .................... SAI-23
Underwriter .................................. SAI-24
Our Management ............................... SAI-24
Financial Statements ......................... SAI-26
</TABLE>
CLIP AND MAIL TO US TO RECEIVE A
STATEMENT OF ADDITIONAL INFORMATION
----------------------------------------------------
To:The Equitable Life Assurance Society
of the United States
Box 2486 G.P.O.
New York, NY 10116
Please send me a copy of the Statement of Additional Information for the
American Dental Association Members Retirement Program Prospectus dated May
1, 1995.
Name
-----------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
----------------------------------------------------
Copyright 1995 by The Equitable Life Assurance Society of the United States.
All rights reserved.
55
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
SUMMARY OF INVESTMENT OPTIONS ..................... 2
SUMMARY OF THE PROGRAM ............................ 3
SUMMARY OF FUND EXPENSES .......................... 4
CONDENSED FINANCIAL INFORMATION ................... 8
INVESTMENT OPTIONS ................................ 12
THE EQUITY FUNDS
The Growth Equity Fund ........................... 12
The Aggressive Equity Fund ....................... 13
The Balanced Fund ................................ 13
The ADA Foreign Fund ............................. 14
Risks and Investment Techniques--Equity Funds .. 15
The Equity Index Fund ............................ 18
Lifecycle Funds--Conservative and Moderate ..... 19
The Lifecycle Fund Group Trusts .................. 19
Lifecycle Fund Group Trust--Conservative ........ 19
Lifecycle Fund Group Trust--Moderate ............. 20
The Underlying Funds ............................. 20
How We Calculate the Value of Amounts
Allocated to the Equity Funds ................... 20
THE REAL ESTATE FUND
Real Estate Fund Objectives and Investment
Policies ........................................ 22
Special Risks Related to The Real Estate Fund .. 24
Conflicts of Interest Related to Prime Property
Fund ............................................. 24
How We Calculate The Value of Amounts
Allocated to The Real Estate Fund ............... 25
THE GUARANTEED OPTIONS
Guaranteed Rate Accounts ......................... 27
Money Market Guarantee Account ................... 28
EQUITABLE LIFE AND THE INVESTMENT MANAGERS
Equitable Life ................................... 30
The Separate Accounts ............................ 30
Investment Management of the Equity Funds ...... 31
Investment Management of the Real Estate Fund .. 32
INVESTMENT PERFORMANCE
Measuring the Investment Performance of the
Funds ............................................ 33
Unmanaged Market Indices ......................... 33
How Performance Data Are Presented ............... 34
Annual Percentage Change in Fund Unit
Values .......................................... 34
Average Annual Percentage Change in
Fund Unit Values--Years Ending December 31,
1994 ............................................. 35
Cumulative Value Examples ........................ 35
How We Calculate Performance Data ................ 37
THE PROGRAM
Employers Who May Participate in the
Program ......................................... 38
Choices for the Employer ......................... 38
Summary of the Plans And Trusts .................. 38
Information on Joining the Program ............... 39
Choosing the Right Plan .......................... 39
Getting Started In The Program After
Choosing A Plan ................................. 39
Communicating With Us After you Enroll .......... 40
Your Responsibilities As the Employer ............ 40
When Transactions Are Effective .................. 41
Minimum Investments .............................. 41
Making Contributions to the Program .............. 41
Our Account Investment Management (AIM) System . 41
Allocating Contributions Among the
Investment Options .............................. 42
Transfers Among the Investment Options .......... 42
Distributions From the Investment Options ....... 42
Special Rules For Distributions and Transfers
from the Real Estate Fund ....................... 43
When Distributions Are Available to
Participants .................................... 44
Participant Loans ................................ 44
Benefit Payment Options .......................... 45
Spousal Consent Rules ............................ 45
Benefits Payable After the Death of a
Participant ..................................... 46
DEDUCTIONS AND CHARGES ............................ 47
CHARGES BASED ON AMOUNTS
INVESTED IN THE PROGRAM
Program Expense Charge ........................... 47
Administration and Investment Management
Fees ............................................ 48
Other Expenses Borne Directly by the Funds ..... 49
<PAGE>
PAGE
--------
PLAN AND TRANSACTION EXPENSES
ADA Retirement Plan, Prototype
Self-Directed Plan and
Individually-Designed Plan Fees ................. 50
Individual Annuity Charges ....................... 50
General Information On Fees And Charges ......... 50
FEDERAL INCOME TAX
CONSIDERATIONS
Adopting the Program ............................ 51
Income Taxation of Distributions to Qualified
Plan Participants ............................. 51
Other Tax Consequences .......................... 52
MISCELLANEOUS ..................................... 53
Table of Contents of Statement of Additional
Information ................................... 55
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT OPTION CHARACTERISTICS
AGGRESSIVE EQUITY
ADA FOREIGN FUND FUND GROWTH EQUITY FUND EQUITY INDEX FUND BALANCED FUND
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
<S> <C> <C> <C> <C> <C>
Designed for Long term growth Long term growth Long term growth Parallel the total Competitive
(Objective) of capital of capital of capital return of the S&P return through a
500 Index combination of
growth of capital
and current
income
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
Invests Primarily The Templeton Common stocks and Common stocks and Invests 100% of Common stocks and
In Foreign Fund other equity-type other equity-type its assets in the other equity-type
which invests securities issued securities Seven Seas Series securities,
primarily in by medium and generally issued S&P 500 Index Fund publicly traded
common stocks and smaller sized by large and which invests in debt securities
debt obligations companies with intermediate-sized all 500 stocks in and money market
of companies and strong growth companies the S&P 500 Index instruments,
governments potential in proportion to within stated
outside the U.S. their weighting in ranges
the Index
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
Risk to Principal Average for an Greatest risk of Average for a Somewhat lower Somewhat lower
international all Investment growth fund than Growth Equity than the Growth
growth fund Options Fund Equity Fund
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
Primary Growth Capital Capital Capital Capital Capital
Potential Through appreciation and appreciation appreciation and appreciation and appreciation,
reinvested reinvested reinvested reinvested
dividends dividends dividends dividends and
interest
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
Income Guarantee No No No No No
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
Volatility of Generally depends Highly volatile Somewhat more Generally equal to Generally lower
Return on stock, country volatile than the the S&P 500 Index than pure equity
and currency S&P 500 funds, but degree
selections, as may vary
well as market depending on
factors market conditions
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
Transfers to other Permitted daily Permitted daily Permitted daily Permitted daily Permitted daily
Options except under
extreme
circumstances
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
Withdrawal No No No No No
Penalties
- ------------------ ----------------- ----------------- ------------------ ------------------ -----------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
INVESTMENT OPTION CHARACTERISTICS
LIFECYCLE FUND-- LIFECYCLE FUND-- GUARANTEED RATE MONEY MARKET
CONSERVATIVE MODERATE REAL ESTATE FUND ACCOUNTS GUARANTEE ACCOUNT
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C> <C>
Designed for Current income Growth of Stable rate of Principal and Principal and
(Objective) and low to capital and return through interest interest
moderate growth reasonable level rental income and guaranteed-- guaranteed--short
of capital of current appreciation interest rates term rates
income reflect maturities
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
Invests Primarily Invests 100% of Invests 100% of High-grade, Contributions Contributions
In its assets in a its assets in a income-producing credited with fixed credited with
mix of mix of real property rate of interest guaranteed
underlying underlying until the maturity current rate of
collective collective date interest
investment funds investment funds
maintained by maintained by
State Street State Street
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
Risk to Principal Somewhat lower Somewhat lower Lower than the Carrier providing Equitable Life
than the than the Equity Funds GRAs guarantees guarantees
Lifecycle Balanced Fund principal and principal and
Fund--Moderate interest interest; also
backed by assets
in insulated
separate account
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
Primary Growth Capital Capital Rental income, Interest income Interest income
Potential Through appreciation and appreciation, capital
reinvested reinvested appreciation and
dividends and dividends interest
interest
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C> <C>
Income Guarantee No No No Yes--subject to Yes
withdrawal
penalties
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
Volatility of Generally lower Generally lower Stable and less Carrier providing Equitable Life
Return than pure equity than pure equity volatile than the GRAs guarantees guarantees
funds, but funds, but Equity Funds interest rate until monthly interest
degree may vary degree may vary the maturity date rate; also backed
depending on depending on by assets in
market market insulated
conditions conditions separate account
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
Transfers to other Permitted daily Permitted daily Permitted Permitted only at Permitted daily
Options quarterly if cash maturity
available
- ------------------ ---------------- ---------------- ----------------- ------------------- -----------------
Withdrawal No 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>
- -----------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------
NOVEMBER , 1995
AMERICAN DENTAL ASSOCIATION
MEMBERS RETIREMENT PROGRAM
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 American Dental Association Members
Retirement Program. Toll-free telephone number 1-800-223-5790.
- -----------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the prospectus dated November , 1995 for the
American Dental Association Members Retirement Program and the May 1, 1995
SAI referred to below. A copy of the May 1, 1995 SAI is provided with, and is
part of, this Statement of Additional Information.
A copy of the prospectus to which this Statement of Additional Information
relates is available at no charge by writing to The Equitable Life Assurance
Society of the United States ("Equitable Life"), at Box 2486 G.P.O., New
York, New York 10116 or by calling our toll-free telephone number.
This Statement of Additional Information comprises the particular information
set forth below, through page 2a, regarding the Aggressive Equity Fund, as
our Separate Account No. 200, and the information contained in our Statement
of Additional Information dated May 1, 1995 (the "May 1, 1995 SAI") used in
conjunction with our May 1, 1995 prospectus for the American Dental
Association Members Retirement Program with respect to all other Investment
Options (except the Equity Index Fund and the Lifecycle Funds, and the
Aggressive Equity Fund as our Separate Account No. 200).
At the direction of the Trustees, Separate Account No. 200, which invests in
Class A shares of MFS Emerging Growth Fund, will replace our Separate Account
No. 3 (Pooled) as the Aggressive Equity Fund on December 1, 1995.
Accordingly, the information contained in the May 1, 1995 SAI regarding
investment restrictions, asset valuation, unit values, fund transactions and
investment management fees relating to the Aggressive Equity Fund, as
Separate Account No. 3 (Pooled), is no longer relevant, except for historical
purposes. The same is the case with respect to information in the May 1, 1995
SAI relating to the Balanced Fund, which is to be terminated upon the
transfer by the ADA Trustees at the close of business on December 8, 1995 of
all Program Account Balances from that Fund to the Lifecycle Fund-Moderate,
our Separate Account No. 198.
- -----------------------------------------------------------------------------
PROCEDURES FOR WITHDRAWALS, DISTRIBUTIONS AND TRANSFERS
BENEFIT DISTRIBUTIONS. See the same sub-caption at page SAI-4 of the May 1,
1995 SAI. The following is additional:
Transfers and withdrawals from the Aggressive Equity Fund may be deferred if
there is any delay in redemption of Class A shares of the MFS Emerging Growth
Fund. We generally do not expect any such delays.
SAI-1a
<PAGE>
INVESTMENT RESTRICTIONS APPLICABLE TO THE FUNDS
The following is in addition to that included under the same caption at page
SAI-17 of the May 1, 1995 SAI:
THE AGGRESSIVE EQUITY FUND. The Aggressive Equity Fund will operate as
discussed under Investment Options--Aggressive Equity Fund in the prospectus,
and will be subject to the investment policies and limitations described
there. The prospectus for the MFS Emerging Growth Fund describes the
investment objective, policies and limitations applicable to the MFS Emerging
Growth Fund. A free copy of the prospectus may be obtained by calling an
Equitable Account Executive.
HOW WE VALUE THE ASSETS OF THE FUND
THE EQUITY FUNDS: See the same sub-caption at page SAI-18 of the May 1, 1995
SAI. The following is additional:
The Aggressive Equity Fund will invest all of its assets in Class A shares of
the MFS Emerging Growth Fund. The net asset value of the MFS Emerging Growth
Fund is computed daily. See the prospectus of the MFS Emerging Growth Fund
for information on valuation methodology.
Copyright 1995
The Equitable Life Assurance Society of the United States
New York, New York 10019
All rights reserved.
SAI-2a
<PAGE>
- -----------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------
MAY 1, 1995
AMERICAN DENTAL ASSOCIATION
MEMBERS RETIREMENT PROGRAM
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 American Dental Association Members
Retirement Program. Toll-free telephone number 1-800-223-5790.
- -----------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the prospectus dated May 1, 1995 for the American
Dental Association Members Retirement Program. THIS SAI RELATES TO ALL
INVESTMENT OPTIONS EXCEPT THE EQUITY INDEX FUND AND LIFECYCLE FUNDS, WHICH
ARE DISCUSSED IN OUR SEPARATE SAI FOR THOSE FUNDS.
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 2486
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 Contracts ...................................... SAI-2
Your Responsibilities as Employer .................. SAI-2
Procedures for Withdrawals, Distributions and
Transfers ........................................ SAI-3
Pre-Retirement Withdrawals ........................ SAI-3
Benefit Distributions ............................. SAI-4
Spousal Consent Requirements ...................... SAI-4
Eligible Rollover Distributions and
Federal Income Tax Withholding ................... SAI-5
Premature Withdrawals and Transfers from
a GRA ............................................ SAI-5
Maturing GRAs ..................................... SAI-7
Special Rules for Distributions and Transfers
from the Real Estate Fund ........................ SAI-7
Real Estate Fund Withdrawals from Prime Property
Fund .............................................. SAI-8
Types of Benefits .................................. SAI-8
Provisions of the Master Plan ...................... SAI-10
Plan Eligibility Requirements ..................... SAI-10
Contributions to Qualified Plans .................. SAI-10
Contributions to the ADA Master Plan .............. SAI-10
Allocation of Contributions ....................... SAI-12
The ADA Master Plan and Section 404(c) of ERISA . SAI-12
Vesting ........................................... SAI-12
Prime Property Fund Investments .................... SAI-13
Holdings of Prime Property Fund .................... SAI-15
Investment Restrictions Applicable to the Funds ... SAI-17
The Growth Equity, Aggressive Equity and
Balanced Funds .................................. SAI-17
The ADA Foreign Fund .............................. SAI-17
The Equity Index Fund ............................. SAI-17
Lifecycle Funds ................................... SAI-18
The Real Estate Fund .............................. SAI-18
How We Value the Assets of the Funds ............... SAI-18
The Equity Funds .................................. SAI-18
Assets Held in Prime Property Fund ................ SAI-19
Summary of Unit Values for the Funds ............... SAI-19
The Equity Funds ................................ SAI-19
The Real Estate Fund ............................ SAI-21
Prime Property Fund ............................. SAI-22
Growth Equity, Aggressive Equity and Balanced Fund
Transactions .................................... SAI-22
Prime Property Fund Transactions ................... SAI-23
Investment Management Fee .......................... SAI-23
Underwriter ........................................ SAI-24
<PAGE>
PAGE
----------
Our Management ..................................... SAI-24
Financial Statements ............................... SAI-26
<FN>
Copyright 1995 by The Equitable Life Assurance Society of The United States.
All rights reserved.
</TABLE>
<PAGE>
ADDITIONAL INFORMATION ABOUT THE PROGRAM
THE CONTRACTS
The Program is primarily funded through a group annuity contract issued to
the Trustees by The Equitable Life Assurance Society of the United States
(Equitable Life). The contract governs the Investment Options that are
provided by Equitable Life under the Program. The Trustees have also entered
into two group annuity contracts with Metropolitan Life Insurance Company
(MetLife) which govern Guaranteed Rate Accounts opened during the one year
period beginning August 3, 1994. The Trustees hold all contracts for the
benefit of employers and participants in the Program.
In addition, the Trustees and Equitable Life have entered into an
administrative services agreement that governs Equitable Life's duties
relating to administrative support, recordkeeping and marketing for the
Program. This agreement would under most circumstances terminate at the same
time as the group annuity contract.
YOUR RESPONSIBILITIES AS EMPLOYER
If you adopt the ADA Master 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
format;
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;
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 provision in your plan.
SAI-2
<PAGE>
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 for investment only. 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 1-800-223-5790 or write to us at Box 2486 G.P.O., New York, New
York 10116.
PROCEDURES FOR WITHDRAWALS, DISTRIBUTIONS AND TRANSFERS
PRE-RETIREMENT WITHDRAWALS. Under the Master 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 Master 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. If your employer maintains the Master Plan as a 401(k)
plan and you are under age 59 1/2 , you may withdraw your own 401(k)
contributions only if you can 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 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 Master 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. 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).
TRANSFERS FROM THE ADA FOREIGN FUND, THE EQUITY INDEX FUND AND THE LIFECYCLE
FUNDS--CONSERVATIVE AND MODERATE ARE PERMITTED DAILY EXCEPT UNDER INFREQUENT
CIRCUMSTANCES WHEN THEY MAY BE SUBJECT TO A DELAY. SEE BENEFIT DISTRIBUTIONS
BELOW. IN ADDITION, THE REAL ESTATE FUND IS SUBJECT TO SPECIAL WITHDRAWAL
RULES WHICH ARE DESCRIBED UNDER SPECIAL RULES FOR DISTRIBUTIONS AND TRANSFERS
FROM THE REAL ESTATE FUND.
SAI-3
<PAGE>
BENEFIT DISTRIBUTIONS. In order for you to begin receiving benefits under the
Master 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 a variable annuity contract from
us. Fixed annuities are available from insurance companies selected by the
Trustees. See Types of Benefits. Annuity payments will be paid directly to
you and will commence as of the close of business 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.
The ADA Foreign Fund will normally invest up to 5% of its assets in units of
our Separate Account No. 2A for the purpose of maintaining sufficient
liquidity to effect transfer and withdrawal requests. However, if net
transfers and withdrawals from the ADA Foreign Fund on any day exceed the
amount of the Fund's investment in Separate Account No. 2A at the beginning
of that day, some transfers and withdrawals may be deferred for up to seven
days pending settlement of redemptions of shares of the Templeton Foreign
Fund. Furthermore, cessation of trading in Templeton Foreign Fund shares,
closing of securities markets and other events beyond our control may cause
the ADA Foreign Fund portfolio temporarily to fail to maintain the percentage
limitations noted above.
Transfers and withdrawals from the Equity Index Fund may be deferred if there
is any delay in redemption of shares of the Seven Seas S&P 500 Fund. We
generally do not expect any such delays.
Transfers and withdrawals from the Lifecycle Funds--Conservative and Moderate
may be deferred if there is any delay in redemption of units of the Lifecycle
Fund Group Trusts. We generally do not expect any such delays.
Special rules apply to withdrawals from the Real Estate Fund. See Special
Rules for Distributions and Transfers from the Real Estate Fund.
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 buy a
fixed annuity, your check will come from the company you selected. If you are
withdrawing more than $50,000 and you would like expedited delivery at your
expense, you may request it 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 Master 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
SAI-4
<PAGE>
designation and, upon your reaching age 35, must again give his or her
consent or the designation will lapse. You may elect a benefit (or make a
withdrawal) in a form other than a Qualified Joint and Survivor Annuity
within the 90 day period before your annuity starting date. In order to 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. 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 Section 401(k) plans;
o certain 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.
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 The
Program--Summary of the Plans and Trusts in the prospectus.
SAI-5
<PAGE>
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 that is available under
the withdrawal rules for Exempt and Qualified Withdrawals will first be used
to make withdrawal or installment payments. Please note that withdrawals,
transfers, reallocations on maturity and benefit distributions from GRAs
provided by a carrier other than Equitable Life are subject to Equitable
Life's receipt of the proceeds of such GRA from such carrier.
Exempt Withdrawal. You may withdraw amounts without penalty from a GRA prior
to its maturity if:
o you are a dentist 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 dentist and you attain age 59 1/2 or terminate employment
(including retirement);
o you are disabled;
o you attain age 70 1/2 ; or
o you die.
Qualified Withdrawal. You may withdraw amounts with a penalty from a GRA
prior to its maturity if you are a dentist and are taking payment upon
retirement after age 59 1/2 under a distribution option of less than three
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.
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 GRAs of the same duration.
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.
SAI-6
<PAGE>
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 four days before the
GRA matures.)
o The instructions you give us remain in effect until you change them
(again, at least four 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.
SPECIAL RULES FOR DISTRIBUTIONS AND TRANSFERS FROM THE REAL ESTATE
FUND. PLEASE NOTE THAT AT TIMES OF INSUFFICIENT LIQUIDITY WITHDRAWALS FROM
THE REAL ESTATE FUND AND PRIME PROPERTY FUND COULD BE DELAYED IN ACCORDANCE
WITH THE PROCEDURES DESCRIBED BELOW. AT THIS TIME THE REAL ESTATE FUND IS
FULFILLING WITHDRAWAL REQUESTS ON A CURRENT BASIS. YOU MAY CALL US TO RECEIVE
CURRENT INFORMATION REGARDING THE STATUS OF REAL ESTATE FUND WITHDRAWALS. SEE
SPECIAL RISKS RELATED TO THE REAL ESTATE FUND IN THE PROSPECTUS FOR MORE
INFORMATION.
There is a minimum wait of one calendar quarter for withdrawals from the Real
Estate Fund. All distributions and transfers from the Real Estate Fund will
be scheduled to be made shortly after the end of the calendar quarter
following the quarter in which we receive properly completed forms. (See The
Real Estate Fund in the prospectus for more information on how we value and
liquidate Real Estate Fund Units.) The amount distributed will be based on
the Real Estate Fund's Unit Value on the date distribution is made.
Withdrawals from the Real Estate Fund must be made in amounts of at least
$1,000 or, if less, your balance in the Real Estate Fund.
IN ADDITION TO THE WAIT OF AT LEAST ONE CALENDAR QUARTER WHICH IS REQUIRED BY
OUR PROCEDURES, IT IS ALSO POSSIBLE THAT THE REAL ESTATE FUND WILL NOT HAVE
ENOUGH CASH TO MAKE ALL WITHDRAWALS AND TRANSFERS WHEN REQUESTED. If at the
end of a calendar quarter the Real Estate Fund does not have enough cash to
pay all scheduled withdrawals, they will be divided into two priority
categories. Priority 1 consists of all amounts requested because of death or
disability or after age 70 1/2 . Priority 2 consists of all other requests.
THE REAL ESTATE FUND WILL SATISFY ALL SCHEDULED PRIORITY 1 DISTRIBUTION
REQUESTS BEFORE IT SATISFIES ANY PRIORITY 2 REQUEST, EVEN IF THE PRIORITY 1
REQUESTS WERE RECEIVED AFTER THE PRIORITY 2 REQUESTS. If the Real Estate Fund
does not have enough cash to make all Priority 1 distributions, they will be
paid in the order the requests were received. After the Real Estate Fund has
made all Priority 1 distributions, it will make Priority 2 distributions and
transfers. If the Real Estate Fund does not satisfy all scheduled Priority 2
distributions and transfer requests, they will be paid in the order the
requests were received.
To make Priority 1 distributions, the Real Estate Fund will use substantially
all its liquid assets, keeping only a reserve that we believe is adequate for
anticipated expenses. If possible, the Real Estate Fund will also liquidate
as much of its interest in Prime Property Fund as required. With regard to
Priority 2, we will make distributions and transfers to the extent that funds
are available from cash flow and from liquidation of Prime Property Fund
units. However, we will not make Priority 2 distributions and transfers if
the Real Estate Fund cannot liquidate enough of its interest in Prime
Property Fund and we believe that it would be desirable to maintain liquidity
to meet anticipated Priority 1 distributions.
SAI-7
<PAGE>
Requests that remain unpaid will be scheduled for the next quarterly
distribution date. At that time they will be satisfied to the extent
possible, in accordance with their respective priorities and order of
receipt. Please note that if you make a Priority 2 request that is not paid
when scheduled, Priority 1 distributions requested in later quarters may be
paid before your Priority 2 request.
REAL ESTATE FUND WITHDRAWALS FROM PRIME PROPERTY FUND. If the Real Estate
Fund does not have enough liquid assets to pay all requested withdrawals, it
will seek to withdraw some or all of its interest from Prime Property Fund.
We may postpone withdrawals from Prime Property Fund, however, for such time
as we reasonably consider necessary to obtain the amount to be withdrawn or
to protect the interests of other participants in Prime Property Fund. In
making this determination, we consider primarily (i) the availability of cash
to manage Prime Property Fund's property holdings, to meet emergencies and to
meet commitments for property acquisitions and loans, (ii) the time necessary
to dispose of properties and (iii) any adverse impact of proposed property
sales on other participants in Prime Property Fund. Except as described
below, Prime Property Fund has been able to pay withdrawals when requested
since its inception in 1973.
If withdrawal from Prime Property Fund is restricted, any payment from Prime
Property Fund is applied pro rata to the withdrawal requests of all
participants in Prime Property Fund that are eligible for payment on the
withdrawal date, regardless of when those requests were made. Prime Property
Fund withdrawal requests not satisfied by a pro rata distribution are
deferred until the next withdrawal date (generally the last business day of
the following month), at which time the amount available for distribution
will again be applied pro rata to all pending requests. For purposes of this
policy, the Real Estate Fund is considered a single participant in Prime
Property Fund, on par with each other participant in Prime Property Fund. As
of March 31, 1995, Prime Property Fund has satisfied all participant
withdrawal requests. Since June 1994 the Real Estate Fund has had sufficient
liquidity; and withdrawals have not been restricted. If the Real Estate Fund
experiences periods of insufficient liquidity withdrawals may be delayed in
accordance with the procedures described above. See Special Rules for
Distributions and Transfers from the Real Estate Fund. There have been other
periods when there was insufficent available cash in Prime Property Fund to
meet all withdrawal requests and the above withdrawal procedures were put
into place for all pending Prime Property Fund withdrawal requests. During
these other periods Real Estate Fund withdrawals were not delayed or
restricted in any manner because there was sufficient liquidity in the Real
Estate Fund.
In general, a withdrawal from Prime Property Fund by one or more of its
larger investors could significantly reduce its cash position and increase
the likelihood that the Real Estate Fund would not have cash sufficient to
meet all withdrawal requests. At December 31, 1994 there were 262
participants in Prime Property Fund, none of which held more than 3.9% of
Prime Property Fund.
TYPES OF BENEFITS
Under the Master 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.
Fixed annuities are available from insurance companies selected by the
Trustees, which meet criteria established by the Trustees from time to time.
Fixed annuities are currently not available from Equitable
SAI-8
<PAGE>
Life. The types of fixed annuity benefits described below will be available
through one or more of such companies. Upon your request, the companies will
provide annuity benefit information. We will have no further responsibility
for the amount used to purchase the annuity once it has been sent to the
insurance company you select. The cost of a fixed annuity is determined by
each insurance company based on its current annuity purchase rates. The
amount of your monthly annuity benefit will depend on the type of annuity
selected, your age and the age of your beneficiary if you select a joint and
survivor annuity. Your Account Executive has more details regarding the
insurance companies currently providing annuity benefits under the Program.
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 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 AUTOMATICALLY RECEIVE A LUMP SUM PAYMENT OF THE ENTIRE AMOUNT.
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, other than the Real Estate
Fund; each payment will be drawn pro rata from all the Options you have
selected. If you elect installment payments, you may not leave or place any
assets in the Real Estate Fund. 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. Except
in the case of participant accounts transferred from defined contribution
plans, we do not offer installments for benefits under the individually
designed plans or 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 other 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
SAI-9
<PAGE>
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.
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.
All forms of variable annuity benefits under the Program will be provided by
us. The payments under variable annuity options 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.
PROVISIONS OF THE MASTER PLAN
PLAN ELIGIBILITY REQUIREMENTS. Under the Master 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 employer may also exclude salaried dentists (those with no ownership
interest in the practice), employees of related employers, leased employees
and certain other types of employees at the employer's election, provided
such exclusion does not cause the Plan to discriminate in favor of "highly
compensated" employees (defined below). The Master Plan provides that a
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.
CONTRIBUTIONS TO THE ADA MASTER PLAN. The employer makes annual contributions
to its plan based on the plan's provisions.
SAI-10
<PAGE>
An employer that adopts the Master 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 practice, or
(b) anyone with earnings of more than $100,000 from the practice, or (c)
anyone with earnings of more than $66,000 from the practice who is among the
highest-paid 20% of employees, or (d) an officer of the practice with
earnings of at least $60,000. 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), 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 Master 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.
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
practice with earnings of more than $30,000, or (b) an officer of the
practice with earnings of more than $60,000 or (c) an owner of more than 5%
of the practice, or (d) an owner of more than 1% of the practice 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. BEFORE PERMITTING ANY
HIGHLY-COMPENSATED EMPLOYEE TO MAKE POST-TAX CONTRIBUTIONS, THE EMPLOYER
SHOULD MAKE SURE THAT ALL NON-DISCRIMINATION TESTS HAVE BEEN 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 apply to matching
contributions and may limit the amount of matching contributions that may be
made on behalf of highly compensated employees.
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.
SAI-11
<PAGE>
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.
ALLOCATION OF CONTRIBUTIONS. Contributions may be allocated among any number
of the Investment Options. Allocation instructions may be changed at any
time, and as often as needed, by calling the AIM System. New instructions
become effective on the business day we receive them. Employer contributions
may be allocated in different percentages than employee contributions. The
allocation percentages elected for employer contributions will automatically
apply to any 401(k) qualified non-elective contributions, qualified matching
contributions and matching contributions. The allocation percentages for
employee contributions will automatically apply to any post-tax employee
contributions and 401(k) salary deferral contributions. IF WE HAVE NOT
RECEIVED VALID INSTRUCTIONS, WE WILL ALLOCATE CONTRIBUTIONS TO THE MONEY
MARKET GUARANTEE ACCOUNT.
The ADA Master Plan and Section 404(c) of ERISA. The ADA Master 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 ADA Program 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 Master Plan.
The participant's Account Balance attributable to 401(k) contributions
(including salary deferral, qualified non-elective and qualified matching
contributions), post-tax employee contributions and to rollover contributions
is nonforfeitable at all times.
SAI-12
<PAGE>
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 forfeitable. The normal retirement age is 65 under the Master Plan.
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.
PRIME PROPERTY FUND INVESTMENTS
Since typically 90% to 100% of the Real Estate Fund's assets are invested in
Prime Property Fund, we have provided the following information about the
investments of Prime Property Fund.
Prime Property Fund seeks the acquisition and long-term ownership of
high-grade, income-producing real property. Prime Property Fund seeks to
invest in properties that are located in strong rental markets and have
continuous potential for resale. At December 31, 1994, Prime Property Fund
held 171 investments in wholly-owned properties and equities in partnerships
with an aggregate appraised value of over $3.2 billion.
Prime Property Fund seeks to diversify its property portfolio by usage and
location. Prime Property Fund's major holdings (in wholly-owned properties
and equities in partnerships) as of December 31, 1994 included:
o 32 retail properties, primarily super-regional shopping centers, with
an aggregate market value of $1,921.3 million.
o 42 office properties, with an aggregate market value of $798.4 million.
o 86 industrial properties (primarily warehouses) and research and
development facilities, with an aggregate market value of $361.7 million.
o 5 hotels, with an aggregate market value of $108.9 million.
o 6 special purpose properties, which include any other income-producing
properties not specifically mentioned above, with an aggregate market value
of $17.7 million.
In addition to wholly-owned properties and equities in partnerships, Prime
Property Fund has five investments in mortgage loans receivable with an
aggregate market value of $192 million, or 5.7% of Prime Property Fund's
investments. Mortgages may be accepted as partial consideration for
properties sold.
BORROWINGS. There is no limit on mortgage indebtedness with respect to any
one property. During the period from 1985 through 1994 Prime Property Fund's
total borrowings secured by wholly-owned
SAI-13
<PAGE>
properties ranged from 6.2% to 15.7% of the total portfolio value. Properties
held by joint ventures may also be mortgaged. The borrowings on wholly-owned
properties held in Prime Property Fund as of December 31, 1994 are summarized
below.
- -----------------------------------------------------------------------------
Summary of Borrowings on Wholly-Owned Properties*--December 31, 1994
<TABLE>
<CAPTION>
<S> <C>
Number of mortgages payable ........... 7
Number of encumbered properties ...... 12
Outstanding borrowings (millions) .... 422.2
Borrowings as a percent of total value 13.8%
</TABLE>
*Prime Property Fund also held interests in real estate partnerships
having total assets of $1,280 million and total liabilities of $982 million.
- -----------------------------------------------------------------------------
SAI-14
<PAGE>
HOLDINGS OF PRIME PROPERTY FUND
The charts below describe the investments in wholly-owned properties,
partnership equities and mortgage and construction loans receivable of Prime
Property Fund as of December 31, 1994 and for the other periods indicated.
<TABLE>
<CAPTION>
DISTRIBUTION OF INVESTMENT VALUE BY TYPE AND LOCATION* (BY
PERCENTAGE) -- DECEMBER 31, 1994
- ---------------------------------------------------------------
SOUTH EAST MID-WEST WEST TOTAL
- --------------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
Industrial/R&D 2.5% 2.3% 1.3% 4.5% 10.6%
Office 1.0 12.2 1.1 10.6 24.9
Retail 15.3 14.7 24.9 5.9 60.8
Hotel 0.8 1.4 -- 1.0 3.2
Special Purpose 0.1 0.4 -- -- 0.5
- --------------- ------- ------- ---------- ------- -------
Total 19.7% 31.0% 27.3% 22.0% 100.0%
- --------------- ------- ------- ---------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF INVESTMENTS BY TYPE AND LOCATION* (BY NUMBER
OF INVESTMENTS) -- DECEMBER 31, 1994
- -------------------------------------------------------------
SOUTH EAST MID-WEST WEST TOTAL
- --------------- ------- ------ ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Industrial/R&D 29 22 13 22 86
Office 3 23 8 11 45
Retail 10 10 10 3 33
Hotel 1 3 -- 1 5
Special Purpose 1 5 1 -- 7
- --------------- ------- ------ ---------- ------ -------
Total 44 63 32 37 176
- --------------- ------- ------ ---------- ------ -------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF INVESTMENT VALUE BY LOCATION* (BY
PERCENTAGE)
- -------------------------------------------------------
1994 1993 1992 1991 1990
- ---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
South 19.7% 20.0% 20.8% 24.9% 24.3%
East 31.0 30.9 29.9 29.3 32.0
Mid-West 27.3 27.6 26.6 23.8 20.8
West 22.0 21.5 22.7 22.0 22.9
- ---------- ------- ------- ------- ------- -------
</TABLE>
* Each region comprises the states indicated:
South: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi,
Oklahoma, Tennessee, Texas
East: Connecticut, Delaware, District of Columbia, Kentucky, Maine,
Maryland, Massachusetts, New Hampshire, New Jersey, New York, North
Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia,
West Virginia
Mid-West: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, South Dakota, Wisconsin
West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada,
New Mexico, Oregon, Utah, Washington, Wyoming
SAI-15
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTION OF INVESTMENT VALUE BY PROPERTY TYPE (BY
PERCENTAGE)
- ------------------------------------------------------------
1994 1993 1992 1991 1990
- --------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Industrial/R&D 10.6% 10.8% 11.4% 10.9% 11.1%
Office 24.9 25.2 26.8 33.2 38.0
Retail 60.8 60.0 57.6 51.6 46.5
Hotel 3.2 2.9 3.3 3.8 3.8
Special Purpose 0.5 1.1 0.9 0.5 0.6
- --------------- ------- ------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF INVESTMENT VALUE BY TYPE OF OWNERSHIP (BY PERCENTAGE) --
DECEMBER 31, 1994
- --------------------------------------------------------------------------
WHOLLY-OWNED EQUITY IN MORTGAGE LOANS
REAL ESTATE* PARTNERSHIPS RECEIVABLE TOTAL
- --------------- -------------- -------------- ---------------- -------
<S> <C> <C> <C> <C>
Industrial/R&D 10.2% 0.4% -- 10.6%
Office 20.9 2.6 1.4% 24.9
Retail 55.3 1.2 4.3 60.8
Hotel 2.1 1.1 -- 3.2
Special Purpose 0.1 0.4 -- 0.5
- --------------- -------------- -------------- ---------------- -------
Total 88.6% 5.7% 5.7% 100.0%
- --------------- -------------- -------------- ---------------- -------
</TABLE>
* Title to wholly-owned properties allocated to Prime Property Fund is
generally held in Equitable Life's name.
<TABLE>
<CAPTION>
DISTRIBUTION OF INVESTMENTS BY VALUE RANGE* -- DECEMBER 31,
1994
- -------------------------------------------------------------
INVESTMENT PERCENTAGE OF
VALUE PERCENTAGE OF NUMBER OF TOTAL NUMBER
(MILLIONS) INVESTMENT VALUE INVESTMENTS OF INVESTMENTS
- ------------ ---------------- ------------- --------------
<S> <C> <C> <C>
Under $2.5 2.0% 51 29.0%
$2.5-$5 3.7 35 19.9
$5-$10 6.5 31 17.6
$10-$20 7.8 18 10.2
$20-$50 23.3 24 13.6
$50-$100 19.3 9 5.1
Over $100 37.4 8 4.6
- ------------ ---------------- ------------- --------------
Total 100.0% 176 100.0%
- ------------ ---------------- ------------- --------------
</TABLE>
* Includes all investments stated at the Fund's ownership share.
SAI-16
<PAGE>
INVESTMENT RESTRICTIONS APPLICABLE TO THE FUNDS
THE GROWTH EQUITY, AGGRESSIVE EQUITY AND BALANCED FUNDS. None of the Growth
Equity, Aggressive Equity or 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; purchase or write puts and
calls (options);
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 ADA FOREIGN FUND. The ADA Foreign Fund will operate as discussed in The
Equity Funds--The ADA Foreign Fund in the prospectus, and will be subject to
the investment policies and limitations described there. The prospectus for
the Templeton Foreign Fund describes the investment objective, policies and
limitations applicable to that Fund. A free copy of the Templeton Foreign
Fund prospectus may be obtained by calling an Equitable Account Executive.
THE EQUITY INDEX FUND. The Equity Index Fund will operate as discussed in The
Equity Funds--The Equity Index Fund in the prospectus, and will be subject to
the investment policies and limitations described there. The prospectus for
the Seven Seas Series Fund describes the investment objective, policies and
limitations applicable to the Seven Seas S&P 500 Index Fund. A free copy of
the Seven Seas Series Fund prospectus may be obtained by calling an Equitable
Account Executive.
SAI-17
<PAGE>
LIFECYCLE FUNDS. The Lifecycle Funds will operate as discussed in The Equity
Funds--The Lifecycle Funds in the prospectus, and will be subject to the
investment policies and limitations described there. Our separate prospectus
for the Lifecycle Funds describes the investment objectives, policies and
limitations applicable to the Lifecycle Fund Group Trusts. A free copy of
that prospectus may be obtained by calling an Equitable Account Executive.
THE REAL ESTATE FUND. The Real Estate Fund will operate as discussed in The
Real Estate Fund in the prospectus, and will be subject to the investment
policies and limitations described there.
HOW WE VALUE THE ASSETS OF THE FUNDS
THE EQUITY FUNDS. The assets of the Equity 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 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 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.
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.
The ADA Foreign Fund will normally invest at least 95% of its assets in
shares of the Templeton Foreign Fund, with the balance of the assets being
invested in units of our Separate Account No. 2A. The asset value of the
Templeton Foreign Fund is computed on a daily basis by the Templeton Foreign
Fund. See the prospectus of the Templeton Foreign Fund for information on
valuation methodology.
SAI-18
<PAGE>
The Equity Index Fund will invest all of its assets in the Seven Seas S&P 500
Fund. The asset value of the Seven Seas S&P 500 Index Fund is computed on a
daily basis by the Seven Seas S&P 500 Fund. See the prospectus of the Seven
Seas Series Fund for information on valuation methodology.
The Lifecycle Funds--Conservative and Moderate will invest all of their
assets in the Lifecycle Fund Group Trusts--Conservative and Moderate,
respectively. The Group Trusts, in turn, will invest all of their assets in
the Underlying Funds. See our separate prospectus for the Lifecycle Funds for
information on valuation methodology.
ASSETS HELD IN PRIME PROPERTY FUND. Real properties held by Prime Property
Fund (Equitable's Separate Account No. 8) are valued by staff appraisers in
our field offices or third-party appraisers. Appraised values do not
necessarily represent the prices at which the real estate investments would
sell since sales prices are determined by negotiation between a willing buyer
and seller.
Our appraisers value each Prime Property Fund property prior to acquisition
and at the end of each calendar quarter thereafter. The initial appraisal is
a fully documented appraisal. This appraisal takes into account all relevant
information, including the property's physical attributes, location,
marketability, zoning, expandability, and adaptability to use. The initial
appraisal also involves consideration of values based on the three major
methods of estimating property value:
o the income method, based on the value of the property's projected
income stream;
o the cost method, based on the replacement cost of improvements, less
depreciation, plus land value; and
o the market method, based on the sales prices of similar properties.
Subsequent quarterly appraisals include less documentation but take into
account all relevant information and consist of a physical inspection, a
valuation based on the most relevant of the three above methods, usually the
income method, performance record and an assessment of any relevant market
changes. Interim monthly valuations also take into account physical or
economic changes respecting a property which we believe would have a material
effect on its market value. Quarterly appraisals are prepared primarily by
staff appraisers. Staff appraisals are submitted to one of three designated
third-party appraisal firms which also physically inspect those properties
periodically. These appraisal firms provide Equitable Real Estate with a
written statement of concurrence annually.
Partnership equities are valued at Prime Property Fund's equity in the net
assets of the partnerships in accordance with the valuation procedures
described above.
During the past five years, on average, net proceeds (equal to sales price
minus sales expenses) from sales of properties in which Equitable Life
retains no equity interest were equal to approximately 94.9% of their most
recent quarterly valuation. In some cases, Prime Property Fund has received
purchase money mortgages for a portion of the sales price.
Mortgage and construction loans receivable are valued by comparing the loan
rate of interest to market rates for loans of comparable quality and
duration, giving consideration to the value of the underlying security.
See Note B2 to the Financial Statements of Separate Account No. 8 (Prime
Property Fund) in this SAI for more information about the valuation of
investments in Prime Property Fund.
SUMMARY OF UNIT VALUES FOR THE FUNDS
THE EQUITY FUNDS. Set forth below are Unit Values for the Growth Equity,
Aggressive Equity, Balanced, ADA Foreign and Equity Index Funds, computed to
the nearest cent on the last business day of the periods
SAI-19
<PAGE>
specified. The value of a Growth Equity Fund Unit was established at $10.00
on January 1, 1968, the date the Program first became available. The
Aggressive Equity and Balanced Fund Unit Values under the Program were
established at $10.00 on May 1, 1985, the date on which Separate Account Nos.
3 (Pooled) and 10 (Pooled) were first made available under the Program to
fund the Aggressive Equity and Balanced Funds, respectively. The ADA Foreign
Fund Unit Value was established at $10.00 on March 2, 1992, the date the ADA
Foreign Fund began operations. The Equity Index Fund Unit Value was
established at $10.00 on February 1, 1994, the date the Equity Index Fund
began operations. The Lifecycle Funds' Unit Values were established at $10.00
on May 1, 1995, the date these Funds began operation. Since the Lifecycle
Funds and the Lifecycle Fund Group Trusts have had no prior operations, Unit
Values for the Lifecycle Funds are not provided.
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 Separate Account Nos. 3 (Pooled)
and 10 (Pooled), respectively, 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 during
these periods to the historical investment experience of Separate Account
Nos. 3 (Pooled) and 10 (Pooled). For information about these ratios, see
Condensed Financial Information in the prospectus. You should note that these
ratios generally increased during the periods shown. See Deductions and
Charges in the prospectus for a description of the charges which will apply.
The Program's interest in Separate Account No. 10 (Pooled) was transferred to
Separate Account No. 190 at the close of business on January 31, 1991 at the
Unit Value then in effect. Hypothetical Unit Values for the ADA Foreign Fund
for periods prior to March 2, 1992 assume that the Fund's assets are invested
95% in the Templeton Foreign Fund and 5% in Separate Account No. 2A .
Hypothetical Unit Values for periods prior to the availability of the ADA
Foreign Fund and the Equity Index Fund under the Program were calculated by
applying the Program expense charge during those periods plus .15% in
estimated other expenses to the historical investment experience of the
Templeton Foreign Fund and Separate Account No. 2A for the ADA Foreign Fund,
and to the historical investment experience of the Seven Seas S&P 500 Index
Fund (from its first full year of operations) for the Equity Index Fund.
<TABLE>
<CAPTION>
UNIT VALUES OF THE EQUITY FUNDS
LAST BUSINESS GROWTH EQUITY AGGRESSIVE BALANCED ADA FOREIGN EQUITY INDEX
DAY OF FUND EQUITY FUND (A) FUND (B) FUND (C) FUND (D)
- --------------- ------------- --------------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C>
1985 $ 59.30 $11.16 $11.56 $ 3.56 --
1986 67.10 11.24 13.33 4.52 --
1987 70.48 10.89 12.52 5.56 --
1988 81.94 11.02 14.27 6.70 --
1989 117.90 16.08 17.92 8.62 --
1990 103.88 17.37 17.67 8.33 --
1991 156.93 32.26 24.98 9.74 --
1992 157.79 31.03 24.34 9.81 $9.06
1993 187.30 35.30 27.06 13.08 9.64
1994 183.07 33.69 24.62 13.01 9.71
March 1995 195.57 35.70 25.77 13.04 10.60
</TABLE>
(a) Unit Values reflect hypothetical performance through April 30, 1985
and actual performance thereafter.
SAI-20
<PAGE>
(b) Unit Values reflect hypothetical performance under Separate Account
No. 10 (Pooled) through April 30, 1985, and actual performance under
Separate Account No. 10 (Pooled) through January 31, 1991 and actual
performance of Separate Account No. 190 after January 31, 1991. The
Program's interest in Separate Account No. 10 (Pooled) was
transferred to Separate Account No. 190 at the close of business on
January 31, 1991, at the Unit Value then in effect.
(c) For periods prior to March 2, 1992, Unit Values reflect hypothetical
performance.
(d) For periods prior to February 1, 1994, Unit Values reflect
hypothetical performance.
THE REAL ESTATE FUND. The Real Estate Fund Unit Value was established at
$10.00 on August 29, 1986, the date the Real Estate Fund began operations.
Set forth below are Unit Values for the Real Estate Fund, computed to the
nearest cent on the last business day of the periods specified. For periods
before the Real Estate Fund commenced operations, because it had no actual
historical performance record which would reflect investment experience and
the deduction of fees and charges, we have calculated hypothetical
performance for the Real Estate Fund based on the actual performance of Prime
Property Fund and on the assumptions described below.
First, we have assumed that, for periods prior to August 29, 1986, 90% of the
Real Estate Fund's assets were invested in Prime Property Fund and that 10%
were invested in our Separate Account No. 2A, described in the prospectus.
We have also approximated the asset-based fees which would have applied under
the Program for the periods shown and applied them to the hypothetical
investment experience of the Real Estate Fund. For 1985 through August 28,
1986, we have assumed those charges were equal to the average Program Expense
Charge for each year, plus a 1.10% investment management fee for the Real
Estate Fund, plus the .25% administration fee applicable to the Real Estate
Fund. See Deductions and Charges in the prospectus for more information about
the charges that apply to the Real Estate Fund.
UNIT VALUES OF THE REAL ESTATE FUND
<TABLE>
<CAPTION>
LAST BUSINESS
DAY OF UNIT VALUE*
- --------------- -------------
<S> <C>
1985 $ 9.58
1986 10.07
1987 10.84
1988 11.37
1989 12.29
1990 12.53
1991 11.44
1992 10.85
1993 10.50
1994 10.88
March 1995 10.99
</TABLE>
(*) Unit Values reflect hypothetical performance through August 28, 1986
and actual performance thereafter. For 1985, hypothetical Unit Values
were determined as of December 31. For periods after 1985, Unit
Values are the actual Unit Values last determined before the date
shown, which determination normally will have been from five to ten
days after the end of the preceding month. Consequently, the Unit
Values for years ending after 1985 may differ from the Unit Values
presented in Condensed Financial Information in the prospectus.
SAI-21
<PAGE>
PRIME PROPERTY FUND. Set forth below are the unit values of Prime Property
Fund, computed to the nearest cent on the last business day of the periods
specified. The value of a Prime Property Fund unit was established at
$1,000.00 on August 20, 1973, the date on which it commenced operations. Unit
values are shown without deduction for investment management fees.
UNIT VALUES OF PRIME PROPERTY FUND
<TABLE>
<CAPTION>
LAST BUSINESS
DAY OF UNIT VALUE
- --------------- ------------
<S> <C>
1985 $4,086.96
1986 4,431.87
1987 4,848.46
1988 5,260.89
1989 5,765.73
1990 5,786.40
1991 5,367.19
1992 5,177.99
1993 5,287.69
1994 5,643.72
</TABLE>
GROWTH EQUITY, AGGRESSIVE EQUITY AND BALANCED FUND TRANSACTIONS
The Growth Equity, Aggressive Equity and Balanced Funds are charged for
securities brokers' commissions, transfer taxes and other fees relating to
securities transactions. Transactions in equity securities for a Fund 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 and 1993 the Growth Equity Fund
paid $4,738,796 and $3,407,006, respectively, in brokerage commissions; and
the Aggressive Equity Fund paid $908,990 and $616,015, respectively, in
brokerage commissions. For 1994 and 1993, the Balanced Fund paid $128,466 and
$129,707, respectively, in brokerage commissions.
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 the 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 $37,323, respectively, were paid to
brokers providing research services on transactions of $583,662,157,
$62,548,119 and $16,631,405, respectively.
SAI-22
<PAGE>
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.
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.
PRIME PROPERTY FUND TRANSACTIONS
Prime Property Fund is charged separately for fees paid to independent
property managers, outside legal expenses, operating expenses, real estate
taxes and insurance premiums. In addition, Prime Property Fund reimburses
Equitable Life for certain direct expenses and pays property management and
leasing fees associated with Equitable Life's management of some properties
held in Prime Property Fund.
INVESTMENT MANAGEMENT FEE
The table below shows the amount we received under the investment management
fee under the Program during each of the last three years. These figures
include charges for financial accounting. See Deductions and Charges in the
prospectus.
<TABLE>
<CAPTION>
FUND 1994 1993
- ------------------ ---------- ----------
<S> <C> <C>
Growth Equity ..... $632,720 $819,035
Aggressive Equity 209,181 256,490
Balanced .......... 341,102 374,554
ADA Foreign ....... 40,815 54,409
Equity Index Fund* 788 --
Real Estate ....... 39,344 54,761
<FN>
* The Equity Index Fund became available on February 1, 1994.
</TABLE>
SAI-23
<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 Securities Exchange Act of 1934 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 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 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 Brothers, Inc.
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 and Chief Executive Officer, American Cyanamid
Company
*Dave H. Williams Chairman and Chief Executive Officer, Alliance Capital Management,
L.P.
</TABLE>
*Member of Equitable's Investment Committee.
SAI-24
<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
<FN>
* Member of Equitable Life's Investment Committee.
</TABLE>
SAI-25
<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), 190, 30 (Pooled), and 191 reflect applicable fees, charges and
other expenses under the Program as in effect during the periods covered and,
except in the case of Separate Account No. 190, they also reflect the charges
against the accounts made in accordance with the terms of all other contracts
participating in the respective separate accounts. The financial statements
of Separate Account No. 8 (Prime Property Fund) reflect charges against the
account made in accordance with the terms of all other contracts
participating in the account; there are no Program fees charged against
Separate Account No. 8.
SEPARATE ACCOUNT NOS. 3 (POOLED) 4 (POOLED), 190 AND 191 (THE AGGRESSIVE
EQUITY, GROWTH EQUITY, BALANCED AND ADA FOREIGN):
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Accountants .................................................................. SAI-28
Separate Account No. 3 (Pooled) (The Aggressive Equity Fund):
Statement of Assets and Liabilities, December 31, 1994 ............................................. SAI-29
Statements of Operations and Changes in Net Assets for the Years Ended December 31, 1994, and 1993 SAI-30
Portfolio of Investments, December 31, 1994 ........................................................ SAI-31
Separate Account No. 4 (Pooled) (The Growth Equity Fund):
Statement of Assets and Liabilities, December 31, 1994 ............................................. SAI-35
Statements of Operations and Changes in Net Assets for the Years Ended December 31, 1994, and 1993 SAI-36
Portfolio of Investments, December 31, 1994 ........................................................ SAI-37
Separate Account No. 190 (The Balanced Fund):
Statement of Assets and Liabilities, December 31, 1994 ............................................. SAI-42
Statements of Operations and Changes in Net Assets for the Years Ended December 31, 1994, and 1993 SAI-43
Portfolio of Investments, December 31, 1994 ........................................................ SAI-44
Separate Account No. 191 (The ADA Foreign Fund):
Statement of Assets and Liabilities, December 31, 1994 ............................................. SAI-48
Statements of Operations and Changes in Net Assets for the Years Ended December 31, 1994, and 1993 SAI-49
Separate Account Nos. 3 (Pooled), 4 (Pooled), 190 and 191
Notes to Financial Statements ...................................................................... SAI-50
SEPARATE ACCOUNT NO. 30 (POOLED) (THE REAL ESTATE FUND):
Report of Independent Accountants .................................................................. SAI-54
Statements of Assets and Liabilities, December 31, 1994 and 1993 ................................... SAI-55
Statements of Operations and Changes in Net Assets for the Years Ended December 31, 1994 and 1993 . SAI-56
Statements of Cash Flows for the Years Ended December 31, 1994 and 1993 ............................ SAI-57
Statement of Investments and Net Assets, December 31, 1994 ......................................... SAI-58
Notes to Financial Statements ...................................................................... SAI-59
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND):
Report of Independent Accountants .................................................................. SAI-60
Statement of Independent Appraisers ................................................................ SAI-61
Statements of Assets and Liabilities, December 31, 1994 and 1993 ................................... SAI-62
Statements of Operations and Changes in Net Assets for the Years Ended December 31, 1994 and 1993 . SAI-63
Statements of Cash Flows for the Years Ended December 31, 1994 and 1993 ............................ SAI-64
Notes to Financial Statements ...................................................................... SAI-65
Schedule X: Supplementary Income Statement Information, December 31, 1994 and 1993 ................ SAI-74
Schedule XII: Mortgage Loans Receivable on Real Estate, December 31, 1994 and 1993 ................ SAI-75
SAI-26
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES:
Report of Independent Accountants .................................................................. SAI-76
Independent Auditors' Report ....................................................................... SAI-77
Consolidated Balance Sheets, December 31, 1994 and 1993 ............................................ SAI-78
Consolidated Statements of Earnings for the Years Ended December 31, 1994, 1993 and 1992 .......... SAI-79
Consolidated Statements of Shareholder's Equity for the Years Ended December 31, 1994, 1993 and
1992 ............................................................................................. SAI-80
Consolidated Statements of Cash Flows for the Years Ended December 31, 1994, 1993 and 1992 ........ SAI-81
Notes to Consolidated Financial Statements ......................................................... SAI-82
</TABLE>
SAI-27
<PAGE>
To the Board of Directors of The Equitable Life Assurance Society
of the United States and the Participants in the American Dental
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, 190 and 191
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, 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 the application of
alternative auditing procedures where confirmations from brokers were not
received, 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-28
<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-29
<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-30
<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-31
<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>
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-32
<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 (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-33
<PAGE>
Separate Account No. 3 (Pooled)
of The Equitable Life Assurance Society of the United States
Portfolio of Investments
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
==============
*Non-income producing.
</TABLE>
See Notes to Financial Statements.
SAI-34
<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-35
<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-36
<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-37
<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-38
<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-39
<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-40
<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-41
<PAGE>
SEPARATE ACCOUNT NO. 190 (THE BALANCED 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: $34,997,849) .............................................. $34,845,131
Long-term debt securities--at value (amortized cost: $19,083,632) ........................ 19,340,807
Participation in Separate Account No. 2A--at amortized cost, which approximates market
value, equivalent to 37,271 units at $227.94 ........................................... 8,495,682
Cash ....................................................................................... 2,912
Receivables:
Securities sold .......................................................................... 281,149
Interest ................................................................................. 276,104
Dividends ................................................................................ 85,066
------------------------------------------------------------------------------------------ -------------
Total assets ........................................................................... 63,326,851
------------------------------------------------------------------------------------------ -------------
LIABILITIES:
Payables:
Securities purchased ..................................................................... 40,170
Due to Equitable Life's General Account .................................................. 32,127
Accrued expenses ........................................................................... 27,602
------------------------------------------------------------------------------------------ -------------
Total liabilities ...................................................................... 99,899
------------------------------------------------------------------------------------------ -------------
NET ASSETS ................................................................................. $63,226,952
========================================================================================== =============
</TABLE>
See Notes to Financial Statements.
SAI-42
<PAGE>
SEPARATE ACCOUNT NO. 190
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 ....................................................................... $ 1,653,096 $ 1,493,487
Dividends ...................................................................... 546,286 615,066
------------------------------------------------------------------------------ -------------- --------------
Total .......................................................................... 2,199,382 2,108,553
EXPENSES--(NOTE 4) ............................................................. (969,598) (912,231)
------------------------------------------------------------------------------ -------------- --------------
NET INVESTMENT INCOME .......................................................... 1,229,784 1,196,322
------------------------------------------------------------------------------ -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain (loss) from security transactions ................................ (2,360,647) 3,623,740
------------------------------------------------------------------------------ -------------- --------------
Unrealized appreciation (depreciation) of investments:
Beginning of period .......................................................... 5,742,929 3,608,964
End of Period ................................................................ 104,457 5,742,929
------------------------------------------------------------------------------ -------------- --------------
Change in unrealized appreciation/depreciation ................................. (5,638,472) 2,133,965
------------------------------------------------------------------------------ -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ......................... (7,999,119) 5,757,705
------------------------------------------------------------------------------ -------------- --------------
Increase (decrease) in net assets attributable to operations ................... (6,769,335) 6,954,027
------------------------------------------------------------------------------ -------------- --------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions .................................................................. 16,587,650 23,044,255
Withdrawals .................................................................... (17,148,138) (14,173,071)
------------------------------------------------------------------------------ -------------- --------------
Increase (decrease) in net assets attributable to contributions and
withdrawals ................................................................... (560,488) 8,871,184
------------------------------------------------------------------------------ -------------- --------------
INCREASE (DECREASE) IN NET ASSETS .............................................. (7,329,823) 15,825,211
NET ASSETS--BEGINNING OF PERIOD ................................................ 70,556,775 54,731,564
------------------------------------------------------------------------------ -------------- --------------
NET ASSETS--END OF PERIOD ...................................................... $ 63,226,952 $ 70,556,775
============================================================================== ============== ==============
</TABLE>
See Notes to Financial Statements.
SAI-43
<PAGE>
SEPARATE ACCOUNT NO. 190
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
Metals & Mining (1.9%)
American Barrick Resources Corp. .......... 33,300 $ 740,925
Wolverine Tube, Inc.* ..................... 18,600 441,750
------------
TOTAL BASIC MATERIALS (1.9%) .............. 1,182,675
------------
BUSINESS SERVICES
Environmental Control (1.8%)
Thermo Instrument Systems, Inc.* .......... 35,300 1,120,775
------------
PRINTING, PUBLISHING & BROADCASTING (2.1%)
Clear Channel Communications, Inc.* ...... 12,800 649,600
Infinity Broadcasting (Class A)* .......... 21,000 661,500
------------
1,311,100
------------
PROFESSIONAL SERVICES (0.9%)
Loewen Group, Inc. ........................ 23,100 612,150
------------
TOTAL BUSINESS SERVICES (4.8%) ............ 3,044,025
------------
CAPITAL GOODS
Machinery (1.4%)
Deere & Co. ............................... 6,200 410,750
Solectron Corporation* .................... 17,000 467,500
------------
TOTAL CAPITAL GOODS (1.4%) ................ 878,250
------------
CONSUMER CYCLICALS
Autos & Trucks (1.5%)
Ek Chor China Motorcycle Co. .............. 21,400 291,575
Paccar, Inc. .............................. 14,500 641,625
------------
933,200
------------
FOOD SERVICES, LODGING (3.2%)
Brinker International, Inc.* .............. 40,000 725,000
Luby's Cafeterias, Inc. ................... 24,800 554,900
Outback Steakhouse, Inc.* ................. 10,000 235,000
Taco Cabana, Inc. (Class A)* .............. 53,750 490,469
------------
2,005,369
------------
HOUSEHOLD FURNITURE, APPLIANCES (2.1%)
Heilig Meyers Co. ......................... 27,650 698,163
Leggett & Platt, Inc. ..................... 19,100 668,500
------------
1,366,663
------------
LEISURE-RELATED (3.7%)
Aldila, Inc.* ............................. 41,700 479,550
Callaway Golf Co. ......................... 9,500 314,687
Coleman Co., Inc.* ........................ 14,000 491,750
Gaylord Entertainment Co. (Class A) ...... 45,400 1,032,850
------------
2,318,837
------------
RETAIL--GENERAL (2.3%)
Eckerd Corp.* ............................. 12,000 358,500
</TABLE>
SAI-44
<PAGE>
Separate Account No. 190
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>
May Department Stores Co. ................. 11,400 $ 384,750
Walgreen Co. .............................. 17,000 743,750
------------
1,487,000
------------
TOTAL CONSUMER CYCLICALS (12.8%) .......... 8,111,069
------------
CONSUMER NONCYCLICALS
Beverages (0.7%)
Celestial Seasonings, Inc.* ............... 30,000 438,750
------------
CONTAINERS (0.6%)
Bemis, Inc. ............................... 15,600 374,400
------------
DRUGS (3.5%)
Merck & Co., Inc. ......................... 26,400 1,006,500
Mylan Laboratories, Inc. .................. 43,600 1,177,200
------------
2,183,700
------------
FOODS (2.3%)
McCormick & Co. ........................... 30,000 547,500
Wrigley (Wm.), Jr. Co. .................... 17,800 878,875
------------
1,426,375
------------
HOSPITAL SUPPLIES & SERVICES (1.4%)
Surgical Care Affiliates, Inc. ............ 44,000 891,000
------------
RETAIL--FOOD (1.0%)
Sysco Corp. ............................... 24,800 638,600
------------
SOAPS & TOILETRIES (1.3%)
Clorox Co. ................................ 7,000 412,125
Gillette Corp. ............................ 6,000 448,500
------------
860,625
------------
TOTAL CONSUMER NONCYCLICALS (10.8%) ...... 6,813,450
------------
CREDIT-SENSITIVE
Financial Services (1.1%)
Mercury Finance Co. ....................... 55,400 720,200
------------
INSURANCE (0.7%)
American International Group, Inc. ....... 4,800 470,400
------------
REAL ESTATE (1.7%)
Irvine Apartment Communities, Inc. ....... 24,000 393,000
Oasis Residential, Inc. ................... 27,300 668,850
------------
1,061,850
------------
UTILITY--ELECTRIC (1.3%)
Duke Power Co. ............................ 11,500 438,437
Teco Energy Incorporated .................. 20,000 402,500
------------
840,937
------------
UTILITY--GAS (1.3%)
ENRON Corp. ............................... 26,300 802,150
------------
UTILITY--TELEPHONE (1.6%)
Telephone & Data Systems, Inc. ............ 12,000 553,500
U.S. West, Inc. ........................... 11,800 420,375
------------
973,875
------------
TOTAL CREDIT-SENSITIVE (7.7%) ............. 4,869,412
------------
</TABLE>
SAI-45
<PAGE>
Separate Account No. 190
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 (0.6%)
Questar Corp. ............................. 14,700 $ 404,250
------------
OIL--DOMESTIC (3.7%)
Anadarko Petroleum Corp. .................. 18,300 704,550
Apache Corp. .............................. 16,100 402,500
Enron Oil And Gas Co. ..................... 11,000 206,250
Phillips Petroleum Co. .................... 19,200 628,800
Valero Energy Corp. ....................... 24,400 411,750
------------
2,353,850
------------
OIL--INTERNATIONAL (0.7%)
YPF Sociedad Anonima (ADR) ................ 21,000 448,875
------------
OIL--SUPPLIES & CONSTRUCTION (2.6%)
Seitel, Inc.* ............................. 14,500 311,750
Smith International, Inc.* ................ 31,800 397,500
Tidewater, Inc. ........................... 24,000 444,000
Western Atlas, Inc.* ...................... 13,000 489,125
------------
1,642,375
------------
RAILROADS (2.9%)
Illinois Central Corp. .................... 59,000 1,814,250
------------
TOTAL ENERGY (10.5%) ...................... 6,663,600
------------
TECHNOLOGY
Electronics (3.2%)
Sensormatic Electronics Corp. ............. 56,000 2,016,000
------------
TELECOMMUNICATIONS (2.0%)
AirTouch Communications, Inc.* ............ 20,400 594,150
Vodafone Group PLC (ADR) .................. 20,000 672,500
------------
1,266,650
------------
TOTAL TECHNOLOGY (5.2%) ................... 3,282,650
------------
Total Common Stocks (55.1%)
(Cost $34,997,849) ...................... 34,845,131
------------
PRINCIPAL
LONG-TERM DEBT SECURITIES: AMOUNT
CREDIT-SENSITIVE
-------------
U.S. GOVERNMENT (28.8%)
U.S. Treasury:
6.25% Note, 2023 ......................... $10,200,000 8,284,307
4.125% Note,1995 ......................... 10,000,000 9,906,250
------------
TOTAL CREDIT-SENSITIVE (28.8%) ............ 18,190,557
------------
TECHNOLOGY (1.8%)
Electronics
General Instrument Corp.
5.0% Conv., 2000 ........................ 860,000 1,150,250
------------
TOTAL LONG-TERM DEBT SECURITIES (30.6%)
(Amortized Cost $19,083,632) ............ 19,340,807
------------
</TABLE>
SAI-46
<PAGE>
SEPARATE ACCOUNT NO. 190
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 37,271 units at $227.94 each (Note 2)
(13.4%) .................................................... $ 8,495,682
-------------
TOTAL INVESTMENTS (99.1%)
(Cost/Amortized Cost $62,577,163) .......................... 62,681,620
CASH AND RECEIVABLES LESS LIABILITIES (0.9%) ................ 545,332
-------------
NET ASSETS (100.0%) ......................................... $63,226,952
=============
*Non-income producing.
</TABLE>
See Notes to Financial Statements.
SAI-47
<PAGE>
SEPARATE ACCOUNT NO. 191 (THE ADA FOREIGN 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 in shares of The Templeton Foreign
Fund--at value (cost: $70,981,905) (Notes 2, 3 and
6) .................................................. $68,854,443
Participation in Separate Account No. 2A--
at amortized cost, which approximates market
value, equivalent to 14,111 units at $227.94 ....... 3,216,528
Cash ................................................. 19,663
- ----------------------------------------------------- -------------
Total assets ..................................... 72,090,634
- ----------------------------------------------------- -------------
LIABILITIES:
Due to Equitable Life's General Account .............. 19,341
Accrued expenses ..................................... 30,092
- ----------------------------------------------------- -------------
Total liabilities ................................ 49,433
- ----------------------------------------------------- -------------
NET ASSETS ........................................... $72,041,201
===================================================== =============
</TABLE>
See Notes to Financial Statements.
SAI-48
<PAGE>
SEPARATE ACCOUNT NO. 191
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 from The Templeton Foreign Fund ........................... $ 2,444,487 $ 894,890
Interest ............................................................ 125,681 43,759
- -------------------------------------------------------------------- -------------- --------------
Total ............................................................... 2,570,168 938,649
EXPENSES -- (NOTE 4) ................................................ (673,967) (319,822)
- -------------------------------------------------------------------- -------------- --------------
NET INVESTMENT INCOME ............................................... 1,896,201 618,827
- -------------------------------------------------------------------- -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTE 2):
Realized gain (loss) from share transactions ........................ 3,165,838 209,573
Realized gain distribution from The Templeton Foreign Fund ......... 2,513,801 372,529
- -------------------------------------------------------------------- -------------- --------------
Net realized gain ................................................... 5,679,639 582,102
- -------------------------------------------------------------------- -------------- --------------
Unrealized appreciation (depreciation) of investments:
Beginning of period ................................................ 6,344,998 (1,669,243)
End of period ...................................................... (2,127,462) 6,344,998
- -------------------------------------------------------------------- -------------- --------------
Change in unrealized appreciation/depreciation ...................... (8,472,460) 8,014,241
- -------------------------------------------------------------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. (2,792,821) 8,596,343
- -------------------------------------------------------------------- -------------- --------------
Increase (decrease) in net assets attributable to operations ....... (896,620) 9,215,170
- -------------------------------------------------------------------- -------------- --------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ....................................................... 52,322,250 43,518,506
Withdrawals ......................................................... (34,585,740) (14,123,274)
- -------------------------------------------------------------------- -------------- --------------
Increase in net assets attributable to contributions and withdrawals 17,736,510 29,395,232
- -------------------------------------------------------------------- -------------- --------------
INCREASE IN NET ASSETS .............................................. 16,839,890 38,610,402
NET ASSETS -- BEGINNING OF PERIOD ................................... 55,201,311 16,590,909
- -------------------------------------------------------------------- -------------- --------------
NET ASSETS -- END OF PERIOD ......................................... $ 72,041,201 $ 55,201,311
==================================================================== ============== ==============
</TABLE>
See Notes to Financial Statements.
SAI-49
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 190 AND 191
(THE AGGRESSIVE EQUITY, GROWTH EQUITY, BALANCED AND ADA
FOREIGN FUNDS)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
1. Separate Account Nos. 3 (Pooled), 4 (Pooled), 190 and 191 (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 Statements
of Assets and Liabilities in Separate Account No. 4 may be transferred to
Equitable Life's General Account.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account Nos. 3 and 4 aggregated $48,123,292
(15.6%) and $184,086,304 (11.1%), respectively, at December 31, 1994 and
$43,232,604 (14.9%) and $179,616,502 (10.0%), 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 190 (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. 191 normally invests at least 95% of its assets in
shares of the Templeton Foreign Fund, a series of Templeton Funds, Inc.,
which is registered under the Investment Company Act of 1940 as an open-end
management investment company. The investment manager of the Templeton
Foreign Fund is Templeton, Galbraith & Hansberger Ltd., an indirect
wholly-owned subsidiary of Franklin Resources, Inc. The balance of the ADA
Foreign Fund's assets (up to 5%) are invested in units of Equitable's
internal short-term investment account, Separate Account No. 2A, for the
purpose of maintaining sufficient liquidity to effect transfer and withdrawal
requests from the account.
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.
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. 191, realized gains and losses on investments include gains and
losses on redemptions of the underlying fund's shares (determined on the
identified cost basis) and capital gain distributions from the underlying
fund. Dividends and realized gain distributions from underlying fund are
recorded on ex-date.
SAI-50
<PAGE>
Separate Account Nos. 3 (Pooled), 4 (Pooled), 190 and 191
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
Transactions denominated in foreign currencies for the Equitable Funds 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 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.
For 1994 and 1993, investment security transactions were as follows:
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPARATE ACCOUNT NO. 3 SEPARATE ACCOUNT NO. 4 SEPARATE ACCOUNT NO. 190
------------------------------ ------------------------------ -----------------------------
COST OF NET PROCEEDS COST OF NET PROCEEDS COST OF NET PROCEEDS
PURCHASES OF SALES PURCHASES OF SALES PURCHASES OF SALES
- ---------------------------- -------------- -------------- -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Stocks and long-term
corporate debt securities:
1994 ...................... $314,667,935 $272,832,266 $1,556,068,225 $1,644,508,525 $36,045,119 $34,370,795
1993 ...................... 229,810,388 192,736,750 1,394,550,892 1,610,595,838 45,780,150 41,796,409
U.S. Government obligations:
1994 ...................... -- -- -- -- 47,571,815 48,953,104
1993 ...................... -- -- -- -- 22,477,155 14,588,279
</TABLE>
----------------------------------------------------------------------------
No activity is shown for Separate Account No. 191 since it trades
exclusively in shares of the Templeton Foreign Fund.
SAI-51
<PAGE>
Separate Account Nos. 3 (Pooled), 4 (Pooled), 190 and 191
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
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 ADA Foreign Fund's investments in the Templeton Foreign Fund are
valued at the underlying mutual fund's net asset value per share. The value
of units in the ADA Foreign Fund and changes in the value of such units will
not be the same as the value of shares of the Templeton Foreign Fund, due to
several factors.
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 American Dental Association Members Retirement Program, these
expenses consist of investment management and accounting fees, program
expense charge, direct expenses and record maintenance and report fee. These
charges and fees are paid to Equitable Life by the Funds 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.
6. The Templeton Foreign Fund has provided Equitable Life with the
following information as of December 31, 1994.
SAI-52
<PAGE>
Separate Account Nos. 3 (Pooled), 4 (Pooled), 190 and 191
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Concluded)
The Templeton Foreign Fund had total assets of $5.3 billion and a net
asset value per share of $8.82. Its asset allocation consisted of 68.7% in
common and preferred shares and convertible issues, 26.1% in liquid
investments and 5.2% in fixed income issues. Its five major industry group
concentrations were as follows: Banking (11.7%), Energy Sources (5.0%),
Transportation (5.0%), Metals and Mining (5.0%) and Telecommunications
(4.8%). Geographically, the five major country concentrations were as
follows: United Kingdom (8.3%), Hong Kong (7.6%), Netherlands (6.5%),
Australia (5.4%) and Spain (5.2%).
SAI-53
<PAGE>
SEPARATE ACCOUNT NO. 30 (POOLED) (THE REAL ESTATE FUND)
Report of Independent Accountants
To The Board of Directors of The Equitable Life Assurance Society of the
United States:
We have audited the accompanying statements of assets and liabilities of The
Real Estate Fund (Separate Account No. 30) of The Equitable Life Assurance
Society of the United States (the Account) as of December 31, 1994 and 1993,
the statement of investments and net assets as of December 31, 1994, the
related statements of operations and changes in net assets and of cash flows
for the years then ended. These financial statements are the responsibility
of the Account's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of the Account at December 31, 1994
and 1993, and the results of its operations and the changes in its net assets
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
As explained in Note B2, the financial statements at December 31, 1994
include an investment in PPF, valued at $8.0 million (90% of total assets).
PPF holds real estate related investments whose values have been estimated by
management in accordance with the procedures described in Note B2 to the PPF
financial statements. We have tested the procedures used by PPF's management
in arriving at its estimate of market value and have tested the underlying
documentation. In the circumstances, we believe the procedures are reasonable
and the documentation appropriate. Because of the subjectivity inherent in
any estimate of market value of real estate, and because the real estate
related assets underlying PPF's investments are generally held for long-term
operation and appreciation, amounts ultimately realized from the sale of real
estate related investments may vary from the market values presented.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The condensed financial information of
the Account for the years ended December 31, 1994 and 1993 included in the
accompanying Prospectus, is presented for purposes of additional analysis and
is not a required part of the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audits 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
Atlanta, Georgia
February 10, 1995
SAI-54
<PAGE>
SEPARATE ACCOUNT NO. 30 (THE REAL ESTATE FUND) (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Assets and Liabilities
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
1994 1993
- ------------------------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
ASSETS:
Investments (Notes 2 and 3):
Participation in Prime Property Fund, at value, equivalent to 1,418 units at $5,643.72
for 1994 (cost: $6,966,153) and 1,848 units at $5,287.69 for 1993 (cost: $8,955,486) ... $8,002,106 $ 9,769,464
Participation in Separate Account No. 2A, at amortized cost which approximates market
value, equivalent to 3,922 units at $227.94 for 1994 and 9,786 units at $218.27 for 1993 893,924 2,136,040
Cash ...................................................................................... 4,426 742
- ------------------------------------------------------------------------------------------ ------------ ------------
Total assets .......................................................................... 8,900,456 11,906,246
- ------------------------------------------------------------------------------------------ ------------ ------------
LIABILITIES:
Accrued expenses .......................................................................... 12,712 17,567
- ------------------------------------------------------------------------------------------ ------------ ------------
Total liabilities ..................................................................... 12,712 17,567
- ------------------------------------------------------------------------------------------ ------------ ------------
NET ASSETS ................................................................................ $8,887,744 $11,888,679
========================================================================================== ============ ============
</TABLE>
See Notes to Financial Statements.
SAI-55
<PAGE>
SEPARATE ACCOUNT NO. 30 (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 Income .................................................... $ 36,884 $ 8,580
EXPENSES (NOTE 4) .................................................. (185,127) (253,517)
- ------------------------------------------------------------------- ------------- -------------
NET INVESTMENT LOSS ................................................ (148,243) (244,937)
- ------------------------------------------------------------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain from redemption of Prime Property Fund units ........ 342,395 666,574
- ------------------------------------------------------------------- ------------- -------------
Unrealized appreciation (depreciation) of Prime Property Fund
units:
January 1 ......................................................... 813,978 1,212,870
December 31 ....................................................... 1,035,953 813,978
- ------------------------------------------------------------------- ------------- -------------
Unrealized appreciation (depreciation) ............................. 221,975 (398,892)
- ------------------------------------------------------------------- ------------- -------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS .................... 564,370 267,682
- ------------------------------------------------------------------- ------------- -------------
Increase in net assets attributable to operations .................. 416,127 22,745
- ------------------------------------------------------------------- ------------- -------------
FROM ALLOCATIONS AND WITHDRAWALS:
Allocations ........................................................ 914,352 356,303
Withdrawals ........................................................ (4,331,414) (3,503,119)
- ------------------------------------------------------------------- ------------- -------------
Increase (decrease) in net assets attributable to
allocations and withdrawals ....................................... (3,417,062) (3,146,816)
- ------------------------------------------------------------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS .................................. (3,000,935) (3,124,071)
NET ASSETS -- JANUARY 1 ............................................ 11,888,679 15,012,750
- ------------------------------------------------------------------- ------------- -------------
NET ASSETS -- DECEMBER 31 .......................................... $ 8,887,744 $11,888,679
=================================================================== ============= =============
</TABLE>
See Notes to Financial Statements.
SAI-56
<PAGE>
SEPARATE ACCOUNT NO. 30 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Cash Flows
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993
- ------------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net investment loss ........................................................... $ (148,243) $ (244,937)
- ------------------------------------------------------------------------------ ------------- -------------
Adjustments to reconcile net investment loss to net cash flow used in
operating activities:
Increase (decrease) in accrued expenses ...................................... (4,855) 2,558
- ------------------------------------------------------------------------------ ------------- -------------
Total adjustments ............................................................ (4,855) 2,558
- ------------------------------------------------------------------------------ ------------- -------------
Net cash flow used in operating activities ................................... (153,098) (242,379)
- ------------------------------------------------------------------------------ ------------- -------------
INVESTING ACTIVITIES:
Net proceeds from redemption of Prime Property Fund units .................... 2,331,728 4,412,104
- ------------------------------------------------------------------------------ ------------- -------------
Net cash flow provided by investing activities ............................... 2,331,728 4,412,104
- ------------------------------------------------------------------------------ ------------- -------------
FINANCING ACTIVITIES:
Allocations .................................................................. 914,352 356,303
Withdrawals .................................................................. (4,331,414) (3,503,119)
- ------------------------------------------------------------------------------ ------------- -------------
Net cash flow used in financing activities ................................... (3,417,062) (3,146,816)
- ------------------------------------------------------------------------------ ------------- -------------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS .................... (1,238,432) 1,022,909
CASH AND SHORT-TERM INVESTMENTS --JANUARY 1 ................................... 2,136,782 1,113,873
- ------------------------------------------------------------------------------ ------------- -------------
CASH AND SHORT-TERM INVESTMENTS -- DECEMBER 31 ................................ $ 898,350 $ 2,136,782
============================================================================== ============= =============
</TABLE>
See Notes to Financial Statements.
SAI-57
<PAGE>
SEPARATE ACCOUNT NO. 30 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Investments and Net Assets
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENTS (NOTES 2 AND 3):
- ------------------------------------------------------------------------------------------------------- ------------
REAL ESTATE INVESTMENTS:
Participation in Prime Property Fund at value, equivalent to 1,418 units at $5,643.72 (cost:
$6,966,153) ........................................................................................... $8,002,106
SHORT-TERM INVESTMENTS:
Participation in Separate Account No. 2A, at amortized cost which approximates market value,
equivalent to 3,922 units at $227.94 .................................................................. 893,924
- ------------------------------------------------------------------------------------------------------- ------------
Total Investments ...................................................................................... 8,896,030
- ------------------------------------------------------------------------------------------------------- ------------
Cash Less Liabilities .................................................................................. (8,286)
- ------------------------------------------------------------------------------------------------------- ------------
Net Assets ............................................................................................. $8,887,744
======================================================================================================= ============
</TABLE>
See Notes to Financial Statements.
SAI-58
<PAGE>
SEPARATE ACCOUNT NO. 30 (POOLED)
(THE REAL ESTATE FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
1. Separate Account No. 30 (the Account) was established as a separate
account of The Equitable Life Assurance Society of the United States
(Equitable), in conformity with the New York State Insurance Law. Pursuant to
such law, the net assets of the Account are not chargeable with liabilities
arising out of any other business of Equitable. Equitable is the investment
manager for the Account. In managing the Account, Equitable uses the services
of its wholly-owned subsidiary, Equitable Real Estate Investment Management,
Inc.
2. The Account participates primarily in Equitable's Prime Property Fund
by purchasing or redeeming units on the date Prime Property Fund units are
valued. Prime Property Fund invests in real estate as discussed in the
accompanying financial statements of Prime Property Fund.
The change in value of Prime Property Fund units owned by the Account is
recorded as unrealized appreciation (depreciation). Prime Property Fund's
unit value changes as a result of both investment income and increases and
decreases in investment appreciation (depreciation). In determining realized
gains or losses from the redemption of Prime Property Fund units, the cost of
units sold is recorded on a first-in, first-out basis.
The Account participates in Equitable's Separate Account No. 2A by purchasing
or redeeming units, depending on the Account's excess cash availability or
need for cash to meet Account liabilities or withdrawals. The investments of
Separate Account No. 2A consist of debt securities which mature or can be
liquidated in sixty days or less from the date of acquisition. Short-term
debt securities may also be purchased directly by the Account. Interest
income is recorded when earned and expenses are recognized when incurred.
3. Investments are valued as follows:
The Account's participation in Prime Property Fund is valued as of the last
business day of the month based upon the number of units held and the unit
value of Prime Property Fund. Investments held by Prime Property Fund are
valued as disclosed in Note B2 of the financial statements of Prime Property
Fund which are included in this Statement of Additional Information.
Separate Account No. 2A is primarily valued at amortized cost which
approximates market value.
4. Expense charges are made in accordance with the terms of the contracts
participating in the Account.
5. In the Statements of Cash Flows, the Account considers short-term
investments to be cash equivalents.
6. No federal income tax based on net investment income or realized and
unrealized gains was applicable to contracts participating in the Account by
reason of applicable sections of the Internal Revenue Code, and no federal
income tax payable by Equitable will affect the contracts.
7. The ability of a client to withdraw funds from the Account is subject
to the availability of cash arising from net investment income, allocations
and the redemption of units in Prime Property Fund. To the extent that
withdrawal requests exceed such available cash, Management has uniform
procedures to provide for cash payments. As of December 31, 1994, the Real
Estate Fund is fulfilling withdrawal requests on a current basis.
8. These financial statements should be read in conjunction with the
financial statements of Prime Property Fund, which are included in this
Statement of Additional Information.
SAI-59
<PAGE>
Report of Independent Accountants
The Board of Directors of The Equitable Life Assurance Society of the United
States:
We have audited the accompanying statements of assets and liabilities of
Prime Property Fund of The
Equitable Life Assurance Society of the United States (the Account) as of
December 31, 1994 and 1993, and the related statements of operations and
changes in net assets and of cash flows for the years then ended. These
financial statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of the Account at December 31, 1994
and 1993, and the results of its operations and the changes in its net assets
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
As explained in Note B2, the financial statements at December 31, 1994
include real estate related investments, valued at $3.4 billion (95% of total
assets), whose values have been estimated by management in accordance with
the procedures described in the Note. We have tested the procedures used by
the Account's management in arriving at its estimate of market value and have
tested the underlying documentation. In the circumstances, we believe the
procedures are reasonable and the documentation appropriate. Because of the
subjectivity inherent in any estimate of market value of real estate, and
because the real estate related assets underlying the Account's investments
are generally held for long-term operation and appreciation, amounts
ultimately realized from the sale of real estate related investments may vary
from the market values presented.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
supplementary income statement information and of mortgage loans receivable
on real estate are presented for purposes of additional analysis and are not
a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits 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
Atlanta, Georgia
February 7, 1995
SAI-60
<PAGE>
STATEMENT OF INDEPENDENT APPRAISERS
Equitable Real Estate staff appraisers and independent fee appraisers make
quarterly market value estimates of all properties in Prime Property Fund.
During 1994, those appraisals completed by Equitable Real Estate staff were
independently reviewed by L. W. Ellwood Company, Arthur Andersen & Co., Real
Estate Advisory Services, and Landauer Real Estate Counselors. Each company
independently reviewed separate portions of the Equitable valuations so that
by year end all properties were analyzed once by non-Equitable appraisers.
Based on our review and analysis we concur with the value estimates on
properties prepared by Equitable Real Estate staff as of the calendar quarter
during which we conducted our review.
Our appraisal review is part of a comprehensive three-year program which
analyzes Equitable Real Estate staff appraisals including our thorough market
value comparisons and physical inspections of one-third of the properties
during the year. At the end of the three-year cycle, we have subjected all
properties to on-site review.
We have had the full cooperation of Equitable Real Estate with complete
and unrestricted access to all underlying documents including leases,
operation agreements, budgets, and partnership joint venture agreements. We
have, where in our opinion deemed appropriate, independently researched the
market for additional data and performed supplemental analysis to complete
our review.
Our review has been made in conformity with and subject to the Code of
Professional Ethics and Standards of Practice of the Appraisal Institute.
L.W. Ellwood Company
Arthur Andersen & Co., Real Estate Advisory Services
Landauer Real Estate Counselors
December 31, 1994
SAI-61
<PAGE>
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Assets and Liabilities
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
1994 1993
- ------------------------------------------------------------ -------------- --------------
<S> <C> <C>
ASSETS:
Real estate investments at value (Notes B, C and D):
Properties ................................................. $3,015,415,000 $2,628,065,000
Partnership equities and related mortgage loans receivable 212,322,573 476,329,986
Mortgage loans receivable .................................. 172,300,000 180,151,104
- ------------------------------------------------------------ -------------- --------------
Total real estate investments at value ...................... 3,400,037,573 3,284,546,090
- ------------------------------------------------------------ -------------- --------------
Cash and short-term investments (Notes B and C) ............ 65,252,499 76,502,768
Accrued investment income ................................... 74,877,495 62,059,033
Prepaid real estate expenses and taxes ...................... 6,638,877 5,768,891
Other assets ................................................ 15,629,624 10,206,063
- ------------------------------------------------------------ -------------- --------------
Total assets ............................................ 3,562,436,068 3,439,082,845
- ------------------------------------------------------------ -------------- --------------
LIABILITIES:
Mortgage loans payable (Note E) ............................. 422,207,905 456,418,238
Accrued real estate expenses and taxes ...................... 53,168,032 45,177,696
Accrued asset management fees and other liabilities (Note I) 19,062,551 17,776,723
Accrued capital expenditures ................................ 12,422,321 7,736,461
- ------------------------------------------------------------ -------------- --------------
Total liabilities ....................................... 506,860,809 527,109,118
- ------------------------------------------------------------ -------------- --------------
NET ASSETS .................................................. $3,055,575,259 $2,911,973,727
============================================================ ============== ==============
</TABLE>
See Notes to Financial Statements.
SAI-62
<PAGE>
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
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 INVESTMENT ACTIVITIES:
INVESTMENT INCOME (NOTES B AND D):
Rental income from real estate properties ................................. $ 410,179,367 $ 380,094,064
Income from partnership operations and interest from related mortgage
loans receivable ......................................................... 21,690,976 31,737,217
Interest from mortgage loans receivable ................................... 13,534,675 14,022,545
Interest from short-term investments ...................................... 5,419,060 4,035,313
Other ..................................................................... 49,609 24,997
- -------------------------------------------------------------------------- -------------- --------------
Total ..................................................................... 450,873,687 429,914,136
- -------------------------------------------------------------------------- -------------- --------------
EXPENSES (NOTE B):
Real estate operating expenses ............................................ 132,262,835 126,126,919
Real estate taxes ......................................................... 59,635,936 54,524,628
Asset management fees (Note I) ............................................ 29,785,130 31,664,679
Interest on mortgage loans payable (Note E) ............................... 25,931,441 23,741,988
- -------------------------------------------------------------------------- -------------- --------------
Total ..................................................................... 247,615,342 236,058,214
- -------------------------------------------------------------------------- -------------- --------------
NET INVESTMENT INCOME ..................................................... 203,258,345 193,855,922
- -------------------------------------------------------------------------- -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTE B):
Realized gain (loss) from sale of investments:
Net proceeds from sales .................................................. 24,326,114 55,344,480
Cost of investments sold ................................................. (51,428,164) (96,392,488)
- -------------------------------------------------------------------------- -------------- --------------
Net realized gain (loss) from sale of investments ........................ (27,102,050) (41,048,008)
- -------------------------------------------------------------------------- -------------- --------------
Unrealized appreciation (depreciation) on investments:
January 1 ................................................................ (359,530,346) (238,227,691)
December 31 .............................................................. (370,439,139) (359,530,346)
- -------------------------------------------------------------------------- -------------- --------------
Unrealized appreciation (depreciation) on investments .................... (10,908,793) (121,302,655)
- -------------------------------------------------------------------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................... (38,010,843) (162,350,663)
- -------------------------------------------------------------------------- -------------- --------------
Increase in net assets attributable to investment activities ............ 165,247,502 31,505,259
- -------------------------------------------------------------------------- -------------- --------------
FROM CLIENT TRANSACTIONS:
Allocations ............................................................... 185,252,463 10,119,100
Withdrawals (Note G) ...................................................... (206,898,433) (188,595,253)
- -------------------------------------------------------------------------- -------------- --------------
Increase (decrease) in net assets attributable to client transactions ... (21,645,970) (178,476,153)
- -------------------------------------------------------------------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS ......................................... 143,601,532 (146,970,894)
NET ASSETS -- JANUARY 1 ................................................... 2,911,973,727 3,058,944,621
- -------------------------------------------------------------------------- -------------- --------------
NET ASSETS -- DECEMBER 31 ................................................. $3,055,575,259 $2,911,973,727
========================================================================== ============== ==============
Unit Value ................................................................ $5,643.72 $5,287.69
Units Outstanding ......................................................... 541,410 550,708
- -------------------------------------------------------------------------- -------------- --------------
</TABLE>
See Notes to Financial Statements.
SAI-63
<PAGE>
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Cash Flows
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993
- ----------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net investment income .............................................................. $ 203,258,345 $ 193,855,922
- ----------------------------------------------------------------------------------- --------------- ---------------
Adjustments to reconcile net investment income to net cash flow provided by
operating activities:
Changes in assets -- (increase) decrease:
Accrued investment income ........................................................ (13,730,542) (10,677,531)
Prepaid real estate expenses and taxes ........................................... (869,986) (532,981)
Other assets ..................................................................... (126,116) (1,791,678)
Changes in liabilities -- increase (decrease):
Accrued real estate expenses and taxes ........................................... 9,911,961 2,865,603
Accrued asset management fees and other liabilities .............................. 1,783,913 (2,725,272)
- ----------------------------------------------------------------------------------- --------------- ---------------
Total adjustments ................................................................. (3,030,770) (12,861,859)
- ----------------------------------------------------------------------------------- --------------- ---------------
Net Cash Flow Provided by Operating Activities .................................... 200,227,575 180,994,063
- ----------------------------------------------------------------------------------- --------------- ---------------
INVESTING ACTIVITIES:
Acquisitions of real estate properties ............................................. (79,391,114) --
Additions to real estate properties ................................................ (69,096,671) (60,120,586)
Proceeds from real estate properties sold .......................................... 17,140,410 55,615,870
Repayments of mortgage loans receivable ............................................ 14,425,000 6,658,530
Proceeds from partnership equities sold and repayments of loans receivable related
to partnership equities ........................................................... 2,940,517 7,738,868
Contributions to partnership equities and advances on related loans receivable .... (2,930,726) (57,976,634)
Distributions from partnerships less than net cash provided by partnership
operating activities .............................................................. (9,200,042) (5,662,554)
- ----------------------------------------------------------------------------------- --------------- ---------------
Net Cash Flow Used in Investing Activities ........................................ (126,112,626) (53,746,506)
- ----------------------------------------------------------------------------------- --------------- ---------------
FINANCING ACTIVITIES:
Increase in mortgage loans payable ................................................. -- 172,000,000
Principal payments on mortgage loans payable ....................................... (63,675,602) (103,506,591)
Allocations ........................................................................ 185,208,817 10,526,860
Withdrawals ........................................................................ (206,898,433) (188,595,253)
- ----------------------------------------------------------------------------------- --------------- ---------------
Net Cash Flow Used in Financing Activities ........................................ (85,365,218) (109,574,984)
- ----------------------------------------------------------------------------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS ......................... (11,250,269) 17,672,573
CASH AND SHORT-TERM INVESTMENTS AT JANUARY 1 ....................................... 76,502,768 58,830,195
- ----------------------------------------------------------------------------------- --------------- ---------------
CASH AND SHORT-TERM INVESTMENTS AT DECEMBER 31 ..................................... $ 65,252,499 $ 76,502,768
=================================================================================== =============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-64
<PAGE>
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
A: GENERAL
Prime Property Fund (the Account) was established as a separate account of
The Equitable Life Assurance Society of the United States (Equitable) in
conformity with the New York State Insurance Law. Pursuant to such law,
the net assets in the Account are not chargeable with liabilities arising
out of any other business of Equitable. Equitable acts as investment
manager for the Account. In managing the Account, Equitable uses the
services of its wholly-owned subsidiary, Equitable Real Estate Investment
Management, Inc. (Management).
B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Investment Transactions
Real estate property acquisitions are recorded as of the date of
closing. Mortgage and construction loans receivable and capital
contributions to partnership equities are recorded as of the date funds
are advanced. Purchase money mortgages, acquired as consideration
received for real estate sold, are recorded as of the closing date of
the sales transaction.
Expenditures which extend economic life or represent additional capital
investments benefiting future periods (including tenant improvements and
leasing commissions) are capitalized. For properties under development
or major expansion, carrying costs related to the development or
expansion, principally real estate taxes, interest, and utility costs,
are capitalized prior to substantial completion of tenant improvements
for a maximum period of one year from cessation of major construction
activity. Historical cost depreciation is not recognized on real estate
properties.
Rental income is recognized when due in accordance with the terms of the
respective leases rather than being averaged over the lives of the
leases. Expenses are recognized when incurred. Income from partnership
operations represents the Account's share of partnership income
excluding historical cost depreciation.
The Account determines realized gain (loss) by comparing net proceeds
from the sale of properties to the cost of the properties sold. The
unrealized gain (loss) previously recorded for these properties is then
eliminated.
Mortgage loans payable are stated at the principal amount of obligations
outstanding. Benefits or detriments resulting from a differential in
current mortgage interest rates and contractual mortgage interest rates
are taken into consideration in the appraisal of the related property.
Certain real estate and partnership equity properties may have a market
value that is lower than the outstanding principal amount of the
obligation. If the Account's obligation is limited to the value of the
individual property and if Management intends to limit the Account's
exposure in the property to its existing investment, then the value of
the property is adjusted to equal the outstanding principal amount of
the obligation plus incidental liabilities. Upon transfer of properties
in satisfaction of debt, the Account reclassifies previously recognized
unrealized losses to realized gains and losses. This results in a
realized loss for the difference between the cost and the value of the
property, and a realized gain from extinguishment of debt for the
difference between the value of the property and the amount of debt
extinguished.
SAI-65
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
2. Valuation of Investments
The values of real estate investments are estimated in accordance with
the policies and procedures of the Appraisal Institute. Ultimate
realization of the market values is dependent to a great extent on
economic and other conditions that are beyond Management's control.
Further, values do not necessarily represent the prices at which the
real estate investments would sell since market prices of real estate
investments can only be determined by negotiation between a willing
buyer and seller. Market value considers the financial aspects of a
property, market transactions and the relative yield for an asset as
measured against alternative investments. Although the market values
represent subjective estimates, Management believes that these market
values are reasonable approximations of market prices.
Real Estate Properties and Partnership Equities
The values of real estate properties and partnership equities have been
prepared giving consideration to Income, Cost, and Market Data
Approaches of estimating property value. The Income Approach projects an
income stream for a property (typically 10 years) and discounts this
income plus a reversion (presumed sale) into a present value. Yield
rates and growth assumptions utilized in this approach are derived from
market transactions as well as other financial and demographic data. The
Cost Approach estimates the replacement cost of the building less
depreciation plus the land value. Generally, this approach provides a
check on the Income Approach. The Market Data Approach compares recent
transactions to the appraised property. Adjustments are made for
dissimilarities which typically provide a range of value. Generally, the
Income Approach carries the most weight in the value reconciliation.
The initial valuation of properties allocated to the Account is based on
a fully documented appraisal report. Subsequent values are determined
quarterly from certificates of value which include less documentation
but nevertheless meet all of the requirements of the Appraisal Institute
and are considered appraisals. In these appraisals, a full discounted
cash flow analysis, which is the basis of an Income Approach, is the
primary focus. Interim monthly valuations are determined giving
consideration to material investment transactions. Full appraisal
reports on selected properties are prepared as deemed necessary by
Management.
Appraisals are prepared by Management's valuation staff or third-party
appraisers. Staff appraisals are concurred with and reviewed by one of
three designated third-party appraisal firms which also physically
inspect one-third of the properties every year on a rotating basis.
Since appraisals take into consideration the estimated effect of
physical depreciation, a more meaningful financial statement
presentation is achieved by excluding historical cost depreciation from
net investment income. This presentation does not affect the net assets
or unit value of the Account.
Partnership equities are stated at the Account's equity in the value of
the net assets of the partnerships.
SAI-66
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
Mortgage Loans Receivable
The fair value of mortgage loans receivable held in the Account has been
determined by one or more of the following criteria as appropriate: (i)
on the basis of estimated market interest rates for loans of comparable
quality and maturity, (ii) by recognizing the value of equity
participations and options to enter into equity participations contained
in certain loan instruments and (iii) giving consideration to the value
of the underlying security.
Short-Term Investments
The short-term investments are primarily valued at amortized cost, which
approximates market value.
SAI-67
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
C: INVESTMENTS
1. Real Estate Investments
The Account's real estate investments are comprised of the following:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
(MILLIONS) (MILLIONS)
- -------------------------- ---------------------- ---------------------
COST VALUE COST VALUE
- -------------------------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Properties:
Industrial/R&D ........ $ 371.5 $ 348.7 $ 373.3 $ 341.5
Office ................ 1,194.7 710.2 1,161.8 707.7
Retail (Note D) ....... 1,693.8 1,880.0 1,242.4 1,501.5
Hotel ................. 97.7 72.6 94.8 69.8
Special Purpose ....... 4.1 3.9 33.5 7.6
----------------------- ---------- ---------- ---------- ---------
Subtotal .............. 3,361.8 3,015.4 2,905.8 2,628.1
----------------------- ---------- ---------- ---------- ---------
Partnership equities and related
mortgage loans receivable:
Industrial/R&D ........ 18.7 13.0 18.5 12.7
Office ................ 130.1 107.9 122.7 96.8
Retail (Note D) ....... 54.8 41.3 379.1 326.9
Hotel ................. 43.0 36.3 42.3 26.5
Special Purpose ....... 13.3 13.8 13.8 13.4
----------------------- ---------- ---------- ---------- ---------
Subtotal .............. 259.9 212.3 576.4 476.3
----------------------- ---------- ---------- ---------- ---------
Mortgage loans receivable:
Office ................ 23.6 27.3 22.6 24.7
Retail ................ 125.2 145.0 124.9 141.0
Special Purpose ....... -- -- 14.4 14.4
----------------------- ---------- ---------- ---------- ---------
Subtotal .............. 148.8 172.3 161.9 180.1
----------------------- ---------- ---------- ---------- ---------
Total ..................... $3,770.5 $3,400.0 $3,644.1 $3,284.5
----------------------- ---------- ---------- ---------- ---------
</TABLE>
SAI-68
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
2. Real Estate Partnership Equities
The Account's equity interests in real estate partnerships and their
respective financial positions at December 31, 1994 and 1993 (based on
market valuations determined for the Account) and results from
operations for the years then ended are summarized as follows:
<TABLE>
<CAPTION>
1994 1993
- ---------------------------------------------------------- ------------ ------------
<S> <C> <C>
Number of interests ....................................... 17 23
Ownership positions ....................................... 33.3-91.2% 33.3-91.2%
Account's equity value (millions) ......................... $150 $341
Notes receivable related to partnership equities
(millions) ............................................... $43 $108
Partnership assets (millions) ............................. $1,280 $1,623
Partnership liabilities (millions) ........................ $982 $1,030
Partnership income before depreciation (millions) ........ $29 $34
========================================================== ============ ============
</TABLE>
3. Mortgage Loans Receivable
At December 31, 1994, mortgage loans receivable at a fair value of
$192.0 million, consisting of $19.7 million related to partnership
equities and $172.3 million of other mortgage loans receivable, had
interest rates ranging from 8.2% to 12.0%. Aggregate annual receipts of
mortgage principal due during the five years following December 31, 1994
and thereafter are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (MILLIONS)
- ---------------------------- ------------
<S> <C>
1995 ........................ $2
1996 ........................ --
1997 ........................ 1
1998 ........................ 1
1999 ........................ 1
Thereafter .................. 172
- ---------------------------- ------------
Total ....................... $177
============================ ============
</TABLE>
4. Short-Term Investments
The Account's short-term investments are comprised principally of
participation in Equitable's Separate Account No. 2A. The assets of
Separate Account No. 2A consist of debt securities maturing in sixty
days or less from the date of acquisition. Such debt securities include
bankers acceptances, certificates of deposit, commercial paper, and
repurchase agreements. Short-term debt securities may also be purchased
directly by the Account.
D: INVESTMENT RESTRUCTURINGS
During 1994, five partnership equities and certain related loans
receivable with a market value of $222.1 million were transferred to real
estate properties. The Account acquired its partners' interests in four of
the partnerships
SAI-69
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
in exchange for loans owed by the partners to the Account. Additionally,
the Account acquired its partner's interest in a partnership in which the
Account had been recording all of the partnership's operating results. In
accordance with the terms of the partnership agreement, no consideration
was given to the partner in exchange for its interest. These transactions
were recorded at the investments' existing cost and market values and had
no effect on the net assets or unit value of the Account.
In November 1994, the Account acquired the 50% interest of its partner in
a partnership in which the Account previously had held the other 50%
interest. Upon acquisition, this investment was transferred to real estate
properties.
E: MORTGAGE LOANS PAYABLE
Mortgage loans payable consist of the following at December 31, 1994:
<TABLE>
<CAPTION>
(MILLIONS)
- ------------------------------------------------------------------------------------------ ----------
<S> <C>
LIBOR plus 1.1% loan collateralized by three real estate properties with a market value of
$509.8 million. Includes an interest rate cap agreement which limits the interest rate to
a maximum of 11.5%. In September 1994, proceeds from this loan were used to repay a loan
which was previously due in installments from 1995 through 1997. The Account anticipates
obtaining permanent financing to replace this loan by its maturity date in June 1995. .... $205.0
LIBOR plus 1.1% loan collateralized by four real estate properties with a market value of
$437.8 million. Includes an interest rate cap agreement which limits the interest rate to
a maximum of 9.5%. Maturing June 1998. .................................................... 172.0
9.0% loan collateralized by a real estate property with a market value of $43.1 million.
Maturing June 2011. ....................................................................... 14.6
9.0% loan collateralized by a real estate property with a market value of $30.1 million.
Maturing March 2000. ...................................................................... 14.1
9.375% loan collateralized by a real estate property with a market value of $21.6 million.
Maturing December 1999. (1) ............................................................... 10.3
9.375% loan collateralized by a real estate property with a market value of $4.3 million.
Maturing February 2000. ................................................................... 3.7
11.375% loan collateralized by a real estate property with a market value of $7.5 million.
Maturing November 2000. ................................................................... 2.5
- ------------------------------------------------------------------------------------------ ----------
Total ..................................................................................... $422.2
==========
</TABLE>
(1) This represents the Account's 50% interest in a tenancy-in-common
property with a total market value of $43.2 million and total outstanding debt
of $20.6 million.
SAI-70
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
Aggregate annual payments of principal on mortgage loans are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (MILLIONS)
- ------------------------ ----------
<S> <C>
1995 .................... $206
1996 .................... 1
1997 .................... 1
1998 .................... 173
1999 .................... 11
2000-2004 ............... 21
Thereafter .............. 9
- ------------------------ ----------
Total ................... $422
======================== ==========
</TABLE>
F: LEASES
Minimum future rentals to be received on real estate properties, excluding
partnership equities, under noncancelable operating leases in effect as of
December 3l, 1994 are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (MILLIONS)
- ------------------------ ----------
<S> <C>
1995 .................... $ 275.5
1996 .................... 246.9
1997 .................... 216.9
1998 .................... 189.1
1999 .................... 163.9
Thereafter .............. 517.4
- ------------------------ ----------
Total ................... $1,609.7
======================== ==========
</TABLE>
Contingent rentals included in investment income were approximately $8.3
million and $10.5 million in 1994 and 1993, respectively.
G: WITHDRAWALS
The ability of a client to withdraw funds from the Account is subject to
the availability of cash arising from net investment income,
contributions, and the sale of investments in the normal course of
business. To the extent that withdrawal requests exceed such available
cash, Management has uniform procedures to provide for cash payments,
which may be deferred for such period as Management considers necessary to
protect the interests of other clients in the Account or to obtain the
funds to be withdrawn. At December 31, 1994 and 1993, withdrawal requests
exceeded available cash.
SAI-71
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
H: RELATED PARTY TRANSACTIONS
At December 31, 1994 and 1993, interests of retirement plans for
employees, managers, and agents of Equitable in the Account aggregated
$65.5 million (2.1%) and $58.2 million (2.0%), respectively, of the net
assets of the Account.
Management has an exemption from the Department of Labor which allows it
to charge market rate property management and leasing fees for properties
it manages for the Account. All such fees must be approved by an
independent fiduciary. During 1994 and 1993, Management earned $6.1
million and $4.0 million, respectively, in property management and leasing
fees from the Account, and in addition was reimbursed $13.6 million and
$9.8 million, respectively, for payroll expenses for on-site personnel.
I: FEES
Management charges clients in the Account a monthly asset management fee
based on the client's prior month-end net asset value at the annual rates
shown below:
<TABLE>
<CAPTION>
ANNUAL RATE ANNUAL RATE
AMOUNT OF FUNDS 1/1/93-6/30/93 7/1/93-12/31/94
- ----------------------- -------------- ---------------
<S> <C> <C>
First $10 million ...... 1.25% 1.15%
Next $15 million ....... 1.10% 1.00%
Next $25 million ....... 0.90% 0.80%
Excess over $50 million 0.80% 0.80%
======================= ============== ===============
</TABLE>
Additional fees may also be charged to clients for certain optional
services provided by Management.
At December 31, 1994 and 1993, the clients' liability to Management for
asset management fees totaled $4.5 million and $4.3 million, respectively.
Account investments in Separate Account No. 2A are not subject to an
additional asset management fee.
J: SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
In the Statements of Cash Flows, the Account considers short-term
investments to be cash equivalents. Cash payments of interest were
$25.6 million and $25.2 million during 1994
and 1993, respectively.
SAI-72
<PAGE>
Separate Account No. 8 (Prime Property Fund)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements (Continued)
Non-cash investing and financing activities are summarized as follows:
<TABLE>
<CAPTION>
1994
(MILLIONS)
- ---------------------------------------------------------------------- ----------
<S> <C>
Conversion of partnership equities and related loans receivable to
real estate properties, at cost ...................................... $327
- ---------------------------------------------------------------------- ----------
Assumption of mortgage loans payable upon conversion of partnership
equities to real estate properties ................................... $ 29
- ---------------------------------------------------------------------- ----------
Refinancing of mortgage loan payable .................................. $205
====================================================================== ==========
</TABLE>
K: FEDERAL INCOME TAX
No federal income tax based on net investment income or realized and
unrealized gains was applicable to contracts participating in the Account
by reason of applicable sections of the Internal Revenue Code, and no
federal income tax payable by Equitable will affect the contracts.
L: INVESTMENT COMMITMENTS
As of December 31, 1994, the Account proposes to invest an additional
$29.9 million in existing real estate properties and $15.0 million in new
investments.
SAI-73
<PAGE>
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Supplementary Financial Information
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
(IN THOUSANDS)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMN B
YEAR ENDED DECEMBER
COLUMN A 31,
ITEM 1994 1993
- --------------------------- --------- ---------
<S> <C> <C>
1. Maintenance and repairs $11,465 $10,695
2. Real estate taxes ....... $57,663 $54,525
- --------------------------- --------- ---------
</TABLE>
Maintenance and Repairs is included in Real Estate Operating Expenses.
Other captions not included since such costs and expenses are not applicable
or did not exceed 1% of total revenues.
SAI-74
<PAGE>
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Supplementary Financial Information
SCHEDULE XII -- MORTGAGE LOANS RECEIVABLE ON REAL ESTATE
AS OF DECEMBER 31, 1994
(IN THOUSANDS)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
CARRYING
CURRENT AMOUNT OF
EFFECTIVE FINAL MORTGAGE
INTEREST MATURITY FACE AMOUNT AT MARKET
DESCRIPTION RATE DATE PERIODIC PAYMENT TERMS OF MORTGAGE VALUE
- ---------------------------------------- ----------- ----------- -------------------------------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Mortgage Loans Receivable:
Participating mortgage secured by 8.2% 07/01/03 Monthly interest plus participation in $125,186 $145,000
shopping center in New Castle County, property cash flow. Loan due at
DE maturity date.
Secured by 19 office, industrial and 9.5% 05/01/01 Monthly interest only payable at 6%. 26,785 25,300
retail properties in Principal and all accrued unpaid
Rockville, MD interest due at maturity date.
Secured by office, hotel, retail, garage 12% 03/31/02 Monthly interest only to the extent of 23,254 19,681
and marina facility in Boston, MA available cash flow. Principal and
all accrued unpaid interest due at
maturity date.
Other:
$2,000,000-$7,500,000 (two loans) 9.5%-10% 1/95-9/95 9,500 2,000
- ---------------------------------------- ----------- ----------- -------------------------------------- ----------- ----------
Total $184,725 $191,981
======================================== =========== =========== ====================================== =========== ==========
</TABLE>
The following is a reconciliation of the carrying amounts of the above loans
at market value for the years ended December 31, 1994 and 1993:
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
1994 1993
- --------------------------------------------------------------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Balance -- January 1 ........................................... $207,100 $210,412
Additions during the year:
Advances/New Loans ............................................ 1,320 4,145
Deductions during the year:
Collection of principal and transfers to real estate
properties .................................................... (20,198) (7,824)
Increase/(decrease) in unrealized gain/(loss) during the year . 3,759 367
Increase/(decrease) in realized gain/(loss) during the year ... -- --
- --------------------------------------------------------------- ---------- ----------
Balance -- December 31 ......................................... $191,981 $207,100
=============================================================== ========== ==========
</TABLE>
SAI-75
<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-76
<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-77
<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-78
<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-79
<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-80
<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-81
<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-82
<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-83
<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-84
<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-85
<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-86
<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-87
<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-88
<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-89
<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-90
<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-91
<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-92
<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-93
<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-94
<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-95
<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-96
<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 DECEMBER JULY 22 THROUGH
31, DECEMBER 31,
-------------------- 1992
1994 1993
--------- ---------
(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-97
<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-98
<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-99
<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-100
<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-101
<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-102
<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-103
<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-104
<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-105
<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-106
<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-107
<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-108
<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-109
<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-110
<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-111
<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>
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 it's 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-112
<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-113
<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-114
<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-115
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Consolidated Financial Statements--(Continued)
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-116
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 24. Exhibits
The following Exhibits are filed herewith:
1.(a) Resolutions of the Board of Directors of The Equitable Life
Assurance
Society of the United States ("Equitable") authorizing the
establishment of Separate Account Nos. 197 and 198, (filed as
Exhibit 1(a) to Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
(b) Action by Brian S. O'Neil, Executive Vice President and Chief
Investment Officer of Equitable, dated October, 1993 establishing
Separate Account No. 195 and copies of resolutions of the Board of
Directors of Equitable referenced in said action, (filed as Exhibit
1(b) to Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
(c) Action by Peter D. Noris, Executive Vice President and Chief
Investment Officer of Equitable, dated September 5, 1995
establishing
Separate Account No. 200 and copies of resolutions of the Board of
Directors of Equitable referenced in said action.
2. Not applicable.
3. (a)(1) Service Agreement, effective as of February 1, 1994,
among The Seven Seas Series Fund, Russell Fund
Distributors,
Inc. in its capacity as distributor of the Seven Seas
Series Fund and The Equitable Life Assurance Society of the United
States, incorporated by reference to Registration No.33-
75614 on Form N-4 of Registrant, filed February 23, 1994.
(a)(2) Service Agreement, effective as of February 1, 1994,
between State Street Bank and Trust Company and The Equitable Life
Assurance Society of The United States, incorporated by
reference to Registration No.33-75614 on Form N-4 of
Registrant, filed February 23, 1994.
(a)(3) Service Agreement, effective as of December 1, 1995,
between MFS Distributers, Inc. and The Equitable Life
Assurance Society of the United States.
(b) Letter Agreement between The Equitable Life Assurance
Society of the United States and the Trustees of the
American Dental Association Members Retirement Trust and
Trustees of the American Dental Association Members Pooled
Trust for Retirement, incorporated by reference to
Registration No. 33-75616 on Form N-4 of Registrant, filed
April 29, 1994.
C-1
(c) Letter Agreement between The Equitable Life Assurance
Society of the United States and the Trustees of the
American Dental Association Members Retirement Trust and
Trustees of the American Dental Association Members Pooled
Trust for Retirement, (filed as Exhibit 3(c) to
Registration No. 33-75616 on Form N-4 of
Registrant, on April 28, 1995.)
(d) Form of Agreement, effective as of May 1, 1995, between
State Street Bank and Trust Company and The Equitable Life
Assurance Society of the United States regarding
Lifecycle Fund Group Trusts and Underlying Funds, (filed as
Exhibit 3(d) to Registration No. 33-75616 on Form N-4 of
Registrant, on April 28, 1995.)
(e) Form of Letter Agreement between The Equitable Life
Assurance Society of the United States and the Trustees of
the American Dental Association Members Retirement Trust
and
the Trustees of the American Dental Association Members
Pooled Trust for Retirement.
4. (a) Exhibit 6(a)(2) (Group Annuity Contract AC 2100, as amended
and restated effective February 1, 1991 on contract Form
No. APC 1,000-91, among the Trustees of the American Dental
Association Members Retirement Trust, the American Dental
Association Members Pooled Trust for Retirement Plans and
The Equitable Life Assurance Society of the United States),
incorporated by reference to Post-Effective Amendment No. 1
on Form N-3 to Registration Statement 33-40162, filed
December 20, 1991.
(b) Rider No. 1 to Group Annuity Contract AC 2100 among the
Trustees of the American Dental Association Members
Retirement Trust, the American Dental Association Members
Pooled Trust for Retirement Plans 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.
(c) Form of Rider No. 2 to Group Annuity Contract AC 2100 among
the Trustees of the American Dental Association Members
Retirement Trust, the American Dental Association Members
Pooled Trust for Retirement Plans 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.
(d) Rider No. 3 to Group Annuity Contract AC 2100 among the
Trustees of the American Dental Association Members
Retirement Trust, the American Dental Association Members
Pooled Trust for Retirement Plans and The Equitable Life
Assurance Society of the United States, incorporated by
C-2
reference to Registration No. 33-75616 on Form N-4 of
Registrant, filed April 29, 1994.
(e) Form of Rider No. 4 to Group Annuity Contract AC 2100 among
the Trustees of the American Dental Association Members
Retirement Trust, the American Dental Association Members
Pooled Trust for Retirement Plans and The Equitable Life
Assurance Society of the United States, incorporated by
reference to Registration No. 33-75616 on Form N-4 of
Registrant, filed April 29, 1994.
(f) Form of Rider No. 5 to Group Annuity Contract AC 2100 among
the Trustees of the American Dental Association Members
Retirement Trust, the American Dental Association Members
Pooled Trust for Retirement Plans and The Equitable Life
Assurance Society of the United States,(filed as Exhibit
4(f) to Registration No. 33-75616 on Form N-4 of
Registrant,
on February 27, 1995.)
(g) Form of Rider No. 6 to Group Annuity Contract AC 2100 among
the Trustees of the American Dental Association Members
Retirement Trust, the American Dental Association Members
Pooled Trust for Retirement Plans and The Equitable Life
Assurance Society of the United States.
(h) Form of Rider No. 7 to Group Annuity Contract AC 2100 among
the Trustees of the American Dental Association Members
Retirement Trust, the American Dental Association Members
Pooled Trust for Retirement Plans and The Equitable Life
Assurance Society of the United States.
5. (a) Exhibit 7(a) (Form of Participation Agreement for the
standardized Profit-Sharing Plan under the ADA 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.
(b) Exhibit 7(b) (Form of Participation Agreement for the non-
standardized Profit-Sharing Plan under the ADA 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.
(c) Exhibit 7(e) (Copy of Attachment to Profit Sharing
Participation Agreement under the American Dental
Association Members Retirement Plan), incorporated by
reference to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1988.
(d) Exhibit 7(e)(2) (Form of Participant Enrollment Form under
the ADA Program), incorporated by reference to Post-
Effective Amendment No. 2 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April 2l, l987.
(e) Exhibit 7(v) (Form of Simplified Participation Agreement
for
the Profit-Sharing Plan under the ADA Program, as filed
C-3
with the Internal Revenue Service), incorporated by
reference to Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(f) Exhibit 7(w) (Form of Non-Standardized Participation
Agreement for the Profit-Sharing Plan under the ADA
Program,
as filed with the Internal Revenue Service), incorporated
by
reference to Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(g) Exhibit 7(x) (Form of Standardized Participation Agreement
for the Profit-Sharing Plan under the ADA Program, as filed
with the Internal Revenue Service), incorporated by
reference to Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26,
1989.
6. (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.
7. Not applicable
8. (a) Exhibit 11(a)(2) (Form of American Dental Association
Members Retirement Plan, as filed with the Internal Revenue
Service), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(b) Exhibit 11(g)(2) (Form of American Dental Association
Members Retirement Trust, as filed with the Internal
Revenue
Service), 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(i) (Form of First Amendment to the American
Dental Association Members Retirement Trust), incorporated
by reference to Post-Effective Amendment No. 1 to
Registration No. 33-40162 on Form N-3 of Registrant, filed
December 20, 1991.
(d) Exhibit 11(g) (Copy of Administration Services Agreement,
dated January 10, 1986, among The Equitable Life Assurance
Society of the United States, the Trustees of the Trust
maintained under the American Dental Association Members
Retirement Plan, the Trustees of the Pooled Trust
C-4
maintained by the American Dental Association and the
Council of Insurance of the American Dental Association),
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.
(e) Exhibit 11(j) (Copy of American Dental Association Members
Pooled Trust for Retirement Plans, dated as of January 1,
1984), incorporated by reference to Post-Effective
Amendment
No. 1 to Registration No. 33-40162 on Form N-3 of
Registrant
on Form N-3 of Registrant, filed December 20, 1991.
(f) Exhibit 11(k) (Form of First Amendment to the American
Dental Association Members Pooled Trust for Retirement
Plans, dated as of January 1, 1984), incorporated by
reference to Post-Effective Amendment No. 1 to Registration
No. 33-40162 on Form N-3 of Registrant, filed December 20,
1991.
(g) Administrative Services Agreement among The Equitable Life
Assurance Society of the United States, the Trustees of the
American Dental Association Members Retirement Trust and of
the American Dental Association Member Retirement Trust for
Retirement Plans and the Council on Insurance of the
American Dental Association, incorporated by reference to
to Registration No. 33-75616 on Form N-4 of Registrant,
filed April 29, 1994.
(h) Declaration of Trust dated February 21, 1991 for the State
Street Bank and Trust Company Investment Funds for Tax
Exempt Retirement Plans (filed as Exhibit 8(h) to
Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
(i) First Amendment to the Declaration of Trust dated as of
July
19, 1991, (Filed as Exhibit 8(i) to Registration No. 33-
75616 on Form N-4 of Registrant, on February 27, 1995.)
(j) Fund Declaration of State Street Bank and Trust Company
establishing the Lifecycle Fund Group Trust-Conservative
dated February 1, 1995, (Filed as Exhibit 8(j) to
Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
(k) First Amendment and Fund Declaration for the Lifecycle
Group
Trust-Conservative effective April 26, 1995, (filed as
Exhibit 8(k) to Registration No. 33-75616 on Form N-4 of
Registrant, on April 28, 1995.)
(l) Fund Declaration of State Street Bank and Trust Company
establishing the Lifecycle Fund Group Trust-Moderate dated
February 1, 1995, (filed as Exhibit 8(k) to Registration
No. 33-75616 on Form N-4 of Registrant, on February 27,
1995.)
C-5
(m) First Amendment and Fund Declaration for the Lifecycle Fund
Group Trust-Moderate effective April 26, 1995, (filed as
Exhibit 8(m) to Registration No. 33-75616 on Form N-4 of
Registrant, on April 28, 1995.)
(n) Amendment and Fund Declaration for the S&P 500 Flagship
Fund
effective September 1, 1991, (filed as Exhibit 8(l) to
Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
(o) Amendment and Fund Declaration for the Short Term
Investment
Fund effective September 1, 1991, (filed as Exhibit 8(m) to
Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
(p) Fund Declaration for the Daily EAFE Fund effective
September
16, 1993, (filed as Exhibit 8(n) to Registration No. 33-
75616 on Form N-4 of Registrant, on February 27, 1995.)
(q) First Amendment and Fund Declaration for the Daily
Government/Corporate Bond Fund effective November 30, 1994,
(filed as Exhibit 8(o) to Registration No. 33-75616 on Form
N-4 of Registrant, on February 27, 1995.)
(r) Second Amendment and Fund Declaration for the Russell 2000
Fund effective February 1, 1995, (filed as Exhibit 8(p) to
Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
(s) Fund Declaration for the Russell 2000 Growth Fund effective
February 1, 1995, (Filed as Exhibit 8(q) to Registration
No.
33-75616 on Form N-4 of Registrant, on February 27, 1995.)
(t) Fund Declaration for the Russell 2000 Value Fund effective
February 1, 1995, (filed as Exhibit 8(q) to Registration
No.
33-75616 on Form N-4 of Registrant, on February 27, 1995.)
9. (a) Opinion and Consent of Anthony A. Dreyspool, Vice President
and Senior Counsel of The Equitable Life Assurance Society
of the United States.
10. (a) Consent of Anthony A. Dreyspool (included within Exhibit
9(a) above.)
(b) Consent of Price Waterhouse LLP.
(c) Consent of Deloitte & Touche LLP.
(d) Powers of Attorney (Equitable) (filed as Exhibit 10(b) to
Registration No. 33-75616 on Form N-4 of Registrant, on
February 27, 1995.)
C-6
(e) Powers of Attorney (State Street) (filed as Exhibit 10 (e)
to Registration No. 33-75616 on Form N-4 of Registrant on
April 28, 1995.)
11. Not applicable.
12. Not applicable.
13. Not applicable.
14. Not Applicable.
C-7
Item 25. 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.
Name and Principal Positions and Offices
Business Address With Equitable
- ---------------- --------------
Directors
- ---------
[S] [C]
Claude Bebear Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Christopher Brocksom Director
AXA Equity & Law
Amersham Road
High Wycombe
Bucks HP 13 5 AL, England
Francoise Colloc'h Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Henri de Castries Director
AXA
23, Avenue Matignon
75008 Paris, France
Joseph L. Dionne Director
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
William T. Esrey Director
Sprint Corporation
P.O. Box 11315
Kansas City, MO 64112
C-8
Name and Principal Positions and Offices
Business Address With Equitable
- ---------------- --------------
Jean-Rene Fourtou Director
Rhone-Poulenc S.A.
25 Quai Paul Doumer
92408 Courbevoie Cedex
France
Norman C. Francis Director
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
Donald J. Greene Director
LeBouef, Lamb, Greene & MacRae
125 West 55th Street
New York, NY 10019-4513
John T. Hartley Director
Harris Corporation
1025 NASA Boulevard
Melbourne, FL 32919
John H.F. Haskell, Jr. Director
Dillon, Read & Co., Inc.
535 Madison Avenue
New York, NY 10022
W. Edwin Jarmain Director
Jarmain Group Inc.
95 Wellington Street West
Suite 805
Toronto, Ontario M5J 2N7,
Canada
Don Johnston Director
184-400 Ocean Road
John's Island
Vero Beach, FL 32963
Winthrop Knowlton Director
Knowlton Brothers, Inc.
530 Fifth Avenue
New York, NY 10036
Arthur L. Liman Director
Paul, Weiss, Rifkind, Wharton &
Garrison
1285 Avenue of the Americas
New York, NY 10019
C-9
Name and Principal Positions and Offices
Business Address With Equitable
- ---------------- --------------
George T. Lowy Director
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
George J. Sella, Jr. Director
P.O. Box 397
Newton, NJ 07860
Dave H. Williams Director
Alliance Capital Management
Corporation
1345 Avenue of the Americas
New York, NY 10105
Officer-Directors
- -----------------
*James M. Benson President, Chief Operating Officer and
Director
*Richard H. Jenrette Chairman of the Executive Committee and
Director
*Joseph J. Melone Chairman of the Board, Chief Executive
Officer and Director
Other Officers
- --------------
*Harvey Blitz Senior Vice President and Deputy Chief
Financial Officer
*Kevin R. Byrne Vice President and Treasurer
*Jerry M. de St. Paer Executive Vice President and Chief
Financial Officer
*Gordon G. Dinsmore Senior Vice President
*Alvin H. Fenichel Senior Vice President and Controller
C-10
Name and Principal Positions and Offices
Business Address With Equitable
- ---------------- --------------
*Paul J. Flora Vice President and Auditor
*Robert E. Garber Executive Vice President and General
Counsel
*J. Thomas Liddle, Jr. Senior Vice President and Chief
Valuation
Actuary
*Michael S. Martin Senior Vice President
*William T. McCaffrey Executive Vice President and
Chief Administrative Officer
*Peter D. Noris Executive Vice President and Chief
Investment Officer
*Anthony C. Pasquale Senior Vice President
*Pauline Sherman Vice President, Secretary and Associate
General Counsel
Richard V. Silver Senior Vice President and Chief
1755 Broadway, 2nd floor Compliance Officer
New York, New York 10019
*Jose Suquet Executive Vice President and Chief
Agency
Officer
C-11
Item 26. Persons Controlled by or Under Common Control with the Insurance
Company or Registrant
Separate Account Nos. 195, 197, 198 and 200 of The Equitable Life
Assurance Society of the United States (the "Separate Accounts") are separate
accounts of Equitable. Equitable, a New York stock life insurance company, is
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-12
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)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
- ----------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-13
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)
- -------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-14
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
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)
(limited partnership interests)
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)
Compass Management and Leasing Co. (formerly known as
EREIM, Inc.) (l984) (Colorado)
Equitable Real Estate Capital Markets, Inc. (1987) (Delaware) (a)
- -----------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-15
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
EQ Realty Associates-V, Inc. (1987) (Delaware)
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 Financial, Inc. (1993) (Delaware) (50%)
Buckhead Strategic Corp. (1994) (Delaware)
Buckhead Strategic Fund L.P.
BH Strategic Co. I, L.P.
CJVS, Inc. (1994) Delaware
ERE European Corp. I, L.P. (1994) (Delaware)
A/E European Associates I Limited Partnership
- --------------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-16
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-17
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM - OTHER NON-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)
- -----------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-18
January 1, 1995
AXA GROUP SIMPLIFIED CHART
AXA
"societes mutuelles"
62.1%
(75.7%)
26.5%
FINAXA PARIBAS
(16.6%)
4.6% 60%
(5.5%) 40%
MIDI PARTICIPATIONS GENERALI
4.4% (**) 42.3% (54.7%)
(5.6%)(**)
AXA Autocontrole
O Voting power
* AXA ASSURANCES LARD MUTUELLE
AXA ASSURANCES VIE MUTUELLE
UNI EUROPE ASSURANCES MUTUELLE
ALPHA ASSURANCES IARD MUTUELLE
ALPHA ASSURANCES VIE MUTUELLE
** Including A.N.F.
C-19
AXA GROUP CHART
The information listed below is dated as of January 1, 1995; percentages
indicated represent voting power.
AXA INSURANCE AND REINSURANCE
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Axa Assurances Iard France 99.00%
Axa Assurances Vie France 100.00%
Uni Europe Assurance France 100.00%
Uni Europe Vie France 99.15%
Alpha Assurances Vie France 100.00%
Direct Assurance Iard France 100.00%
Direct Assurance Vie France 100.00%
Axiva France 100.00%
Defense Civile France 95.04%
Societe Francaise d'Assistance France 51.23%
Monvoisin Assurances France 70.90% (99.92% including Axa mutuals)
Adis France 100.00% (including Axa mutuals)
Societe Beaujon France 100.00%
Lor Finance France 99.60%
Jour Finance France 100.00%
Axa Direct France 100.00%
Axa U.K. U.K. 100.00%
Compagnie Auxiliaire pour le Commerce
et l'Industrie France 100.00%
C.F.G.A. France 100.00% (including Axa mutuals and Finaxa)
Saint Bernard Diffusion France 95.00%
Sogarep France 95.00% (100% including Axa mutuals)
Argos France N.S.
</TABLE>
C-20
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Finaxaq Belgium Belguim 100.00%
Axa Belgium Belguim 23.28% (held by Axa (SA) and
65.20% (held by Finaxa Belgium)
De Kortrijske Verzekering Belgium 99.80%
Victoire Belgium Belgium 100.00% (held by Axa Belgium)
Juris Belgium 100.00%
Finaxa Luxembourg Luxembourg 100.00%
Axa Assurance Luxembourg Luxembourg 99.40%
Axa Direkt Versicherung A.G. Germany 100.00% (held by Axa Direct) (ex Amnisia)
Axa Equity & Law Lebensversicherung Germany 99.80%
Axa Aurora Spain 50.00% (held by Axa)
Aurora Polar Spain 99.20% (held by Axa Aurora)
Axa Seguros Spain 99.10% (held by Axa Aurora)
Axa Assicurazioni Italy 100.00%
Eurovita Italy 30.00% (held by Axa Assicurazioni)
Axa Equity & Law UK U.K. 99.80%
Axa Equity & Law International U.K. (Isle of Man) 100.00% (held by Axa Equity & Law)
Axa Insurance U.K. 100.00%
Axa Marine & Aviation U.K. 100.00%
Axa Equity & Law Levensverzekeringen Netherlands 99.80%
Axa Canada Canada 100.00%
Boreal Canada 100.00% (held by Axa Canada)
Axa Assurances Inc Canada 100.00% (held by Axa Canada)
Axa Insurance Inc Canada 100.00% (held by Axa Canada)
Anglo Canada General Insurance Cy Canada 100.00% (held by Axa Canada)
Axa Sime Axa Berhad Malaisya 27.78% (held by Axa)
</TABLE>
C-21
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Axa Sime Assurance Hong Kong Hong Kong 100.00% (held by Axa Sime Invt. Holdings Pte Ltd.)
Axa Sime Assurance Singapour Singapore 100.00% (held by Axa Sime Invt Holdings Pte Ltd.)
Equitable Cies Incorp. U.S.A. 60.00% (held by Axa 44.17%; Financiere 45,
8.75%; and Lorfinance 7.62%)
Equitable Life Assurance of the U.S.A. U.S.A. 100.00% (held by Equitable Cies Inc)
Axa Re Mexico Mexico 100.00% (held by Axa Reassurance)
Axa Reassurance France 100.00%
Axa Re Asia Singapore 100.00% (held by Axa Reassurance)
Axa Re U.K. Plc U.K. 100.00% (held by Axa Re U.K. Holding)
Axa Re U.K. Holding U.K. 100.00% (held by Axa Reassurance)
Axa Re U.S.A. U.S.A. (Delaware) 100.00% (held by Axa America)
Axa America U.S.A. (Illinois) 100.00% (held by Axa Reassurance)
C.G.R.M. Monaco 100.00%
Paternelle Monegasque Monaco 99.70%
International Technology U.S.A. (Maryland) 80.00% (held by Axa America)
Underwriters Inc (INTECT)
Societe Technique d'Acceptation en
Reassurance (STAR) France 100.00%
Axa Japan Japan 100.00% (held by Axa) AXA FINANCE
</TABLE>
C-22
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Compagnie Financiere (C.F.P.) France 97.10% (100.00% including Axa mutuals)
Axa Banque France 98.70% (held by C.F.P.)
Financiere 78 France 100.00% (held by C.F.P.)
Axa Credit France 65.00% (held by C.F.P.)
Axa Gestion Interessement France 100.00% (held by C.F.P.)
Compagnie Europeenne de Credit (C.E.C.) France 100.00% (held by C.F.P.)
Gecofrance France 100.00% (held by C.E.C.)
Fidei France 20.67% (held by C.F.P. and 10.79% by Axamur)
Fidei Banque France 100.00% (held by Fidei)
Fideicomi France 100.00% (held by Fidei)
Fideimur France 100.00% (held by Fidei)
Fide Bail France 100.00% (held by Fidei)
Colisee Murs France 100.00% (held by Fidei)
Meeschaert Rousselle France 100.00% (held by Financiere 78)
Meeschaert Rousselle Future France 100.00% (held by Meeschaert Rousselle
and M.R. Participations)
Meeschaert Rousselle Participations France 100.00% (held by Meeschaert Rousselle)
Opale Derivee Bourse France 89.40% (held by M.R. Futures and
Meeschaert Rousselle)
Anjou Courtage France 95.00% (held by Meeschaert Rousselle)
Axiva Gestion France 98.80% (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 56.97% (86.30% including Axa mutuals)
Presence et Initiative France 63.70% (100.00% including Axa mutuals
and I.F.D.)
</TABLE>
C-23
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Vamopar France 99.80% (held by Societe Beaujon)
Axa Asset Management Conseils France 100.00% (held by Axa Asset Management Europe)
Axa Asset Management Europe France 100.00%
Axa Asset Management Distribution France 100.00% (held by Axa Asset Management Europe)
Colisee Developpement France 100.00% (held by Axa Asset Management Europe)
Equity & Law Home Loans U.K. 100.00%
Equity & Law Commercial Loans U.K. 100.00%
Alliance Capital Management U.S.A. 63.00% (held by ELAS)
Donaldson Lufkin Jenrette U.S.A. 60.00% (held by ELAS)
Cogefin Luxembourg 100.00% (held by Victoire Belgium)
Argovie France 65.88% (held by Axiva and 33.92% by Argos SCA)
Financiere 45 France 100.00% (held by Axa)
Axa Re Vie France 100.00% (held by Axa Reassurance)
Mofipar France 99.76% (held by Societe Beaujon)
Promothee Finance France 99.76% (held by Societe Beaujon)
Oria France 53.80% (held by Axa Millesimes)
Axa Oeuvres d'Art France 100.00% (including Axa mutuals)
Axa Cantenac Brown France 100.00%
Colisee Acti Finance 1 France 100.00% (held by Societe Beaujon)
Colisee Acti Finance 2 France 100.00% (held by Societe Beaujon)
Colisee Acti Finance 3 France 100.00% (held by Societe Beaujon)
Participations 2001 France 100.00% (held by Societe Beaujon)
Finalor France 100.00% (held by Societe Beaujon)
</TABLE>
C-24
AXA REAL ESTATE
<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 100.00% (held by Societe Beaujon and C.P.P.)
Axamur France 96.33% (100.00% including Axa mutuals)
Garantie et Patrimoine France 98.00% (98.09% including Axa mutuals and S.P.S.)
Parigest France 100.00% (including Axa mutuals and C.I.P.M.)
Parimmo France 100.00% (including Axa mutuals)
S.G.C.I. France 99.97% (including Axa mutuals)
Transaxim France 99.40% (held by S.G.C.I.)
Compagnie Parisienne de Participations France 100.00% (held by S.G.C.I.)
Monte Scopeto France 100.00% (held by C.P.P.)
Matipierre France 100.00% (held by Axa Assurances Iard
and Axa Assurances Vie)
Securimmo France 87.13% (held by different companies and mutuals)
Delta Point du Jour France 100.00% (held by Matipierre)
Paroi Nord de l'Arche France 100.00% (held by Matipierre)
Falival France 100.00% (held by Axa Reassurance)
Immobiliere Jeanne France 99.40% (held by Axa Assurances Iard)
Compagnie du Gaz d'Avignon France 99.00% (held by Axa Assurances Iard)
Ahorro Familiar France 40.10% (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 100.00% (held by Alpha Assurances Vie
and Axa Assurance Iard)
</TABLE>
C-25
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Fonciere du Val d'Oise France 99.72% (held by C.P.P.)
S.N.C. Saint Barth France 58.82% (held by Axa Assurances 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.)
Immobiliere du Sud France 99.90% (held by Axa)
S.N.C. Dumont d'Urville France 50.00% (held by Axa Assurances Iard
and 50.00% held by S.G.C.I.)
Colisee S.C.P.I. Gestion France 99.00% (held by Immobiliere Jeanne)
Colisee Point du Jour France 100.00% (held by different insurance companies)
Axa Pierre S.C.I. France 97.92% (held by different companies and mutuals)
Capimmo France 100.00% (held by insurance companies)
Drouot Pierre France 47.22% (held by insurance companies;
52.79% held by Axa Pierre)
Pierre Croissance France 100.00% (held by some insurance companies,
mutuals and Axa Pierre)
Plagam France 100.00% (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 100.00% (held by Axa Millesimes)
Diznoko Hongrie 90.00% (held by Axa Millesimes)
Finapel France 99.90% (held by Axa Assurances Iard Mut et
Uni Europe Assurance Mutuelle)
Compagnie Financiere Matignon France 83.50% (held by different companies and mutuals)
Fonciere Wagram France 99.95% (held by Finapel)
</TABLE>
C-26
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Equitable Real Estate Development U.S.A. 100.00% (held by ELAS)
Quinta do Noval Vinhos S.A. Portugal 99.90% (held by Axa Millesimes)
Groupment Foncier Francais France 10.8%
</TABLE>
C-27
AXA OTHER
<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.
Sogefie Belgique 50% held by Victoire Belgique
Lucia France 27.75%
Cogedim France 11.21%
</TABLE>
C-28
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 Management Corporation'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 Compass Management and Leasing Co. (formerly known as
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 September 12, 1995.
C-29
Item 27. Number of Contractowners.
As of August 31, 1995, the number of participants in the American Dental
Association Members Program offered by the Registrant was 19,629.
Item 28. Indemnification
(a) Indemnification of Principal Underwriter: to the extent permitted
by law of the State of New York and subject to all applicable requirements
thereof, Equico Securities, Inc. ("Equico") undertook to indemnify each of its
directors and officers 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.
(b) Undertaking: insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Item 29. Principal Underwriters
(a) 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, NY,
NY 10019.
(b) See Item 25.
(c) Not applicable.
C-30
Item 30. Location of Accounts and Records
The records required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, with
respect to the separate accounts named in Item 29(a),are maintained by The
Equitable Life Assurance Society of the United States at 135 West 50th Street
New York, New York 10020.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant hereby undertakes:
(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 16 months old for so long as
payments under the variable annuity contracts may be accepted;
(b) to include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a 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;
(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.
SIGNATURES
Pursuant to the Securities Act of 1933 the Registrant has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City and State of New York, on this 29th day of
September, 1995.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
(Registrant)
By: The Equitable Life Assurance
Society of the United States
By: /s/Naomi J. Weinstein
----------------------------
Naomi J. Weinstein
Vice President
SIGNATURES
Pursuant to the Securities Act of 1933 the Registrant has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and State of New York, on this 29th day
of September, 1995.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
(Depositor)
By: /s/Naomi J. Weinstein
------------------------------
Naomi J. Weinstein
Vice President
As required by the Securities Act of 1933 this registration statement
or amendment thereto has been signed by the following persons in the capacities
and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
<TABLE>
<CAPTION>
<S> <C>
Richard H. Jenrette Chairman of the Executive Committee and Director
Joseph J. Melone Chairman of the Board and 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
September 29, 1995 Controller
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS:
<S> <C> <C>
Claude Bebear Jean-Rene Fourtou Don Johnston
James M. Benson Norman C. Francis Winthrop Knowlton
Chrisopher 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
</TABLE>
/s/Naomi J. Weinstein
- ----------------------
Naomi J. Weinstein
Attorney-in-Fact
September 29, 1995
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Page No.
<S> <C>
1(c) Action by Peter D. Noris, establishing Separate
Account No. 200.
3(a)(3) Service Agreement, effective as of December 1, 1995
between MFS Distributors, Inc. and The Equitable
Life Assurance Society of the United States.*
3(e) Form of Letter Agreement between The Equitable Life
Assurance Society of the United States and the Trustees of
the American Dental Association Members Retirement Trust
and Trustees of the American Dental Association
Members Pooled Trust for Retirement.
4(g) Form of Rider No. 6 to Group Annuity Contract 2100.
4(h) Form of Rider No. 7 to Group Annuity Contract 2100.
9(a) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States.
10(b) Consent of Price Waterhouse LLP.
10(c) Consent of Deloitte & Touche LLP.
</TABLE>
* To be filed by amendment.
September 5, 1995
Establishment of Separate Account No. 200
Pursuant to the authority granted to me by Resolution Nos.
21-69 and B57-91, adopted by the Board of Directors of The Equitable Life
Assurance Society of the United States, I hereby establish Separate Account No.
200 (the "Separate Account") as a funding medium for the retirement plans and
trusts of the American Dental Association Members Program, the assets of the
Separate Account to be invested at all times primarily in shares of a mutual
fund selected by a committee of the Separate Account. Furthermore, pursuant to
the authority granted to me by the above-mentioned Resolutions, I hereby
authorize the creation of a committee of the Separate Account, the members of
which will be designated by the Trustees of the American Dental Association
Members Retirement Trust and the Trustees of the American Dental Association
Members Pooled Trust for Retirement Plans, such committee to have the powers set
forth in Resolution No. B57-91.
/s/ Peter D. Noris
------------------------
Peter D. Noris
Executive Vice President
and Chief Investment Officer
October 1, 1995
Ms. Naomi J. Weinstein
Vice President
The Equitable Life Assurance Society
200 Plaza Drive
Secaucus, New Jersey 07096
Re: Change of Investment Manager and Establishment of Separate
Account No. 200 for the ADA Aggressive Equity Fund
Dear Naomi:
At their meeting on August 25, 1995, the ADA Council on Insurance, who are the
Trustees of the American Dental Association Members Retirement Trust and the
American Dental Association Members Pooled Trust for Retirement Plans, voted to
change investment managers for the ADA Program's Aggressive Equity Fund.
Therefore, pursuant to action of the undersigned Trustees on August 25, 1995, we
instruct Equitable to transfer the value in cash of all ADA Program assets out
of Equitable's pooled Separate Account No. 3 and into a single-client separate
account which will be used solely as the Program's Aggressive Equity Fund. Such
transfer of assets shall take place at the close of business on November 30,
1995 or as soon as possible thereafter. We acknowledge that Equitable has
established Separate Account No. 200 (the "Separate Account") as the Program's
Aggressive Equity Fund. As a committee of the Separate Account (see below), we
hereby instruct you to invest all funds transferred or otherwise allocated to
the Separate Account in Class A shares of the MFS Emerging Growth Fund (the "MFS
Fund").
The Trustees acknowledge that this change will require that the SEC declare
effective a new registration statement and that Equitable enter into one or more
agreements with the distributor of the MFS Emerging Growth Fund.
In connection with the operation of the Separate Account as a funding vehicle of
the American Dental Association Members Retirement Program (the "Program"), we
have agreed as follows:
PROXY VOTING: As owner of the assets of the Separate Account, Equitable will
receive all communications sent to shareholders of the MFS Fund, including
proxies for shares held in the Separate Account. Equitable will vote such
proxies only in accordance with the instructions received from participants in
the Program, or in the case of the American Dental Association Members Pooled
Trust for Retirement Plans, from participants or trustees, as the case may be.
Equitable will not vote any shares with respect to which no instructions were
received.
ACCOUNTING: Equitable will provide reasonable and customary investment
accounting services with respect to the Separate Account of the type that would
ordinarily be provided for a separate account which invests in a registered
investment company.
EXPENSES: Expenses to be incurred in connection with the organization of the
Separate Account will initially be paid by Equitable and will be reimbursed from
the Separate Account. All other direct expenses will be deducted from the
Separate Account as they are incurred.
COMMITTEE OF THE SEPARATE ACCOUNT: Pursuant to an action of the Chief
Investment Officer of Equitable dated September 5, 1995, we hereby designate the
Council on Insurance of the ADA consisting of the undersigned persons, as the
committee of the Separate Account.
The committee shall have the power, without further supervision, authorization
or approval by the Board of Directors of Equitable or any committee thereof to
authorize, approve or review the acquisition and disposition of investments for
the Separate Account and to exercise such power directly or to delegate such
power to one or more investment managers or advisors who may be authorized by
the committee to have any or all of the powers for selecting investments and
determining the amount and timing of purchases and sales; provided that
Equitable reserves the right to terminate this arrangement in the event that
either the investments made by, or directed to be made by, the committee or any
other investment manager fail to meet the standard of care required by Section
4240(a)(2)(C) of the New York Insurance Law or this arrangement fails to meet
Equitable's reasonable administrative standards.
HOLD HARMLESS PROVISIONS: We will indemnify and hold harmless Equitable and its
directors, employees and agents (the "Indemnitees"), from any and all expenses
(including attorney's fees), losses, damages, liabilities, demands, charges, and
claims of any kind whatsoever, arising directly from or directly attributable to
(a) the transfer of assets from Separate Account No. 3 to Separate Account No.
200, (b) the purchase, holding and sale as instructed by the committee of the
Separate Account of the shares of the MFS Fund or any successor or substitute
mutual fund as an investment for the Separate Account, (c) all other actions
taken or omitted to be taken by us or the committee with respect to the Separate
Account, and (d) actions taken or omitted to be taken by the Indemnitees on the
instruction of the undersigned or the committee with respect to the Separate
Account.
If any claim shall be made or action or proceeding commenced that might give
rise to an obligation hereunder, the party being held harmless shall give prompt
written notice thereof to us, and, if requested by us, shall permit us, at our
sole cost and expense, to assume the defense of such claim, action or
proceeding.
Please indicate your agreement with the foregoing by signing and dating the
enclosed copy of this letter where indicated and returning it to the
undersigned, attention David R. Dwyer.
Sincerely,
Trustees of the American Dental Association Members Retirement Trust and
Trustees of the American Dental Association Members Pooled Trust for Retirement
Plans
By:___________________________ By:___________________________
By:___________________________ By:___________________________
By:___________________________ By:___________________________
By:___________________________ By:___________________________
By:___________________________ By:___________________________
By:___________________________ By:___________________________
By:___________________________ By:___________________________
By:___________________________ By:___________________________
The foregoing is agreed to this 1st day of October 1995.
The Equitable Life Assurance Society of the United States
By:___________________________
Naomi J. Weinstein
Vice President
Attached to and made part of Group Annuity Contract No. AC 2100
between
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
and
TRUSTEES OF THE AMERICAN DENTAL ASSOCIATION MEMBERS RETIREMENT TRUST AND OF THE
AMERICAN DENTAL ASSOCIATION MEMBERS POOLED TRUST FOR RETIREMENT PLANS
RIDER NO. 6
IT IS HEREBY AGREED that, as of May 1, 1995, said Contract is amended as
described below.
1. A new third sentence is added to Section 2.12A to read as
follows:
"Any funds invested in, or income earned by, the Lifecycle
Fund-Conservative or Lifecycle Fund-Moderate which equitably
belongs to either of the Trusts are prohibited from being
used for or diverted to any purposes other than for the
exclusive benefit of the Participants or their beneficiaries
who are entitled to benefits under such Trusts."
2. A new second sentence is added to Section 8.5 to read as
follows:
"Notwithstanding the previous sentence or any other
provision of this Contract, neither of the Trusts may
assign, sell or otherwise transfer any part of its direct or
indirect equity or interest in the assets allocated to
either the Lifecycle Fund-Conservative or the Lifecycle
Fund-Moderate."
New York, New York
FOR THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES:
<TABLE>
<S> <C>
Chairman and Chief Executive Officer President and Chief Operating Officer Vice President and Secretary
_________________________________ __________________________________
Assistant Registrar Date of Issue
</TABLE>
FOR THE CONTRACTHOLDER: Trustees of the American Dental Association Members
Retirement Trust and of the American Dental Association Members Pooled Trust for
Retirement Plans
<TABLE>
<S> <C>
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
</TABLE>
Attached to and made part of Group Annuity Contract No. AC 2100
between
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
and
TRUSTEES OF THE AMERICAN DENTAL ASSOCIATION MEMBERS RETIREMENT TRUST AND OF THE
AMERICAN DENTAL ASSOCIATION MEMBERS POOLED TRUST FOR RETIREMENT PLANS
RIDER NO. 7
IT IS HEREBY AGREED that, effective as of the dates specified herein, said
Contract is amended as described below.
1. As of December 1, 1995, the definition of Aggressive Equity Fund" is
amended to read as follows:
"Aggressive Equity Fund - Equitable's Separate Account No. 200."
2. As of December 9, 1995, the definition of "Balanced Fund" is deleted in
its entirety.
3. As of December 9, 1995, the definition of "Equity Funds" is amended to
read as follows:
"Equity Funds - The ADA Foreign Fund, Aggressive Equity Fund,
Growth Equity Fund, Equity Index Fund, Lifecycle Fund-
Conservative and Lifecycle Fund-Moderate."
4. As of December 9, 1995, the definition of "Funding Account" is amended
to read as follows:
"Funding Account - an account maintained under Article II,
Article III or Section 4.6 to which contributions to the Trusts
are allocated and which is adjusted to reflect, as applicable,
interest, income, gains, losses, penalties, expenses, charges
and fees. The following Funding Accounts will be maintained:
the Five-Year Weekly GRA provided by Equitable, the Money Market
Guarantee, the Aggressive Equity Fund, the Growth Equity Fund,
the Real Estate Fund, the ADA Foreign Fund, the Equity Index
Fund, the Lifecycle Fund-Conservative, the Lifecycle Fund-
Moderate and the GRAs offered by a Major Insurance Carrier
pursuant to Article III."
5. As of December 9, 1995, the first sentence of the definition of
"Separate Account" is amended to read as follows:
"Separate Account - Pooled Separate Account Nos. 4 and 30 and
Separate Account Nos. 191, 195, 197, 198 and 200."
6. As of December 1, 1995, the first sentence of the definition of
"Separate Account" is amended to read as follows:
"Separate Account - Pooled Separate Account Nos. 4 and 30 and
Separate Account Nos. 190, 191, 195, 197, 198 and 200."
7. As of Decemeber 1, 1995, the last paragraph of the definition of
"Separate Account Unit Value" is amended to read as follows:
"The Separate Account Unit Values for the Growth Equity Fund and
the Real Estate Fund were $10.00 as of January 1, 1968 and
August 29, 1986, respectively, the first day those Separate
Accounts were offered as Funding Accounts. The Separate Account
Unit Value for the Aggressive Equity Fund was $10.00 as of May
1, 1985, the first day that Fund was offered as a Funding
Account through Equitable's Pooled Separate Account No. 3. The
Separate Account Unit Value for the ADA Foreign Fund was $10.00
as of March 2, 1992, the first day that Separate Account was
offered as a Funding Account. The Separate Account Unit Value
for the Equity Index Fund was $10.00 as of February 1, 1994, the
first day that Separate Account was offered as a Funding
Account. The Separate Account Unit Values for the Lifecycle
Fund-Conservative and the Lifecycle Fund-Moderate were $10.00 as
of May 1, 1995, the first day those Separate Accounts were
offered as Funding Accounts. For purposes of this definition,
the value of a Separate Account was the aggregate fair market
value of all its assets, or, to the extent that the fair market
value of certain assets cannot be easily ascertained, their fair
value as determined in good faith by Equitable in accordance
with accepted accounting practices and applicable laws and
regulations."
8. As of December 9, 1995, the first sentence of Section 2.9 is amended to
read as follows:
"2.9 Seven Separate Accounts -- the Growth Equity Fund, the
Aggressive Equity Fund, the Real Estate Fund, the ADA Foreign
Fund, the
Equity Index Fund, the Lifecycle Fund-Conservative and
the Lifecycle Fund-Moderate--are available as Funding Accounts."
9. As of December 1, 1995, Section 2.11 is deleted in its entirety as it
relates to the Balanced Fund, and is replaced by a new Section 2.11 as
follows:
"2.11 Equitable shall maintain Separate Account No. 200, which
will be the Aggressive Equity Fund under the Program. Equitable
shall cancel all units held by ADA Program participants in
Equitable's Pooled Separate Account No. 3 and transfer the cash
value to Separate Account No. 200, effective at the opening of
business on December 1, 1995. The transfer will not affect the
Aggressive Equity Fund Unit Value or the number of Aggressive
Equity Fund units credited to any Participant's account."
10. As of December 1, 1995, Section 2.12 is amended to read as follows:
"2.12 Contributions and transfers to the ADA Foreign Fund, the
Equity Index Fund and the Aggressive Equity Fund shall be
invested in the shares of funds registered under the Investment
Company Act of 1940 ("1940 Act") as open-end diversified
management investment companies (the "Investment Company")
except that normally up to 5% of the market value of the ADA
Foreign Fund's assets may be invested in units of Equitable's
Separate Account No. 2A for the purpose of maintaining
sufficient liquidity to effect transfers or withdrawal requests
from the ADA Foreign Fund prior to receipt of proceeds from
redemption of shares of the Investment Company. However, if net
transfers and withdrawals from the ADA Foreign Fund on any day
exceed the amount of the ADA Foreign Fund's investment in
Separate Account No. 2A, transfers and/or withdrawals may be
deferred pending settlement of the redemption of shares from the
Investment Company. If net transfers and withdawals from the
Equity Index Fund or the Aggressive Equity Fund exceed the cash
available to pay such transfers and/or withdrawals, transfers
and/or withdrawals may be deferred pending settlement of the
redemption of shares from the Investment Company."
11. As of December 9, 1995, Section 2.13 is amended to read as follows:
"2.13 Equitable is the Investment Manager for the Growth Equity
Fund and the Real Estate Fund. Equitable hereby acknowledges
that it is a fiduciary with respect to any assets of the Trusts
that are allocated to any of those Funds, but it is not a
fiduciary for any portion of a Separate Account which is under
the investment direction of a committee consisting of persons
who are not employed by Equitable or any of its affiliates."
12. As of December 1, 1995, Section 2.13 is amended to read as follows:
"2.13 Equitable is the Investment Manager for the Growth Equity
Fund, the Balanced Fund and the Real Estate Fund. Equitable
hereby acknowledges that it is a fiduciary with respect to any
assets of the Trusts that are allocated to any of those Funds,
but it is not a fiduciary for any portion of a Separate Account
which is under the investment direction of a committee
consisting of persons who are not employed by Equitable or any
of its affiliates."
13. As of October 15, 1995, the title of Article IV is amended to read as
follows:
"Article IV. Termination, Replacement and Addition of Funding
Accounts"
14. As of October 15, 1995, a new Section 4.1A is added as follows:
"4.1A Subject to the terms of Sections 2.1, 2.11, 2.12A and
Article VII of this Contract, the Trustees may, upon reasonable
notice to Equitable under the circumstances, terminate the
Trust's participation in any Funding Account and may direct that
(a) all or any portion of the Units of such Funding Account held
by the Trusts shall be redeemed as of the date of termination of
participation and (b) the cash value of such Units on such date
be transferred to another Funding Account or paid to the
Trustees or to any person designated in writing by the Trustees.
As of the date of such termination of participation in a Funding
Account, no further contributions from the Trusts may be made to
such Funding Account."
15. As of October 15, 1995, Section 4.2 is amended to read as follows:
"4.2 The Trustees and Equitable may agree to establish
additional Funding Accounts under the Trusts. The Trustees may
at any time appoint one or more Investment Managers to manage
all or any portion of a Funding Account under this Contract.
The Trustees shall give Equitable at least six months notice of
the appointment of an Investment Manager to manage the Real
Estate Fund and shall give Equitable at least 90 days written
notice of any other such appointment. Notwithstanding the
foregoing, (a) unless the Money Market Guarantee is terminated
in accordance with Section 7.3A, the Trustees may not allow any
Investment Manager other than Equitable to offer a money market
mutual fund or similar arrangement as a Funding Account under
the Trusts, (b) the Trustees may not appoint an Investment
Manager for
Equitable's Pooled Separate Account Nos. 4 and 30
and (c) Equitable may defer the transfer to the new Investment
Manager of all or part of the amounts held for the Trusts in the
Real Estate Fund for such time as Equitable reasonably considers
necessary to obtain the amount to be withdrawn or to protect the
interest of other clients in the Real Estate Fund or in
Equitable's Pooled Separate Account No. 8."
16. As of December 1, 1995, Section 4.7 is amended to read as follows:
"4.7 Equitable reserves the right to suspend the offer of or
terminate the ADA Foreign Fund, the Equity Index Fund, the
Lifecycle Fund-Conservative, the Lifecycle Fund-Moderate or the
Aggressive Equity Fund (the "Outside Funds") in the event that
Equitable, in its sole and reasonable discretion, determines
that (a) investments made for the Outside Funds fail to meet
applicable securities laws and the rules and regulations
promulgated thereunder, and/or the standard of care required by
Section 4240 (a) (2) (C) of the New York Insurance Law; or (b)
it is no longer administratively feasible to maintain any of the
Outside Funds."
17. As of December 1, 1995, Section 5.3 is deleted in its entirety.
18. As of December 1, 1995, Section 5.4 is changed to read as follows:
"5.4 An investment management fee shall be paid to Equitable in
an amount equal to a percentage of the aggregate amount held for
the Trusts in the Growth Equity Fund. The percentage shall be
calculated as of the first day of each month, based on the
aggregate amount held for the Trusts in the Growth Equity Fund
as of the last day of the second previous month, and shall be
charged against the Separate Account Unit Value for the Growth
Equity Fund on a daily basis during the month, as follows:
(a) 1/12 of 0.29% of the amount held for the Trusts not in excess of
$100,000,000; and
(b) 1/12 of 0.20% of the amount held for the Trusts in excess of
$100,000,000."
19. As of December 9, 1995, Section 5.6 is deleted in its entirety.
20. As of December 1, 1995, the first sentence of Section 5.15 is amended to
read as follows:
"Equitable shall give the Trustees 90 days written notice of any
proposed increase in the investment management fees set forth in
Sections 5.4 or 5.5."
New York, New York
FOR THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES:
<TABLE>
<S> <C>
Chairman and Chief Executive Officer President and Chief Operating Officer Vice President and Secretary
_________________________________ __________________________________
Assistant Registrar Date of Issue
</TABLE>
FOR THE CONTRACTHOLDER: Trustees of the American Dental Association Members
Retirement Trust and of the American Dental Association Members Pooled Trust for
Retirement Plans
<TABLE>
<S> <C>
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
_________________________________, Trustee _________________________________, Trustee
</TABLE>
September 27, 1995
The Equitable Life Assurance
Society of the United States
787 Seventh Avenue
New York, New York 10019
Dear Sirs:
This opinion is furnished in connection with the N-4 Registration Statement
of The Equitable Life Assurance Society of the United States ("Equitable") under
the Securities Act of 1933, as amended (the "Act"), relating to separate account
units of interest ("Units") under a group annuity contract issued by Equitable
to the Trustees of the American Dental Association Members Retirement Trust and
of the American Dental Association Members Pooled Trust for Retirement Plans
(the "ADA Contract"), as proposed to be formally amended, including Separate
Account No. 200 ("Separate Account") (the "Registration Statement"). The ADA
Contract is designed to provide benefits under retirement plans and trusts
adopted by members of the American Dental Association for themselves and their
employees. Such plans and trusts will be qualified under Section 401 of the
Internal Revenue Code of 1986, as amended. The securities being registered are
to be offered in the manner described in the Registration Statement covering up
to $20,000,000 of the plan contributions to be received under the Contract.
I have examined all such corporate records of Equitable and such other
documents and such laws as I consider appropriate as a basis for the opinion
hereinafter expressed. On the basis of such examination, it is my opinion that:
1. Equitable is a corporation duly organized and validly existing under the
laws of the State of New York.
2. The Separate Account has been duly authorized and established by action
of an appropriate executive officer of Equitable. Upon the approval by the New
York State Insurance Department of the amendment to Equitable's Summary of
Operation for Separate Accounts for Group Pension Business relating to the
Separate Account, the Separate Account
will have been duly established pursuant to the provisions of the New York
Insurance Law.
3. When assets are allocated to the Separate Account, such assets will be
owned by Equitable; Equitable will not be a trustee with respect thereto. Under
New York law, the income, gains and losses, whether or not realized, from assets
allocated to the Separate Account must be credited to or charged against such
Account, without regard to the other income, gains or losses of Equitable.
4. The ADA Contract provides that the portion of the assets of the Separate
Accounts equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising out of any
other business Equitable may conduct.
5. The ADA Contract (including proposed formal amendments thereto) and the
Units issued thereunder have been duly authorized; and the ADA Contract
(including the Units duly issued thereunder) when formally amended and delivered
will constitute validly issued and binding obligations of Equitable in
accordance with their terms.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Yours very truly,
/s/Anthony A. Dreyspool
----------------------------
Anthony A. Dreyspool
AAD:mf
Consent of Independent Accountants
We hereby consent to the use in the Statement of Additional Information dated
May 1, 1995, which constitutes part of this Registration Statement on Form N-4
(the "Registration Statement") of our report dated February 8, 1995, relating to
the consolidated financial statements of The Equitable Life Assurance Society of
the United States, our report dated March 15, 1995, relating to the financial
statements of the Separate Account Nos. 3, 4, 190 and 191 of The Equitable Life
Assurance Society of the United States, our report dated February 10, 1995,
relating to the financial statements of the Separate Account No. 30 of The
Equitable Life Assurance Society of the United States and our report dated
February 7, 1995, relating to the financial statements of the Separate Account
No. 8 of The Equitable Life Assurance Society of the United States. We also
consent to references to us under the headings "Condensed Financial Information"
and "Miscellaneous--Experts" in the Prospectus dated May 1, 1995, which
constitutes part of this Registration Statement.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
New York, New York
September 27, 1995
CONSENT OF INDEPENDENT AUDITORS
The Equitable Life Assurance Society of the United States:
We hereby consent to the use in this Registration Statement on Form N-4 of our
opinion dated February 16, 1993, relating to the financial statements of The
Equitable Life Assurance Society of the United States for the year ended
December 31, 1992 included in the Statement of Additional Information dated May
1, 1995 which is a part of such Registration Statement and to the reference to
us under the caption "Miscellaneous--Experts" in the prospectus dated May 1,
1995 which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
New York, New York
September 27, 1995
