<PAGE>
Filed pursuant to Rule 424(b) (5) under the Securities Act
of 1933, As Amended. Registration Statement File No. 33-89510
EQUI-VEST(REGISTERED TRADEMARK) AND MOMENTUM
PERSONAL RETIREMENT PROGRAMS
AND
EMPLOYER SPONSORED RETIREMENT PROGRAMS
PROSPECTUS, DATED MAY 1, 1996
- -----------------------------------------------------------------------------
VARIABLE ANNUITY CONTRACTS FUNDED THROUGH THE
INVESTMENT FUNDS OF SEPARATE ACCOUNT A
Issued By:
The Equitable Life Assurance Society of the United States
- -----------------------------------------------------------------------------
This prospectus describes group and individual deferred variable annuity
contracts (CONTRACTS) offered by The Equitable Life Assurance Society of the
United States (EQUITABLE LIFE). The EQUI-VEST Contracts are designed for
retirement savings and long-range financial planning as part of a retirement
savings plan. The Momentum Contract (MOMENTUM) is designed to fund defined
contribution plans. Contributions in both MOMENTUM and EQUI-VEST Contracts
accumulate on a Federal income tax-deferred basis, and at a future date you
can receive a stream of periodic payments, including a fixed or variable
annuity.
EQUI-VEST Personal Retirement Programs include individual retirement
annuities (IRAS) and those established through rollovers from tax-favored
retirement plans (QP IRAS) as well as non-qualified annuities (NQS).
EQUI-VEST Employer Sponsored Retirement Programs include SEPs, TSAs, EDCs,
Trusteed and Annuitant-Owned HR-10 Plans, as described in this prospectus.
MOMENTUM Employer-Sponsored Retirement Plans include 401(a) and 401(k) plans
as described in this prospectus. Employers sponsoring such plans and trustees
of such plans (PLAN TRUSTEES) can participate in MOMENTUM through the
MOMENTUM Program. The MOMENTUM Program consists of a defined contribution
master plan and trust sponsored by Equitable Life (the MASTER PLAN AND TRUST)
or, for Employers who prefer to use their own individually-designed or a
prototype defined contribution plan, a pooled trust (the POOLED TRUST).
EQUI-VEST offers the investment options (INVESTMENT OPTIONS) listed below.
MOMENTUM offers the Investment Options listed below except the Fixed Maturity
Periods. These Investment Options include the Guaranteed Interest Account,
which is part of Equitable Life's general account and pays interest at
guaranteed fixed rates, and thirteen variable investment funds (INVESTMENT
FUNDS) of Separate Account A (SEPARATE ACCOUNT). Each Fixed Maturity Period
(FIXED MATURITY PERIOD) in the Fixed Maturity Account is available only under
EQUI-VEST (in states where approved).
<TABLE>
<CAPTION>
OTHER
INVESTMENT FUNDS INVESTMENT OPTIONS
- ----------------------------------------------------- --------------------
<S> <C> <C> <C>
o Money Market o Growth & Income Asset Allocation o Guaranteed Interest
Series: Account
o Intermediate o Equity Index o Conservative o Fixed Maturity
Government Investors Periods with
Securities o Common Stock o Balanced Expiration Dates
o Quality Bond o Global o Growth 1996 through 2006
o International Investors
o High Yield o Aggressive
Stock
</TABLE>
We invest each Investment Fund in shares of a corresponding portfolio
(PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are
purchased by the separate accounts of insurance companies. The prospectus for
the Trust, directly following this prospectus, describes the investment
objectives, policies and risks of the Portfolios.
Amounts allocated to a Fixed Maturity Period accumulate on a fixed basis and
are credited with interest at a rate we set (RATE TO MATURITY) for the entire
period. On each business day (BUSINESS DAY) we will determine the Rate to
Maturity available for amounts newly allocated to Fixed Maturity Periods. A
market value adjustment (positive or negative) will be made for withdrawals,
transfers, terminations and certain other transactions from a Fixed Maturity
Period before its expiration date (EXPIRATION DATE). Each Fixed Maturity
Period has its own Rates to Maturity.
Participants may choose from a variety of payout options. If an annuity is
selected as the retirement payout option, variable and fixed annuities are
available. Fixed annuities are funded through Equitable Life's general
account. Variable payments will be funded through your choice of Investment
Funds.
This prospectus provides information about EQUI-VEST and MOMENTUM that
prospective investors should know before investing. You should read it
carefully and retain it for future reference. The prospectus is not valid
unless it is attached to a current prospectus for the Trust, which you should
also read carefully.
Registration statements relating to the Separate Account and to interests
under the Fixed Maturity Periods have been filed with the Securities and
Exchange Commission (SEC). The statement of additional information (SAI),
dated May 1, 1996, which is part of the registration statement for the
Separate Account, is available free of charge upon request by writing to the
Processing Office or calling 1-800-628-6673 for EQUI-VEST, or 1-800-528-0204
for MOMENTUM, our toll-free numbers. The SAI has been incorporated by
reference into this prospectus. The Table of Contents for the SAI appears at
the back of this prospectus.
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.
THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY
ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
May 1, 1996 888-1107
Copyright 1996
The Equitable Life Assurance Society of the United States,
New York, New York, 10019.
All rights reserved.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable Life's Annual Report on Form 10-K for the year ended December
31, 1995 is incorporated herein by reference.
All documents or reports filed by Equitable Life pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE
ACT) after the date hereof and prior to the termination of the offering of
the securities offered hereby shall be deemed to be incorporated by reference
in this prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified and superseded, to constitute a part of this prospectus.
Equitable Life will provide without charge to each person to whom this
prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits not specifically incorporated by reference
into the text of such documents). Requests for such documents should be
directed to The Equitable Life Assurance Society of the United States, 787
Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary
(telephone: (212) 554-1234).
2
<PAGE>
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL TERMS PAGE 5
PART 1:SUMMARY PAGE 8
Equitable Life 8
Types of Retirement Programs 8
Investment Options 9
Selecting Investment Options 9
Contributions 10
Transfers 10
Services We Provide 10
Distribution Options and Death Benefits 12
SPDA Variable Distribution Option 12
Withdrawals and Termination 12
Loans 13
Taxes 13
Deductions and Charges 13
Deferred Variable Annuities 14
10-Day Free Look for EQUI-VEST 14
Fee Tables and Examples 15
PART 2: SEPARATE ACCOUNT A AND
ITS INVESTMENT FUNDS PAGE 24
Separate Account A 24
The Hudson River Trust 24
The Trust's Investment Adviser 25
Investment Policies and Objectives of the
Trust's Portfolios 25
PART 3: INVESTMENT PERFORMANCE PAGE 27
Investment Fund Performance 27
PART 4: THE GUARANTEED INTEREST ACCOUNT PAGE 36
PART 5: THE EQUI-VEST FIXED MATURITY ACCOUNT PAGE 37
PART 6: PROVISIONS OF THE EQUI-VEST CONTRACTS PAGE 40
The EQUI-VEST Contract Series 40
Selecting Investment Options 40
Contributions Under the Contracts 40
Annuity Account Value 42
Transfers 43
Automatic Transfer Options Investment
Simplifier 44
Loans (for TSA and Corporate Trusteed
only) 44
Assignment and Funding Changes 45
Partial Withdrawals and Termination 45
Third Party Transfers or Exchanges 46
Requirements for Distributions 46
Distribution Options 46
Guaranteed Death Benefit 49
Your Beneficiary 49
Proceeds 50
PART 7: PROVISIONS OF THE MOMENTUM
CONTRACT AND SERVICES WE PROVIDE PAGE 51
Understanding the MOMENTUM Program 51
Employer's Responsibilities 51
Adopting the MOMENTUM Program 52
The MOMENTUM Contract 52
Selecting Investment Options 52
Contributions 53
Retirement Account Value 53
Transfers 54
Investment Simplifier: Automatic Transfer
Options 55
Loans 55
Withdrawals and Termination 56
Forfeitures 56
Distribution Options 57
Annuity Distribution Options 57
Electing an Annuity Distribution Option 57
Minimum Distributions/Automatic
Minimum Withdrawal Over-Age 70 1/2 58
Death Benefit 58
Payment of Proceeds 59
Plan Recordkeeping Services 59
PART 8: DEDUCTIONS AND CHARGES PAGE 61
All Contracts 61
Trust Charges to Portfolios 61
Charges for State Premium and Other
Applicable Taxes 61
EQUI-VEST IRA, QP IRA, SEP and NQ
Contracts (Series 300 and 400 only) 61
Charges to Investment Funds 61
Annual Administrative Charge 62
Contingent Withdrawal Charge 62
Allocation of Certain Charges to the
Fixed Maturity Account 64
Charge on Third Party Transfer or
Exchange 64
All EQUI-VEST EDC, TSA and Trusteed
Contracts plus IRA, QP IRA, SEP and NQ
(Series 100 and 200 only) 65
Limitation on Charges 65
Annual Administrative Charge 65
Contingent Withdrawal Charge 66
MOMENTUM Contract 68
Limitation on Charges 68
Charges to Investment Funds 68
Quarterly Administrative Charge 69
Charge for Plan Recordkeeping Services 69
Contingent Withdrawal Charge 69
Plan Loan Charges 70
Special Circumstances 71
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
PART 9:VOTING RIGHTS PAGE 72
PART 10:FEDERAL TAX AND
ERISA MATTERS PAGE 73
Annuities 73
Taxation of Non-Qualified
Annuities--EQUI-VEST Only 73
Special Rules for Tax Favored Retirement
Programs 74
Tax-Qualified Retirement Plans
("Qualified Plans") 74
Tax Sheltered Annuity (TSAs) Arrangements 74
Distributions from Qualified Plans and
TSAs 75
Tax-Qualified Individual Retirement
Arrangements (IRSs) 77
Annuity Account Values and Cash Values
(Tables) 83
Simplified Employee Pensions (SEPs) 84
Public and Tax-Exempt Organization
Employee Deferred Compensation Plans
(EDC Plans) 84
Penalty Tax on Early Distributions 85
Tax Penalties for Insufficient
Distributions 85
Federal and State Income Tax Withholding 85
Other Withholding 86
Special Rules for NQ and Trusteed
Contracts Issued in Puerto Rico 86
Impact of Taxes to Equitable Life 87
Transfer Among Investment Options 87
Tax Changes 87
ERISA Matters 87
Certain Rules Applicable to Plan Loans 87
Certain Rules Applicable to Plans
Designed to Comply with Section 404(c)
of ERISA 88
PART 11:INDEPENDENT ACCOUNTANTS PAGE 89
APPENDIX I: AN EXAMPLE OF EQUI-VEST
MARKET VALUE ADJUSTMENT PAGE 90
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS PAGE 91
HOW TO OBTAIN THE EQUI-VEST AND MOMENTUM
STATEMENT OF ADDITIONAL INFORMATION PAGE 91
</TABLE>
4
<PAGE>
- -----------------------------------------------------------------------------
GENERAL TERMS
- -----------------------------------------------------------------------------
In this prospectus, the terms "we," "our" and "us" mean The Equitable Life
Assurance Society of the United States (EQUITABLE LIFE). The terms "you" and
"your" refer to the Contract Owner for EQUI-VEST and either the Employer,
Trustee or the Participant as indicated for MOMENTUM. Some of the terms
described below may be called different names under EQUI-VEST and MOMENTUM.
We have indicated those differences in the following descriptions and in
those instances where the term is applicable only to EQUI-VEST the symbol EV
will be used and in those instances where it is applicable only to MOMENTUM
the symbol M will be used.
ACCUMULATION UNIT--Contributions that are invested in an Investment Fund
purchase Accumulation Units in that Investment Fund. The "Accumulation Unit
Value" is the dollar value of each Accumulation Unit in an Investment Fund on
a given date.
ACTIVE LOAN-M-The principal amount of any Participant plan loan that has
neither been repaid nor deemed distributed under Section 72(p) of the Code.
ANNUITANT/PARTICIPANT--EV--We use the term Annuitant in our Contracts and in
our Certificates we use the term Participant. In either case, these terms
mean the individual who is the measuring life for determining annuity
benefits and generally the person who is entitled to receive those benefits.
The person may, in certain cases, not be the Contract or Certificate Owner.
The Annuitant or Participant will have the right to exercise rights under a
Contract or Certificate only if that person is also the Contract or
Certificate Owner. Throughout this prospectus, we will use the term
"Annuitant" to refer to both Annuitants and Participants.
ANNUITY ACCOUNT VALUE--EV--The sum of the amounts in the Investment Options
under your Contract, plus the amount of any loan reserve account (including
accrued interest). The sum of the amounts in the Investment Options on any
Business Day equals (1) the value of your Investment Funds on that date, (2)
the value in the Guaranteed Interest Account on that date plus (3) the sum of
your Market Adjusted Amounts in the Fixed Maturity Periods on that date. See
"Annuity Account Value" in Part 6.
BUSINESS DAY--Generally, our Business Day is any day on which Equitable Life
is open and the New York Stock Exchange is open for trading. We are closed on
national business holidays and also on Martin Luther King, Jr. Day and the
Friday after Thanksgiving. Additionally, we may choose to close on the day
immediately preceding or following a national business holiday or due to
emergency conditions. For the purpose of determining the Transaction Date,
our Business Day ends at 4:00 p.m. Eastern Time or the closing of the New
York Stock Exchange, if earlier.
CASH VALUE--EV--The Annuity Account Value minus any applicable withdrawal
charges and minus any outstanding loan (including accrued interest).
CASH VALUE--M--The Retirement Account Value minus any applicable withdrawal
charges.
CODE--The Internal Revenue Code of 1986, as amended.
CONTRACT/CERTIFICATE--EV--When EQUI-VEST is offered under a group Contract, the
document provided to participating individuals is called a Certificate rather
than a Contract. When EQUI-VEST is offered on an individual basis, the
document provided is a Contract. Throughout this prospectus, we will use the
term "Contract" to refer to both Contracts and Certificates.
CONTRACT DATE/PARTICIPATION DATE--EV--We use the term Contract Date in our
Contracts and in our Certificates we use the term Participation Date. In
either case, this is the Business Day we receive at our Processing Office,
the properly completed and signed application form for your Contract, any
other required documentation and a contribution (unless payment is being made
through your employer). Throughout this prospectus, we will use the term
"Contract Date" to refer to both the Contract Date and Participation Date.
CONTRACT OWNER/CERTIFICATE OWNER--EV--The Annuitant, employer, trustee or other
party, whichever owns the Contract or Certificate. References to "Contracts"
and "Contract Owners" in this prospectus include the Certificates and their
Certificate Owners. Throughout this prospectus, we will use the term
"Contract Owner" to refer to both the Contract Owner and Certificate Owner.
5
<PAGE>
CONTRACT YEAR/PARTICIPATION YEAR--EV--We use the term Contract Year in our
Contracts and in our Certificates we use the term Participation Year. In
either case, this is the 12-month period beginning on either your Contract
Date or each anniversary of that date. Throughout this prospectus, we will
use the term "Contract Year" to refer to both Contract Year and Participation
Year.
CURRENT TOTAL ACCOUNT BALANCE--EV--The sum of the amounts in your Investment
Funds and your Guaranteed Interest Account, plus the total Book Value of all
of your Fixed Maturity Periods.
DEFAULT OPTION--M--The Money Market Fund, if that Fund is selected by the
Employer or Plan Trustee as a funding option under the plan. Otherwise, the
Guaranteed Interest Account. For Original Certificates, the Guaranteed
Interest Account is the Default Option.
EMPLOYER--M--An employer who has sponsored a defined contribution plan that
participates in the MOMENTUM Program through either the Master Plan and Trust
or the Pooled Trust.
ERISA--The Employee Retirement Income Securities Act of 1974, as amended.
EXPIRATION DATE--EV--The date on which a Fixed Maturity Period ends.
FIXED MATURITY ACCOUNT--EV--The Account that contains the Fixed Maturity
Periods. The Fixed Maturity Account is referred to as the "Guaranteed Period
Account" in the Contracts.
FIXED MATURITY PERIOD (PERIODS)--EV--Any of the periods of time ending on an
Expiration Date that are available for investment under the Series 400
Contracts. Fixed Maturity Periods are referred to as "Guarantee Periods" in
the Contracts.
GUARANTEED INTEREST ACCOUNT--The Investment Option that pays interest at
guaranteed fixed rates and is part of our general account. The Guaranteed
Interest Account is referred to as "Guaranteed Interest Division" in some
EQUI-VEST Certificates.
INVESTMENT FUNDS--In some EQUI-VEST contracts and in the MOMENTUM Contract,
the Investment Funds are referred to as Investment Divisions. For EQUI-VEST
we use the term Investment Funds in our Contracts, and in our Certificates we
use the term Investment Divisions. These are the thirteen variable investment
funds of the Separate Account. Throughout this prospectus, we will use the
term "Investment Funds" to refer to both Investment Funds and Investment
Divisions.
INVESTMENT OPTIONS--The choices for investment of contributions: the thirteen
Investment Funds, the Guaranteed Interest Account, and for EQUI-VEST, each
available Fixed Maturity Period.
MASTER PLAN AND TRUST--M--A defined contribution master plan and trust
sponsored by Equitable Life.
MATURITY AMOUNT--EV--The amount in a Fixed Maturity Period on its Expiration
Date. The Maturity Amount is referred to as the "Maturity Value" in the
Contracts.
MAXIMUM FUND CHOICE--EV--One of two methods for selecting Investment
Options--Allows the Contract Owner to allocate contributions to any
Investment Fund, the Guaranteed Interest Account and (for Owners of Series
400 Contracts only) the Fixed Maturity Account. This election will result in
restrictions in the amount you can transfer out of the Guaranteed Interest
Account.
MAXIMUM TRANSFER FLEXIBILITY--EV--One of two methods for selecting Investment
Options--Allows the Contract Owner to allocate contributions to the Balanced,
Growth & Income, Equity Index, Common Stock, Global, International,
Aggressive Stock and Growth Investors Funds only and to the Guaranteed
Interest Account, with no transfer restrictions in the amount you can
transfer out of the Guaranteed Interest Account.
ORIGINAL CONTRACTS/CERTIFICATES--EQUI-VEST Contracts and MOMENTUM
Certificates under which the EQUI-VEST Contract Owner or the MOMENTUM
Employer has not elected to add Intermediate Government Securities, Quality
Bond, High Yield, Growth & Income, Equity Index, Global, International,
Conservative Investors and Growth Investors Investment Funds as Investment
Options. These Contracts/Certificates:
o permit investment in only the Guaranteed Interest Account and the Money
Market, Balanced, Common Stock and Aggressive Stock Funds and
o prohibit transfers into the Money Market Fund.
PARTICIPANT--An individual who participates in an Employer's plan funded by
either an EQUI-VEST or the MOMENTUM Contract.
PARTICIPATION DATE--M--The Business Day we receive your properly completed and
signed enrollment form at our Processing Office or the date we receive the
first contribution made on your behalf, if earlier. For Participants in plans
that converted to MOMENTUM from our EQUI-VEST Corporate Trusteed Contract,
the Participation Date is the same Participation Date as in the EQUI-VEST
Corporate
6
<PAGE>
Trusteed Certificate relating to that Participant. If more than one EQUI-VEST
Corporate Trusteed Certificate is in force with respect to a Participant,
then the Participation Date will be the earliest Participation Date.
PARTICIPATION YEAR--M--The 12-month period beginning on either your
Participation Date or each anniversary of that date.
PLAN TRUSTEE--M--A trustee or trustees for an Employer's individually-designed
or prototype defined contribution plan.
POOLED TRUST--M--The Pooled Trust for Members Retirement Plans of The Equitable
Life Assurance Society of the United States.
PORTFOLIOS--The portfolios of the Hudson River Trust that correspond to the
Investment Funds of the Separate Account.
PROCESSING OFFICE--The office to which all contributions, written requests or
other written communications must be sent. See "Services We Provide" in Part 1.
RATE TO MATURITY--EV--The interest rate established for each Business Day for
each Fixed Maturity Period. Rates to Maturity are referred to as "Guaranteed
Rates" in the Contracts.
RETIREMENT ACCOUNT VALUE--M--The sum of the amounts that a Participant has in
the Investment Options under the MOMENTUM Contract.
SAI--The EQUI-VEST and MOMENTUM Statement of Additional Information.
SEPARATE ACCOUNT--Our Separate Account A.
SOURCE--M--The source of a contribution. There are six potential sources: (i)
employer, (ii) post-tax, (iii) prior plan, (iv) qualified non-elective and
qualified matching, (v) salary deferral, and (vi) matching contributions. A
detailed description of these Sources is contained in the SAI.
SUCCESSOR ANNUITANT AND OWNER--EV--The individual who upon the death of the
Annuitant and Owner succeeds as the Annuitant and Owner of the Contract. You
can designate a Successor Annuitant and Owner under Series 300 and 400
Contracts if the following conditions are met: (1) you are both Annuitant and
Owner and (2) you name your spouse as the sole beneficiary.
SUCCESSOR OWNER--EV--The individual who upon your death will succeed you as
Owner of your Contract. A Successor Owner can be designated under Series 300
and 400 Contracts.
TRANSACTION DATE--The Business Day we receive a contribution or acceptable
written or telephone transaction request providing the information we need at
our Processing Office. If your contribution or request is not accompanied by
complete information or is mailed to the wrong address, the Transaction Date
will be the date we receive such complete information at our Processing
Office. If your contribution or request reaches our Processing Office on a
non-Business Day, or after the close of the Business Day, the Transaction
Date will be the next following Business Day--unless under certain
circumstances, a future date certain is specified in the request.
THE TRUST--The Hudson River Trust, a mutual fund in which the assets of
Separate Account A are invested.
VALUATION PERIOD--Each Business Day together with any consecutive preceding
non-Business Day(s).
7
<PAGE>
- ------------------------------------------------------------------------------
PART 1: SUMMARY
- ------------------------------------------------------------------------------
The following Summary is qualified in its entirety by more detailed
information appearing elsewhere in the prospectus (see "Prospectus Table of
Contents" on page 3) and the terms of applicable Contracts. Please be sure to
read the prospectus in its entirety.
EQUITABLE LIFE
EQUITABLE LIFE is a New York stock life insurance company that has been in
business since 1859. For more than 100 years we have been among the largest
life insurance companies in the United States. Equitable Life has been
selling annuities since the turn of the century. Our Home Office is located
at 787 Seventh Avenue, New York, New York 10019. 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 S.A. AXA beneficially owns 60.6% of the outstanding shares of
common stock of the Holding Company plus 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, a French company, is the holding company for an international
group of insurance and related financial service companies.
Equitable Life, the Holding Company and their subsidiaries managed
approximately $195.3 billion of assets as of December 31, 1995, including
third party assets of approximately $144.4 billion. We are one of the
nation's leading pension fund managers. These assets are primarily managed
for retirement and annuity programs for businesses, tax-exempt organizations
and individuals. This broad customer base includes nearly half the Fortune
100, more than 42,000 small businesses, state and local retirement funds in
more than half the 50 states, approximately 250,000 employees of educational
and non- profit institutions, as well as nearly 500,000 individuals. Millions
of Americans are covered by Equitable Life's annuity, life and pension
contracts.
TYPES OF RETIREMENT PROGRAMS
EQUI-VEST and MOMENTUM are designed to meet the retirement savings needs of
individuals and those working for businesses and other organizations.
EQUI-VEST PERSONAL RETIREMENT PROGRAMS:
o IRA
An individual retirement annuity (IRA) for both deductible and
non-deductible IRA contributions made by an individual. The Contract
Owner must also be the Annuitant.
o QP IRA
An IRA for rollover distributions only (QP IRA) (generally from
qualified plans or tax-sheltered annuities). The Contract Owner must
also be the Annuitant. References to IRA may include QP IRA.
o NQ
An annuity generally for after-tax or non-qualified (NQ) dollars
contributed by or on behalf of an individual. The Annuitant and Contract
Owner need not be the same.
EQUI-VEST EMPLOYER SPONSORED RETIREMENT PROGRAMS:
o SEP and SARSEP
An IRA Contract used to fund a simplified employee pension plan (SEP)
sponsored by sole proprietorships, partnerships or corporations.
Contributions are made directly by the employer, at the employer's
expense or under a salary reduction program (SARSEP) which permits an
employer to reduce an employee's compensation for the purpose of making
contributions. Each individual employee covered by the SEP is the
Contract Owner of the IRA set up on his or her behalf and must also be
the Annuitant. Unless otherwise noted, all references to SEP Contracts
include SARSEP arrangements.
o UNINCORPORATED TRUSTEED
Trustee-owned Contracts used to fund qualified defined contribution
plans of employers who are sole proprietorships, partnerships or
business trusts. These plans are known as "HR-10" or "Keogh" plans.
Contributions are made by the employer for the benefit of employees who
become Annuitants under the Contract. We do not act as trustee for these
plans, so the employer must select a trustee.
8
<PAGE>
o TSA
A Code section 403(b) tax-sheltered annuity (TSA) for public schools and
nonprofit entities organized under Code section 501(c)(3). Contributions
are made by the employer either directly or through a salary reduction
agreement entered into with the employee. Each employee is the Contract
Owner and must also be the Annuitant.
O UNIVERSITY TSA
A TSA, originally designed to meet the needs of restricted plans of some
universities, may be used for any TSA plan that prohibits loans and has
additional restrictions not found in the basic TSA. Contributions are
made by the employer either directly or through a salary reduction
agreement entered into with the employee. Each employee is the Contract
Owner and must also be the Annuitant. Unless otherwise noted, references
to TSA Contracts include University TSAs.
o EDC
Contracts used to fund Code section 457 employee deferred compensation
(EDC) plans of state and municipal governments and other tax-exempt
organizations. Contributions are made by the employer on behalf of the
employee generally pursuant to a salary reduction agreement. The
employer is the Contract Owner but the employee is the Annuitant. The
EDC program currently is not available for state or municipal government
plans in Texas.
o PAYROLL DEDUCTION IRA AND NQ
Contributions are remitted by the employer on behalf of the employee
through a payroll deduction program.
In the past, EQUI-VEST was available to fund (i) Corporate Trusteed plans
where the employer was a corporation, and (ii) HR-10 (Keogh) plans where the
Contracts were owned by the Annuitants themselves (Annuitant-Owned HR-10),
rather than by a trustee. Although we still issue such Corporate Trusteed and
Annuitant-Owned HR-10 Contracts to employees whose employer's plans enrolled
on this basis, plans of this type are no longer available under EQUI- VEST to
new employer groups. New employers will be offered our MOMENTUM Program.
Later in this prospectus we refer to program features which are specific to
particular types of retirement programs. Under some employer-sponsored plans,
the availability of certain features may be limited. Employers can provide
more detail about such plans.
Only NQ and Trusteed Contracts may be sold in Puerto Rico.
THE MOMENTUM PROGRAM:
o POOLED TRUST
A funding vehicle used in connection with an Employer's qualified
defined contribution plan and trust.
o MASTER TRUST
A funding vehicle used in connection only with the Master Plan, an
IRS-approved master defined contribution plan, in which case the Master
Trust will be the sole funding vehicle for the Employer's plan.
The Employer or Plan Trustee, as applicable, is responsible for determining
whether the MOMENTUM Contract is a suitable funding vehicle for its defined
contribution plan and should, therefore, carefully read this prospectus and
the MOMENTUM Contract before entering into the contract.
INVESTMENT OPTIONS
The following Investment Options are offered: The Guaranteed Interest
Account, and thirteen Investment Funds (Money Market, Intermediate Government
Securities, Quality Bond, High Yield, Growth & Income, Equity Index, Common
Stock, Global, International, Aggressive Stock and the Asset Allocation
Series: Conservative Investors, Balanced and Growth Investors). Each
Investment Fund invests in shares of a corresponding Portfolio of the Trust.
The attached Trust prospectus describes the investment objectives and
policies of the Portfolios available to Contract Owners. Also, for EQUI-VEST
only, subject to state regulatory approval, Fixed Maturity Periods are
available under Series 400 Contracts.
If an employer's plan is intended to comply with the requirements of ERISA
Section 404(c), the Employer or the Plan Trustee is responsible for making
sure that the Investment Options chosen constitute a broad range of
investment choices as required by the Department of Labor's (DOL) regulation
under ERISA Section 404(c). See "Certain Rules Applicable to Plans Designed
to Comply with Section 404(c) of ERISA" in Part 10.
Educational information about investing which may be useful for Participants
is contained in "Part 13: Key Factors in Retirement Planning" in the SAI. The
SAI is available free of charge by calling (EQUI-VEST) 1-800-628-6673 or
(MOMENTUM) 1-800-528-0204.
SELECTING INVESTMENT OPTIONS
Under EQUI-VEST Trusteed Contracts and under the MOMENTUM Program, the
Employer or Plan Trustee will choose the investment options available
9
<PAGE>
to the Participant. Under all other Contracts, the Contract Owner makes that
choice. If any of the Options listed below are selected, there will be
restrictions on the amount you can transfer out of the Guaranteed Interest
Account. Additionally, if you are participating through your Employer's plan
and your employer makes any of these Options available to you, whether or not
you select them, you will be subject to such restrictions. The Options that
result in restrictions are: Conservative Investors, Money Market,
Intermediate Government Securities, Quality Bond, High Yield and, for
EQUI-VEST, the Fixed Maturity Periods.
EQUI-VEST and MOMENTUM Original Contracts and Certificates limit you to only
the Guaranteed Interest Account and the Money Market, Balanced, Common Stock
and Aggressive Stock Funds.
CONTRIBUTIONS
Generally, for EQUI-VEST, contributions may be made at any time: in single
sum amounts, on a regular basis or as your financial situation permits. For
some types of retirement plans, contributions must be made by the employer.
Different minimum contribution limits apply to different EQUI-VEST Contracts.
MOMENTUM contributions may be made at any time and may be made only by the
Employer or Plan Trustee by either wire transfer or check. Participants
should not send contributions directly to Equitable Life. There is no minimum
contribution.
MOMENTUM and EQUI-VEST contributions are credited as of the Transaction Date,
if they are accompanied by properly completed forms. Failure to use the
proper form, or to complete the form properly, may result in a delay in
crediting contributions. All contributions made by check must be drawn on a
bank in the U.S., in U.S. dollars and made payable to Equitable Life. All
checks are accepted subject to collection. Under the MOMENTUM Program and
EQUI-VEST Trusteed Contracts, either you or the Plan Trustee, or both, as
applicable, must instruct us to allocate contributions to one or several
Investment Options that are available under your Employer's plan.
Under all other EQUI-VEST Contracts, you, as Owner, may instruct us to
allocate your contributions to one or several Investment Options.
Allocation percentages must be in whole numbers and the sum must equal 100%.
Contributions made to an Investment Fund purchase Accumulation Units in that
Investment Fund.
TRANSFERS
Under the MOMENTUM Program and EQUI-VEST Trusteed Contracts, either the
Participant or the Plan Trustee, or both as applicable, may direct us to
transfer among the investment options. Under other EQUI-VEST Contracts, you
may make such transfers. There is no charge for these transfers. If you have
an Original Contract, restrictions will apply to transfers into the Money
Market Fund from any of the other Investment Options. Minimum transfer
amounts may apply.
SERVICES WE PROVIDE
Your Equitable Life Agent can help you with any questions you have. In
addition, there are a number of services designed to keep you informed.
REGULAR REPORTS
We currently provide written confirmation of every financial transaction,
and:
o Annual statement
o Semi-annual statement of account
(MOMENTUM only)
o Statement as of the last day of the Contract Year (EQUI-VEST only)
We reserve the right to change the frequency of these reports.
ADDITIONAL SERVICES
Materials and seminars of an educational nature to assist retirement planning
needs of Participants can be arranged through your Equitable Life Agent. Your
Equitable Life Agent can also schedule retirement planning workshops to
facilitate plan enrollment periods.
TELEPHONE OPERATED
PLAN/POLICY SUPPORT (TOPS) SYSTEM
TOPS is designed to provide up-to-date information via touch-tone telephone.
TOPS is available under all EQUI-VEST Contracts, but in certain plans, the
use of TOPS may be limited by the plan provisions. Under MOMENTUM, TOPS is
available only if your Employer has elected this service. Use TOPS:
o for current Annuity or Retirement Account Value;
o for current allocation percentages;
o for the number of units held in the Investment Funds under your account;
or
o to change your allocation percentages and transfer money among the
Investment Funds and the Guaranteed Interest Account.
o to elect Investment Simplifier (EQUI-VEST only)
10
<PAGE>
A special code number is required to use TOPS. We have established procedures
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 we do 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, we will not be
liable for following telephone instructions that we reasonably believe to be
genuine. We reserve the right to terminate or modify any telephone or
automated transfer/withdrawal service we provide upon 90 days written
notice.
A toll-free number is available, and local TOPS telephone numbers will be
provided. TOPS is available daily, 24 hours a day for EQUI-VEST and from 8:00
a.m. to 9:00 p.m. Eastern Time every Business Day for MOMENTUM. Transfers
made after 4:00 p.m. Eastern Time on a Business Day or on a non-Business Day
are not processed until the following Business Day.
TOLL-FREE TELEPHONE SERVICES
We maintain toll-free numbers for your convenience. See the charts below.
WRITTEN COMMUNICATION
All items received at the proper address prior to 4:00 p.m. Eastern Time on a
Business Day will be effective on the same Business Day. Written requests
will be processed as of the date a properly completed request is received at
our Processing Office.
WHERE TO REACH US
EQUI-VEST
<TABLE>
<CAPTION>
CONTRIBUTIONS:
FOR EDC, TSA, TRUSTEED,
FOR ALL WRITTEN REQUESTS CONTRIBUTIONS: ANNUITANT OWNED HR-10,
AND COMMUNICATIONS (OTHER FOR IRA & NQ OWNERS SEP AND LOAN REPAYMENTS:
THAN CONTRIBUTIONS AND WHO CONTRIBUTE IRA AND NQ WHEN CONTRIBUTIONS FOR TSA AND CORPORATE
LOAN REPAYMENTS INDIVIDUALLY ARE REMITTED BY THE EMPLOYER TRUSTEED LOAN REPAYMENTS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REGULAR Individual Annuity Center Equitable Life Equitable Life Equitable Life Loan
MAIL Equitable Life EQUI-VEST Individual EQUI-VEST Unit Annuity Repayment IAC Lockbox
Post Office Box 2996 Annuity Collections Collections Post Office Box 13496
New York, NY 10116-2996 Post Office Box 13459 Post Office Box 13463 Newark, NJ 07188-0496
Newark, NJ 07188-0459 Newark, NJ 07188-0463
EXPRESS Individual Annuity Center Equitable Life Equitable Life N/A
MAIL Equitable Life* c/o First Chicago c/o First Chicago National
2 Penn Plaza, 5th Floor National Processing Processing Center
New York, NY 10121 Center, 3rd Floor 300 Harmon Meadow
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094 Secaucus, NJ 07094
Attn: Box 13459 Attn: Box 13463
TOPS 1-800-755-7777
Note: Your subscriber number is 777700000
DAILY UNIT VALUE 1-800-841-0801
CUSTOMER SERVICE REPRESENTATIVES 1-800-628-6673
(AVAILABLE 8:30 A.M.-7:00 P.M, EASTERN
TIME, ON EACH BUSINESS DAY
</TABLE>
* Effective on or about July 1, 1996, Equitable intends to relocate this
office to 200 Plaza Drive, 2nd Floor, Secaucus, N.J. 07094.
11
<PAGE>
MOMENTUM
<TABLE>
<CAPTION>
FOR PAYMENTS (E.G., CONTRIBUTIONS, LOAN FOR ALL OTHER COMMUNICATIONS (E.G.,
PAYMENTS, ETC.) REQUESTS FOR TRANSFERS, WITHDRAWALS)
- ----------- -------------------------------------------- ---------------------------------------
<S> <C> <C>
REGULAR Equitable Life MOMENTUM Administrative MOMENTUM Administrative Services P.O.
MAIL Services P.O. Box 13629 Newark, NJ Box 2919 New York, NY 10116
07188-0629
EXPRESS First Chicago National Processing Center 300 MOMENTUM Administrative Services 200
MAIL Harmon Meadow Boulevard, 3rd Floor Secaucus, Plaza Drive Harmon Meadow Secaucus, NJ
NJ 07094 Attention: MOMENTUM 13629 07094
TOPS----------------------------------------------1-800-821-7777---------------------------------------------
Note: Your subscriber number is 66644. For Original Certificates, the subscriber number is 66633.
DAILY UNIT VALUE-----------------------------------Call TOPS or Telephone Consultants------------------------
TELEPHONE CONSULTANTS------------------------------1-800-528-0204-------------------------------------------
(AVAILABLE 8:30 A.M.-7:00 P.M.,
EASTERN TIME, ON EACH BUSINESS DAY)
- --------------------------------------------------------------------------------------------------
</TABLE>
DISTRIBUTION OPTIONS AND
DEATH BENEFITS
Not all of the options described below may be available to MOMENTUM
Participants. The selection of options depends on the terms of each Employer
plan. EQUI-VEST Contracts and the MOMENTUM Program provide several different
types of distribution options, including:
o fixed and variable annuities;
o lump sum payments;
o partial withdrawals;
o required minimum distributions;
o payments for a specific period of time.
o our Systematic Withdrawal option under EQUI-VEST (not available for
amounts allocated to the Fixed Maturity Account);
Under EQUI-VEST, there is a death benefit if the Annuitant dies before an
annuity payout begins. The beneficiary will be paid the greater of the
Annuity Account Value minus any outstanding loan balance (including accrued
interest) or the minimum death benefit. Under MOMENTUM, if a participant dies
before distributions begin, the MOMENTUM Contract provides a death benefit.
The beneficiary will be paid the greater of the Participant's Retirement
Account Value or the minimum death benefit. The minimum death benefit will
not be less than the total contributions adjusted for total withdrawals and
any applicable taxes, and, for EQUI-VEST, less any outstanding loan balance
(including accrued interest).
SPDA VARIABLE DISTRIBUTION OPTION
In addition to offering a variable annuity distri-bution option to
participants in EQUI-VEST and MOMENTUM, we also make the variable annuity
distribution option described in Part 6 under "Distribution Options: Fixed
and Variable Annuity Forms" available to owners of Equitable Life's single
premium deferred annuity (SPDA) contracts. SPDA contractholders who are
considering purchasing a variable distribution option should review the
section on Distribution Options in Part 6, "Part 2: Separate Account A and
its Investment Funds," "Part 3: Investment Performance," the Hudson River
Trust prospectus (beginning after page 91 of this prospectus) and the
sections of the Statement of Additional Information which discuss the
variable annuity distribution option.
WITHDRAWALS AND TERMINATION
Premature withdrawals or contract terminations (generally prior to age
59 1/2), may be restricted and subject to an early withdrawal Federal income tax
penalty. See "Part 10: Federal Tax and ERISA Matters."
Subject to income tax rules and the provisions of any applicable employer
plan, you may withdraw funds at any time by completing and submitting a
proper form. This form is available from your Agent or from our Processing
Office. Withdrawals may be subject to a minimum amount or to a contingent
withdrawal charge. Under EQUI-VEST, withdrawals from Fixed Maturity Periods
prior to their Expiration Dates will result in a market value adjustment.
The MOMENTUM Contract also permits the Employer or Plan Trustee to terminate
the Employer's plan's participation under the Contract at any time. Equitable
Life has also reserved the right to terminate the Contract if we learn that
the Employer's plan fails to qualify under the Code or if the Employer fails
to provide the Participant information necessary to administer the Contract.
Withdrawals due to plan termination may also result in a contingent
withdrawal charge.
12
<PAGE>
LOANS
The MOMENTUM Contract permits your Employer to withdraw funds from your
Retirement Account Value, without incurring a contingent withdrawal charge,
in order to make a loan to a Participant under the Employer's plan. See
"Loans" in Part 7 for a description of loan procedures and rules and
"Deductions and Charges" in Part 8 for a description of charges associated
with plan loans.
A plan loan under the MOMENTUM Program will be in default if the amount of
any scheduled repayment is not received by us within 90 days of its due date,
or if the Participant dies or participation under the MOMENTUM Contract is
terminated. We will then treat the outstanding loan principal as a withdrawal
subject to the contingent withdrawal charge.
Certain EQUI-VEST Contracts also permit loans without incurring a contingent
withdrawal charge on undefaulted loan amounts. Such loans will be
administered in accordance with proposed regulations, if applicable. See
"Loans" in Part 6 for more information.
TAXES
Generally, any earnings attributable to your Annuity Account Value or to your
Retirement Account Value will not be included in your taxable income until
distributions are made. See "Part 10: Federal Tax and ERISA Matters."
DEDUCTIONS AND CHARGES
Keep in mind that these programs are designed for retirement savings and
long-range financial planning; certain charges will not apply unless you make
early withdrawals from your Contract.
Following is a summary of the different types of deductions and charges which
may be applicable.
O CHARGE TO INVESTMENT FUNDS--We make a daily charge for certain expenses
of the Contract. It covers death benefits, mortality risks, expenses and
expense risks. The daily Accumulation Unit Value is quoted net of these
charges. These charges will vary by Contract, and are at a maximum of
1.35% (effective annual rate) for the Intermediate Government
Securities, Quality Bond, High Yield, Growth & Income, Equity Index,
Global, International, Aggressive Stock, Conservative Investors and
Growth Investors Funds and 1.49% (effective annual rate) for the Money
Market, Common Stock and Balanced Funds. Further, EQUI-VEST Series 100
and 200 Contracts and the MOMENTUM Contract impose an overall limit of
1.75% on total Separate Account and Trust expenses for the Money Market,
Common Stock, Aggressive Stock and Balanced Funds.
O TRUST CHARGES TO PORTFOLIOS--Investment advisory fees and other expenses
of the Trust are charged daily against the Trust's assets. These charges
are reflected in the Portfolio's daily share price and in the daily
Accumulation Unit Value for the Investment Funds.
O ADMINISTRATIVE CHARGES--The administrative charge is currently at a
maximum of $30 a year but may be less under different contracts.
For EQUI-VEST, the charge is deducted each Contract Year from your
Annuity Account Value in the Guaranteed Interest Account and Investment
Funds and, in certain cases, from the Fixed Maturity Periods.
For MOMENTUM, the charge is deducted pro rata from your Retirement
Account Value on the last Business Day of each calendar quarter. Under
most contracts, we reserve the right to increase this charge if our
administrative costs increase. Employers under the MOMENTUM Contract
have the option of being billed directly for this charge.
O CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES--Generally, charges
for state premium taxes and other applicable taxes, if any, are deducted
when an annuity payment option is elected. The current tax charge that
might be imposed varies by state and ranges from 0% to 3.5%; however,
the rate is 1% in Puerto Rico and 5% in the Virgin Islands.
O CONTINGENT WITHDRAWAL CHARGE--If you terminate your participation under
a contract or make a partial withdrawal, your Annuity Account Value or
Retirement Account Value, as applicable, may be subject to a contingent
withdrawal charge that will be used to cover sales and promotional
expenses. This charge will not exceed 6% of the amount withdrawn. The
amount withdrawn includes the amount you request and the withdrawal
charge. Important exceptions and limitations eliminate or reduce the
contingent withdrawal charge.
O CHARGE ON THIRD PARTY TRANSFER OR EXCHANGE UNDER EQUI-VEST
CONTRACTS--You may instruct us to make a direct transfer to a third
party of amounts under your Contract, or request that your Contract be
exchanged for another contract or certificate issued by another carrier.
Certain Contracts permit us to deduct a charge of $25 per occurrence for
such transfers or exchanges.
13
<PAGE>
O PLAN LOAN CHARGES UNDER MOMENTUM Program--A $25 set-up fee will be
deducted from your Retirement Account Value at the time a plan loan is
made. Also, we will deduct a loan recordkeeping fee of $6 from your
Retirement Account Value on the last Business Day of each calendar
quarter if there is an Active Loan on that date. We reserve the right to
increase these administrative charges if our costs increase. Your
Employer may elect to pay these fees. See "Plan Loan Charges" in Part 8.
O CHARGE FOR PLAN RECORDKEEPING SERVIES UNDER MOMENTUM Program--Equitable
Life offers two plan recordkeeping options, one of which must be elected
for each plan. The annual charge for basic recordkeeping is $300 per
plan and is billed directly to the Employer. The full service
recordkeeping option is available only for plans that satisfy Equitable
Life's underwriting requirements. Fees for the full service
recordkeeping option are defined in the plan recordkeeping services
agreement which is required for all plans that elect this option. We
reserve the right to increase these charges. See "Charge for Plan
Recordkeeping Services" in Part 8.
DEFERRED VARIABLE ANNUITIES
EQUI-VEST is a series of deferred variable annuity contracts. The MOMENTUM
Program is offered under a group variable annuity contract. Variable
annuities are designed for retirement savings and long-range financial
planning. Contributions accumulate on a Federal income tax deferred basis and
at a future date you can receive a stream of periodic payments. Tax deferral
is one of the advantages of an annuity over many other kinds of investments.
In addition, annuities offer individuals the opportunity to receive an
assured stream of payments for life.
Under Federal tax law, an individual, employer or trustee may, subject to
various limits, purchase an annuity to fund a tax-favored retirement program,
such as an IRA or qualified retirement plan. In many cases, the individual or
employer makes contributions to the tax-favored retirement program with
pre-tax dollars. Alternatively, annuities may be purchased with after-tax
dollars by individuals who wish to create additional retirement savings.
There are a variety of payout options at retirement, including a lump sum and
a variety of investment choices while your contributions are accumulating.
10-DAY FREE LOOK FOR EQUI-VEST
You have the right to examine your EQUI-VEST Contract for a period of 10 days
after you receive it, and to return it to us for a refund. You cancel it by
sending it to our Processing Office. The free look is extended if your state
requires a refund period of longer than 10 days. This right applies only to
the initial owner of a Contract.
For contributions allocated to Investment Funds, your refund will equal those
contributions plus or minus any investment gain or loss through the date we
receive your Contract at our Processing Office. Certain daily charges will
also be automatically deducted. For contributions allocated to the Guaranteed
Interest Account, the refund will equal the amount allocated to the
Guaranteed Interest Account without interest. For contributions allocated to
the Fixed Maturity Account, the refund will equal the amount of your
contributions plus any crediting of interest, and plus or minus any market
value adjustment. Some states or Federal income tax regulations may require
that we calculate the refund differently. We follow these same procedures if
you change your mind before a Contract has been issued, but after a
contribution has been made.
In certain cases, there may be tax implications to cancelling your Contract
during the 10-day free look period.
14
<PAGE>
FEE TABLES AND EXAMPLES
The EQUI-VEST Contracts and the MOMENTUM Contract may differ in terms of the
fees that are charged. One of the following four Tables will apply to you.
These Tables, and the related Examples, will assist you in understanding the
various costs and expenses under your EQUI-VEST Contract or the MOMENTUM
Program so that you may compare them with other products. The Tables reflect
expenses of both the Separate Account and the Trust for the year ended
December 31, 1995.
As explained in Parts 4 and 5, the Guaranteed Interest Account and the
EQUI-VEST Fixed Maturity Account are not a part of the Separate Account and
are not covered by the Tables and Examples. The only expenses shown in the
Tables which apply to the Guaranteed Interest Account and the Fixed Maturity
Account are the Contingent Withdrawal Charge, the Annual Administrative
Charge and the Third Party Transfer or Exchange Fee, if applicable. Also see
"Income Annuity Distribution Options" in Part 6 for a description of charges
under EQUI-VEST Income Annuities and "Distribution Options" and "Annuity
Distribution Options" in Part 7 for a description of annuity options under
the MOMENTUM Program and Part 8 for charges associated with some of those
options.
Certain expenses and fees shown in these Tables may not apply to you. To
determine whether a particular item in a Table applies (and the actual
amount, if any) consult the section of the prospectus for your EQUI-VEST
Contract series or for MOMENTUM indicated in the notes to the Table. For a
description of the different EQUI-VEST Series, see "Part 6: The EQUI-VEST
Contract Series". A charge for applicable state or local taxes may be
deducted from contributions in some states. See "Charges for State Premium
and Other Applicable Taxes" in Part 8.
TABLE 1: EQUI-VEST SERIES 100
Description of Expenses
<TABLE>
<CAPTION>
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
SALES LOAD ON PURCHASES ................... NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) .. 6%
MAXIMUM ANNUAL ADMINISTRATIVE CHARGE (2) .. $30
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY GROWTH & EQUITY
MARKET SECURITIES BOND HIGH YIELD INCOME INDEX
---------- -------------- --------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND TRUST
ANNUAL EXPENSE (3) 1.75% N/A N/A N/A N/A N/A
Separate Account Annual
Expenses (4)
Mortality and Expense Risk Fees .65% .50% .50% .50% .50% .50%
Other Expenses .84% .84% .84% .84% .84% .84%
---------- -------------- --------- ------------ ---------- --------
Total Separate Account Annual
Expenses 1.49%(3) 1.34% 1.34% 1.34% 1.34% 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees 0.40% 0.50% 0.55% 0.55% 0.55% 0.35%
Other Expenses 0.04% 0.07% 0.04% 0.05% 0.05% 0.13%
---------- -------------- --------- ------------ ---------- --------
Total Trust Annual Expenses (5) 0.44%(3) 0.57% 0.59% 0.60% 0.60% 0.48%
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
---------- -------- --------------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND
TRUST ANNUAL EXPENSE (3) 1.75% N/A N/A 1.75% N/A 1.75% N/A
Separate Account Annual Expenses
(4)
Mortality and Expense Risk Fees .65% .50% .50% .50% .50% .65% .50%
Other Expenses .84% .84% .84% .84% .84% .84% .84%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Separate Account Annual
Expenses 1.49%(3) 1.34% 1.34% 1.34%(3) 1.34% 1.49%(3) 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees 0.35% 0.53% 0.90% 0.46% 0.55% 0.37% 0.52%
Other Expenses 0.03% 0.08% 0.13% 0.03% 0.04% 0.03% 0.04%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Trust Annual Expenses (5) 0.38%(3) 0.61% 1.03% 0.49%(3) 0.59% 0.40%(3) 0.56%
</TABLE>
15
<PAGE>
TABLE 2: EQUI-VEST SERIES 200
Description of Expenses
<TABLE>
<CAPTION>
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
SALES LOAD ON PURCHASES ................... None
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) .. 6%
MAXIMUM ANNUAL ADMINISTRATIVE CHARGE (2) .. $30
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY GROWTH & EQUITY
MARKET SECURITIES BOND HIGH YIELD INCOME INDEX
---------- -------------- --------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND TRUST
ANNUAL EXPENSE (3) 1.75% N/A N/A N/A N/A N/A
Separate Account Annual Expenses
(4)
Mortality and Expense Risk Fees 1.15% 1.09% 1.09% 1.09% 1.09% 1.09%
Other Expenses .25% .25% .25% .25% .25% .25%
---------- -------------- --------- ------------ ---------- --------
Total Separate Account Annual
Expenses 1.40%(3) 1.34% 1.34% 1.34% 1.34% 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees 0.40% 0.50% 0.55% 0.55% 0.55% 0.35%
Other Expenses 0.04% 0.07% 0.04% 0.05% 0.05% 0.13%
---------- -------------- --------- ------------ ---------- --------
Total Trust Annual Expenses (5) 0.44%(3) 0.57% 0.59% 0.60% 0.60% 0.48%
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
---------- -------- --------------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND
TRUST ANNUAL EXPENSE (3) 1.75% N/A N/A 1.75% N/A 1.75% N/A
Separate Account Annual Expenses
(4)
Mortality and Expense Risk Fees 1.15% 1.09% 1.09% 1.09% 1.09% 1.15% 1.09%
Other Expenses .25% .25% .25% .25% .25% .25% .25%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Separate Account Annual
Expenses 1.40%(3) 1.34% 1.34% 1.34%(3) 1.34% 1.40%(3) 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees 0.35% 0.53% 0.90% 0.46% 0.55% 0.37% 0.52%
Other Expenses 0.03% 0.08% 0.13% 0.03% 0.04% 0.03% 0.04%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Trust Annual Expenses (5) 0.38%(3) 0.61% 1.03% 0.49%(3) 0.59% 0.40%(3) 0.56%
</TABLE>
- ------------
Notes:
(1) The contingent withdrawal charge is a percentage of specified
contributions or amounts withdrawn, depending on the Contract.
Important exceptions and limitations eliminate or reduce the contingent
withdrawal charge. See "Contingent Withdrawal Charge" in Part 8.
(2) Many Contracts are exempt from this charge. The Annual Administrative
Charge is the lesser of $30 or 2% of the Annuity Account Value. See
"Annual Administrative Charge" in Part 8.
(3) The amounts shown in the Table under "Separate Account Annual Expenses"
and "Hudson River Trust Annual Expenses," when added together, are not
permitted to exceed a total annual rate of 1.75% of the value of the
assets held in the Money Market, Common Stock, Aggressive Stock and
Balanced Funds. For Series 100 Contracts, without this expense
limitation, total Separate Account Annual Expenses plus Trust Annual
Expenses for 1995 would have been 1.93%, 1.87%, 1.83%, and 1.89% for
the Money Market, Common Stock, Aggressive Stock and Balanced Funds,
respectively. For Series 200 Contracts, without this expense
limitation, total Separate Account Annual Expenses plus Trust Annual
Expenses for 1995 would have been 1.84%, 1.78%, 1.83%, and 1.80% for
the Money Market, Common Stock, Aggressive Stock and Balanced Funds,
respectively. For Series 100 Contracts, Separate Account Annual
Expenses are guaranteed not to exceed a total annual rate of 1.49% for
the Money Market, Balanced and Common Stock Funds and an annual rate of
1.34% for all other Investment Funds. See "Limitation on Charges" in
Part 8.
(4) Separate Account and Trust expenses are shown as a percentage of each
Investment Fund's or Portfolio's average value. "Mortality and Expense
Risk Fees" includes death benefit charges. "Other Expenses" under
"Separate Account Annual Expenses" includes financial accounting
expenses. See "Limitation on Charges," "Charges to Investment Funds"
and "Trust Charges to Portfolios" in Part 8.
(5) Expenses shown for all Portfolios are for the fiscal year ended
December 31, 1995. The amount shown for the International Portfolio,
which was established on April 3, 1995 is annualized. The investment
advisory fee for each Portfolio may vary from year to year depending
upon the average daily net assets of the respective Portfolio of the
Trust. The maximum investment advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. The other
direct operating expenses will also fluctuate from year to year
depending on actual expenses. The Trust expenses are shown as a
percentage of each Portfolio's average value. See "Trust Charges to
Portfolios" in Part 8.
16
<PAGE>
EXAMPLES: EQUI-VEST SERIES 100 AND 200
For each type of Series 100 and 200 Contract, the examples which follow
show the expenses that a hypothetical Contract Owner would pay in the
surrender and non-surrender situations noted below, assuming a single
contribution of $1,000 on the Contract Date invested in one of the
Investment Funds listed and a 5% annual return on assets and no waiver of
the contingent withdrawal charge.(1) For purposes of these examples, the
annual administrative charge is computed by reference to the actual
aggregate annual administrative charges as a percentage of the total assets
held under all EQUI-VEST Contracts.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future
investment performance.
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE EXPENSE
WOULD BE:
FOR IRA (INCLUDING CERTAIN QP IRA(2)), SEP, EDC AND PARTICIPANT-OWNED HR-10
CONTRACTS:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market $81.26 $125.75 $166.03 $259.78
Intermediate Government Securities 82.84 130.51 174.07 276.62
Quality Bond 83.04 131.11 175.07 278.70
High Yield 83.13 131.41 175.57 279.74
Growth & Income 83.13 131.41 175.57 279.74
Equity Index 81.95 127.84 169.55 267.18
Common Stock 81.26 125.75 166.03 259.78
Global 83.23 131.70 176.07 280.78
International 87.37 144.12 196.86 323.52
Aggressive Stock 81.26 125.75 166.03 259.78
Asset Allocation Series:
Conservative Investors 83.04 131.11 175.07 278.70
Balanced 81.26 125.75 166.03 259.78
Growth Investors 82.74 130.22 173.57 275.57
FOR TSA AND QP IRA CONTRACTS:(3) 1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ----------
Money Market $75.08 $119.19 $166.03 $259.78
Intermediate Government Securities 76.67 123.98 174.07 276.62
Quality Bond 76.86 124.58 175.07 278.70
High Yield 76.96 124.88 175.57 279.74
Growth & Income 76.96 124.88 175.57 279.74
Equity Index 75.77 121.29 169.55 267.18
Common Stock 75.08 119.19 166.03 259.78
Global 77.06 125.18 176.07 280.78
International 81.23 137.67 196.86 323.52
Aggressive Stock 75.08 119.19 166.03 259.78
Asset Allocation Series:
Conservative Investors 76.86 124.58 175.07 278.70
Balanced 75.08 119.19 166.03 259.78
Growth Investors 76.57 123.68 173.57 275.57
FOR TRUSTEED AND NQ CONTRACTS: 1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ----------
Money Market $75.08 $119.19 $163.26 $223.29
Intermediate Government
Securities 76.67 123.98 171.80 240.72
Quality Bond 76.86 124.58 172.87 242.88
High Yield 76.96 124.88 173.40 243.95
Growth & Income 76.96 124.88 173.40 243.95
Equity Index 75.77 121.29 167.00 230.95
Common Stock 75.08 119.19 163.26 223.29
Global 77.06 125.18 173.93 245.03
International 81.23 137.67 196.04 289.27
Aggressive Stock 75.08 119.19 163.26 223.29
Asset Allocation Series:
Conservative Investors 76.86 124.58 172.87 242.88
Balanced 75.08 119.19 163.26 223.29
Growth Investors 76.57 123.68 171.27 239.64
</TABLE>
17
<PAGE>
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSE WOULD BE:
FOR ALL SERIES 100 AND 200 CONTRACTS:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market $19.43 $60.08 $103.26 $223.29
Intermediate Government
Securities 21.10 65.16 111.80 240.72
Quality Bond 21.31 65.80 112.87 242.88
High Yield 21.42 66.11 113.40 243.95
Growth & Income 21.42 66.11 113.40 243.95
Equity Index 20.16 62.31 107.00 230.95
Common Stock 19.43 60.08 103.26 223.29
Global 21.52 66.43 113.93 245.03
International 25.93 79.68 136.04 289.27
Aggressive Stock 19.43 60.08 103.26 223.29
Asset Allocation Series:
Conservative Investors 21.31 65.80 112.87 242.88
Balanced 19.43 60.08 103.26 223.29
Growth Investors 21.00 64.84 111.27 239.64
</TABLE>
- ------------
(1) The amount accumulated could not be paid in the form of an annuity at
the end of any of the periods shown in the examples. If the amount
applied to purchase an annuity is less than $2,000, or the initial
annuity payment is less than $20 we may pay the amount to the payee in
a single sum instead of as payments under an annuity form. See
"Distribution Options" in Part 6. In some cases, charges for state
premium or other taxes will be deducted from the amount applied, if
applicable.
(2) These expenses also apply to a Series 100 or 200 QP IRA purchased in a
state where group Contracts are issued.
(3) These expenses apply only to a Series 100 or 200 QP IRA purchased in a
state where individual Contracts are issued.
18
<PAGE>
TABLE 3: EQUI-VEST SERIES 300 AND 400
<TABLE>
<CAPTION>
Description of Expenses
- --------------------------------------------------------------------
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
SALES LOAD ON PURCHASES ........................................... NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) .......................... 6%
MAXIMUM/CURRENT ANNUAL ADMINISTRATIVE CHARGE (2) .................. $65/30
MAXIMUM/CURRENT THIRD PARTY TRANSFER OR EXCHANGE FEE (3) .......... $65/25 PER OCCURRENCE
SEPARATE ACCOUNT ANNUAL EXPENSE
Mortality and Expense Risk Fees (including Death Benefit Charges) . 1.10%
Other Expenses (4) ................................................ .25%
-------------------------
Total Separate Account Annual Expenses (5) ....................... 1.35%
=========================
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
MARKET SECURITIES BOND YIELD INCOME INDEX
-------- -------------- --------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
TRUST ANNUAL EXPENSES:
Investment Advisory Fees 0.40% 0.50% 0.55% 0.55% 0.55% 0.35%
Other Expenses 0.04% 0.07% 0.04% 0.05% 0.05% 0.13%
-------- -------------- --------- ------- ---------- --------
Total Trust Annual
Expenses (6) 0.44% 0.57% 0.59% 0.60% 0.60% 0.48%
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
-------- -------- --------------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST ANNUAL EXPENSES:
Investment Advisory
Fees 0.35% 0.53% 0.90% 0.46% 0.55% 0.37% 0.52%
Other Expenses 0.03% 0.08% 0.13% 0.03% 0.04% 0.03% 0.04%
-------- -------- --------------- ------------ -------------- ---------- -----------
Total Trust Annual
Expenses (6) 0.38% 0.61% 1.03% 0.49% 0.59% 0.40% 0.56%
</TABLE>
- ------------
Notes:
(1) The contingent withdrawal charge is a percentage of specified
contributions. See "Contingent Withdrawal Charge" in Part 8. Important
exceptions and limitations eliminate or reduce the contingent
withdrawal charge.
(2) The Annual Administrative Charge is the lesser of $30 or 2% of the
Annuity Account Value (adjusted to include any withdrawals made during
that year) during the first two Contract Years; and $30 for each
Contract Year thereafter. See "Annual Administrative Charge" in Part 8.
We reserve the right to increase this fee in the future if our
administrative costs increase, but such fee may not exceed an annual
maximum of $65, subject to applicable law.
(3) There is a Third Party Transfer or Exchange Fee of $25 per occurrence.
We reserve the right to increase this fee in the future, but such fee
may not exceed a maximum of $65 per occurrence, subject to applicable
law.
(4) For a limited period of time, we will charge .24% against the assets of
the Intermediate Government Securities, Quality Bond, High Yield,
Growth & Income, Equity Index, Global, International, Conservative
Investors and Growth Investors Funds for expenses.
(5) The amounts shown in the Table under "Separate Account Annual Expenses"
are not permitted to exceed a total annual rate of 1.35% of the value
of the assets held in the Investment Funds. Separate Account expenses
are shown as a percentage of each Investment Fund's average value. See
"Limitation on Charges" in Part 8.
(6) Expenses shown for all Portfolios are for the fiscal year ended
December 31, 1995. The amount shown for the International Portfolio,
which was established on April 3, 1995, is annualized. The investment
advisory fee for each Portfolio may vary from year to year depending
upon the average daily net assets of the respective Portfolio of the
Trust. The maximum investment advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. The other
direct operating expenses will also fluctuate from year to year
depending on actual expenses. The Trust expenses are shown as a
percentage of each Portfolio's average value. See "Trust Charges to
Portfolios" in Part 8.
19
<PAGE>
EXAMPLES: EQUI-VEST SERIES 300 AND 400
For each type of Series 300 and 400 Contract, the examples which follow
show the expenses that a hypothetical Contract Owner would pay in the
surrender and non-surrender situations noted below, assuming a single
contribution of $1,000 on the Contract Date invested in one of the
Investment Funds listed, a 5% annual return on assets and no waiver of the
contingent withdrawal charge.(1) For purposes of these examples the annual
administrative charge is computed by reference to the actual aggregate
annual administrative charges as a percentage of the total assets held
under all EQUI-VEST Contracts.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future
investment performance.
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE EXPENSE
WOULD BE:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market $75.47 $120.39 $165.40 $227.68
Intermediate Government
Securities 76.67 123.98 171.80 240.72
Quality Bond 76.86 124.58 172.87 242.88
High Yield 76.96 124.88 173.40 243.95
Growth & Income 76.96 124.88 173.40 243.95
Equity Index 75.77 121.29 167.00 230.95
Common Stock 74.88 118.59 162.18 221.10
Global 77.06 125.18 173.93 245.03
International 81.23 137.67 196.04 289.27
Aggressive Stock 75.97 121.88 168.07 233.13
Asset Allocation Series:
Conservative Investors 76.86 124.58 172.87 242.88
Balanced 75.08 119.19 163.26 223.29
Growth Investors 76.57 123.68 171.27 239.64
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSE WOULD BE:
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ----------
Money Market $19.85 $ 61.35 $105.40 $227.68
Intermediate Government
Securities 21.10 65.16 111.80 240.72
Quality Bond 21.31 65.80 112.87 242.88
High Yield 21.42 66.11 113.40 243.95
Growth & Income 21.42 66.11 113.40 243.95
Equity Index 20.16 62.31 107.00 230.95
Common Stock 19.22 59.44 102.18 221.10
Global 21.52 66.43 113.93 245.03
International 25.93 79.68 136.04 289.27
Aggressive Stock 20.37 62.94 108.07 233.13
Asset Allocation Series:
Conservative Investors 21.31 65.80 112.87 242.88
Balanced 19.43 60.08 103.26 223.29
Growth Investors 21.00 64.84 111.27 239.64
</TABLE>
- ------------
(1) The amount accumulated could not be paid in the form of an annuity at
the end of any of the periods shown in the examples. If the amount
applied to purchase an annuity is less than $2,000, or the initial
annuity payment is less than $20, we may pay the amount to the payee in
a single sum instead of as payments under an annuity form. See
"Distribution Options" in Part 6. In some cases, charges for state
premium or other taxes will be deducted from the amount applied, if
applicable.
20
<PAGE>
TABLE 4: MOMENTUM Program
<TABLE>
<CAPTION>
Description of Expenses
- --------------------------------------------
<S> <C>
CONTRACT TRANSACTION EXPENSES
SALES LOAD ON PURCHASES .................... NONE
TRANSFER FEES .............................. NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) .. 6%
PLAN LOAN CHARGES (2) ....................... $25 WHEN LOAN IS MADE
+$6 PER QUARTER
ANNUAL ADMINISTRATIVE CHARGE (3) ............ $30 PER PARTICIPANT
ANNUAL BASIC RECORDKEEPING CHARGE (4) ...... $300 PER PLAN
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY GROWTH & EQUITY
MARKET SECURITIES BOND HIGH YIELD INCOME INDEX
---------- -------------- --------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND HUDSON
RIVER TRUST ANNUAL EXPENSES (5) 1.75% n/a n/a n/a n/a n/a
Separate Account Annual Expenses (6)
Mortality and Expense
Risk Fees 0.65% 0.50% 0.50% 0.50% 0.50% 0.50%
Other Expenses 0.84% 0.84% 0.84% 0.84% 0.84% 0.84%
---------- -------------- --------- ------------ ---------- --------
TOTAL SEPARATE ACCOUNT
ANNUAL EXPENSES 1.49%(5) 1.34% 1.34% 1.34% 1.34% 1.34%
Hudson River Trust Annual Expenses(6)
Investment Advisory Fee 0.40% 0.50% 0.55% 0.55% 0.55% 0.35%
Other Expenses 0.04% 0.07% 0.04% 0.05% 0.05% 0.13%
---------- -------------- --------- ------------ ---------- --------
TOTAL HUDSON RIVER TRUST
ANNUAL EXPENSES(7) 0.44%(5) 0.57% 0.59% 0.60% 0.60% 0.48%
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
---------- -------- --------------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT
AND HUDSON RIVER TRUST
ANNUAL EXPENSES (5) 1.75% n/a n/a 1.75% n/a 1.75% n/a
Separate Account Annual
Expenses (6)
Mortality and Expense
Risk Fees 0.65% 0.50% 0.50% 0.50% 0.50% 0.65% 0.50%
Other Expenses 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84%
---------- -------- --------------- ------------ -------------- ---------- -----------
TOTAL SEPARATE ACCOUNT
ANNUAL EXPENSES 1.49%(5) 1.34% 1.34% 1.34%(5) 1.34% 1.49%(5) 1.34%
Hudson River Trust Annual
Expenses(6)
Investment Advisory Fee 0.35% 0.53% 0.90% 0.46% 0.55% 0.37% 0.52%
Other Expenses 0.03% 0.08% 0.13% 0.03% 0.04% 0.03% 0.04%
-------- --------------- ------------ -------------- ---------- -----------
TOTAL HUDSON RIVER TRUST
ANNUAL EXPENSES (7) 0.38% 0.61% 1.03% 0.49%(5) 0.59% 0.40%(5) 0.56%
</TABLE>
(footnotes on next page)
21
<PAGE>
- ---------
Notes:
(1) The maximum contingent withdrawal charge is 6% of the lesser of the
amount withdrawn and the contributions made in the current and five prior
Participation Years. Important exceptions and limitations eliminate or reduce
the contingent withdrawal charge. See "Contingent Withdrawal Charge" in Part
8.
(2) Your Employer may elect to pay these charges and we have reserved the
right to increase them.
(3) The administrative charge is deducted quarterly and is currently $7.50
or, if less, .50% of your Retirement Account Value plus the amount of any
Active Loan. Your Employer may elect to pay this charge. This charge is not
currently assessed for any calendar quarter in which the Retirement Account
Value plus any Active Loan is $25,000 or more on the last Business Day of
that calendar quarter. We have reserved the right to increase this charge.
See "Quarterly Administrative Charge" in Part 8.
(4) This charge will be billed directly to the Employer if the basic plan
recordkeeping option has been elected. We charge a fee of $25 per check drawn
if the Employer elects to have Equitable Life directly distribute plan
benefits and withdrawals. We reserve the right to increase these charges upon
90 days written notice to the Employer or Plan Trustee. See "Charge for Plan
Recordkeeping Services" in Part 8.
(5) The amounts shown in the Table under "Separate Account Annual Expenses"
and "Hudson River Trust Annual Expenses," when added together, are not
permitted to exceed a total annual rate of 1.75% of the value of the assets
held in the Money Market, Balanced, Common Stock and Aggressive Stock Funds.
Without this expense limitation, total Separate Account Annual Expenses plus
Trust Annual Expenses for 1995 would have been 1.93%, 1.89%, 1.87%, and 1.83%
for the Money Market, Balanced, Common Stock and Aggressive Stock Funds,
respectively. See "Limitation on Charges" and "Charges to Investment Funds
for Expenses" in Part 8.
(6) Separate Account and Hudson River Trust expenses are shown as a
percentage of each Investment Fund's or Portfolio's average value. Separate
Account Annual Expenses are guaranteed not to exceed a total annual rate of
1.49% for the Money Market, Balanced and Common Stock Funds and an annual
rate of 1.34% for all other Investment Funds. "Mortality and Expense Risks
Fees" includes death benefit charges. "Other Expenses" under "Separate
Account Annual Expenses" includes financial accounting expenses. See
"Limitations on Charges," "Charges to Investment Funds for Expenses" and
"Hudson River Trust Charges to Portfolios" in Part 8.
(7) Amounts shown for all Portfolios are for the year ended December 31,
1995. The amount shown for the International Portfolio, which was established
on April 3, 1995 is annualized. The investment advisory fee for each
Portfolio may vary from year to year depending upon the average daily net
assets of the respective Portfolio of The Hudson River Trust. The maximum
investment advisory fees, however, cannot be changed without a vote of that
Portfolio's shareholders. The other direct operating expenses will also
fluctuate from year to year depending on actual expenses. The Hudson River
Trust expenses are shown as a percentage of each Portfolio's average value.
See "Hudson River Trust Charges to Portfolios" in Part 8.
22
<PAGE>
EXAMPLES: MOMENTUM
The examples below show the expenses that a hypothetical Participant would
pay in the surrender and non-surrender situations noted below, assuming a
single contribution of $1,000 on the Participation Date invested in one of
the Investment Funds listed, a 5% annual return on assets and no waiver of
the contingent withdrawal charge.(1) For purposes of these examples, the
annual administrative charge is computed by reference to the actual
aggregate annual administrative charges as a percentage of the total assets
held under the contracts. These examples do not reflect the $300 annual
charge for basic recordkeeping services, which is billed directly to the
Employer.
These examples should not be considered a representation of past or future
expenses for each Investment Funds or Portfolio. Actual expenses may be
greater or less than those shown.(2) Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future
investment performance.
IF YOUR PARTICIPATION UNDER THE MOMENTUM CONTRACT TERMINATES AT THE END OF
EACH PERIOD SHOWN, THE MAXIMUM EXPENSE WOULD BE:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market $75.72 $121.12 $166.70 $230.34
Intermediate Government
Securities 77.30 125.90 175.22 247.64
Quality Bond 77.50 126.50 176.28 249.78
High Yield 77.60 126.80 176.81 250.85
Growth & Income 77.60 126.80 176.81 250.85
Equity Index 76.41 123.21 170.43 237.94
Common Stock 75.72 121.12 166.70 230.34
Global 77.70 127.09 177.34 251.92
International 81.86 139.56 199.38 295.84
Aggressive Stock 75.72 121.12 166.70 230.34
Asset Allocation Series:
Conservative Investors 77.50 126.50 176.28 249.78
Balanced 75.72 121.12 166.70 230.34
Growth Investors 77.20 125.60 174.69 246.56
IF YOUR PARTICIPATION UNDER THE MOMENTUM CONTRACT DOES NOT TERMINATE AT THE
END OF EACH PERIOD SHOWN, THE MAXIMUM EXPENSE WOULD BE:
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ----------
Money Market $20.10 $ 62.13 $106.70 $230.34
Intermediate Government
Securities 21.78 67.20 115.22 247.64
Quality Bond 21.99 67.83 116.28 249.78
High Yield 22.09 68.15 116.81 250.85
Growth & Income 22.09 68.15 116.81 250.85
Equity Index 20.84 64.35 110.43 237.94
Common Stock 20.10 62.13 106.70 230.34
Global 22.20 68.46 117.34 251.92
International 26.60 81.68 139.38 295.84
Aggressive Stock 20.10 62.13 106.70 230.34
Asset Allocation Series:
Conservative Investors 21.99 67.83 116.28 249.78
Balanced 20.10 62.13 106.70 230.34
Growth Investors 21.67 66.88 114.69 246.56
</TABLE>
- ------------
(1) The amount accumulated could not be paid to you in the form of an
annuity at the end of any of the periods shown in the examples. The
minimum amount applied to purchase an annuity must be $3,500. See
"Electing an Annuity Distribution Option" in Part 7. In some cases,
charges for state premium or other applicable state or local taxes will
be deducted from the amount applied, if applicable.
(2) Actual administrative charges may be less if you, as Employer, are
billed directly for the quarterly administrative charge or if the
charge does not apply to a Participant because the Retirement Account
Value plus the amount of any Active Loan is at least $25,000 on the
last Business Day of a calendar quarter.
23
<PAGE>
- -------------------------------------------------------------------------------
PART 2: SEPARATE ACCOUNT A AND
ITS INVESTMENT FUNDS
- -------------------------------------------------------------------------------
SEPARATE ACCOUNT A
Separate Account A is organized as a unit investment trust, a type of
investment company, and is registered with the SEC under the Investment
Company Act of 1940 (1940 ACT). This registration does not involve any
supervision by the SEC of the management or investment policies of the
Separate Account. The Separate Account has several Investment Funds, each of
which invests in shares of a corresponding Portfolio of the Trust. You may
allocate some or all contributions among the Investment Funds.
The assets of the Separate Account are our property. As a separate account
under the New York Insurance Law, the portion of the Separate Account's
assets equal to the reserves and other liabilities relating to the contracts
will not be chargeable with liabilities arising out of any other business we
may conduct. Accordingly, income, gains or losses, whether or not realized,
from assets of the Separate Account are credited to or charged against the
Separate Account without regard to our other income, gains or losses. We are
the issuer of the contracts, and the obligations set forth in the contracts
(other than those of Annuitants or Contract Owners) are our obligations.
In addition to contributions made under your contracts, we may allocate to
the Separate Account monies received under other annuity contracts,
certificates or agreements. Owners of all such contracts, certificates or
agreements will participate in the Separate Account in proportion to the
amounts they have in the Investment Funds that relate to their contracts,
certificates or agreements. We may retain in the Separate Account assets that
are in excess of the reserves and other liabilities relating to the Contracts
or to other contracts, certificates or agreements, or we may transfer them to
our general account.
We reserve the right, subject to compliance with applicable law, including
approval of Contract Owners, Participants and Plan Trustees if required, (1)
to add new Investment Funds (or sub-divisions of Investment Funds) to, or
remove Investment Funds (or sub-divisions of Investment Funds) from, the
Separate Account, (2) to combine any two or more Investment Funds or
sub-divisions thereof, (3) to transfer assets determined by us to be the
proportionate share of the class to which the contracts belong from any of
the Investment Funds to another Investment Fund by withdrawing the same
percentage of each investment in that Investment Fund with appropriate
adjustments to avoid odd lots and fractions, (4) to operate the Separate
Account or any Investment Fund as a management investment company under the
1940 Act (which may be directed by a committee which may be composed of a
majority of persons who are "interested persons" of Equitable Life under the
1940 Act, which committee may be discharged by us at any time) or in any
other form permitted by law, including a form that allows us to make direct
investments, (5) to deregister the Separate Account under the 1940 Act, (6)
to cause one or more Investment Funds to invest in a mutual fund other than
or in addition to the Trust, (7) to discontinue the sale of contracts, (8) to
terminate any employer or plan trustee agreement pursuant to its terms and
(9) to restrict or eliminate any voting rights of Contract Owners or other
people who have voting rights that affect the Separate Account.
If any changes are made that result in a material change in the underlying
investments of an Investment Fund, Contract Owners or MOMENTUM Employers will
be notified. We may make other changes in the contracts that do not reduce
any Cash Value, annuity benefit, Annuity Account Value, Retirement Account
Value or other accrued rights or benefits.
THE HUDSON RIVER TRUST
The Trust is an open-end, diversified management investment company, more
commonly called a mutual fund. As a "series" type of mutual fund, it issues
several different series of stock, each of which relates to a different
Portfolio of the Trust. The Trust commenced operations in January 1976 with a
predecessor of its Common Stock Portfolio. The Trust does not impose a sales
charge or "load" for buying and selling its shares. All dividend
distributions to the Trust are reinvested in full and fractional shares of
the Portfolio to which they relate.
More detailed information about the Trust, its investment objectives,
policies, restrictions, risks, expenses and all other aspects of its
operations, appears in its prospectus, or in its statement of additional
information.
24
<PAGE>
THE TRUST'S INVESTMENT ADVISER
The Trust is advised by Alliance Capital Management LP (ALLIANCE), which is
registered with the SEC as an investment adviser under the Investment
Advisers Act of 1940. Alliance, a publicly traded limited partnership, is
indirectly majority-owned by Equitable Life. On December 31, 1995, Alliance
was managing over $146.5 billion in assets. Alliance acts as 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, endowments 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 record as an investment manager is based, in part, on its ability
to provide a diversity of investment services to domestic, international and
global markets. Alliance prides itself on its ability to attract and retain a
quality, professional work force. Alliance employs 162 investment
professionals, including 81 research analysts. Portfolio managers have
average investment experience of more than 16 years.
Alliance's main office is located at 1345 Avenue of the Americas, New York,
New York 10105.
INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS
Each Portfolio has a different investment objective which it tries to achieve
by following separate investment policies. The policies and objectives of
each Portfolio will affect its return and its risks. There is no guarantee
that these objectives will be achieved.
The policies and objectives of the Trust's Portfolios are as follows:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- -------------------- ---------------------------------------------- -------------------------------------------
<S> <C> <C>
Money Market ........ Primarily high quality short-term money market High level of current income while
instruments preserving assets and maintaining liquidity
Intermediate ........ Primarily debt securities issued or High current income consistent with
Government guaranteed by the U.S. Government, its relative stability of principal
Securities agencies and instrumentalities. Each
investment will have a final maturity of not
more than 10 years or a duration not exceeding
that of a 10-year Treasury note
Quality Bond ........ Primarily investment grade fixed income High current income consistent with
securities preservation of capital
High Yield .......... Primarily a diversified mix of high yield, High return by maximizing current income
fixed-income securities involving greater and, to the extent consistent with that
volatility of price and risk of principal and objective, capital appreciation
income than high quality fixed- income
securities. The medium and lower quality debt
securities in which the Portfolio may invest
are known as "junk bonds"
Growth & ............ Primarily income producing common High total return through a combination
Income stocks and securities convertible into common of current income and capital appreciation
stocks
Equity Index ........ Selected securities in the S&P 500 Index (the Total return performance (before trust
"Index") which the advisor believes will, in expenses) that approximates the investment
the aggregate, approximate the performance performance of the Index (including
results of the Index reinvestment of dividends) at risk level
consistent with that of the Index
25
<PAGE>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- -------------------- ---------------------------------------------- -------------------------------------------
Common Stock ........ Primarily common stock and other equity-type Long-term growth of capital and
instruments increasing income
Global .............. Primarily equity securities of non-United Long-term growth of capital
States as well as United States companies
International ....... Primarily equity securities selected Long-term growth of capital
principally to permit participation in
non-United States companies with prospects for
growth
Aggressive Stock ... Primarily common stocks and other equity-type Long-term growth of capital
securities issued by medium and other smaller
sized companies with strong growth potential
Asset Allocation Series:
Conservative
Investors ............ Diversified mix of publicly-traded, fixed- High total return without, in the
income and equity securities; asset mix and Adviser's opinion, undue risk to
security selection are primarily based upon principal
factors expected to reduce risk. The Portfolio
is generally expected to hold approximately
70% of its assets in fixed income securities
and 30% in equity securities.
Balanced ............ Primarily common stocks, publicly-traded debt High return through a combination of
securities and high quality money market current income and capital appreciation
instruments. The Portfolio is generally
expected to hold 50% of its assets in equity
securities and 50% in fixed income securities.
Growth Investors ... Diversified mix of publicly-traded, fixed- High total return consistent with the
income and equity securities; asset mix and adviser's determination of reasonable
security selection based upon factors expected risk
to increase possibility of high long-term
return. The Portfolio is generally expected to
hold approximately 70% of its assets in equity
securities and 30% in fixed income securities.
</TABLE>
26
<PAGE>
- -------------------------------------------------------------------------------
PART 3: INVESTMENT PERFORMANCE
- -------------------------------------------------------------------------------
INVESTMENT FUND PERFORMANCE
In order to help show how the actual performance of the Investment Funds has
affected Annuity Account and Retirement Account Values, the following tables
provide a historical view of investment performance. The information
presented includes performance results for each Investment Fund along with
data representing unmanaged market indices and similarly managed funds.
Performance data for the Money Market, Balanced, Common Stock and Aggressive
Stock Funds shown in this section include periods prior to December 18, 1987,
when four predecessor open-end management separate accounts were reorganized
into the Separate Account in unit investment trust form. (See Part 9 of the
SAI.) The "since inception" figures are based on the date of inception of the
predecessor separate accounts. Also, the performance data shown from December
18, 1987 through December 31, 1990 reflects the investment results of The
Equitable Trust, which was replaced by the Trust on September 6, 1991. The
investment objectives and policies of the Portfolios are substantially
similar to those of the corresponding portfolios of The Equitable Trust. At
all times, Equitable Life and/or one of its subsidiaries has served as the
investment adviser to the four predecessor separate accounts, The Equitable
Trust and the Trust. Performance data for the remaining Investment Funds
reflect (i) the investment results of the corresponding Portfolios of the
Trust from the date of inception of those Portfolios, (ii) the actual
investment advisory fee and direct operating expenses of the relevant
Portfolio and (iii) the Separate Account asset charges.
The performance for all periods has been adjusted to reflect the Separate
Account asset charges as well as the Trust expenses.
Because amounts allocated to the Investment Funds are invested in a mutual
fund, investment return and principal will fluctuate and Accumulation Units
may be worth more or less than the original cost when redeemed. The results
shown are not an estimate or guarantee of future investment performance, and
do not reflect the actual experience of amounts invested under a particular
Contract.
HOW PERFORMANCE DATA ARE PRESENTED
The tables on the following pages compare annualized rates of return for each
Investment Fund along with appropriate benchmarks. These performance results
are based on the change in the accumulation unit value for each Investment
Fund for the periods shown.
Investment results in these tables are net of all charges and expenses
assessed against the Investment Funds (including investment advisory fees and
the direct operating expenses of the Trust and the expenses of the Contracts)
but excluding the annual administrative charge and any withdrawal charges
which would also reduce the actual return. There are variations in the fees
and charges among the Contracts offered in EQUI-VEST and in the MOMENTUM
Program. The rates of return shown for EQUI-VEST reflect the highest charges
that are currently being assessed. The tables under "Standardized Computation
of Performance" in the next Section show performance results after giving
effect to all charges including the annual administrative charge and the
contingent withdrawal charge. The illustrations for MOMENTUM are separate.
BENCHMARKS
Market indices are not subject to any charges for investment advisory fees
typically associated with a managed portfolio. Comparisons with these
benchmarks, therefore, are of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each Portfolio manager is likely to make selections.
INCEPTION DATES AND COMPARATIVE
BENCHMARKS
MONEY MARKET: May 11, 1982; Salomon Brothers Three-Month T-Bill Index
(3-Month T-Bill).
INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate
Government Bond Index (Lehman Intermediate Government).
QUALITY BOND: October 1, 1993; Lehman Aggregate Bond Index (Lehman
Aggregate).
HIGH YIELD: January 2, 1987; Merrill Lynch High Yield Master Index (Master
High Yield).
GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index (S&P 500)
and 25% Value Line Convertibles Index (75% S&P 500/25% Value Line Conv.).
27
<PAGE>
EQUITY INDEX: March 1, 1994; Standard & Poor's 500 Index (S&P 500)
COMMON STOCK: August 1, 1968; Standard & Poor's 500 Index (S&P 500)
GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index
(MSCI World).
INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International Europe,
Australia, Far East Index (MSCI EAFE).
AGGRESSIVE STOCK: May 1, 1984; 50% Russell 2000 Small Stock Index and 50% S&P
Mid-Cap Total Return (50% Russell 2000/50% S&P MidCap).
CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite
Index and 30% S&P 500 Index (70% Lehman Treas./30% S&P 500).
BALANCED: May 1, 1984; 50% S&P 500 and 50% Lehman Government/Corporate Bond
Index (50% S&P 500/50% Lehman Corp.).
GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index
and 70% S&P 500 Index (30% Lehman Treas./70% S&P 500).
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
records the performance of a large group of variable annuity and variable
life products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc., the data are presented net of
investment management fees, direct operating and asset-based charges
applicable under insurance policies or annuity contracts. Lipper data provide
a more accurate picture than market indices of EQUI-VEST and MOMENTUM
performance relative to other annuity products.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of
return reflect performance over a stated period of time. Annualized rates of
return represent the annual rate of growth that would have produced the same
cumulative return, if performance had been constant over the entire period.
28
<PAGE>
- -------------------------------------------------------------------------------
EQUI-VEST ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS
-------- --------- ---------
<S> <C> <C> <C>
MONEY MARKET 4.32% 2.83% 3.08%
Lipper Money Market 4.35 2.88 3.10
3-Month T-Bill 5.74 4.34 4.47
INTERMEDIATE GOVERNMENT
SECURITIES 11.81 4.79 --
Lipper U.S. Government 15.47 6.27 --
Lehman Intermediate Government 14.41 6.74 --
QUALITY BOND 15.46 -- --
Lipper Corporate Bond A-Rated 18.15 -- --
Lehman Aggregate 18.47 -- --
HIGH YIELD 18.32 11.30 13.40
Lipper High Yield 17.36 9.80 15.79
Master High Yield 19.91 11.57 17.17
GROWTH & INCOME 22.42 -- --
Lipper Growth & Income 31.18 -- --
75% S&P 500/25% Value Line
Conv. 34.93 -- --
EQUITY INDEX 34.66 -- --
Lipper S&P 500 Index Funds 35.31 -- --
S&P 500 37.54 -- --
COMMON STOCK 30.64 15.79 16.51
Lipper Growth 31.08 12.09 15.53
S&P 500 37.54 15.30 16.57
GLOBAL 17.23 16.63 14.93
Lipper Global 13.87 13.45 9.10
MSCI World 20.72 15.83 11.74
INTERNATIONAL* -- -- --
Lipper International -- -- --
MSCI EAFE -- -- --
AGGRESSIVE STOCK 29.87 12.38 20.14
Lipper Small Company Growth 28.19 15.26 25.72
50% Russell 2000/50% S&P MidCap 29.69 13.67 20.16
The Asset Allocation Series:
CONSERVATIVE INVESTORS 18.79 7.09 8.67
Lipper Income 21.25 9.65 11.99
70% Lehman Treas./30% S&P 500 24.11 10.41 11.73
BALANCED 18.13 5.90 9.77
Lipper Flexible Portfolio 21.58 9.32 11.43
50% S&P 500/50% Lehman Corp. 28.39 12.01 13.39
GROWTH INVESTORS 24.68 10.65 15.55
Lipper Flexible Portfolio 21.58 9.32 11.43
30% Lehman Corp./70% S&P 500 32.05 13.35 14.70
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SINCE INCEPTION
10 YEARS 20 YEARS INCEPTION DATE
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
MONEY MARKET 4.63% -- 5.64% 5/11/82
Lipper Money Market 4.71 -- 5.91
3-Month T-Bill 5.77 -- 6.68
INTERMEDIATE GOVERNMENT
SECURITIES -- -- 6.19 4/1/91
Lipper U.S. Government -- -- 7.87
Lehman Intermediate Government -- -- 8.17
QUALITY BOND -- -- 3.14 10/1/93
Lipper Corporate Bond A-Rated -- -- 4.58
Lehman Aggregate -- -- 6.46
HIGH YIELD -- -- 8.72 1/2/87
Lipper High Yield -- -- 8.87
Master High Yield -- -- 11.28
GROWTH & INCOME -- -- 8.20 10/1/93
Lipper Growth & Income -- -- 12.76
75% S&P 500/25% Value Line
Conv. -- -- 15.45
EQUITY INDEX -- -- 17.58 3/1/94
Lipper S&P 500 Index Funds -- -- 17.62
S&P 500 -- -- 19.89
COMMON STOCK 13.67 13.73% 10.65 8/1/68
Lipper Growth 12.05 12.79 N/A
S&P 500 14.87 14.59 11.18
GLOBAL -- -- 9.87 8/27/87
Lipper Global -- -- 2.52
MSCI World -- -- 6.75
INTERNATIONAL* -- -- 9.60* 4/3/95
Lipper International -- -- 12.21*
MSCI EAFE -- -- 9.17*
AGGRESSIVE STOCK 16.32 -- 17.85 5/1/84
Lipper Small Company Growth 16.42 -- 18.71
50% Russell 2000/50% S&P MidCap 13.66 -- N/A
The Asset Allocation Series:
CONSERVATIVE INVESTORS -- -- 8.18 10/2/89
Lipper Income -- -- 9.79
70% Lehman Treas./30% S&P 500 -- -- 10.55
BALANCED 8.93 -- 10.16 5/1/84
Lipper Flexible Portfolio 10.13 -- 11.57
50% S&P 500/50% Lehman Corp. 12.53 -- 13.94
GROWTH INVESTORS -- -- 14.51 10/2/89
Lipper Flexible Portfolio -- -- 9.44
30% Lehman Corp./70% S&P 500 -- -- 11.97
</TABLE>
- ------------
* Unannualized.
29
<PAGE>
- --------------------------------------------------------------------------------
EQUI-VEST CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS
-------- --------- ---------
<S> <C> <C> <C>
MONEY MARKET 4.32% 8.74% 16.40%
Lipper Money Market 4.35 8.87 16.48
3-Month T-Bill 5.74 13.58 24.45
INTERMEDIATE GOVERNMENT
SECURITIES 11.81 15.08 --
Lipper U.S. Government 15.47 20.05 --
Lehman Intermediate Government 14.41 21.60 --
QUALITY BOND 15.46 -- --
Lipper Corporate Bond A-Rated 18.15 -- --
Lehman Aggregate 18.47 -- --
HIGH YIELD 18.32 37.86 87.54
Lipper High Yield 17.36 32.45 108.96
Master High Yield 19.91 38.89 120.85
GROWTH & INCOME 22.42 -- --
Lipper Growth & Income 31.18 -- --
75% S&P 500/25% Value Line Conv. 34.93 -- --
EQUITY INDEX 34.66 -- --
Lipper S&P 500 Index Funds 35.31 -- --
S&P 500 37.54 -- --
COMMON STOCK 30.64 55.23 114.65
Lipper Growth 31.08 41.29 107.30
S&P 500 37.54 53.30 115.25
GLOBAL 17.23 58.64 100.53
Lipper Global 13.87 46.36 55.44
MSCI World 20.72 55.39 74.20
INTERNATIONAL* -- -- --
Lipper International -- -- --
MSCI EAFE -- -- --
AGGRESSIVE STOCK 29.87 41.93 150.26
Lipper Small Company Growth 28.19 55.24 268.67
50% Russell 2000/50% S&P MidCap 29.69 46.89 150.49
The Asset Allocation Series:
CONSERVATIVE INVESTORS 18.79 22.82 51.55
Lipper Income 21.25 31.95 76.42
70% Lehman Treas./30% S&P 500 24.11 34.58 74.09
BALANCED 18.13 18.76 59.39
Lipper Flexible Portfolio 21.58 30.92 72.73
50% S&P 500/50% Lehman Corp. 28.39 40.53 87.43
GROWTH INVESTORS 24.68 35.48 106.02
Lipper Flexible Portfolio 21.58 30.92 72.73
30% Lehman Corp./70% S&P 500 32.05 45.64 98.56
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SINCE INCEPTION
10 YEARS 20 YEARS INCEPTION DATE
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
MONEY MARKET 57.24% -- 111.32% 5/11/82
Lipper Money Market 58.55 -- 119.52
3-Month T-Bill 75.23 -- 141.98
INTERMEDIATE GOVERNMENT
SECURITIES -- -- 32.99 4/1/91
Lipper U.S. Government -- -- 43.43
Lehman Intermediate Government -- -- 45.17
QUALITY BOND -- -- 7.20 10/1/93
Lipper Corporate Bond A-Rated -- -- 10.67
Lehman Aggregate -- -- 15.09
HIGH YIELD -- -- 112.16 1/2/87
Lipper High Yield -- -- 117.28
Master High Yield -- -- 161.50
GROWTH & INCOME -- -- 19.38 10/1/93
Lipper Growth & Income -- -- 31.42
75% S&P 500/25% Value Line Conv. -- -- 38.14
EQUITY INDEX -- -- 34.60 3/1/94
Lipper S&P 500 Index Funds -- -- 34.65
S&P 500 -- -- 39.30
COMMON STOCK 260.01 1,210.04% 1,504.82 8/1/68
Lipper Growth 215.49 1,036.49 N/A
S&P 500 300.11 1,425.04 1,728.76
GLOBAL -- -- 119.39 8/27/87
Lipper Global -- -- 23.09
MSCI World -- -- 72.38
INTERNATIONAL* -- -- 9.60* 4/3/95
Lipper International -- -- 12.21*
MSCI EAFE -- -- 9.17*
AGGRESSIVE STOCK 353.28 -- 579.47 5/1/84
Lipper Small Company Growth 357.25 -- 588.33
50% Russell 2000/50% S&P MidCap 259.88 -- 465.90
The Asset Allocation Series:
CONSERVATIVE INVESTORS -- -- 63.44 10/2/89
Lipper Income -- -- 79.42
70% Lehman Treas./30% S&P 500 -- -- 87.24
BALANCED 135.32 -- 209.23 5/1/84
Lipper Flexible Portfolio 163.91 -- 248.20
50% S&P 500/50% Lehman Corp. 225.59 -- 359.14
GROWTH INVESTORS -- -- 133.02 10/2/89
Lipper Flexible Portfolio -- -- 76.92
30% Lehman Corp./70% S&P 500 -- -- 102.72
</TABLE>
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
MARKET SECURITIES BOND YIELD INCOME INDEX
-------- -------------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
1986 5.17% --% --% --% --% --%
1987 5.23 -- -- 3.27* -- --
1988 5.94 -- -- 8.25 -- --
1989 7.72 -- -- 3.71 -- --
1990 6.82 -- -- (2.43) -- --
1991 4.69 10.94* -- 22.78 -- --
1992 2.16 4.17 -- 10.80 -- --
1993 1.58 9.09 (0.84)* 21.48 (0.59)* --
1994 2.62 (5.65) (6.37) (4.09) (1.90) (0.04)*
1995 4.32 11.81 15.46 18.32 22.42 34.66
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
COMMON INTER- AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL NATIONAL STOCK INVESTORS BALANCED INVESTORS
-------- ---------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1986 15.43% --% --% 21.75% --% 11.70% --%
1987 6.08 (13.67)* -- (1.13) -- (5.05) --
1988 21.55 9.38 -- (0.39) -- 13.27 --
1989 24.07 25.02 -- 42.87 2.75* 24.60 3.65*
1990 (9.27) (7.33) -- 5.73 4.97 (1.46) 9.12
1991 35.81 28.79 -- 84.57 18.23 40.02 46.90
1992 1.82 (1.86) -- (4.47) 4.36 (4.15) 3.52
1993 23.11 30.34 -- 15.17 9.27 10.80 13.71
1994 (3.48) 3.82 -- (5.11) (5.38) (9.27) (4.44)
1995 30.64 17.23 9.60* 29.87 18.79 18.13 24.68
</TABLE>
- ------------
* Unannualized
30
<PAGE>
STANDARDIZED COMPUTATION OF
PERFORMANCE FOR EQUI-VEST
The performance data in the following tables, which are prepared in a manner
prescribed by the SEC for use when we advertise the performance of the
Separate Account, illustrate the average annual total return of the
Investment Funds over the periods shown assuming a single initial
contribution of $1,000 and termination of the Contract at the end of each
period under circumstances in which the contingent withdrawal charge applies.
The values shown are also net of all other charges and expenses assessed
against the Investment Funds. An Investment Fund's average annual total
return is the annual rate of growth of the Investment Fund that would be
necessary to achieve the ending value of a contribution kept in the
Investment Fund for the period specified.
Since charges under the Contracts may vary, we have assumed, for each charge,
the highest that might apply. Each calculation further assumes that the
$1,000 contribution was allocated to only one Investment Fund, no transfers
or additional contributions were made, no loans, and no amounts were
allocated to any other Investment Fund under the Contract.
In order to calculate the standardized performance information, we divide the
termination value (defined below) of a Contract which is terminated on
December 31, 1995 by the $1,000 investment made at the beginning of each
period illustrated. The result of that calculation is the total growth rate
for the period. Then we annualize that growth rate to obtain the average
annual percentage increase (decrease) during the period shown. When we
"annualize," we assume that a single rate of return applied each year during
the period will produce the ending value, taking into account the effect of
compounding. "Termination value" means the Annuity Account Value less the
contingent withdrawal charge, the annual administrative charge and all other
charges and expenses which are applied against an Investment Fund. See "Part
8: Deductions and Charges."
TABLE 1: GROWTH OF $1,000 FOR CONTRACTS TERMINATED ON DECEMBER 31, 1995
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------
INVESTMENT THREE SINCE
FUND ONE YEAR YEARS FIVE YEARS TEN YEARS INCEPTION*
- --------------- ---------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Money Market $ 967.14 $ 959.58 $ 969.16 $1,238.28 --
Intermediate
Government
Securities 1,036.61 1,017.18 -- -- $1,129.47
Quality Bond 1,070.42 -- -- -- 966.87
High Yield 1,096.88 1,227.61 1,622.29 -- 1,717.29
Growth & Income 1,134.90 -- -- -- 1,079.01
Equity Index 1,248.40 -- -- -- 1,227.00
Common Stock 1,211.15 1,382.15 1,874.49 2,984.60 --
Global 1,086.81 1,413.78 1,744.84 -- 1,801.98
International -- -- -- -- 1,021.40
Aggressive
Stock 1,204.92 1,266.93 2,242.97 3,878.98 --
Asset Allocation Series:
Conservative
Investors 1,101.32 1,089.58 1,296.10 -- 1,376.50
Balanced 1,095.13 1,050.79 1,362.92 1,906.80 --
Growth
Investors 1,155.92 1,206.38 1,796.08 -- 2,005.22
</TABLE>
TABLE 2: AVERAGE ANNUAL TOTAL RETURN UNDER CONTRACTS TERMINATED ON DECEMBER
31, 1995
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Three Five Ten Since
Fund One Year Years Years Years Inception*
- --------------- --------- --------- --------- ------- ------------
Money Market (3.29)% (1.37)% (0.62)% 2.16% --
Intermediate
Government
Securities 3.66 0.57 -- -- 2.60 %
Quality Bond 7.04 -- -- -- (1.49)
High Yield 9.69 7.07 10.16 -- 6.20
Growth & Income 13.49 -- -- -- 3.44
Equity Index 24.84 -- -- -- 11.80
Common Stock 21.11 11.39 13.39 11.55 --
Global 8.68 12.23 11.78 -- 7.31
International -- -- -- 2.14
Aggressive
Stock 20.49 8.21 17.53 14.52 --
Asset Allocation Series:
Conservative
Investors 10.13 2.90 5.32 -- 5.25
Balanced 9.51 1.67 6.39 6.67 --
Growth
Investors 15.59 6.45 12.43 -- 11.79
</TABLE>
- --------
* Inception dates are as follows: Money Market (May 11, 1982);
Intermediate Government Securities (April 1, 1991); Quality Bond (October 1,
1993); High Yield (January 2, 1987); Growth & Income (October 1, 1993);
Equity Index (March 1, 1994); Common Stock (August 1, 1968); Global (August
27, 1987); International (April 3, 1995); Aggressive Stock (May 1, 1984);
Conservative Investors (October 2, 1989); Balanced (May 1, 1984) and Growth
Investors (October 2, 1989). The "Since Inception" number for the
International Fund is unannualized.
31
<PAGE>
- ------------------------------------------------------------------------------
MOMENTUM Annualized Rates of Return for Periods Ending December 31, 1995:
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS
-------- --------- ---------
<S> <C> <C> <C>
MONEY MARKET 4.35% 2.85% 3.08%
Lipper Money Market 4.35 2.88 3.10
3-Month T-Bill 5.74 4.34 4.47
INTERMEDIATE GOVERNMENT
SECURITIES 11.81 4.80 --
Lipper U.S. Government 15.47 6.27 --
Lehman Intermediate Government 14.41 6.74 --
QUALITY BOND 15.46 -- --
Lipper Corporate Bond A-Rated 18.15 -- --
Lehman Aggregate 18.47 -- --
HIGH YIELD 18.32 11.30 13.41
Lipper High Yield 17.36 9.80 15.79
Master High Yield 19.91 11.57 17.17
GROWTH & INCOME 22.42 -- --
Lipper Growth & Income 31.18 -- --
75% S&P 500/25% Value Line
Conv. 34.93 -- --
EQUITY INDEX 34.66 -- --
Lipper S&P 500 Index Funds 35.31 -- --
S&P 500 37.54 -- --
COMMON STOCK 30.64 15.79 16.51
Lipper Growth 31.08 12.09 15.53
S&P 500 37.54 15.30 16.57
GLOBAL 17.23 16.63 14.94
Lipper Global 13.87 13.45 9.10
MSCI World 20.72 15.83 11.74
INTERNATIONAL* -- -- --
Lipper International -- -- --
MSCI EAFE -- -- --
AGGRESSIVE STOCK 29.97 12.48 20.23
Lipper Small Company Growth 28.19 15.26 25.72
50% Russell 2000/50% S&P MidCap 29.69 13.67 20.16
The Asset Allocation Series:
CONSERVATIVE INVESTORS 18.79 7.10 8.68
Lipper Income 21.25 9.65 11.99
70% Lehman Treas./30% S&P 500 24.11 10.41 11.73
BALANCED 18.13 5.90 9.77
Lipper Flexible Portfolio 21.58 9.32 11.43
50% S&P 500/50% Lehman Corp. 28.39 12.01 13.39
GROWTH INVESTORS 24.68 10.66 15.56
Lipper Flexible Portfolio 21.58 9.32 11.43
30% Lehman Corp./70% S&P 500 32.05 13.35 14.70
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SINCE INCEPTION
10 YEARS 20 YEARS INCEPTION DATE
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
MONEY MARKET 4.63% -- 5.64% 5/11/82
Lipper Money Market 4.71 -- 5.91
3-Month T-Bill 5.77 -- 6.68
INTERMEDIATE GOVERNMENT
SECURITIES -- -- 6.19 4/1/91
Lipper U.S. Government -- -- 7.87
Lehman Intermediate Government -- -- 8.17
QUALITY BOND -- -- 3.14 10/1/93
Lipper Corporate Bond A-Rated -- -- 4.58
Lehman Aggregate -- -- 6.46
HIGH YIELD -- -- 8.73 1/2/87
Lipper High Yield -- -- 8.87
Master High Yield -- -- 11.28
GROWTH & INCOME -- -- 8.20 10/1/93
Lipper Growth & Income -- -- 12.76
75% S&P 500/25% Value Line
Conv. -- -- 15.45
EQUITY INDEX -- -- 17.58 3/1/94
Lipper S&P 500 Index Funds -- -- 17.62
S&P 500 -- -- 19.89
COMMON STOCK 13.67 13.75% 10.69 8/1/68
Lipper Growth 12.05 12.79 N/A
S&P 500 14.87 14.59 11.18
GLOBAL -- -- 9.88 8/27/87
Lipper Global -- -- 2.52
MSCI World -- -- 6.75
INTERNATIONAL* -- -- 9.60* 4/3/95
Lipper International -- -- 12.21*
MSCI EAFE -- -- 9.17*
AGGRESSIVE STOCK 16.42 -- 17.97 5/1/84
Lipper Small Company Growth 16.42 -- 18.71
50% Russell 2000/50% S&P MidCap 13.66 -- N/A
The Asset Allocation Series:
CONSERVATIVE INVESTORS -- -- 8.19 10/2/89
Lipper Income -- -- 9.79
70% Lehman Treas./30% S&P 500 -- -- 10.55
BALANCED 8.93 -- 10.16 5/1/84
Lipper Flexible Portfolio 10.13 -- 11.57
50% S&P 500/50% Lehman Corp. 12.53 -- 13.94
GROWTH INVESTORS -- -- 14.51 10/2/89
Lipper Flexible Portfolio -- -- 9.44
30% Lehman Corp./70% S&P 500 -- -- 11.97
</TABLE>
- ------------
* Unannualized
32
<PAGE>
- --------------------------------------------------------------------------------
MOMENTUM Cumulative Rates of Return for Periods Ending December 31, 1995:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS
-------- --------- ---------
<S> <C> <C> <C>
MONEY MARKET 4.35% 8.80% 16.40%
Lipper Money Market 4.35 8.87 16.48
3-Month T-Bill 5.74 13.58 24.45
INTERMEDIATE GOVERNMENT
SECURITIES 11.81 15.09 --
Lipper U.S. Government 15.47 20.05 --
Lehman Intermediate Government 14.41 21.60 --
QUALITY BOND 15.46 -- --
Lipper Corporate Bond A-Rated 18.15 -- --
Lehman Aggregate 18.47 -- --
HIGH YIELD 18.32 37.88 87.60
Lipper High Yield 17.36 32.45 108.96
Master High Yield 19.91 38.89 120.85
GROWTH & INCOME 22.42 -- --
Lipper Growth & Income 31.18 -- --
75% S&P 500/25% Value Line
Conv. 34.93 -- --
EQUITY INDEX 34.66 -- --
Lipper S&P 500 Index Funds 35.31 -- --
S&P 500 37.54 -- --
COMMON STOCK 30.64 55.23 114.65
Lipper Growth 31.08 41.29 107.30
S&P 500 37.54 53.30 115.25
GLOBAL 17.23 58.66 100.60
Lipper Global 13.87 46.36 55.44
MSCI World 20.72 55.39 74.20
INTERNATIONAL* -- -- --
Lipper International -- -- --
MSCI EAFE -- -- --
AGGRESSIVE STOCK 29.97 42.29 151.25
Lipper Small Company Growth 28.19 55.24 268.67
50% Russell 2000/50% S&P MidCap 29.69 46.89 150.49
The Asset Allocation Series:
CONSERVATIVE INVESTORS 18.79 22.83 51.59
Lipper Income 21.25 31.95 76.42
70% Lehman Treas./30% S&P 500 24.11 34.58 74.09
BALANCED 18.13 18.76 59.39
Lipper Flexible Portfolio 21.58 30.92 72.73
50% S&P 500/50% Lehman Corp. 28.39 40.53 87.43
GROWTH INVESTORS 24.68 35.49 106.08
Lipper Flexible Portfolio 21.58 30.92 72.73
30% Lehman Corp./70% S&P 500 32.05 45.64 98.56
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SINCE INCEPTION
10 YEARS 20 YEARS INCEPTION DATE
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
MONEY MARKET 57.24% -- 111.32% 5/11/82
Lipper Money Market 58.55 -- 119.52
3-Month T-Bill 75.23 -- 141.98
INTERMEDIATE GOVERNMENT
SECURITIES -- -- 33.03 4/1/91
Lipper U.S. Government -- -- 43.43
Lehman Intermediate Government -- -- 45.17
QUALITY BOND -- -- 7.20 10/1/93
Lipper Corporate Bond A-Rated -- -- 10.67
Lehman Aggregate -- -- 15.09
HIGH YIELD -- -- 112.31 1/2/87
Lipper High Yield -- -- 117.28
Master High Yield -- -- 161.50
GROWTH & INCOME -- -- 19.38 10/1/93
Lipper Growth & Income -- -- 31.42
75% S&P 500/25% Value Line
Conv. -- -- 38.14
EQUITY INDEX -- -- 34.60 3/1/94
Lipper S&P 500 Index Funds -- -- 34.65
S&P 500 -- -- 39.30
COMMON STOCK 260.01 215.12% 1,519.31 8/1/68
Lipper Growth 215.49 036.49 N/A
S&P 500 300.11 1,425.04 1,728.76
GLOBAL -- -- 119.53 8/27/87
Lipper Global -- -- 23.09
MSCI World -- -- 72.38
INTERNATIONAL* -- -- 9.60* 4/3/95
Lipper International -- -- 12.21*
MSCI EAFE -- -- 9.17*
AGGRESSIVE STOCK 357.25 -- 587.30 5/1/84
Lipper Small Company Growth 357.25 -- 588.33
50% Russell 2000/50% S&P MidCap 259.88 -- 465.90
The Asset Allocation Series:
CONSERVATIVE INVESTORS -- -- 63.51 10/2/89
Lipper Income -- -- 79.42
70% Lehman Treas./30% S&P 500 -- -- 87.24
BALANCED 135.32 -- 209.23 5/1/84
Lipper Flexible Portfolio 163.91 -- 248.20
50% S&P 500/50% Lehman Corp. 225.59 -- 359.14
GROWTH INVESTORS -- -- 133.12 10/2/89
Lipper Flexible Portfolio -- -- 76.92
30% Lehman Corp./70% S&P 500 -- -- 102.72
</TABLE>
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
MARKET SECURITIES BOND YIELD INCOME INDEX
-------- -------------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
1986 5.27% --% --% --% --% --%
1987 5.27 -- -- 3.28* -- --
1988 5.94 -- -- 8.26 -- --
1989 7.72 -- -- 3.72 -- --
1990 6.82 -- -- (2.42) -- --
1991 4.69 10.94* -- 22.79 -- --
1992 2.19 4.18 -- 10.81 -- --
1993 1.59 9.10 (0.84) 21.50 (0.59)* --
1994 2.63 (5.65) (6.37) (4.09) (1.90) (0.04)*
1995 4.35 11.81 15.46 18.32 22.42 34.66
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
COMMON INTER- AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL NATIONAL STOCK INVESTORS BALANCED INVESTORS
-------- ---------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1986 15.49% --% --% 21.95% --% 11.77% --%
1987 6.14 (13.67)* -- (1.00) -- (5.02) --
1988 21.55 9.39 -- (0.30) -- 13.27 --
1989 24.07 25.04 -- 42.95 2.75* 24.60 3.65*
1990 (9.27) (7.32) -- 5.76 4.98 (1.46) 9.13
1991 35.81 28.81 -- 84.65 18.24 40.02 46.92
1992 1.82 (1.85) -- (4.37) 4.37 (4.15) 3.53
1993 23.11 30.36 -- 15.28 9.28 10.81 13.72
1994 (3.48) 3.82 -- (5.03) (5.38) (9.27) (4.44)
1995 30.64 17.23 9.60* 29.97 18.79 18.13 24.68
</TABLE>
- ------------
* Unannualized
33
<PAGE>
STANDARDIZED COMPUTATION OF
PERFORMANCE FOR MOMENTUM
The performance data in the following tables, which are prepared in a manner
prescribed by the SEC for use when we advertise the performance of the
Separate Account, illustrate the average annual total return of the
Investment Funds over the periods shown, assuming a single initial
contribution of $1,000 and termination of participation under the MOMENTUM
Contract at the end of each period under circumstances in which the
contingent withdrawal charge applies. The values shown are also net of all
other charges and expenses assessed against the Investment Funds. An
Investment Fund's average annual total return is the annual rate of growth of
the Investment Fund that would be necessary to achieve the ending value of a
contribution kept in the Investment Fund for the period specified.
For purposes of the tables below, deduction of a quarterly administrative
charge equal to $7.50 is assumed, even though this charge does not currently
apply if the Retirement Account Value plus the amount of any Active Loan is
at least $25,000 as of the end of the quarter. Each calculation further
assumes that the $1,000 contribution was allocated to only one Investment
Fund, no transfers or additional contributions were made, no loans, and no
amounts were allocated to any other Investment Fund and the Participant has
not taken any loans.
In order to calculate the standardized performance information, we divide the
termination value (defined below) as of December 31, 1995 by the $1,000
contribution made at the beginning of each period illustrated. The result of
that calculation is the total growth rate for the period. Then we annualize
that growth rate to obtain the average annual percentage increase (decrease)
during the period shown. When we "annualize," we assume that a single rate of
return applied each year during the period will produce the ending value,
taking into account the effect of compounding. "Termination value" means the
Retirement Account Value less the contingent withdrawal charge, the quarterly
administrative charge and all other charges and expenses which are applied
against Separate Account assets. The contingent withdrawal charge will never
be greater than 6%. See "Part 8: Deductions and Charges."
GROWTH OF $1,000 FOR PARTICIPANT TERMINATED ON DECEMBER 31, 1995
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------
INVESTMENT THREE SINCE
FUND ONE YEAR YEARS FIVE YEARS TEN YEARS INCEPTION*
- --------------- ---------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Money Market $ 967.55 $ 969.19 $ 996.14 $1,286.74 --
Intermediate
Government
Securities 1,036.77 1,025.22 -- -- $1,149.41
Quality Bond 1,071.69 -- -- -- 969.39
High Yield 1,099.67 1,238.27 1,640.09 -- 1,779.34
Growth & Income 1,139.87 -- -- -- 1,081.13
Equity Index 1,259.86 -- -- -- 1,233.08
Common Stock 1,220.48 1,401.72 1,890.59 3,057.26 --
Global 1,089.02 1,433.99 1,762.37 -- 1,860.98
International -- -- -- -- 1,021.37
Aggressive
Stock 1,213.90 1,279.87 2,246.95 3,939.40 --
Asset Allocation Series:
Conservative
Investors 1,104.37 1,096.63 1,311.33 -- 1,442.55
Balanced 1,097.82 1,058.25 1,381.82 1,951.87 --
Growth
Investors 1,162.09 1,215.83 1,813.57 -- 2,079.88
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR PARTICIPANT
TERMINATED ON DECEMBER 31, 1995
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
---------------------------------------------------
INVESTMENT THREE FIVE TEN SINCE
FUND ONE YEAR YEARS YEARS YEARS INCEPTION*
- --------------- -------- -------- -------- ------- ------------
<S> <C> <C> <C> <C> <C>
Money Market -3.25% -1.04% -0.08% 2.55% --
Intermediate
Government
Securities 3.68 0.83 -- -- 2.97%
Quality Bond 7.17 -- -- -- -1.37
High Yield 9.97 7.38 10.40 -- 6.62
Growth & Income 13.99 -- -- -- 3.53
Equity Index 25.99 -- -- -- 12.10
Common Stock 22.05 11.91 13.58 11.82 --
Global 8.90 12.77 12.00 -- 7.73
International -- -- -- -- 2.14
Aggressive
Stock 21.39 8.57 17.58 14.69 --
Asset Allocation Series:
Conservative
Investors 10.44 3.12 5.57 -- 6.04
Balanced 9.78 1.91 6.68 6.92 --
Growth
Investors 16.21 6.73 12.64 -- 12.44
</TABLE>
- -------
* Inception dates are as follows: Money Market (May 11, 1982);
Intermediate Government Securities (April 1, 1991); Quality Bond (October 1,
1993); High Yield (January 2, 1987); Balanced (May 1, 1984); Growth & Income
(October 1, 1993); Equity Index (March 1, 1994); Common Stock (August 1,
1968); Global (August 27, 1987); International (April 3, 1995); Aggressive
Stock (May 1, 1984); Conservative Investors (October 2, 1989); and Growth
Investors (October 2, 1989). The "Since Inception" number for the
International Fund is unannualized.
34
<PAGE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may
describe general economic and market conditions affecting the Separate
Account and the Trust and may compare the performance of the Investment Funds
with (1) that of other insurance company separate accounts or mutual funds
included in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar Inc., VARDS or similar investment services that monitor the
performance of insurance company separate accounts or mutual funds, (2) other
appropriate indices of investment securities and averages for peer universes
of funds which are described in this prospectus on pages 27 and 28, or (3)
data developed by us derived from such indices or averages. The Morningstar
Variable Annuity/Life Report consists of over 700 variable life and annuity
funds, all of which report their data net of investment management fees,
direct operating expenses and separate account charges. VARDS is a monthly
reporting service that monitors over 2,500 variable life and variable annuity
funds on performance and account information. Advertisements or other
communications furnished to present or prospective Contract Owners may also
include evaluations of an Investment Fund or Portfolio by financial
publications that are nationally recognized such as Barron's, Morningstar's
Variable Annuity Sourcebook, Business Week, Chicago Tribune, Forbes, Fortune,
Institutional Investor, Investment Adviser, Investment Dealer's Digest,
Investment Management Weekly, Los Angeles Times, Money, Money Management
Letter, Kiplinger's Personal Finance, Financial Planning, National
Underwriter, Pension & Investments, USA Today, Investor's Daily, The New York
Times and The Wall Street Journal.
35
<PAGE>
- --------------------------------------------------------------------------------
PART 4: THE GUARANTEED INTEREST ACCOUNT
- --------------------------------------------------------------------------------
The Guaranteed Interest Account is part of our general account and pays
interest at a guaranteed rate. The general account supports all of our policy
and contract guarantees, as well as our general obligations. The general
account is subject to regulation and supervision by the Insurance Department
of the State of New York and to the insurance laws and regulations of all
jurisdictions where we are authorized to do business. Because of applicable
exemptive and exclusionary provisions, interests in the general account have
not been registered under the Securities Act of 1933 (1933 ACT), nor is the
general account an investment company under the 1940 Act. Accordingly, the
general account is not subject to regulation under the 1933 Act or the 1940
Act. We have been advised that the staff of the SEC has not made a review of
the disclosures that are included in the prospectus for your information and
that relate to the general account and the Guaranteed Interest Account. 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.
The amount that you as a Participant or Contract Owner have in the Guaranteed
Interest Account at any time is equal to the sum of all contributions and
transfers that have been allocated to that Account on your behalf plus
interest, less the sum of all amounts that have been withdrawn, transferred
or deducted.
Interest is credited to the Account every day. There are three levels of
interest rates simultaneously in effect in the Guaranteed Interest Account:
the minimum interest rate guaranteed over the life of the contract, the
yearly guaranteed interest rate for the calendar year, and the current
interest rate. Current interest rates are set periodically by Equitable Life,
at its discretion, according to procedures that Equitable Life reserves the
right to change. All interest rates are effective annual rates, but before
deduction of applicable administrative or contingent withdrawal charges.
The setting of current interest rates is handled differently for EQUI-VEST
and MOMENTUM.
For the MOMENTUM Program, quarterly "current" rates are established. The
current rate applies to the entire amount you have in the Guaranteed Interest
Account during the calendar quarter for which it is declared. We may change
the duration of future interest guarantee periods, but no interest guarantee
period will exceed one year. We also reserve the right to assign different
current rates by Transaction Date and different current and yearly guaranteed
rates to different plans based upon when the plan became enrolled in the
MOMENTUM Program. Generally, all plans that become enrolled in the MOMENTUM
Program in the same calendar year will be in the same class. A plan will be
considered enrolled in the MOMENTUM Program as of the earliest Participation
Date applicable to a Participant in that plan. All Participants within the
same plan will be subject to the same interest rates. Plans that converted
from EQUI-VEST Corporate Trusteed to MOMENTUM will be considered in the same
class, regardless of the date of the plan's enrollment under EQUI-VEST.
For EQUI-VEST Contracts, an interest rate is assigned to each allocation to
the Guaranteed Interest Account and the rate is guaranteed for a certain
period of time, depending on when the allocation is made. Therefore, for
these Contracts, different interest rates may apply to different amounts in
this Account. (An exception to this approach is made for Corporate Trusteed
and EDC Contracts issued to governmental employers in New York whose EQUI-
VEST funding arrangements became effective on or after July 1, 1989).
For MOMENTUM and EQUI-VEST, the yearly guaranteed interest rate for 1996 is
4% and for 1997 is 4%. The yearly guaranteed interest rate will never be less
than the minimum Contract guarantee of 3% (4% for EQUI-VEST Corporate
Trusteed Contracts, Series 100 and 200 NQ group certificates, and for
Participants in plans that converted to MOMENTUM from our EQUI-VEST Corporate
Trusteed Contract). At least 15 days before the beginning of a calendar year,
we will notify you in writing of the guaranteed interest rate for the next
year.
36
<PAGE>
- --------------------------------------------------------------------------------
PART 5: THE EQUI-VEST FIXED MATURITY ACCOUNT
- --------------------------------------------------------------------------------
ALLOCATIONS TO FIXED MATURITY PERIODS
The Fixed Maturity Account is only available under the EQUI-VEST Series 400
Contracts.
Your Fixed Maturity Account contains the Fixed Maturity Periods to which you
have made a contribution or transfer. Each amount contributed (including
amounts transferred) to a Fixed Maturity Period and held to that Period's
Expiration Date accumulates interest at the Rate to Maturity in effect on the
date of your contribution to that Period. Thus, your Rate to Maturity is the
interest rate your contribution will earn if your money remains in that Fixed
Maturity Period until its Expiration Date.
Your Maturity Amount in a Fixed Maturity Period on its Expiration Date is
your original contribution plus interest, using the Rate to Maturity in
effect on the date of your contribution (or transfer) for the Fixed Maturity
Period (less appropriate adjustments for any charges or premature
withdrawals).
Before maturity, you have a Market Adjusted Amount in each Fixed Maturity
Period to which you have made a contribution. The Market Adjusted Amount is
the present value of your Maturity Amount, discounted at the Rate to Maturity
in effect for new contributions on the date of the calculation. It thus
reflects whatever market value adjustment (see details below) would apply on
that day were you to withdraw the entire amount in your Fixed Maturity
Period. (On the Expiration Date, your Market Adjusted Amount equals your
Maturity Amount.)
Contributions may be made to one or more Fixed Maturity Periods; however, you
may not make more than one contribution to any one Fixed Maturity Period. You
may not make a contribution to a Fixed Maturity Period which has an
Expiration Date beyond the date on which annuity payments are to commence
under your Contract. If you have contributed funds to one or more Fixed
Maturity Periods you must select Maximum Fund Choice; transfers out of the
Guaranteed Interest Account will be restricted. See "Transfers" in Part 6.
AVAILABILITY OF FIXED MATURITY PERIODS
Subject to state regulatory approval, Fixed Maturity Periods are available as
Investment Options only to Owners of Series 400 Contracts.
We offer Fixed Maturity Periods ending on June 15 (or the preceding Business
Day) for each of the maturity years 1996 through 2006. Not all Fixed Maturity
Periods will be available in all states. As Fixed Maturity Periods expire, we
expect to add maturity years so that generally ten are available in most
states at any time.
RATES TO MATURITY AND PRESENT VALUE PER $100 OF MATURITY AMOUNT
Because the Maturity Amount of a contribution to a Fixed Maturity Period can
be determined at the time it is made, you can determine the amount required
to be contributed to a Fixed Maturity Period in order to produce a target
Maturity Amount (assuming no transfers or withdrawals are made and no charges
are allocated to the Fixed Maturity Period). The required contribution is the
present value of that Maturity Amount discounted at the Rate to Maturity on
the Transaction Date for the contribution.
The same approach as described above may also be used to determine the amount
which you would need to allocate to each Fixed Maturity Period in order to
create a series of constant Maturity Amounts for two or more years.
The Rates to Maturity that are available for new contributions can be
obtained from your agent or by calling (800) 841-0801.
OPTIONS AT EXPIRATION DATE
We will notify you at least 45 days before the Expiration Date of each Fixed
Maturity Period in which you have any money. You may elect one of the
following options to be effective at the Expiration Date:
(a) to transfer the Maturity Amount into any Fixed Maturity Period we
are then offering, or into any of our other Investment Options.
(b) to withdraw the Maturity Amount (subject to any contingent
withdrawal charge which may apply under your Contract).
If we have not received your election as of the Expiration Date, the Maturity
Amount in the expired Fixed Maturity Period will be transferred into the
Money Market Fund (or another Investment
37
<PAGE>
Option if required by state regulation). As to contracts issued in New York,
see New York Contracts--Fixed Maturity Account in Part 8: Deductions and
Charges.
MARKET VALUE ADJUSTMENT FOR TRANSFERS, WITHDRAWALS OR
TERMINATION PRIOR TO THE EXPIRATION DATE
Any withdrawal (including transfers, terminations and deductions) from a
Fixed Maturity Period prior to its Expiration Date will result in a positive
or negative market value adjustment, which is reflected in your Market
Adjusted Amount. The amount of the adjustment will depend on two factors: (a)
the difference between the Rate to Maturity on the date of your contribution
or transfer and the Rate to Maturity for the same Fixed Maturity Period on
the date of the calculation, and (b) the length of time remaining until the
Expiration Date. In general, if interest rates have risen between the time
when an amount was originally contributed to a Fixed Maturity Period and the
time it is withdrawn, the market value adjustment will be negative, and vice
versa; and the longer the period of time remaining until the Expiration Date,
the greater the impact of the interest rate difference. Therefore, it is
possible that a significant rise in interest rates could result in a
substantial reduction in your Market Adjusted Amount should you withdraw
before the Expiration Date.
The market value adjustment (positive or negative) resulting from a
withdrawal of all funds from a Fixed Maturity Period will be determined for
each contribution allocated to that Fixed Maturity Period as follows:
(1) We determine the Market Adjusted Amount on the Transaction Date as follows:
(a) We determine the Book Value that would be payable on the Expiration
Date, using the applicable Rate to Maturity. The Book Value equals
your contribution to the Fixed Maturity Period, reduced by any prior
withdrawals, transfers and charges and reflecting any prior market
value adjustments, accumulated at the Rate to Maturity on the date
of the contribution.
(b) We determine the time remaining in your Fixed Maturity Period (based
on the Transaction Date) and convert it to fractional years based on
a 365 day year (or on 366 day year in a leap year). For example
three years and 12 days becomes 3.0329.
(c) We determine the current Rate to Maturity which applies on the
Transaction Date to new contributions to the same Fixed Maturity
Period.
(d) We determine the present value of the Book Value payable at the
Expiration Date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the Book Value as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such Fixed Maturity Period, which may be positive
or negative.
The market value adjustment (positive or negative) resulting from a
withdrawal of a portion of the amount in a Fixed Maturity Period will be a
percentage of the market value adjustment that would be applicable upon a
withdrawal of all funds from a Fixed Maturity Period. This percentage is
determined by (i) dividing the amount of the withdrawal or transfer from the
Fixed Maturity Period by (ii) the Market Adjusted Amount in such Fixed
Maturity Period prior to the withdrawal or transfer. See Appendix I for an
example.
The Rate to Maturity for new contributions to a Fixed Maturity Period is the
rate we have in effect for this purpose even if new allocations to that Fixed
Maturity Period would not be accepted at the time. If we do not have a Rate
to Maturity in effect for a Fixed Maturity Period to which the "current Rate
to Maturity" in (1)(c) would apply, we will use the rate at the next closest
Expiration Date. If we are no longer offering new Fixed Maturity Periods, the
"current Rate to Maturity" will be determined in accordance with our
procedures then in effect. For purposes of calculating the market value
adjustment only, we reserve the right to add up to 0.50% to the current rate
in (1)(c) above.
INVESTMENTS
Contributions received under the Contracts and allocated to Fixed Maturity
Periods will be held in a "nonunitized" separate account established by
Equitable Life under the laws of New York. The separate account provides an
additional measure of assurance that full payment of amounts due under the
Fixed Maturity Periods will be made. Under the New York Insurance Law, the
portion of the separate account's assets equal to the reserves and other
liabilities relating to the Contracts are not chargeable with liabilities
arising out of any other business we may conduct. Investments purchased with
amounts contributed to the Fixed Maturity Account
38
<PAGE>
(and any earnings on those amounts) are our property. Any favorable
investment performance on the assets held in the separate account accrues
solely to our benefit. Contract Owners do not participate in the performance
of the assets held in the separate account. We may, subject to applicable
state law, transfer all assets allocated to the separate account to our
general account. Regardless of whether assets supporting Fixed Maturity
Accounts are held in a separate account or our general account, all benefits
relating to the value in the Fixed Maturity Account are guaranteed by us.
We have no specific formula for establishing the Rates to Maturity for the
Fixed Maturity Periods. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields on the fixed income
securities to be acquired with amounts that are allocated to the Fixed
Maturity Periods at the time that the Rates to Maturity are established. Our
current plans are to invest such amounts in fixed income obligations,
including corporate bonds, mortgage backed and asset backed securities and
government and agency issues having durations in the aggregate consistent
with those of the Fixed Maturity Periods.
Although the foregoing generally describes our plans for investing the assets
supporting our obligations under the fixed portion of the Contracts, we are
not obligated to invest those assets according to any particular plan except
as may be required by state insurance laws nor will the Rates to Maturity we
establish be determined by the performance of the nonunitized separate
account. Interests held in the nonunitized separate account are registered
under the 1933 Act. See "Part 4: The Guaranteed Interest Account" for a
discussion of our general account.
39
<PAGE>
- --------------------------------------------------------------------------------
PART 6: PROVISIONS OF THE EQUI-VEST CONTRACTS
- --------------------------------------------------------------------------------
THE EQUI-VEST CONTRACT SERIES
EQUI-VEST is designed as a funding vehicle for either personal or
employer-sponsored retirement programs. EQUI-VEST may be offered either as an
individual Contract or as a group Contract with individual Certificates. The
difference is primarily one of state requirements; the basic provisions are
the same regardless of group or individual Contract form. Your Contract or
Certificate will indicate what form you have. Certain provisions of your
Conract may differ depending on the type of program purchased and the state
or date of issue. (See Part 1: "Summary" for a description of the types of
programs offered.) In this prospectus, we use a "series" number when
necessary to differentiate among Contracts. Currently, there are four series
of EQUI-VEST Contracts. You can identify the EQUI-VEST series you have by
referring to your confirmation notice, or you may contact your agent or call
our toll free number. In general, the series designations are:
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------- --------------
TSA, SEP, EDC, Annuitant Owned HR-10 Series 100
and Trusteed Contracts issued before
August 17, 1995.
IRA, QP IRA AND NQ Contracts issued
before January 3, 1994.
-------------------------------------------- ---------------
TSA, EDC, Annuitant Owned HR-10 and Series 200
Trusteed Contracts issued on or after
August 17, 1995. SEP Contracts issued
on or after August 17, 1995 and before
November 1, 1995. A Series 200 SEP
Contract will be issued in a state
where the Series 300 Contract has
not been approved.
-------------------------------------------- ---------------
IRA, QP IRA and NQ Contracts issued on or Series 300
after January 3, 1994 and before the date
Series 400 Contracts became available in
a state; and SEP Contracts issued on or
after November 1, 1995 in states which have
approved the Series 300 Contract.
--------------------------------------------- ---------------
IRA, QP IRA and NQ Contracts issued on or Series 400
after July 10, 1995 in states where approved.
--------------------------------------------- ---------------
</TABLE>
The provisions of your Contract may be restricted by any plan or agreement
relating to it or by applicable laws or regulations.
SELECTING INVESTMENT OPTIONS
You can choose one of the following two methods for selecting Investment
Options:
o Maximum Fund Choice, allowing you to allocate contributions to any
Investment Fund, the Guaranteed Interest Account and the Fixed Maturity
Periods; however, this election will result in restrictions in the
amount you can transfer out of the Guaranteed Interest Account; or
o Maximum Transfer Flexibility, allowing you to allocate contributions
only to the Balanced, Growth & Income, Equity Index, Common Stock,
Global, International, Aggressive Stock and Growth Investors Funds and
the Guaranteed Interest Account; and no transfer restrictions apply.
Once this selection is made, you may allocate contributions to, or transfer
among, only the Investment Options that you have chosen. After your Contract
is issued, you may request in writing to add any remaining Funds or eliminate
Funds that result in transfer restrictions, but we have the right to deny the
request. See "Transfers" elsewhere in this Section.
The Guaranteed Interest Account is always available as an Investment Option.
Subject to state regulatory approval, the Fixed Maturity Periods is available
to Owners of Series 400 Contracts. If you want to invest in the Fixed
Maturity Periods, you must select Maximum Fund Choice.
For Original Contracts, only the Guaranteed Interest Account and the Money
Market, Balanced, Common Stock and Aggressive Stock Funds are available. In
most cases, you may request to add additional Funds to your Original
Contract, although we have the right to deny such requests. See "Transfers"
elsewhere in this Section for the transfer restrictions applicable to
Original Contracts.
CONTRIBUTIONS UNDER THE CONTRACTS
Generally, contributions may be made at any time: in single sum amounts, on a
regular basis or as your financial situation permits. For some types of
retirement plans, contributions must be made by the employer.
40
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
Contributions are credited as of the Transaction Date, providing they are
accompanied with complete information. All contributions made by check must
be drawn on a bank in the U.S., in U.S. dollars and made payable to Equitable
Life. All checks are accepted subject to collection.
Minimum amounts that may be contributed are as follows:
o IRA
--Series 100 and 200--$20
--Series 300 and 400--$50
o QP IRA
--Series 100 and 200--$1,000
--Series 300 and 400--$2,500
o NQ
--$1,000 (initial); $50
(initial for payroll
deduction)
--$50 (ongoing)
o All others --$20
We reserve the right to change minimum and maximum contribution amounts upon
90 days prior written notice.
Special Limits
NQ: Subsequent contributions to Series 100 NQ Contracts will be restricted
for Annuitants age 59 and older in states where individual Contracts are
issued. Subsequent contributions to Series 300 and 400 NQ Contracts may not
generally be accepted for Annuitants age 80 and older.
TSA: In certain cases, provided the total annual contribution to the
EQUI-VEST TSA will be at least $200 annually, we may accept contributions of
less than $20. Currently we do not accept contributions via direct TSA to TSA
transfers under Rev. Rul. 90-24 where any such funds were invested in a
custodial account under Code Section 403(b)(7) and are still subject to its
restrictions.
IRA: Contributions to IRA Contracts may be subject to maximums, as discussed
below and in "Part 10: Federal Tax & ERISA Matters." Subsequent contributions
may be "regular" IRA contributions, "rollover" contributions or "direct
transfers." A $2,000 annual limit applies to regular contributions, but not
to rollovers or direct transfers.
"Regular" IRA contributions may no longer be made for the taxable year in
which you attain 70 1/2 and thereafter. Rollover and direct transfer
contributions may be made after you attain age 70 1/2. However, any amount
contributed must be net of your required minimum distibution for the year in
which the rollover or direct transfer contribution is made.
Contributions to the Investment Funds and the
Guaranteed Interest Account
We allocate contributions to the Investment Funds and the Guaranteed Interest
Account on the Transaction Date according to your allocation percentages.
Allocation percentages can be changed at any time by writing to our
Processing Office or by using TOPS. The change will be effective on the
Transaction Date and will remain in effect for future contributions unless
another change is requested.
A contribution allocated to an Investment Fund purchases Accumulation Units
in that Investment Fund. The number of Accumulation Units purchased equals
the dollar amount of the contribution divided by the Accumulation Unit Value
for that Investment Fund computed for the Transaction Date on which we
receive the contribution at our Processing Office. The number of Accumulation
Units purchased will not vary because of any later change in the Accumulation
Unit Value. A description of the computation of the Accumulation Unit Value
is found in the SAI.
Contributions allocated to the Guaranteed Interest Account become part of our
general account on the Transaction Date and begin to accrue interest at the
guaranteed interest rate then in effect.
Contributions to the Fixed Maturity Account (Series 400 Contracts only)
You must provide specific instructions for contributions to the Fixed
Maturity Account. Contributions (or transfers) to a Fixed Maturity Period
will have the Rate to Maturity for the specified Period offered on the
Transaction Date. Contributions may be made to one or more Fixed Maturity
Periods; however, you may not make more than one contribution (or transfer)
to any one Fixed Maturity Period. In no event may contributions be made to
Fixed Maturity Periods with maturities beyond the date on which annuity
payments are to commence under your Contract. See "Distribution Options"
elsewhere in this Section.
Automatic Investment Program
Our Automatic Investment Program (AIP) provides for a specified amount to be
automatically deducted from a bank checking account, bank money market
account or credit union checking account and to be
41
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
contributed into an NQ or IRA Contract on a monthly basis. AIP contributions
may be made to any Investment Option available under your Contract except the
Fixed Maturity Periods. You may elect AIP by properly completing the
appropriate form, which is available from your Equitable Life Agent, and
returning it to our Processing Office. You elect which day of the month
(other than the 29th, 30th or 31st) you wish to have your bank account
debited. That date, or the next Business Day if that day is a non-Business
Day, will be the Transaction Date. AIP is not available to QP IRA Contract
Owners.
You may cancel AIP at any time by notifying our Processing Office in writing.
Equitable Life is not responsible for any debits made to your account prior
to the time written notice of revocation is received at our Processing
Office.
ANNUITY ACCOUNT VALUE
Your Annuity Account Value for an EQUI-VEST Contract is the sum of your
amounts in the Investment Options, plus the amount in any loan reserve
account, including accrued interest. These amounts are defined below and
include your value in the Investment Funds, your value in the Guaranteed
Interest Account and your value in the Fixed Maturity Account. The loan
reserve account, applicable only to certain TSA and Corporate Trusteed
Contracts, is described in the SAI.
Value in the Investment Funds
Your value in an Investment Fund on any Business Day under your Contract is
equal to the number of your Accumulation Units in that Investment Fund times
the Accumulation Unit Value for that Fund for that date. Your number of
Accumulation Units in an Investment Fund at any time is equal to the sum of
Accumulation Units purchased by your contributions and transfers less any
Accumulation Units redeemed for withdrawals, transfers or deductions for
applicable charges.
The number of Accumulation Units you purchase or sell in any Investment Fund
is equal to the dollar amount of your transaction divided by the Accumulation
Unit Value for the Investment Fund on the Transaction Date. The number of
Accumulation Units you own will not vary because of any later change in the
Accumulation Unit Value. However, the Accumulation Unit Value varies with the
investment performance of the Fund, which in turn reflects the investment
income and realized and unrealized capital gains and losses of the
corresponding Portfolio, as well as Trust fees and expenses. The Accumulation
Unit Value is also stated after deduction of the Separate Account asset
charges relating to the Contracts. A description of the computation of the
Accumulation Unit Values is found in the SAI.
Accumulation Unit Values
The following tables show the Accumulation Unit Values, as of the last
Business Day for the periods shown, commencing with the initial offering of
each Fund under the Contracts indicated below.
EQUI-VEST: SERIES 100 AND 200*
<TABLE>
<CAPTION>
LAST INTERMEDIATE
BUSINESS MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
DAY OF MARKET SECURITIES BOND YIELD INCOME INDEX
- ------------- ------ ------------ ------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C>
December 1986 $18.22 -- -- -- -- --
December 1987 19.18 -- -- -- -- --
December 1988 20.32 -- -- -- -- --
December 1989 21.89 -- -- -- -- --
December 1990 23.38 -- -- -- -- --
December 1991 24.48 -- -- -- -- --
December 1992 25.01 -- -- -- -- --
December 1993 25.41 -- -- -- -- --
December 1994 26.08 $ 98.19 $ 93.87 $ 95.88 $ 98.86 $100.95
December 1995 27.22 109.80 108.38 113.44 121.02 135.94
March 1996 27.47 108.56 106.45 119.41 123.33 142.60
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
LAST
BUSINESS COMMON INTER- AGGRESSIVE CONSERVATIVE GROWTH
DAY OF STOCK GLOBAL NATIONAL STOCK INVESTORS BALANCED INVESTORS
- ------------- ------ ------- -------- ---------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
December 1986 $ 52.10 -- -- $18.33 -- $14.69 --
December 1987 55.30 -- -- 18.15 -- 13.95 --
December 1988 67.22 -- -- 18.09 -- 15.80 --
December 1989 83.40 -- -- 25.86 -- 19.69 --
December 1990 75.67 -- -- 27.36 -- 19.40 --
December 1991 102.76 -- -- 50.51 -- 27.17 --
December 1992 104.63 -- -- 48.30 -- 26.04 --
December 1993 128.80 -- -- 55.68 -- 28.85 --
December 1994 124.32 $104.12 -- 52.88 $ 95.10 26.18 $ 96.31
December 1995 162.42 122.06 $104.15 68.73 112.97 30.92 120.08
March 1996 168.92 126.16 106.90 76.51 110.35 31.59 121.66
</TABLE>
42
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
EQUI-VEST: SERIES 300 AND 400*
<TABLE>
<CAPTION>
LAST INTERMEDIATE
BUSINESS MONEY GOVERNMENT QUALITY HIGH GROWTH EQUITY
DAY OF MARKET SERIES BOND YIELD &INCOME INDEX
- ------------- ------- ------------ ------- ------ --------- -------
<S> <C> <C> <C> <C> <C> <C>
December 1994 $102.61 $ 98.19 $ 93.87 $ 95.88 $ 98.86 $100.95
December 1995 107.04 109.80 108.38 113.44 121.02 135.94
March 1996 108.02 108.56 106.45 119.41 123.33 142.60
* Series 400 Contracts were initially offered on July 10, 1995
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
LAST
BUSINESS COMMON INTER- AGGRESSIVE CONSERVATIVE GROWTH
DAY OF STOCK GLOBAL NATIONAL STOCK INVESTORS BALANCED INVESTORS
- ------------- ------- ------- -------- ---------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
December 1994 $ 97.03 $104.12 -- $ 95.45 $ 95.10 $ 91.64 $ 96.31
December 1995 126.78 122.06 $104.15 123.95 112.97 108.26 120.08
March 1996 131.87 126.16 106.90 137.96 110.35 110.59 121.66
</TABLE>
Value in the Guaranteed Interest Account
Your value in the Guaranteed Interest Account on any Business Day is equal to
contributions and transfers made to the Guaranteed Interest Account plus
interest, less withdrawals, transfers and deductions for applicable charges.
Value in the Fixed Maturity Account
Your value in each Fixed Maturity Period on any Business Day is your Market
Adjusted Amount in that Period. See "Part 5: The Fixed Maturity Account."
TRANSFERS
You may transfer all or portions of your Annuity Account Value among the
Investment Options you have chosen at any time, subject to the restrictions
stated below. The amount transferred must be at least $300 or, if less, the
entire amount in the Investment Option.
o If you have selected to make only the Balanced, Growth & Income, Equity
Index, Common Stock, Global, International, Aggressive Stock and Growth
Investors Funds and the Guaranteed Interest Account available (Maximum
Transfer Flexibility), no transfer restrictions will apply among these
Funds and the Guaranteed Interest Account.
o If you have selected to make all Investment Options available (Maximum
Fund Choice), then the maximum amount which you may transfer in any
Contract Year from the Guaranteed Interest Account to any other
Investment Option is the greater of (a) 25% of the amount you had in the
Guaranteed Interest Account on the last day of the prior Contract Year
or (b) the total of all amounts you transferred from the Guaranteed
Interest Account to any other Investment Option in the prior Contract
Year.
o Transfers out of a Fixed Maturity Period other than at the Expiration
Date will result in a market value adjustment. See "Part 5: The Fixed
Maturity Account."
o Transfers may not be made to Fixed Maturity Periods to which you have
already made a contribution or transfer.
If you transfer money to the Guaranteed Interest Account from another
financial institution during your first Contract Year, and if you have
selected Maximum Fund Choice, you will be permitted, during the balance of
that Contract Year, to transfer up to 25% of such initial Guaranteed Interest
Account balance to any other Investment Option.
However, for Original Contract Owners, including Original Contract Owners who
elect to amend their Contract by selecting Maximum Transfer Flexibility, the
Money Market Fund is always available but we do not permit transfers into
that Fund from any other Investment Option. No other transfer limitations
apply to Original Contracts.
Upon 90 days advance notice, we have the right to change or establish
additional restrictions on transfers among the Investment Options.
A transfer request will be effective on the Transaction Date. Transfers in or
out of the Investment Funds will be at the Accumulation Unit Value next
computed after the Transaction Date. Transfers out of the Fixed Maturity
Periods will be at the Market Adjusted Amount on that Transaction Date.
Transfers into the Fixed Maturity Periods will be at the Rate to Maturity on
that Transaction Date. A transfer request does not change your percentages
for allocating current or future contributions among the Investment Options.
All transfers among the Investment Options will be confirmed in writing.
Written transfer requests should be sent directly to the Processing Office.
Your signed request for a transfer should specify your Contract number, the
43
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
amounts to be transferred and the Investment Options to and from which the
amounts are to be transferred. You can use our TOPS service to make transfers
among any Investment Options other than the Fixed Maturity Periods. Please
contact your Equitable Life Agent or the Processing Office to receive the
form necessary to obtain a special code number required for TOPS.
AUTOMATIC TRANSFER OPTIONS
INVESTMENT SIMPLIFIER
We offer two automatic options for transferring amounts from the Guaranteed
Interest Account to the Investment Funds: the Fixed-Dollar and the Interest
Sweep. You may select either, but not both, of these options.
o Fixed Dollar Option
Under the Fixed-Dollar Option you may elect to have a fixed dollar amount
transferred out of the Guaranteed Interest Account and into the Investment
Funds of your choosing (unless transfers to the Money Market Fund are
prohibited) on a monthly basis. You can either specify the number of
monthly transfers or instruct us to continue to make monthly transfers
until amounts in the Guaranteed Interest Account are depleted. In order to
elect this option you must have a minimum amount of $5,000 in the
Guaranteed Interest Account on the date we receive your election form at
our Processing Office and you must elect to transfer at least $50 per
month. The Fixed-Dollar Option is subject to the Guaranteed Interest
Account transfer limitation described in "Transfers" in this Section.
The Fixed-Dollar Option relies upon the principles of dollar cost
averaging. Dollar cost averaging is an investment strategy whereby equal
dollar amounts are invested at regular intervals. By allocating fixed
amounts on a regularly scheduled basis--as opposed to allocating the total
amount at one particular time--an investor may be less susceptible to the
impact of market fluctuations. Although dollar cost averaging is designed
to lessen the impact of market fluctuations, it does not assure a profit
nor protect against loss in a declining market.
o Interest Sweep
Under the Interest Sweep Option, the amount transferred each month will
equal the amount of interest that has been credited to amounts you have in
the Guaranteed Interest Account from the last Business Day of the prior
month to the last Business Day of the current month. To be eligible for
this option you must have at least $7,500 in the Guaranteed Interest
Account on the date we receive your election and on the last Business Day
of each month thereafter.
You may elect either option by completing an election form and sending it
to our Processing Office. You can obtain a form from your Equitable Life
Agent. For the Fixed Dollar Option, the first monthly transfer will occur
on the last Business Day of the month in which we receive your election
form at our Processing Office. For the Interest Sweep, the first monthly
transfer will occur on the last Business Day of the month following the
month in which we receive your election form at our Processing Office.
Termination of Automatic Options
Automatic transfer options will terminate:
-- Under the Fixed-Dollar Option, when either the number of designated monthly
transfers have been completed or the amount you have in the Guaranteed
Interest Account has been depleted, as applicable; or
-- Under the Interest Sweep, when the amount you have in the Guaranteed
Interest Account falls below $7,500 (determined on the last Business Day of
the month) for two consecutive months; or
-- Under either option, on the date we receive your written request to --
terminate automatic transfers at our Processing Office or on the date your
Contract terminates.
LOANS (FOR TSA AND CORPORATE
TRUSTEED ONLY)
Unless restricted by the employer's plan, loans are permitted against the
Annuity Account Value of certain TSA and Corporate Trusteed Contracts only.
Loans under a Corporate Trusteed Contract, however, may not be available in
all states. Loans under TSA and Corporate Trusteed Contracts are restricted
by the rules of the Code. In addition, ERISA rules may apply to loans under
Corporate Trusteed Contracts and, when offered in the future, loans under
individual TSA contracts where the TSA plan is subject to Title I of ERISA.
Loans are not available under University TSA Contracts and under any TSA when
the Required Mini-
44
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
mum Distributions Option has been elected. Also, loans are currently not
available under individual TSA Contracts where the TSA plan is subject to
Title I of ERISA; however, we expect to offer these loans beginning on or
after July 1, 1996 (approximately).
The EQUI-VEST program permits only one loan at any one time. Before a loan
can be made under either a Corporate Trusteed or TSA Contract, a properly
completed loan agreement and application must be signed. Participants should
read the terms and conditions contained in these documents carefully and
consult with a tax advisor before taking out a loan. A loan application form
can be obtained from your Equitable Life Agent, by writing to our Processing
Office or by calling our toll-free number. In the case of Corporate Trusteed
and certain TSA Contracts, the written consent of the Participant's spouse
will be required before a loan can be made. More details of the loan
provisions are stated in the Contract and on the loan agreement and
application form.
A loan will not be treated as a taxable distribution when made to the extent
that it conforms to Code limits. If the loan fails to qualify under Code
limits, or if interest and principal is not repaid when due, or in some
instances if service with the employer terminates, the amount borrowed and
not yet repaid may be treated as a taxable distribution.
The amount and terms of loans under TSA and Corporate Trusteed Contracts are
discussed in Part 4, "Additional Loan Provisions," in the SAI. The tax
consequences of failure to repay a loan are substantial and are discussed in
Part 10, "Federal Tax and ERISA Matters" and in Part 4 of the SAI.
ASSIGNMENT AND FUNDING CHANGES
Generally, the Contract Owner may not assign a Contract for any purpose;
however, an NQ Contract may be assigned for any purpose other than as
security for a loan. In addition, a trustee owner of a Trusteed Contract can
transfer ownership to the Annuitant. We will not be bound by an assignment
unless it is in writing and we have received it at the Processing Office. In
some cases, an assignment may have adverse tax consequences. See "Part 10:
Federal Tax and ERISA Matters."
An employer or trustee can change the funding vehicle for an EDC or Trusteed
Contract, respectively. You can change the funding vehicle for an NQ, TSA,
IRA or SEP Contract.
You may be able to move amounts you have invested with another carrier to
your EQUI-VEST Contract. To make such a change, funds must be remitted via
wire or check. Therefore, any assets accumulated under an existing program
will have to be liquidated. For example, existing insurance policies and
annuity Contracts funding a qualified plan must be converted into cash.
PARTIAL WITHDRAWALS AND
TERMINATION
You may withdraw funds from or terminate your Contract at any time before the
Contract annuitizes and while the Annuitant is alive. Subject to Code
restrictions you may withdraw funds from your Contract in any amount of at
least $300 but the Annuity Account Value should be at least $500 after the
withdrawal is made. Unless you specify otherwise, withdrawals will be taken
on a pro rata basis from the Investment Funds and the Guaranteed Interest
Account. We will make withdrawals from the Fixed Maturity Periods as you
direct. Partial withdrawals or terminations may result in a contingent
withdrawal charge, explained fully in "Part 8: Deductions and Charges."
Withdrawals are generally taxable and may be subject to tax penalty when the
withdrawal is taken prior to age 59 1/2 . In some cases, withdrawals or
termination may be prohibited or limited by the terms of your retirement
plan. We may be required to withhold income taxes from the amount withdrawn.
See Part 10: "Federal Tax and ERISA Matters." Partial withdrawals or
terminations of amounts held in the Fixed Maturity Periods prior to an
Expiration Date will result in a market value adjustment. See "Market Value
Adjustment for Transfers, Withdrawals or Termination Prior to the Expiration
Date" in Part 5.
To make a withdrawal or termination, you should complete a Request for
Disbursement form which leads you through the withdrawal process, step by
step. This form is available from your Agent or from our Processing Office.
In order to process your request, we may require additional information,
depending on the provisions of your Contract or retirement plan. If we have
received the information we require, the requested partial withdrawal or
termination will become effective on the Transaction Date and proceeds will
be mailed within seven days thereafter. If we receive only partially
completed information, we will return the request to you for completion prior
to processing.
We may terminate your Contract and pay your Annuity Account Value, less any
outstanding loan
45
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
(and accrued interest) (1) if no contributions are made for three Contract
Years and the Annuity Account Value is less than $500, or (2) if you request
a partial withdrawal that would result in the Annuity Account Value falling
below $500. We may also terminate your Contract if no contributions are made
within 120 days from the Contract Date. For group certificates, we may
terminate your certificate if no contributions are made within 120 days from
the issue date.
The amount of any outstanding loan balance plus any applicable contingent
withdrawal charge on the loan balance will be deducted from the proceeds paid
upon termination.
For participants in a Texas Optional Retirement Program, Texas law permits
withdrawals only after one of the following distributable events occur:
attainment of age 701/2, death, retirement, or termination of employment in
all Texas public institutions of higher education. To make a withdrawal, a
properly completed written acknowledgment must be received from the employer.
If a distributable event occurs prior to your being vested, any amounts
provided by an employer's first-year matching contribution will be refunded
to the employer. We reserve the right to change these provisions without your
consent, but only to the extent necessary to maintain compliance with
applicable law.
THIRD PARTY TRANSFERS OR EXCHANGES
You may request that your Contract be exchanged for another contract or
certificate of the same type issued by another carrier at any time by
completing the Transfer/Rollover of Assets or 1035 Exchange to Another
Carrier form. This form contains specific delivery instructions and is
available from your Agent.
A contingent withdrawal charge and third party transfer charge, if
applicable, may be imposed on your Annuity Account Value prior to the
transfer or exchange. Any higher investment return which you anticipate as a
result of this transfer or exchange may be outweighed by the cost of these
charges, if applicable. See "Part 8: Deductions and Charges." Consult your
tax or legal advisor before making any such transfers or exchanges.
REQUIREMENTS FOR DISTRIBUTIONS
Payouts may be subject to applicable withdrawal charges. See "Part 8:
Deductions and Charges." Distributions may also be taxable and subject to tax
penalties. See "Part 10: Federal Tax and ERISA Matters." Amounts in the Fixed
Maturity Periods that are applied to a distribution option prior to an
Expiration Date will result in a market value adjustment. See "Market Value
Adjustment for Transfers, Withdrawals or Termination Prior to the Expiration
Date" in Part 5.
IRA, EDC, Annuitant-Owned HR-10, SEP, TSA and Trusteed Contracts are subject
to the Code's minimum distribution requirements for qualified plans.
Generally, distributions from these Contracts must commence by April 1 of the
calendar year following the calendar year in which you attain age 70 1/2.
Subsequent distributions must be made by December 31st of each calendar year.
If the required minimum distribution is not made, a penalty tax in an amount
equal to 50% of the difference between the amount required to be withdrawn
and the amount actually withdrawn may apply. See "Part 10: Federal Tax and
ERISA Matters" for a discussion of various special rules concerning the
minimum distribution requirements.
In addition, distributions from a qualified plan, including our prototype
plans through which Annuitant-Owned HR-10 Contracts are issued, may be
subject to the provisions of the plan document.
DISTRIBUTION OPTIONS
The Contract is an annuity contract, even though you may elect to receive
your benefits in a non-annuity form. In addition to a lump sum distribution
option, two other types of distribution options are available: income annuity
and flexible payment distribution options.
An annuity form of distribution option or "annuitization" pays out
contributions and earnings under the Contract in installments over a
specified period or over the Annuitant's life. Annuitization payments, if
selected, are calculated as of the annuitization date chosen, which is on
file with our Processing Office. You can change this date by writing to our
Processing Office any time before the date, subject to certain restrictions
as described in the Contract.
Except for EDC, Trusteed and NQ Contracts, the Contract Owner is always the
Annuitant. In an EDC or Trusteed Contract, the Annuitant is generally the
covered employee. For EDC Contracts, the employer is the Contract Owner and,
for Trusteed Contracts, the Owner is the trustee. For NQ Contracts, Contract
Owners may name an Annuitant other than themselves if they wish.
46
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
For IRA retirement benefits subject to minimum distribution requirements, we
will send a form outlining the distribution options available before you
reach age 70 1/2 (if you have not annuitized before that time).
INCOME ANNUITY DISTRIBUTION OPTIONS:
o LIFE ANNUITY: An annuity which guarantees payments for the rest of the
Annuitant's life. Payments end with the last monthly payment before the
Annuitant's death. Because there is no death benefit associated with
this annuity form, it provides the highest monthly payment of any of the
life annuity distribution options. This is the normal form of annuity
payment for Annuitants under IRA Contracts who do not have a spouse at
their retirement date, and for SEP, Trusteed, TSA, Annuitant-Owned HR-10
and EDC (other than governmental EDC plans in New York) Contracts.
o LIFE ANNUITY-PERIOD CERTAIN: This annuity form guarantees payments for
the rest of the Annuitant's life. In addition, if the Annuitant dies
before the end of a selected period of time (the "certain period"),
payments will continue to the beneficiary for the balance of the certain
period. The certain period cannot exceed life expectancy (or joint life
expectancy for qualified retirement plans). A life annuity with a
certain period of 10 years is the normal form of annuity under NQ
Contracts.
o LIFE ANNUITY-REFUND CERTAIN: This annuity form guarantees payments for
the rest of the Annuitant's life. In addition, if the Annuitant dies
before the amount applied to purchase this annuity option has been
recovered, payments will continue to the beneficiary until that amount
has been recovered. This annuity option is available only as a fixed
annuity.
o PERIOD CERTAIN ANNUITY: This annuity form guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years, and does not
involve life contingencies. It does not permit any prepayment of the
unpaid principal, so you could not elect to receive part of the payments
as a single sum payment with the rest paid in monthly annuity payments.
This is the normal form of annuity for Annuitants in governmental EDC
plans in New York. Currently, this annuity option is available only as a
fixed annuity.
o JOINT AND SURVIVOR LIFE ANNUITY: This annuity form guarantees payments
for the rest of the Annuitant's life and, after his or her death,
continuation of payments to the survivor. Generally, unless the
Annuitant elects otherwise with the written consent of the spouse, this
will be the normal form of annuity payment under qualified plans and
certain TSAs for married Annuitants.
All of the life annuity distribution options outlined above (with the
exception of Joint and Survivor Life Annuity) are available as either Single
or Joint life annuities. Life annuity distribution options are not available
for Annuitants in governmental EDC plans in New York.
FIXED AND VARIABLE ANNUITY FORMS:
We offer the annuity distribution options outlined above in both fixed and
variable form, unless otherwise indicated. Fixed annuity payments, funded
through our general account, do not change and will be based on the tables of
guaranteed annuity payments in your Contract or on our then current annuity
rates, whichever is more favorable for the Annuitant. For all Annuitants, the
normal form of annuity provides for fixed payments. Variable payments will be
funded through your choice of the 13 Investment Funds of the Hudson River
Trust through the purchase of annuity units. The amount of each variable
annuity payment may fluctuate, depending upon the performance of the
Investment Fund. Variable benefits are not allowed for governmental EDC plans
in New York. See "Annuity Unit Values" in the SAI.
We also make the variable annuity distribution option available to owners of
our single premium deferred annuity (SPDA) contracts. SPDA contractholders
who are considering purchasing a variable distribution option should also
review "Part 2: Separate Account A and its Investment Funds," "Part 3:
Investment Performance," the Hudson River Trust prospectus (directly
following this prospectus) and the sections of the Statement of Additional
Information which discuss the variable annuity distribution option.
We may offer other forms not outlined here. Your Equitable Life Agent can
provide details.
For each annuity distribution option, we will issue a separate written
agreement putting the option into effect. Before we pay any annuity benefit,
we require the return of the Contract. If your Contract is lost, you must
provide us with a written statement to this effect.
47
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
If, at the time you elect an annuity distribution option, the Annuity Account
Value is less than $2,000 or the initial payment under the option elected is
less than $20, we reserve the right to pay the Annuity Account Value in a
single sum rather than as payments under the annuity form chosen.
The size of the payments will depend on the form of annuity (fixed or
variable), the amount applied to purchase the annuity, the type of annuity
chosen and, in the case of a life annuity distribution option, the
Annuitant's age (or the Annuitant's and joint annuitant's ages) and in
certain instances, the sex of the Annuitant(s). Once an annuity distribution
option is chosen and payments have commenced, no change can be made, other
than transfers (if permitted in the future) among the investment funds if a
variable annuity is selected.
A $200 administrative charge currently applies if an income annuity
distribution option is chosen before five Contract Years have been completed.
This charge does not apply when our guaranteed rates are used to calculate
benefits. Beneficiaries do not pay this charge.
FLEXIBLE PAYMENT DISTRIBUTION OPTIONS:
o PARTIAL WITHDRAWALS: See "Partial Withdrawals and Termination" above.
O SYSTEMATIC WITHDRAWAL: You may elect either at the time of Contract
issue or any time thereafter to have an amount periodically withdrawn
from your Contract. (Currently not available for EDC, Trusteed, and
HR-10 Annuitant-Owned Contracts.) A check for the amount withdrawn will
be made payable to you and mailed to your address. You determine on
which day of the month (1st through 28th) you wish to have the
Systematic Withdrawal occur. A minimum Annuity Account Value in the
Investment Funds and the Guaranteed Interest Account of $20,000 is
required at the time this feature is elected and you may terminate it at
any time.
The amount withdrawn may be either the amount of interest earned under the
Guaranteed Interest Account or a fixed dollar amount of the Annuity Account
Value in the Investment Funds or in the Guaranteed Interest Account. When
the interest option is elected, a minimum of $20,000 must be maintained in
the Guaranteed Interest Account. No minimum Annuity Account Value is
required to be maintained when the fixed dollar option is elected.
Withdrawals may be scheduled monthly or quarterly, subject to minimum
amount of $300. Amounts withdrawn which are in excess of the 10% Free
Corridor amount are subject to the contingent withdrawal charge. See
"Contingent Withdrawal Charge" in Part 8.
o REQUIRED MINIMUM DISTRIBUTIONS OPTION: We offer a payment option, which
we call "Required Minimum Distributions Option," which is intended to
meet the minimum distribution requirements applicable to qualified
plans, IRAs, SEPs, TSAs, and EDC Contracts. See "Part 10, Federal Tax &
ERISA Matters." You may elect the Required Minimum Distributions Option
if the Annuitant is at least age 70 1/2 and your Contract has an Annuity
Account Value in the Investment Funds and the Guaranteed Interest
Account of at least $2,000. You can elect the Required Minimum
Distributions Option by filing the proper election form with us. If you
elect the Required Minimum Distributions Option, we will pay out of the
Annuity Account Value in the Investment Funds and the Guaranteed
Interest Account an amount which the Code requires to be distributed
from your Contract. If such amounts are insufficient and you hold
amounts in the Fixed Maturity Account, we will then pay out required
amounts from the Fixed Maturity Account. In performing this calculation,
we assume that the only funds subject to the Code's minimum distribution
requirements are those held under your Contract. We calculate the
Required Minimum Distributions Option amount based on the information
you give us, the various choices you make and certain assumptions.
Currently, the Required Minimum Distributions Option payments will be
made annually. We are not responsible for errors that result from
inaccuracies in the information you provide. The choices you can make
are described in Part 6 of the SAI.
You may elect the Required Minimum Distributions Option for each Contract
you own, subject to our rules then in effect. This election is revocable
except for EDC Contracts. The Required Minimum Distributions Option is not
available under Contracts that have an outstanding loan. Generally electing
this option does not restrict making partial withdrawals, or subsequently
electing an annuity distribution option.
The minimum check that will be sent is $300, or, if less, your Annuity
Account Value. If, after the deduction of the amount of the minimum distri-
48
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
bution, the total Annuity Account Value is less than $500, we may terminate
the Contract and pay the Cash Value. See "Partial Withdrawals and
Termination" above.
Any applicable withdrawal charges will be deducted in addition to the
amount distributed under the Required Minimum Distributions Option.
Withdrawal charges will be deducted on a pro rata basis from the Investment
Funds and the Guaranteed Interest Account or, if there is an insufficient
amount in these Options, on a pro rata basis from the Fixed Maturity
Periods. See "Contingent Withdrawal Charge" in Part 8.
If you have a TSA that was purchased before December 31, 1986 and
transferred to EQUI-VEST, the amount of your pre-1987 account balance is
not subject to the minimum distribution rules at age 70 1/2. However,
post-1986 salary reduction contributions and all earnings since that date
are subject to these minimum distribution requirements.
o DEPOSIT OPTION: This distribution option is for NQ Contracts only.
Proceeds from your NQ Contract can be deposited for a period selected
(including one for as long as the Annuitant lives), and will be credited
with a guaranteed rate of interest for that period.
GUARANTEED DEATH BENEFIT
When the Annuitant Dies
Generally, upon receipt of due proof of the Annuitant's death, we will pay a
death benefit to the beneficiary named in your Contract. You designate the
beneficiary on the application. You may change your beneficiary by writing to
our Processing Office. The change is effective on the date the written
submission was signed. A beneficiary change request must be received by the
Processing Office before the submission of a death claim.
In general, the death benefit is equal to the greater of: (i) the Annuity
Account Value (less any outstanding loan and accrued interest, if any) and
(ii) the "minimum death benefit." The minimum death benefit will not be less
than all contributions made (less any applicable taxes and any outstanding
loan and accrued interest, if any) adjusted for total withdrawals. We will
pay the death benefit to the beneficiary in the form of an annuity
distribution option if you have chosen such form under your Contract. If no
annuity option is in effect at the Annuitant's death, the beneficiary will
receive the death benefit in a lump sum. However, subject to certain
exceptions in the Contract, our rules then in effect and any other applicable
legal requirements, the beneficiary may elect to: (a) apply the death benefit
to an annuity distribution option we offer, (b) apply the death benefit to
provide any other form of distribution option we offer, (c) elect any
combination of forms of distribution option, or (d) in certain circumstances,
continue the Contract.
For Series 300 and 400 Contracts only, if the Annuitant is also the Contract
Owner and the Owner/ Annuitant elects his or her spouse to be the sole
primary beneficiary and to be the Successor Annuitant and Contract Owner,
then the surviving spouse automatically becomes both the successor Contract
Owner and Annuitant, and no death benefit is payable until the surviving
spouse's death.
When the Contract Owner Dies Before the Annuitant (NQ Contracts Only)
For all NQ Contracts, when the Contract Owner is not the Annuitant and the
Contract Owner dies before any annuity distribution payments have begun, the
beneficiary named to receive the death benefit upon the Annuitant's death
will automatically succeed as Contract Owner. For Series 300 and 400
Contracts only, you have the right to designate a Successor Owner either on
the application form or in a written request sent to our Processing Office.
The Code requires that the original Contract Owner's entire interest in the
Contract be completely distributed to the named beneficiary by the fifth
anniversary of such Owner's death (unless an annuity distribution option is
elected and payments begin within one year after the Contract Owner's death
and are made over the beneficiary's life or over a period not exceeding the
beneficiary's life expectancy). If an annuity distribution option has not
been elected, as described above, we will pay any remaining Annuity Account
Value (less any applicable contingent withdrawal charge) on the fifth
anniversary of the Contract Owner's death. If the named beneficiary is the
Contract Owner's surviving spouse, no distributions are required as long as
both the surviving spouse and the Annuitant are living.
YOUR BENEFICIARY
You designate the beneficiary for the death benefit under the Contract on the
application. You may change your beneficiary by writing to our Processing
Office. The change is effective on the Transaction Date. The employer must be
the beneficiary under EDC plans and the trustee must be the beneficiary under
most Trusteed plans.
49
<PAGE>
PROVISIONS OF THE EQUI-VEST CONTRACTS (Continued)
The death benefit available to the beneficiary is determined as of the
Business Day due proof of death is received at our Processing Office. On that
Business Day, the Annuity Account Value is deducted from the Investment
Options and earns voluntary interest at an interest rate not less than the
rate required by law. If you have transferred the value of another Equitable
Life annuity contract to your EQUI-VEST Contract, the value of that
contract's minimum death benefit calculated as of the time of transfer will
be included in total contributions for purposes of calculating the minimum
death benefit.
If no benefit option is in effect at the Annuitant's death, the beneficiary
can select a lump sum option or one of the forms of annuity benefit. Under
certain circumstances the beneficiary may elect to continue the Contract. In
some cases, this may result in a deemed taxable distribution. Any option
selected must provide for distribution of the Annuity Account Value within
the period of time permitted by the Code. For EDC Contracts, benefits must be
distributed within a period not to exceed 15 years (or within the period of
the life expectancy of the surviving spouse if the spouse is the designated
beneficiary). See "Part 10: Federal Tax and ERISA Matters."
If a lump sum is selected, it is generally paid through the Equitable Life
Access Account(Trademark), an interest bearing checking account. A
beneficiary has immediate access to the proceeds by writing a check on the
account. We pay interest from the date the lump sum is deposited into the
Access Account until the date the Access Account is closed.
PROCEEDS
Application of proceeds from the Investment Funds to a variable annuity,
payment of a death benefit from the Investment Funds and payment of any
portion of the Annuity Account Value in the Investment Funds (less any
applicable withdrawal charge) will be made within seven days after the
Transaction Date. Payments or applications of proceeds from the Investment
Funds can be deferred for any period during which (1) the New York Stock
Exchange is closed or trading on it is restricted, (2) sales of securities or
determination of the fair value of an Investment Fund's assets is not
reasonably practicable because of an emergency, or (3) the SEC, by order,
permits us to defer payment in order to protect persons with interests in the
Investment Funds. We can defer payment of any portion of the Annuity Account
Value in the Guaranteed Interest Account and in the Fixed Maturity Account
for up to six months while you are living.
50
<PAGE>
- --------------------------------------------------------------------------------
PART 7: PROVISIONS OF THE MOMENTUM CONTRACT
AND SERVICES WE PROVIDE
- -------------------------------------------------------------------------------
UNDERSTANDING THE MOMENTUM PROGRAM
(EMPLOYERS AND PLAN TRUSTEES)
The MOMENTUM Program offers, pursuant to the terms of either the Master Trust
or the Pooled Trust, a group variable annuity contract as a funding vehicle
for Employers who sponsor qualified defined contribution plans. A defined
contribution plan is a retirement plan which provides for an individual
account for each plan participant and for benefits based solely on the
amounts contributed to such account and any income, expenses, gains and
losses. A qualified defined contribution plan is a defined contribution plan
that meets the requirements of Section 401(a) of the Code and applicable
Treasury regulations.
The Employer or Plan Trustee, as applicable, is responsible for determining
whether the MOMENTUM Contract is a suitable funding vehicle for its defined
contribution plan and should, therefore, carefully read this prospectus and
the MOMENTUM Contract before entering into the Contract.
As an Employer, subject to Equitable Life's underwriting requirements, you
can use the MOMENTUM Program to adopt the Master Plan and Trust, in which
case the Master Trust will be the sole funding vehicle for your plan. The
Master Trust is funded solely by the MOMENTUM Contract.
The Master Plan and Trust consists of Internal Revenue Service approved
master defined contribution plans all of which use the same basic plan
document. They include:
o a standardized and nonstandardized profit sharing plan (both with an
optional qualified cash or deferred arrangement pursuant to Section
401(k) of the Code); and
o a standardized and a nonstandardized defined contribution pension plan.
An Employer may adopt one or more of these plans. The plans are all
participant-directed, that is, the plan participants choose which Investment
Options to use for the investment of their plan accounts. The plans are
designed to meet the requirements of ERISA Section 404(c). See "Certain Rules
Applicable to Plans Designed to Comply With Section 404(c) of ERISA" in Part
10.
If you, as an Employer, elect our full service plan recordkeeping option,
then you must adopt our Master Plan and Trust. A description of such services
may be found under "Plan Recordkeeping Services" below. More information
about the Master Plan and Trust may be found in the SAI.
If you, as an Employer, want to use your own individually-designed or a
prototype qualified defined contribution plan, you may adopt the Pooled Trust
as a funding vehicle. The Pooled Trust is for investment only and may be used
as your plan's only funding vehicle or in addition to other funding vehicles.
The same group variable annuity contract (i.e., the MOMENTUM Contract) is
used under the Pooled Trust and the Master Plan and Trust. The Pooled Trust
is available for qualified defined contribution plans with either
participant-directed or trustee-directed investments. If you adopt the Pooled
Trust you will have elected our basic plan recordkeeping option. We may offer
to perform additional plan recordkeeping services for an additional charge.
Such services will be provided pursuant to the terms of a written service
agreement between us and the Plan Trustee.
Chase Manhattan Bank N.A. currently acts as the trustee under both the Pooled
Trust and the Master Plan and Trust. The sole responsibility of Chase
Manhattan Bank N.A. is to serve as a party to the MOMENTUM Contract. It has
no responsibility for the administration of the MOMENTUM Program or for any
distributions or duties under the MOMENTUM Contract. In certain states the
MOMENTUM Contract will only be issued directly to the Employer or Plan
Trustee and, accordingly, the Master Plan and Trust and the Pooled Trust will
not be available. As a consequence, Employers in those states will not be
able to use our full service plan recordkeeping option.
EMPLOYER'S RESPONSIBILITIES. If you adopt the Master Plan and Trust or if we
otherwise agree to provide the full service recordkeeping option pursuant to
a written service agreement, you, as the Employer and plan administrator,
will have certain responsibilities relating to the administration and
qualification of your plan, including:
o Sending us contributions at the proper time;
51
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
o Determining the amount of all contributions for each Participant;
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 that employees are required to submit;
o Arranging to have all reports distributed to employees and former
employees if you elect to have them sent to you;
o Arranging to have our prospectuses distributed;
o Filing an annual information return for your plan with the Internal
Revenue Service, if required;
o Providing us with the information needed for running special
non-discrimination tests, if you have a 401(k) plan or if your plan
accepts post-tax employee or employer matching contributions and making
any corrections if you do not pass the test;
o Selecting interest rates and monitoring default procedures, if you elect
to offer Participant loans in your plan; and
o Meeting the requirements of ERISA Section 404(c) if you, as Employer,
intend for your plan to comply with that section.
Other responsibilities of the Employer relating to the administration and
qualification of your plan are indicated in the plan recordkeeping services
agreement which is required for all plans that elect the full service plan
recordkeeping options.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you.
If you, as an Employer, use an individually-designed or a prototype plan, you
already have most of these responsibilities, which generally will not be
increased in any way by your adoption of the Pooled Trust.
ADOPTING THE MOMENTUM PROGRAM
(EMPLOYERS AND PLAN TRUSTEES)
In addition to other installation forms and agreements, to adopt the Master
Plan and Trust, you, as the Employer, must complete a participation agreement
and have it executed on behalf of your company. To adopt the Pooled Trust, a
Plan Trustee must execute a Pooled Trust participation agreement. Return your
completed participation agreement to the address specified on the form. You
should keep copies of all completed forms for your own records. In addition,
either you, as Employer, or the Plan Trustee, as applicable, must complete a
contract application in order to participate in the MOMENTUM Contract.
Your Equitable Life Agent can help you complete the participation agreement
and the application for the MOMENTUM Contract. We recommend that the
participation agreement be reviewed by your tax or benefits advisor.
THE MOMENTUM CONTRACT
The MOMENTUM Program is funded through the MOMENTUM Contract, a combination
fixed and variable group annuity contract issued by Equitable Life. The
MOMENTUM Contract governs the Investment Options that are offered under the
MOMENTUM Program.
Bear in mind that the provisions of your plan or applicable laws or
regulations may be more restrictive than the MOMENTUM Contract. We reserve
the right to amend the MOMENTUM Contract without the consent of any other
person in order to comply with applicable laws and regulations. Such right
includes, but is not limited to, the right to conform the MOMENTUM Contract
to the Code, ERISA and applicable regulations.
SELECTING INVESTMENT OPTIONS
(EMPLOYERS AND PLAN TRUSTEES ONLY)
Subject to state regulatory approval, you, as Employer or Plan Trustee, can
elect to fund your plan with any number of the Investment Options available
under the Contract. This selection is made on the application. You may
request to change this selection subject to our rules then in effect. If you
elect to fund your plan with any one of the Intermediate Government
Securities, Quality Bond, High Yield or Conservative Investors Funds, you
must also select the Money Market Fund. If you select the above-listed Funds
and the Guaranteed Interest Account, certain restrictions will apply to
transfers out of the Guaranteed Interest Account. See "Transfers" in this
Section. Lastly, you, as Employer, must elect the Guaranteed Interest Account
as a funding option if you select only from among the Balanced, Growth &
Income, Equity Index, Common Stock, Global, International, Aggressive Stock
or Growth Investors Funds.
For Original Certificates, only the Guaranteed Interest Account and the Money
Market, Balanced,
52
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
Common Stock and Aggressive Stock Funds are available and we do not permit
transfers into the Money Market Fund from any of the other Investment
Options.
CONTRIBUTIONS
Contributions may be made at any time and may be made only by the Employer or
Plan Trustee by either wire transfer or check. Participants should not send
contributions directly to Equitable Life. There is no minimum contribution.
All contributions made by check must be drawn on a bank in the U.S., in U.S.
dollars and made payable to Equitable Life. All checks are subject to
collection. Contributions are credited as of the Transaction Date, if they
are accompanied by properly completed forms. Failure to use the proper form,
or to complete the form properly, may result in a delay in crediting
contributions. Employers should send all contributions to Equitable Life at
the Processing Office. (See "Part 1: Summary.")
We allocate contributions to the Investment Options according to the
allocation percentages on the Participant's enrollment form or as later
changed. Under participant-directed plans, you, as Participant, will provide
those allocation percentages. In trustee-directed plans, the Plan Trustee
will provide those percentages. Employee and Employer contributions may be
allocated in different percentages.
By signing the enrollment form you are providing us with instructions to
allocate your contributions to the Money Market Fund (if that Fund has been
selected as an available Investment Option under your Employer's plan and) if
your allocation instructions on the form are incomplete (e.g., do not add up
to 100%). If your instructions add up to less than 100%, only the portion of
the contribution for which we do not have instructions will be allocated to
the Money Market Fund. If your instructions add up to more than 100%, the
entire amount of the contribution will be allocated to the Money Market Fund.
We will then notify your Employer or Plan Trustee and request that corrected
instructions be forwarded to us. If we do not receive corrected instructions
after three notices have been sent, but in no event later than 105 days from
the date a contribution is first credited to the Money Market Fund, we will
return to the Employer or Plan Trustee, as applicable, all contributions for
which notices had been sent, plus earnings.
If however, the Money Market Fund is not an available Investment Option under
your Employer's plan, we will return the contribution to the Employer or Plan
Trustee in five Business Days, if we have not received the signed form or
corrected allocation instructions, unless we have obtained your permission to
continue to hold the contribution.
If we receive your initial contribution before we receive your signed
enrollment form, we will allocate the initial contribution to the Guaranteed
Interest Account for five Business Days. If we do not receive either the
signed enrollment form or your consent to hold the initial contribution
pending receipt of the form by the fifth Business Day, we will return the
amount of the initial contribution to your Employer or Plan Trustee, as
applicable.
You, as a Participant, should review your confirmation notices carefully to
determine whether your contributions have been allocated correctly. A
certificate evidencing your participation under the MOMENTUM Contract will
also be sent to you.
Unless restricted by your Employer's plan, allocation percentages can be
changed at any time. To change your allocation instruction, you can file a
change of investment allocation form with your Employer or Plan Trustee. In
addition, your Employer may have opted to use our Telephone Operated Plan
Support (TOPS) system to enable you to change your allocation percentages
over the phone. The change will be effective on the Transaction Date and will
remain in effect for future contributions unless another change is requested.
A contribution allocated to an Investment Fund purchases Accumulation Units
in that Investment Fund based on the Accumulation Unit Value for that
Investment Fund computed for the Transaction Date on which we receive the
contribution at our Processing Office. Contributions allocated to the
Guaranteed Interest Account become part of our general account and begin to
accrue interest on the Transaction Date.
RETIREMENT ACCOUNT VALUE
The Retirement Account Value is the sum of the amounts that a Participant has
in the Guaranteed Interest Account and the Investment Funds. See "Part 4:
Guaranteed Interest Account".
The amount you have in an Investment Fund at any time is equal to the number
of Accumulation Units you have in that Investment Fund times the Accumulation
Unit Value for the Investment Fund for that Transaction Date. The number of
Accumulation Units in an Investment Fund at any time is equal to
53
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
the sum of Accumulation Units purchased by contributions, transfers and loan
repayments (including principal and interest) less the sum of Accumulation
Units redeemed for withdrawals, transfers, loans or deductions for charges.
The number of Accumulation Units purchased or sold in any Investment Fund is
equal to the dollar amount of the transaction divided by the Accumulation
Unit Value for the Investment Fund for the applicable Transaction Date. The
number of Accumulation Units will not vary because of any later change in the
Accumulation Unit Value. The Accumulation Unit Value varies with the
investment performance of the corresponding Portfolios of The Hudson River
Trust, which in turn reflects the investment income and realized and
unrealized capital gains and losses of the Portfolios, as well as The Hudson
River Trust fees and expenses. The Accumulation Unit Value is also stated
after deduction of the Separate Account asset charges relating to the
MOMENTUM Contract. A description of the computation of the Accumulation Unit
Value is found in the SAI.
Accumulation Unit Values
The following table shows the Accumulation Unit Values, as of the last
Business Day for the periods shown, commencing with the initial offering of
each Fund under the MOMENTUM Contract.
<TABLE>
<CAPTION>
MOMENTUM
MONEY INTERMEDIATE
LAST BUSINESS MARKET GOVERNMENT QUALITY HIGH GROWTH & EQUITY
DAY OF FUND SECURITIES BOND YIELD INCOME INDEX
------------- ------ ------------ ------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C>
December 1993 $25.41 -- -- -- -- --
December 1994 26.08 $ 98.19 $ 93.87 $ 95.88 $ 98.86 $100.95
December 1995 27.22 109.80 108.38 113.44 121.02 135.94
March 1996 27.47 108.56 106.45 119.41 123.33 142.60
------------- ------ ------------ ------- ------ -------- -------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
MOMENTUM
LAST BUSINESS COMMON AGGRESSIVE CONSERVATIVE GROWTH
DAY OF STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
------------- ------- ------- ------------- ---------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
December 1993 $128.80 -- -- $55.68 -- $28.85 --
December 1994 124.32 $104.12 -- 52.88 $ 95.10 26.18 $ 96.31
December 1995 162.42 122.06 $104.15 68.73 112.97 30.92 120.08
March 1996 168.92 126.16 106.90 76.51 110.35 31.59 121.66
------------- ------- ------- ------------- ---------- ------------ -------- ---------
</TABLE>
TRANSFERS
Subject to certain restrictions, the MOMENTUM Contract permits transfers of
all or a portion of your Retirement Account Value among the Investment
Options at any time. Your Employer's plan may, however, impose restrictions
on transfers. We also offer an automatic transfer service described under
"Investment Simplifier: Automatic Transfer Service" in this section. There is
no charge for transfers.
Participant transfer requests can be made by filing a written request to
transfer with your Employer or Plan Trustee. Transfers may also be arranged
through the TOPS service. Please contact your Equitable Life Agent or the
Processing Office to receive the form necessary to obtain a special code
number required for TOPS transfers.
A transfer request will be effective on the Transaction Date and the transfer
will be made at the Accumulation Unit Value for that Transaction Date. A
transfer request does not change your percentages for allocating current or
future contributions among the Investment Options. All transfers among the
Investment Options will be confirmed in writing.
If your Employer elects to fund your plan with the Guaranteed Interest
Account and any of the Money Market, Intermediate Government Securities,
Quality Bond, High Yield, or Conservative Investors Funds, certain
limitations will apply to funds transferred out of the Guaranteed Interest
Account. During a Transfer Period, the maximum amount that may be transferred
from the Guaranteed Interest Account to any other Fund is the greater of: (i)
25% of the amount you had in the Guaranteed Interest Account as of the last
Business Day of the calendar year immediately preceding the current calendar
quarter or (ii) the total of all amounts you transferred out of the
Guaranteed Interest Account during the same calendar year. A TRANSFER PERIOD
is the calendar quarter in which the transfer request is made and the
preceding three calendar quarters. Generally, this means that new
Participants will not be able to transfer funds out of the Guaranteed
Interest Account during the first calendar quarter of their participation
under the Contract.
Transfers out of the Guaranteed Interest Account that were made at a time
when no transfer limitation is in effect will not be counted for purposes of
determining the maximum transfer amount if the transfer limitation
subsequently goes into effect.
If assets have been transferred to the MOMENTUM Contract from another funding
vehicle by the Em-
54
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
ployer or Plan Trustee, you may for the remainder of the calendar year in
which the assets have been transferred, transfer up to 25% of the amount that
is initially allocated to the Guaranteed Interest Account on your behalf.
However, for Original Certificates, we do not permit transfers into the Money
Market Fund from any of the other Investment Options. No other transfer
limitations apply to Original Certificates.
INVESTMENT SIMPLIFIER: AUTOMATIC
TRANSFER OPTIONS
Your Employer can elect to provide two automatic transfer options out of the
Guaranteed Interest Account: the Fixed-Dollar Option and the Interest Sweep.
Except for Original Certificates, the Fixed-Dollar Option is subject to the
Guaranteed Interest Account transfer limitation described in "Transfers" in
this Section.
Under the Fixed-Dollar Option you may elect to have a fixed dollar amount
transferred out of the Guaranteed Interest Account and into the Investment
Funds of your choosing (except Money Market for Original Certificates) on a
monthly basis. You can either specify the number of monthly transfers or
instruct us to continue to make monthly transfers until amounts in the
Guaranteed Interest Account are depleted. In order to elect this option you
must have a minimum amount of $5,000 in the Guaranteed Interest Account on
the date we receive your election form and you must elect to transfer at
least $50 per month.
Under the Interest Sweep Option, the amount transferred each month will equal
the amount of interest that has been credited to amounts you have in the
Guaranteed Interest Account from the last Business Day of the prior month to
the last Business Day of the current month. To be eligible for this option
you must have at least $7,500 in the Guaranteed Interest Account on the date
we receive your election and on the last Business Day of each month
thereafter.
You may elect either option by filing an election form with your Employer or
Plan Trustee. For the Fixed Dollar Option, the first monthly transfer will
occur on the last Business Day of the month in which we receive your election
form at our Processing Office. For the Interest Sweep, the first monthly
transfer will occur on the last Business Day of the month following the month
in which we receive your election form at our Processing Office. Automatic
transfers will terminate:
o Under the Fixed-Dollar Option, when either the number of designated
monthly transfers have been completed or the amount you have in the
Guaranteed Interest Account has been depleted, as applicable; or
o Under the Interest Sweep, when the amount you have in the Guaranteed
Interest Account falls below $7,500 (determined on the last Business Day
of the month) for two consecutive months; or
o Under either option, on the date we receive your written request to
terminate automatic transfers or on the date your participation under
the MOMENTUM Contract terminates.
LOANS
The MOMENTUM Contract permits your Employer, or Plan Trustee, to withdraw
funds from your Retirement Account Value, without incurring a contingent
withdrawal charge, in order to make a loan to you under your Employer's plan.
Your Employer can tell you whether loans are available under your plan.
Employers who adopt the Master Plan and Trust may choose to offer its loan
feature. The availability of loans under an individually designed or
prototype plan depends on the terms of the plan.
If you are a 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, you presently may not borrow from your vested Retirement Account
Value without first obtaining a prohibited transaction exemption from the
Department of Labor (DOL). Consult with your attorney or tax advisor
regarding the advisability and procedures for obtaining such an exemption.
Participants should apply for a plan loan through their Employer or the Plan
Trustee, as applicable. Prior to the making of any plan loan, the Employer or
Plan Trustee, as applicable, and the Participant must first properly complete
and sign a loan agreement and application. Employers and Plan Trustees can
obtain loan application forms from their Equitable Life Agent, by writing to
our Processing Office or calling our toll-free number. Before taking a plan
loan, married Participants must generally obtain written spousal consent. In
addition, Participants should always consult their tax advisor before taking
out a plan loan.
Only one outstanding plan loan will be permitted at any time; any number of
takeover loans will be permitted at any time. The minimum loan is $1,000 and
the maximum is a percentage of your vested
55
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
Retirement Account Value. See Part 4: Additional Loan Provisions in the SAI
and Part 10: Federal Tax and ERISA Matters of the prospectus. However, you
may not have both takeover loans and plan loans outstanding simultaneously.
While you have a plan loan outstanding, an amount equal to 10% of your loan
balance will be restricted, and may not be withdrawn from your Retirement
Account Value. Also you should refer to "Plan Loan Charges" in Part 8 for a
description of charges associated with plan loans.
The interest rate applicable to your plan loan will be set by your Employer
or the Plan Trustee under the terms of your Employer's plan. It is the
responsibility of each Employer or Plan Trustee to determine the interest
rate applicable to each loan. All interest (as well as principal) that you
pay will be added to your Retirement Account Value. The interest paid in
repaying a loan may not be deductible, but amounts paid as interest on your
loan will be taxable on distribution.
Plan loan repayments covering interest and principal will be due in
accordance with the repayment schedule determined in accordance with the
terms of the Employer's plan. Participants should send plan loan repayments
to the plan administrator and not to Equitable Life. All plan loan payments
made by the plan administrator to us must be made by check or wire transfer.
Checks must be drawn on a bank in the U.S., in U.S. dollars, made payable to
Equitable Life and are subject to collection.
A plan loan may be prepaid in whole or in part at any time. Any payments we
receive will first be applied to interest, with the balance applied to
repayment of the loan. Plan loan repayments will be allocated to the
Investment Options in accordance with the same allocation instructions used
in making the loan. However, a Participant may elect, in writing, to override
these instructions and allocate all plan loan repayments to the Guaranteed
Interest Account.
A plan loan will be in default if the amount of any scheduled repayment is
not received by us within 90 days of its due date, or if the Participant dies
or participation under the MOMENTUM Contract is terminated. We will then
treat the loan principal as a withdrawal subject to the contingent withdrawal
charge. See "Contingent Withdrawal Charge" in Part 8. See "Part 10: Federal
Tax and ERISA Matters" for the consequences of defaulting a plan loan and
other applicable tax matters.
WITHDRAWALS AND TERMINATION
Subject to any restrictions in your Employer's plan, the MOMENTUM Contract
allows your Employer or Plan Trustee, as applicable, to make a withdrawal
from a Retirement Account Value on behalf of a Participant by writing to our
Processing Office. Your request for withdrawal must be on the proper form
which is available from your Employer. If we have received the information we
require, the requested withdrawal will become effective on the Transaction
Date and proceeds will be mailed within seven days. Withdrawal proceeds will
be sent to your Employer or Plan Trustee, unless your Employer has elected
our full service plan recordkeeping option which provides for direct
distribution to Participants. If we receive only partially completed
information, we will return the request to the Employer or Plan Trustee for
completion prior to processing.
As a deterrent to premature withdrawal (generally prior to age 59 1/2 ) the
Code provides certain restrictions on and penalties for early withdrawals. In
addition, for payments made directly to Participants, we withhold income
taxes from the amount withdrawn unless an exception applies. See "Part 10:
Federal Tax and ERISA Matters."
The Employer or Plan Trustee may also terminate its entire participation
under the MOMENTUM Contract by writing to our Processing Office. In addition,
if your plan is found not to qualify under the Code, or, if you fail to
provide us with the Participant data necessary to administer the MOMENTUM
Contract, we may return the plan assets to the Employer or Plan Trustee.
Withdrawals or terminations may result in a contingent withdrawal charge,
explained fully in "Part 8: Deductions and Charges."
While you have a loan outstanding, an amount equal to 10% of your loan
balance will be restricted, and may not be withdrawn from your Retirement
Account Value.
FORFEITURES
Forfeitures can arise when a Participant who is not fully vested under a plan
terminates employment. Under the terms of the Master Plan and Trust and the
Pooled Trust, Equitable Life is directed under these circumstances to
withdraw the unvested portion of the Retirement Account Value and deposit
such amount in a Forfeiture Account, which is to be allocated to the Default
Option.
56
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
We will re-allocate amounts in the Forfeiture Account as contributions in
accordance with instructions received by the Employer or Plan Trustee, as
applicable. Special rules apply to the application of the contingent
withdrawal charge when forfeitures have occurred. See "MOMENTUM Contract--
Contingent Withdrawal Charge" in Part 8.
DISTRIBUTION OPTIONS
The MOMENTUM Contract is an annuity contract, even though you may elect to
receive your benefits in another form.
Subject to the terms of your Employer's plan, payout options under the
MOMENTUM Contract include:
o Lump sum or partial withdrawals;
o Payments for as long as you live;
o Payments for as long as both you and your joint annuitant live; or
o Payments for a specific length of time (not longer than your life
expectancy or that of the joint life expectancy of you and your
designated beneficiary).
You may also be eligible for our "Automatic Minimum Withdrawal" feature,
which is designed to help you satisfy the Code's "minimum distribution"
requirements. Qualified plans are subject to the Code's minimum distribution
requirements. Generally, such distributions must commence by April 1 of the
calendar year following the calendar year in which the Participant attains
age 70 1/2. The plan administrator is responsible for complying with the
Code's minimum distribution requirements. For more information about the
minimum distribution requirements, see "Part 10: Federal Tax and ERISA
Matters."
Your choice may be subject to applicable withdrawal charges. see "Part 8:
Deductions and Charges."
ANNUITY DISTRIBUTION OPTIONS
The annuity distribution options available under the MOMENTUM Contract
include:
o LIFE ANNUITY: An annuity which guarantees payments to you for the rest
of your life. Payments end with the last monthly payment before your
death. Because there is no death benefit associated with this annuity
form, it provides the highest monthly payment of any of the life annuity
distribution options.
o LIFE ANNUITY-PERIOD CERTAIN: This annuity form also guarantees payments
to you for the rest of your life. In addition, if you die before a
previously selected minimum payment period (the "certain period") has
ended, payments will continue to your beneficiary for the balance of the
period certain. The minimum period is usually 5, 10, 15 or 20 years.
o LIFE ANNUITY-REFUND CERTAIN: This annuity form guarantees payments to
you for the rest of your life. In addition, if you die before the amount
applied to purchase this annuity option has been recovered, payments
will continue to your beneficiary until that amount has been recovered.
This option is available only as a fixed annuity.
o PERIOD CERTAIN ANNUITY: This annuity form guarantees payments to you for
a specific period of time, usually 5, 10, 15 or 20 years. If you die
before the period certain has ended, payments will continue to your
beneficiary for the balance of the period certain.
o QUALIFIED JOINT AND SURVIVOR LIFE ANNUITY: This annuity form guarantees
life income to you and, after your death, continuation of income to your
surviving spouse. Generally, unless married Participants elect otherwise
with the written consent of their spouse, this will be the normal form
of annuity payment for plans such as the Master Plan and Trust. See Part
10: "Federal Tax and ERISA Matters."
All of the life annuity distribution options outlined above (with the
exception of Qualified Joint and Survivor Life Annuity) are available as
either Single or Joint life annuities.
The MOMENTUM Contract also offers both fixed and variable annuity
distribution options. Fixed annuity payments, funded through our general
account, do not change and will be based on the tables of guaranteed annuity
values in the MOMENTUM Contract or on our current annuity rates, whichever is
more favorable for the Participant. For all Participants, our normal form of
annuity provides for fixed payments. Variable payments will be funded through
your choice of the 13 Investment Funds of the Hudson River Trust through the
purchase of annuity units.
We offer other forms not outlined here. Your Equitable Life Agent can provide
details.
ELECTING AN ANNUITY DISTRIBUTION
OPTION
In order to elect an annuity distribution option, a Retirement Account Value
must be at least $3,500.
57
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
The size of the payments will depend on the amount applied to purchase the
annuity, the type of annuity chosen and, in the case of a life contingency
annuity distribution option, the Participant's age (or the Participant's and
joint annuitant's ages).
Once you choose an annuity distribution option and payments have commenced,
no change can be made, other than transfers among the investment funds if
permitted in the future and if a variable annuity is selected. Remember, as a
deterrent to premature withdrawal (generally prior to age 59 1/2) the Code
provides certain restrictions on and penalties for early withdrawals. See
"Part 10: Federal Tax and ERISA Matters."
MINIMUM DISTRIBUTIONS
(AUTOMATIC MINIMUM WITHDRAWAL)--OVER AGE 70 1/2
Under the Code, distributions from qualified plans must generally begin no
later than April 1st of the calendar year following the calendar year in
which the plan participant attains age 70 1/2 (the "required beginning
date"). Subsequent distributions must be made by December 31st of each
calendar year (including the calendar year of your required beginning date).
If the minimum distribution is not made, the plan participant may be required
to pay a penalty tax in an amount equal to 50% of the difference between the
amount required to be distributed and the amount actually distributed. See
"Part 10: Federal Tax and ERISA Matters" for a discussion of various special
rules concerning the minimum distribution requirements.
We offer a payment option which we call "Automatic Minimum Withdrawal," which
is intended to meet minimum distribution requirements. You may elect
Automatic Minimum Withdrawal if you, the Participant, are at least age 70 1/2
and have a Retirement Account Value of at least $3,500. You can elect
Automatic Minimim Withdrawal by filing the proper election form with your
Employer. If you elect Automatic Minimum Withdrawal, we will withdraw the
amount which the Code requires you to withdraw from your Retirement Account
Value. We calculate the Automatic Minimum Withdrawal amount based on the
information you give us, the various choices you make and certain
assumptions. In performing this calculation, we assume that the only funds
subject to the Code's minimum distribution requirements are those held under
the MOMENTUM Contract. In addition, we rely on the information you provide to
us, and we will not be responsible for errors that result from inaccuracies
in this information. The choices you can make are described in Part 6 of the
SAI.
Your Automatic Minimum Withdrawal election is revocable. Automatic Minimum
Withdrawal is not available to Participants who have an outstanding loan.
Generally, electing this option does not restrict you from taking additional
partial withdrawals or subsequently electing an annuity distribution option.
The minimum check that will be sent is $300, or, if less, your Retirement
Account Value.
Any applicable withdrawal charges will be deducted from your Retirement
Account Value in addition to the amount of the Automatic Minimum Withdrawal.
See "MOMENTUM Contract--Contingent Withdrawal Charge" in Part 8.
DEATH BENEFIT
In general, the death benefit is equal to the greater of: (i) the Retirement
Account Value and (ii) the "minimum death benefit."
The Master Plan and Trust and the Pooled Trust direct the automatic transfer
of a Retirement Account Value to the Default Option on the date Equitable
Life receives due proof of a Participant's death, unless the beneficiary
provides contrary instructions. All amounts are held in the default option
until your beneficiary requests a distribution or transfer.
The minimum death benefit equals all contributions made less withdrawals of
contributions (including loans that default upon death). For example, assume
that a $1,000 contribution is made, and that the contribution earns $1,000
(for a balance of $2,000). A $1,500 withdrawal is then made leaving a balance
of $500. Assume that a new $500 contribution is subsequently made. If the
participant subsequently dies, the minimum death benefit will be $500 because
there was a $500 contribution that had not been withdrawn, borrowed or
forfeited.
The law requires the distribution of benefits to be completed no more than
five years after the date of your death, unless payments of your benefit to a
designated beneficiary commence within one year after your death and are made
over the beneficiary's life or over a period not exceeding the beneficiary's
life expectancy. If the beneficiary is your surviving spouse, the spouse can
elect to begin distributions over the spouse's life or over a period not
exceeding the spouse's life expectancy at any time up to when
58
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
you would have attained age 70 1/2. If you had already begun to receive
benefits, your beneficiary can continue to receive benefits based on the
payment option you selected. To designate a beneficiary or to change an
earlier designation, you should file a beneficiary designation with your plan
administrator. Your spouse must consent in writing to a designation of any
non-spouse beneficiary, as explained in "Distributions from Qualified Plans
and TSAs--Spousal Consent Rules" in Part 10.
If the Participant dies while a loan is outstanding, the loan will
automatically default and be subject to Federal income tax as a plan
distribution. This defaulted loan will also be treated as a withdrawal for
purposes of calculating the minimum death benefit. Defaulted takeover loans
will not, however, be considered withdrawals for this purpose.
The beneficiary may elect, subject to certain exceptions explained below,
Equitable Life's rules then in effect and any other applicable requirements
under the Code to: (a) receive the death benefit in a single sum, (b) apply
the death benefit to an annuity distribution option offered by Equitable
Life, (c) apply the death benefit to provide any other form of benefit
payment offered by Equitable Life, or (d) have the death benefit credited to
an account under the MOMENTUM Contract maintained on behalf of the
beneficiary in accordance with the beneficiary's investment allocation
instructions. If the beneficiary elects (d) then (1) the beneficiary will be
entitled to delay distribution of his or her account as permitted under the
terms of the Employer's plan and the minimum distribution rules under the
Code; (2) the value of the beneficiary's account will be determined at the
time of distribution to the beneficiary and, depending upon investment gains
or losses, may be worth more or less than the value of the beneficiary's
initial account and (3) if the beneficiary dies prior to taking a
distribution of his or her entire account the beneficiary of the deceased
beneficiary will be entitled to a death benefit as though the deceased
beneficiary were a Participant, based on the deceased beneficiary's initial
account.
If you die before your entire vested benefit has been distributed to you, any
remaining benefits will be payable to your beneficiary.
Our consultants can explain these and other requirements affecting death
benefits if you call them at 1-800-528-0204.
PAYMENTS OF PROCEEDS
Payments of proceeds from the Investment Funds will be made within seven days
of the Transaction Date. Payments or applications of proceeds from the
Investment Funds can be deferred for any period during which (1) the New York
Stock Exchange has been closed or trading on it is restricted, (2) sales of
securities or determination of the fair market value of an Investment Fund's
assets is not reasonably practicable because of an emergency, or (3) the SEC,
by order, permits us to defer payment in order to protect persons with
interests in the Investment Funds.
We can defer payment of any portion of your Retirement Account Value in the
Guaranteed Interest Account for up to six months while you are living.
PLAN RECORDKEEPING SERVICES
Equitable Life offers two plan recordkeeping options, one of which must be
elected for each plan. Employers can elect our basic plan recordkeeping
service option, which includes:
o Accounting by Participant;
o Accounting by Source;
o Provision of annual 5500 series Schedule A report information for use in
making the plan's annual report to the Internal Revenue Service (IRS)
and DOL; and
o Plan loan processing, if applicable.
As an added service under our Basic Recordkeeping Service, Employers may
enter into a written agreement with Equitable Life whereby Equitable Life,
based on information submitted by Employers, direct distribution of plan
benefits and withdrawals to participants, including tax withholding and
reporting to the IRS. The written agreement specifies the fees for such
service.
The MOMENTUM Program also offers a full service plan recordkeeping option;
Employers who elect this option must adopt the Master Plan and Trust. This
option is only available to Employers who have adopted the Master Plan and
Trust. If this option is chosen, Equitable Life will provide the following
plan recordkeeping services in addition to the services described above:
o Master Plan and Trust documents approved by the Internal Revenue Service
(IRS);
o Assistance in interpreting the Master Plan and Trust, including plan
installation and ongoing administrative support;
o Assistance in annual reporting with the IRS and DOL;
59
<PAGE>
PROVISIONS OF THE MOMENTUM Contract and Services We Provide (Continued)
o Plan administration manual and forms (including withdrawal, transfer,
loan processing, and account allocation forms);
o Performance of vesting calculations;
o Performance of special non-discrimination tests applicable to Code
Section 401(k) plans;
o Tracking of hardship withdrawal amounts in Code Section 401(k) plans;
and
o Direct distribution of plan benefits and withdrawals to Participants,
including tax withholding and reporting to the IRS.
Any additional services that Equitable Life will provide are indicated in the
plan recordkeeping services agreement. This agreement is required for
Employers or Plan Trustees who elect the full service recordkeeping option
and specifies the fees for the services to be provided. See "MOMENTUM
Contract--Charge for Plan Recordkeeping Services" in Part 8.
60
<PAGE>
- --------------------------------------------------------------------------------
PART 8: DEDUCTIONS AND CHARGES
- --------------------------------------------------------------------------------
ALL CONTRACTS
Most charges applied to your Contract apply to all Investment Options.
However, Trust Charges to Portfolios and Charges to Investment Funds do not
apply to the Guaranteed Interest Account or to the Fixed Maturity Account.
See "Allocation of Certain Charges to the Fixed Maturity Account" below.
TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against the Trust's assets, direct
operating expenses of the Trust (such as trustees' fees, expenses of
independent auditors and legal counsel, bank and custodian charges and
liability insurance), and certain investment-related expenses of the Trust
(such as brokerage commissions and other expenses related to the purchase and
sale of securities), are reflected in each Portfolio's daily share price. The
maximum investment advisory fees paid annually by the Portfolios cannot be
increased without a vote of that Portfolio's shareholders. The maximum fees
are as follows:
<TABLE>
<CAPTION>
DAILY AVERAGE NET ASSETS
-------------------------------
FIRST
$350 NEXT $400 OVER $750
MILLION MILLION MILLION
--------- --------- ---------
<S> <C> <C> <C>
Common Stock,
Money Market
and Balanced ...... .400% .375% .350%
Aggressive Stock
and Intermediate
Government
Securities ........ .500% .475% .450%
High Yield, Global,
Conservative
Investors and
Growth Investors . .550% .525% .500%
</TABLE>
<TABLE>
<CAPTION>
DAILY AVERAGE NET ASSETS
-------------------------------
FIRST
$500 NEXT $500 OVER $1
MILLION MILLION BILLION
--------- --------- ---------
<S> <C> <C> <C>
Quality Bond and
Growth and
Income ......... .550% .525% .500%
</TABLE>
<TABLE>
<CAPTION>
FIRST
$750 NEXT $750 OVER $1.5
MILLION MILLION BILLION
--------- --------- ---------
<S> <C> <C> <C>
EQUITY INDEX . .350% .300% .250%
</TABLE>
<TABLE>
<CAPTION>
FIRST
$500 NEXT $1 OVER $1.5
MILLION BILLION BILLION
--------- --------- ---------
<S> <C> <C>
International . .900% .850% .800%
</TABLE>
Investment advisory fees are established under investment advisory agreements
between the Trust and its investment adviser, Alliance. All of these fees and
expenses are described more fully in the Trust prospectus. Since Trust shares
are purchased at their net asset value, these fees and expenses are, in
effect, passed on to the Separate Account and are reflected in the
Accumulation Unit Values for the Investment Funds.
CHARGES FOR STATE PREMIUM AND OTHER
APPLICABLE TAXES
Currently, we deduct a charge for applicable taxes, such as state or local
premium taxes, from the amount applied to provide an annuity distribution
option if elected. The current tax charge that might be imposed varies by
state and ranges from 0% to 3.5%; however, the rate is 1% in Puerto Rico and
5% in the Virgin Islands.
We reserve the right to deduct any such charge from each contribution or from
distributions or upon termination. If we have deducted any applicable tax
charges from contributions, we will not deduct a charge for the same taxes at
a later time. If, however, an additional tax is later imposed upon us when
you withdraw from, terminate or annuitize, we reserve the right to deduct a
charge at such time.
- --------------------------------------------------------------------------------
EQUI-VEST IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY)
- --------------------------------------------------------------------------------
CHARGES TO INVESTMENT FUNDS
We make a daily charge at a guaranteed maximum effective annual rate of 1.35%
against the assets held in each of the Investment Funds. This charge is
reflected in the Accumulation Unit Values for the particular Investment Fund
and covers mortality and expense risk charges of 1.10% and expenses of .25%.
For a limited period of time we will charge .24% against the assets of the
Intermediate Government Securities, Quality Bond, High Yield, Growth
61
<PAGE>
EQUI-VEST IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY)
(Continued)
& Income, Equity Index, Global, International, Conservative Investors and
Growth Investors Funds for expenses.
The mortality and expense risk charge is comprised of .60% for mortality risk
and .50% for expense risk, although the allocation of these risk charges may
vary. We assume a mortality risk by (a) our obligation to pay a death benefit
that will not be less than the total value of all contributions made (less
any applicable taxes) adjusted for total withdrawals, (b) our obligation to
make annuity payments for the life of the Annuitant under guaranteed fixed
annuity options, regardless of the Annuitant's longevity, (c) our guarantees
relating to annuity purchase rates, the actuarial basis for which can be
changed only for new contributions and only on the fifth anniversary of the
Contract Date and every five years thereafter, and (d) our obligation to
waive the contingent withdrawal charge upon the payment of a death benefit.
The expense risk we assume is the risk that, over time, our actual expense of
administering the Contracts may exceed the amounts realized from the expense
charge and the annual administrative expense charge. Part of the mortality
and expense risk charge may be considered to be an indirect reimbursement for
certain sales and promotional expenses relating to the Contracts to the
extent that the charge is not needed to meet the actual expenses incurred.
The charge for expenses, together with the annual administrative charge
described below, is designed to reimburse us for our costs in providing
administrative services in connection with the Contracts, and is not designed
to include an element of profit.
ANNUAL ADMINISTRATIVE CHARGE
On the last Business Day of each Contract Year, we deduct from the Annuity
Account Value an annual administrative charge equal to the lesser of $30 or
2% of the Annuity Account Value on such Business Day for the first two
Contract Years, and $30 for each Contract Year thereafter. This charge is
deducted on a pro rata basis from the Investment Funds and the Guaranteed
Interest Account, and from the Fixed Maturity Account should collection from
the other Options be insufficient and we have not been otherwise reimbursed.
This charge will be prorated for a fractional year if, before the end of the
Contract Year, you surrender your Contract, the Annuitant dies or you elect
an annuity distribution option. Accumulation Units will be redeemed in order
to pay any portion of the charge deducted from an Investment Fund. Any
portion of the charge deducted from the Guaranteed Interest Account or Fixed
Maturity Account is withdrawn in dollars.
We reserve the right to increase this charge if our administrative costs
increase, but the charge is guaranteed never to exceed $65 annually, subject
to applicable law. We also reserve the right to eliminate the administrative
charge for IRA, SEP, SARSEP Contracts and NQ Contracts having a minimum
Annuity Account Value of a specified amount currently set at $20,000 (IRA,
SEP, and SARSEP) and $25,000 (NQ), on the last Business Day of each Contract
Year. We also reserve the right to deduct this charge on a quarterly, rather
than annual, basis.
CONTINGENT WITHDRAWAL CHARGE
No sales charges are deducted from contributions. However, to assist us in
defraying the various sales and promotional expenses incurred in connection
with selling the Contracts, we assess a charge on amounts withdrawn when you
make a partial withdrawal or terminate your Contract if the amount withdrawn
is in excess of the free corridor amount (defined below) or if no exception
applies. The amount of the withdrawal and the applicable withdrawal charge
are deducted pro rata from the Investment Funds and the Guaranteed Interest
Account and from the Fixed Maturity Account should collection from the other
Options be insufficient. The amount deducted to pay the withdrawal charge is
also subject to the withdrawal charge.
The contingent withdrawal charge is equal to 6% of the amount attributable to
withdrawn contributions which have been made in the current and five prior
Contract Years. In the case of a termination, we will pay the greater of (i)
the Annuity Account Value after the withdrawal charge has been imposed, as
described above or (ii) the free corridor amount plus 94% of the remaining
Annuity Account Value. For purposes of calculating the withdrawal charge (i)
we treat contributions as being withdrawn before earnings on a first-in,
first-out basis, and (2) amounts withdrawn up to the free corridor amount are
not considered a withdrawal of contributions. Although we treat contributions
as withdrawn before earnings for purposes of calculating the withdrawal
charge, the Federal income tax law treats earnings on NQ Contracts as
withdrawn first. See "Part 10: Federal Tax and ERISA Matters."
We reserve the right to change the amount of the contingent withdrawal
charge, provided that it will not exceed 6% of the amount deemed attributable
to withdrawn contributions. Applicable regulations
62
<PAGE>
EQUI-VEST IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY)
(Continued)
would not permit such a change where it would be unfairly discriminatory to
any person. Moreover, the withdrawal charge will be reduced if needed in
order to comply with any state law that applies. See New York
Contracts--Fixed Maturity Account below. The tax consequences of withdrawals
are discussed under "Part 10: Federal Tax and ERISA Matters."
Free Withdrawal Amount (Free Corridor)
No withdrawal charge will be applied during any Contract Year in which the
amount withdrawn is less than or equal to 10% of the Annuity Account Value at
the time the withdrawal is requested minus any amount previously withdrawn
during that Contract Year. This 10% portion is called the FREE CORRIDOR
AMOUNT. Any withdrawal requested that exceeds the free corridor amount will
be subject to the contingent withdrawal charge, unless one of the following
exceptions applies.
Exceptions to the Contingent Withdrawal Charge
A contingent withdrawal charge will not apply upon any of the events listed
below.
o the Annuitant dies and a death benefit is payable to the beneficiary, or
o we receive a properly completed election form providing for the Annuity
Account Value to be used to buy a life contingent annuity.
A contingent withdrawal charge will not apply in the following events.
However, we reserve the right to impose a contingent withdrawal charge, in
accordance with your Contract and applicable state law, for pre-existing
conditions or conditions which began within 12 months of your Contract Date
for these events:
o the Annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration, or
o we receive proof satisfactory to us that the Annuitant's life expectancy
is six months or less (such proof must include, but is not limited to,
certification by a licensed physician), or
o the Annuitant has been confined to a nursing home for more than a 90 day
period (or such other period, if required in your state) as verified by
a licensed physician. A nursing home for this purpose means one which is
(a) approved by Medicare as a provider of skilled nursing care service,
or (b) licensed as a skilled nursing home by the state or territory in
which it is located (it must be within the United States, Puerto Rico,
U.S. Virgin Islands, or Guam) and meets all of the following:
-- its main function is to provide skilled, intermediate, or custodial
nursing care;
-- it provides continuous room and board to three or more persons;
-- it is supervised by a registered nurse or licensed practical nurse;
-- it keeps daily medical records of each patient;
-- it controls and records all medications dispensed; and
-- its primary service is other than to provide housing for residents.
Additionally, a withdrawal charge will not apply to an IRA, QP IRA, or SEP
Contract upon the following events:
o the Annuitant has completed at least six Contract Years and has attained
age 59 1/2 or
o a request is made for a refund of a contribution in excess of amounts
allowed to be contributed under the Code within one month of the date on
which the contribution is made.
New York Contracts--Fixed Maturity Account
For Contracts issued in New York, the contingent withdrawal charge applicable
to contributions to the Fixed Maturity Account (including amounts transferred
to that Account from the other Investment Options) and which are withdrawn
from the Fixed Maturity Account, will never exceed 6%; however, the
contingent withdrawal charge could be lower.
For the Fixed Maturity Account, the contingent withdrawal charge will be the
greater of that determined by applying the New York Declining Scale
("Declining Scale") and the New York Alternative Scale ("Alternative Scale"),
not to exceed 6%. As to the withdrawal of amounts that have been transferred
within the Fixed Maturity Account from one Maturity Period to another, the
Alternative Scale is applied if it produces a higher charge than the
Declining Scale.
63
<PAGE>
EQUI-VEST IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY)
(Continued)
<TABLE>
<CAPTION>
DECLINING SCALE ALTERNATIVE SCALE
- ------------------------- -------------------------
<S> <C> <C> <C>
Year of Investment in Year of Transfer within
Fixed Maturity Account* Fixed Maturity Account*
Within Year 1 6% Within Year 1 5%
2 6% 2 4%
3 5% 3 3%
4 4% 4 2%
5 3% 5 1%
6 2% After Year 5 0%
After Year 6 0%
Not to exceed 1% times
the number of years
remaining in Maturity
Period, rounded to the
higher number of years.
In other words, if 4.3
years remain, it would be
a 5% charge.
- ----------------- ------ -------------------------
</TABLE>
* Measured from the Contract Anniversary Date prior to the date of the
contribution or transfer.
For example, compare the withdrawal charge that would be applicable to a
withdrawal from a Series 400 Contract that has an Annuity Account Value of
$10,000--$8,000 from contributions made three years ago and $2,000 from
positive investment performance.
o For any contributions withdrawn in the first six years after they are
made, the normal Series 400 withdrawal charge would be $480 (6% of
$8,000). However, if the contributions were made to the Fixed Maturity
Account, the withdrawal charge would be lower. According to the New York
Declining Scale described above, in the third year, the withdrawal
charge would be limited to 5% of the $8,000, or $400.
o Now assume that, although the contributions had been made to the Fixed
Maturity Account three years ago, they were transferred to a new
Maturity Period within the Fixed Maturity Account in the third year, and
further assume that there is exactly one year remaining in the Maturity
Period to which the amounts were transferred. Because there was a
transfer within the Fixed Maturity Account, the New York Alternative
Scale may now apply. Based on this Scale, a contribution that was so
transferred will be subject to a 5% withdrawal charge, if withdrawn in
the year of the transfer, such charge not to exceed 1% for each year
remaining in the Maturity Period. Since, in this example, the time
remaining is exactly one year, the Alternative Scale would limit the
withdrawal charge to 1%. However, New York regulations allow that the
greater of the Declining Scale or the Alternative Scale is used.
Therefore, the withdrawal charge would be 5%, or $400, based on the
Declining Scale.
o In no event would the contingent withdrawal charge exceed that otherwise
applicable under the Contract; application of the New York Scale can
only result in a lower charge. Thus, if a contribution had been in the
Contract for more than six years and was thus exempt from a withdrawal
charge, no such charge would be applicable.
o For withdrawals from an Investment Option other than the Fixed Maturity
Account, the amount available for withdrawal without a contingent
withdrawal charge is reduced by the amount of contributions in the Fixed
Maturity Account to which no withdrawal charge applies.
o As of any date on which 50% or more of your Annuity Account Value is
held in the Fixed Maturity Account, the Free Corridor Amount is zero.
o If you have not made a prior election for the reinvestment of your
Maturity Amount when it reaches the Expiration Date, such Amount will be
reinvested in whichever Fixed Maturity Period then offered has the
nearest Expiration Date; if no Fixed Maturity Periods are being offered,
it will be reinvested in the Money Market Fund.
The potential for the contingent withdrawal charge applicable to withdrawals
from the Fixed Maturity Account to be lower than the otherwise applicable
charge and the potential for the Free Corridor Amount to also be lower than
that which would otherwise apply should be considered in making allocations
to, or transfers to or from, the Fixed Maturity Account.
ALLOCATION OF CERTAIN CHARGES TO THE
FIXED MATURITY ACCOUNT
The annual administration charge and the contingent withdrawal charge will be
deducted from the Guaranteed Interest Account and the Investment Funds, as
discussed above. In the event that amounts in those Options are insufficient
to cover these charges, we reserve the right to deduct those charges from the
Fixed Maturity Periods. Charges applied to the Fixed Maturity Periods are
considered withdrawals and, as such, will result in a market value
adjustment. See "Part 5: The Fixed Maturity Account."
CHARGE ON THIRD PARTY TRANSFER OR EXCHANGE
If you ask us to make a direct transfer to a third party of amounts under
your Contract, or request that your Contract be exchanged for another con-
64
<PAGE>
EQUI-VEST IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY)
(Continued)
tract or certificate issued by another carrier, we deduct from the Annuity
Account Value both a contingent withdrawal charge as described above (if any)
and a charge of $25 per occurrence. We reserve the right to increase this $25
fee to a maximum of $65 for each direct transfer or exchange.
- --------------------------------------------------------------------------------
ALL EQUI-VEST EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ
(SERIES 100 AND 200 ONLY)
- --------------------------------------------------------------------------------
LIMITATION ON CHARGES
Under the terms of these Contracts, for the Money Market, Balanced, Common
Stock and Aggressive Stock Funds, the aggregate amount of the Separate
Account charge made to those Funds, the Trust charges for investment advisory
fees and the direct operating expenses of the Trust may not exceed a total
effective annual rate of 1.75% of the value of the assets held in those
Investment Funds.
CHARGES TO INVESTMENT FUNDS
We make a daily charge against the assets held in each of the Investment
Funds. This charge is reflected in the Accumulation Unit Values for the
particular Investment Fund and covers expenses, expense risks, mortality
risks (for the annuity rate guarantee), death benefits (for the minimum death
benefit) and financial accounting. For the Money Market, Balanced and Common
Stock Funds, the charge is made at an annual rate guaranteed not to exceed
1.49%. For all other Investment Funds, the charge is made at an annual rate
guaranteed not to exceed 1.34%.
Specific charges for each series are set forth below:
<TABLE>
<CAPTION>
SERIES 100
- -----------------------------------------------
MONEY MARKET,
BALANCED, COMMON OTHER
STOCK FUNDS FUNDS
---------------- -------
<S> <C> <C>
Expenses .60% .60%
Expense Risks .30 .15
Mortality Risks .30 .30
Death Benefits .05 .05
Financial Accounting .24 .24
- -------------------- ---------------- -------
</TABLE>
<TABLE>
<CAPTION>
SERIES 200
- -------------------------------------------------
MONEY MARKET,
BALANCED, COMMON OTHER
STOCK FUNDS FUNDS
<S> <C> <C>
Expenses and Financial
Accounting .25% .25%
Expense Risks .55 .49
Mortality Risks and
Death Benefits .60 .60
- ---------------------- ---------------- -------
</TABLE>
The charge for expenses is designed to reimburse us for various research and
development costs and for administrative expenses that exceed the annual
administrative charge described below. The expense risk we assume is the risk
that, over time, our actual administrative expense may exceed the amounts
realized from the expense and the annual administrative expense charges,
which may not be increased. We assume a mortality risk by (a) our obligation
to pay a death benefit that will not be less than the total value of all
contributions made (less any applicable taxes) adjusted for total
withdrawals, (b) our obligation to make annuity payments for the life of the
Annuitant under guaranteed fixed annuity options, regardless of the
Annuitant's longevity, (c) our guarantees relating to annuity purchase rates,
the actuarial basis for which can be changed only for new contributions and
only on the fifth anniversary of the Contract Date and every five years
thereafter, and (d) our obligation to waive the contingent withdrawal charge
upon the payment of a death benefit. The charge for financial accounting
services is designed to reimburse us for our costs in providing those
services in connection with the Contracts, and, like the charge for expenses,
is not designed to include an element of profit. The total of these charges
may be reallocated among the categories of charges shown above; however, we
intend to limit any possible reallocation to include only the charges for
expense risks, mortality risks and death benefits.
Part of the respective charges for expense risks, mortality risks and death
benefits may be considered to be an indirect reimbursement for certain sales
and promotional expenses relating to the Contracts to the extent that the
charges are not needed to meet the actual expenses incurred.
ANNUAL ADMINISTRATIVE CHARGE
Except as discussed below, on the last Business Day of each Contract Year we
deduct from the Annuity Account Value an annual administrative charge equal
to the lesser of $30 or 2% of the Annuity Account Value on such Business Day
(adjusted to include any withdrawals made during the year). This charge is
deducted from each Investment Option on a pro rata basis. This charge will be
prorated
65
<PAGE>
ALL EQUI-VEST EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ
(SERIES 100 AND 200 ONLY) (Continued)
for a fractional year if, before the end of the Contract Year, you surrender
your Contract, the Annuitant dies or you elect an annuity distribution
option. Accumulation Units will be redeemed in order to pay any portion of
the charge deducted from an Investment Fund.
Any portion of the charge deducted from the Guaranteed Interest Account is
withdrawn in dollars.
Exceptions to Annual Administrative Charge
For IRA, QP IRA, NQ, SEP, Unincorporated Trusteed, and Annuitant-Owned HR-10
Contracts, the charge is zero if the Annuity Account Value is at least
$10,000 at the end of the Contract Year.
For TSA, EDC and Corporate Trusteed Contracts, the charge is zero if the
Annuity Account Value is at least $25,000 at the end of the Contract Year.
CONTINGENT WITHDRAWAL CHARGE
No sales charges are deducted from contributions. However, to assist us in
defraying the various and promotional expenses incurred in connection with
selling the Contracts, we assess a charge on amounts withdrawn when you make
a partial withdrawal or terminate your Contract if the amount withdrawn is in
excess of the free corridor amount (defined below) or if no exception
applies. The withdrawal charge is deducted pro rata from the Annuity Account
Value in addition to the amount of the requested withdrawal; the amount
deducted which is applied to pay the withdrawal charge is also subject to the
withdrawal charge.
Free Withdrawal Amount (Free Corridor)
For NQ, Trusteed, TSA and QP IRA Contracts, (but not IRA or QP IRA group
Contracts), no withdrawal charge will be applied during any Contract Year in
which the amount withdrawn is less than or equal to 10% of the Annuity
Account Value at the time the withdrawal is requested minus any amount
previously withdrawn during that Contract Year. This 10% portion is called
the FREE CORRIDOR AMOUNT. For EDC, SEP, IRA and QP IRA Series 100 and 200
group Contracts, the free corridor amount is available only after three
Contract Years have been completed or the Annuitant has reached age 59 1/2.
HOW THE CONTINGENT WITHDRAWAL CHARGE IS APPLIED FOR SERIES 100 AND 200 NQ AND
TRUSTEED CONTRACTS
Partial withdrawals in excess of the free corridor amount will be subject to
a withdrawal charge of 6% of the amount of the contributions made during the
current and five prior Contract Years. In the case of a termination, we will
pay the greater of (i) the Annuity Account Value after the withdrawal charge
has been imposed, as described above and after giving effect to any
outstanding loan balance (including accrued interest), or (ii) the free
corridor amount plus 94% of the remaining Annuity Account Value. For NQ
Contracts issued to Annuitants age 59 or older, this percentage will be 95%
in the fifth Contract Year and 96% in the sixth Contract Year. For Trusteed
Contracts issued to Annuitants age 60 or older, this percentage is 95% in the
fifth Contract Year. For NQ and Trusteed group Contracts, there is no
reduction in the contingent withdrawal charge for older Annuitants (referred
to above) in the fifth and sixth Contract Year.
For purposes of calculating the withdrawal charge, (1) we treat contributions
as being withdrawn before earnings, on a first-in first-out basis, and (2)
amounts withdrawn up to the free corridor amount are not considered a
withdrawal of any contributions. Although we treat contributions as withdrawn
before earnings for purposes of calculating the withdrawal charge, the
federal income tax law treats earnings on NQ Contracts as withdrawn first.
See "Part 10: Federal Tax and ERISA Matters."
No charge will be applied to any amount withdrawn from an NQ or Trusteed
Contract if:
o the amount withdrawn is applied to the election of a life annuity
distribution option; or
o the Annuitant dies and the death benefit is made available to the
beneficiary.
No charge will be applied to any amount withdrawn from a Trusteed Contract
if:
o the Owner has completed at least five Contract Years and the Annuitant
has reached age 59 1/2; or
o a request is made for a refund of an excess contribution within one
month of the date on which the contribution is made.
No charge will be applied to any amount withdrawn from a Corporate Trusteed
Contract if the Annuitant has reached age 59 1/2 and has either retired or
terminated employment, regardless of the number of completed Contract Years.
HOW THE CONTINGENT WITHDRAWAL CHARGE
IS APPLIED FOR SERIES 100 AND 200 IRA, SEP, TSA, EDC AND ANNUITANT-OWNED
HR-10 CONTRACTS
Withdrawals under these Contracts and defaulted loan amounts under TSA
Contracts (in excess of the free corridor amount, if applicable) may be
subject to
66
<PAGE>
ALL EQUI-VEST EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ
(SERIES 100 AND 200 ONLY) (Continued)
a charge of up to 6% of the amount withdrawn or the defaulted loan amount, as
the case may be. The percentage charged will be based on the Contract Year in
which the withdrawal is made, as shown below:
<TABLE>
<CAPTION>
CONTRACT
YEAR(S) CHARGE
- ---------------- ----------
<S> <C>
1 through 5 6%*
6 through 8 5
9 4
10 3
11 2
12 1
13 and later 0
</TABLE>
* This percentage will be reduced to 5% for Contracts issued to Annuitants,
in year 5, if age 60 or older under individual Contracts only.
The total of all withdrawal charges assessed will not exceed 8% of all
contributions made during the current Contract Year and the nine prior
Contract Years before the withdrawal is made.
No charge will be applied to any amount withdrawn from an IRA, QP IRA, SEP,
TSA, EDC or Annuitant-Owned HR-10 Contract if:
o the Contract Owner has completed at least five Contract Years and the
Annuitant has reached age 59 1/2;
o a request is made for a refund of an excess contribution within one
month of the date on which the contribution is made;
o the Annuitant dies and the death benefit is made available to the
beneficiary;
o the Contract Owner has completed at least five Contract Years, the
Annuitant has reached age 55 and the amount withdrawn is used to
purchase from us a period certain annuity that extends beyond the
Annuitant's age 59 1/2 and allows no prepayment;
o the Contract Owner has completed at least three Contract Years and the
amount withdrawn is used to purchase from us a period certain annuity
for a term of at least 10 years that allows no prepayment;
o the amount withdrawn is applied to the election of a life contingent
annuity distribution option (this form of payment is not available for
Annuitants in governmental EDC plans in New York);
o the amount withdrawn is applied to the election of a period certain
annuity of at least 15 years, but not in excess of the Annuitant's life
expectancy, that allows no prepayment (this provision is available only
for Annuitants in governmental EDC plans in New York).
No charge will be applied to any amount withdrawn from a TSA Contract if:
o the Contract Owner has completed at least five Contract Years, has
reached age 55 and has separated from service.
No charge will be applied to any amount withdrawn from a SEP Contract funding
SARSEP arrangements if:
o the amount withdrawn is a distribution of deferrals disallowed (plus or
minus any gain or loss) by reason of the employer's failure to meet the
Code's requirement that 50% of eligible employees elect SARSEP within
the plan year and the request for withdrawal is made by the April 15th
of the calendar year following the calendar year in which you were
notified of such disallowance; or
o the amount withdrawn is an "excess contribution" (as such term is
defined in Section 408(k)(6)(C)(ii) of the Code), plus or minus any gain
or loss, and the request for withdrawal is made by the April 15th of the
calendar year following the calendar year in which the excess
contributions were made; or
o the amount withdrawn is an "excess deferral" (as such term is defined in
Section 402(g)(2) of the Code), plus or minus any gain or loss, and the
request for withdrawal is made by the April 15th of the calendar year
following the calendar year in which such excess deferrals were made.
We reserve the right to reduce or eliminate the withdrawal charge in certain
cases, including transfers to an IRA or QP IRA from another EQUI-VEST
Contract. In no event would such reduction or elimination be permitted where
it would be unfairly discriminatory to any person.
The tax consequences of withdrawals are discussed under "Part 10: Federal Tax
and ERISA Matters."
As a result of regulations which apply to EDC plans of governmental employers
in New York (NY EDC PLANS), EQUI-VEST Contracts which fund New York EDC Plans
contain special provisions which apply to all NY EDC Plans whose EQUI-VEST
funding arrangements became effective or were renewed on or after July 1,
1989.
67
<PAGE>
ALL EQUI-VEST EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ
(SERIES 100 AND 200 ONLY) (Continued)
These provisions permit the automatic termination of all Contracts issued in
connection with a NY EDC Plan five years after the effective date (or any
renewal date) of its EQUI-VEST funding arrangement without the deduction of
any contingent withdrawal charges. If agreed to by the employer and us, the
period may be shorter than five years. A decision to permit the automatic
termination of all Contracts would result in the transfer of each Contract's
Annuity Account Value to a successor funding vehicle designated by the
employer.
The employer sponsoring a NY EDC Plan can prevent such a termination and
transfer by renewing the EQUI-VEST funding arrangement in a written notice to
us which includes a certification of compliance with procedures under the
applicable regulations. We are not responsible for the validity of any
certification by the employer. The written notice must be received at our
Processing Office and accepted by us not later than seven days before the
date on which a transfer would otherwise occur.
No further investment experience, whether positive or negative, will be
credited under a NY EDC Plan Contract once the Contract terminates. As with
other tax-favored retirement programs in which the funding is affected by
actions of a sponsoring employer, we are not required to provide Annuitants
with information relating to an employer's decision to exercise any
termination right.
- -------------------------------------------------------------------------------
MOMENTUM CONTRACT
- -------------------------------------------------------------------------------
LIMITATION ON CHARGES
Under the terms of the MOMENTUM Contract for the Money Market, Balanced,
Common Stock and Aggressive Stock Funds, the aggregate amount of the Separate
Account charge made to those Funds, the Trust charges for investment advisory
fees and the direct operating expenses of the Trust may not exceed a total
effective annual rate of 1.75% of the value of the assets held in those Funds
for the MOMENTUM Contract.
CHARGES TO INVESTMENT FUNDS
We make a daily charge against the assets held in each of the Investment
Funds for expenses of the MOMENTUM Contract. This charge is reflected in the
Accumulation Unit Values for the particular Investment Fund and covers
expenses, expense risks, mortality (for the annuity rate guarantee), death
benefits (for the minimum death benefit) and financial accounting. For the
Money Market, Balanced and Common Stock Funds, the charge is made at an
annual rate not to exceed 1.49% which consists of .60% for expenses, .30% for
expense risks, .30% for mortality risks, .05% for death benefits and .24% for
financial accounting. For all other Investment Funds, the charge is made at
an annual rate not to exceed 1.34% which consists of .60% for expenses, .15%
for expense risks, .30% for mortality risk, .05% for death benefits and .24%
for financial accounting.
The charge for expenses is designed to reimburse us for various research and
development costs and for administrative expenses that exceed the quarterly
administrative charge described below. The expense risk we assume is the risk
that, over time, our actual expense of administering the MOMENTUM Contract
may exceed the amounts realized from the expense and the quarterly
administrative expense charges. We assume a mortality risk by (a) our
obligation to pay a death benefit that will not be less than the total value
of all contributions made (less any applicable taxes) adjusted for total
withdrawals, (b) our obligation to make annuity payments for the life of the
Annuitant under guaranteed fixed annuity options, regardless of the
Annuitant's longevity, (c) our guarantees relating to annuity purchase rates,
the actuarial basis for which can be changed only for new contributions and
only on the fifth anniversary of the Contract Date and every five years
thereafter, and (d) our obligation to waive the contingent withdrawal charge
upon the payment of a death benefit. The charge for financial accounting
services is designed to reimburse us for our costs in providing those
services in connection with the MOMENTUM Contract, and, like the charge for
expenses, is not designed to include an element of profit.
Under the MOMENTUM Contract, the total of these charges may be reallocated
among the categories of charges discussed above. However, notwithstanding
provisions of the Momentum Contract, we intend to limit any possible
reallocation to include only the charges for expense risks, mortality risks
and death benefits.
Part of the respective charges for expense risks, mortality risks and death
benefits may be considered to be an indirect reimbursement for certain
68
<PAGE>
MOMENTUM CONTRACT (Continued)
sales and promotional expenses relating to the MOMENTUM Contract to the
extent that the charges are not needed to meet the actual expenses incurred.
QUARTERLY ADMINISTRATIVE CHARGE
Except as discussed below, on the last Business Day of each calendar quarter
we deduct from each Retirement Account Value an administrative charge which
is currently equal to $7.50 or, if less, .50% of the total of the Retirement
Account Value plus the amount of any Active Loan. This charge is deducted by
Source from each Investment Option in a specified order described under "How
We Deduct the Quarterly Administrative Charge" in the SAI.
Any portion of the charge deducted from an Investment Fund will reduce the
number of Accumulation Units you have in that Investment Fund. Any portion of
the charge deducted from the Guaranteed Interest Account is withdrawn in
dollars.
There is currently no charge for any calendar quarter in which the Retirement
Account Value plus any Active Loan is at least $25,000 as of the last
Business Day of that quarter. We reserve the right to increase this charge if
our administrative costs increase. We will give Employers or Plan Trustees 90
days written notice of any increase. We may also reduce this charge under
certain circumstances. See "Special Circumstances" in this Section.
You, as Employer, may choose to have this quarterly administrative charge
billed to you directly.
CHARGE FOR PLAN RECORDKEEPING
SERVICES
The annual charge for the basic plan recordkeeping option is $300 (pro-rated
in the first year) and will be billed directly to the Employer. The $300
charge is not imposed on plans that converted to the MOMENTUM Contract from
our EQUI-VEST Corporate Trusteed Contract. Employers may enter into a written
agreement with Equitable Life for direct distribution of plan benefits and
withdrawals to Participants, including tax withholding and reporting to the
IRS. For this service, a $25 checkwriting fee shall be charged by Equitable
Life for each check drawn. We reserve the right to increase these charges if
our plan recordkeeping costs increase. We will give Employers or Plan
Trustees 90 days written notice of any increase.
There are additional charges if the Employer or Plan Trustee elects to use
our full service plan recordkeeping option; these additional charges will
depend upon the service used. Employers will be required to execute an
agreement governing additional recordkeeping services and related charges.
CONTINGENT WITHDRAWAL CHARGE
No sales charges are deducted from contributions. However, to assist us in
defraying the various sales and promotional expenses incurred in connection
with selling the MOMENTUM Contract, we assess a sales charge on amounts
withdrawn from Retirement Account Values. Under certain conditions, the
contingent withdrawal charge will not apply to some or all of the amount
withdrawn.
Free Withdrawal Amount (Free Corridor)
Subject to certain restrictions, no withdrawal charge will be applied during
any Participation Year in which the amount withdrawn does not exceed 10% of
the sum of the Retirement Account Value and any Active Loan at the time the
withdrawal is requested, minus any amount previously withdrawn during that
Participation Year (including any defaulted loan amounts and forfeited
amounts). This 10% portion is called the FREE CORRIDOR AMOUNT.
If you, as the Employer, have transferred your plan assets to the MOMENTUM
Program from another qualified plan and we have not yet received from you the
allocation of values among Participants, we will treat the total amount we
hold as one Retirement Account Value. Withdrawals from this Retirement
Account Value will not have the benefit of a free corridor amount. However,
once the amount we hold is allocated among the various Participants,
withdrawals will have the benefit of the free corridor amount.
How the Contingent Withdrawal Charge is
Applied
Partial withdrawals in excess of the free corridor amount will be subject to
a withdrawal charge of 6% of the lesser of (i) such excess or (ii) the amount
of the withdrawal attributable to contributions made by or on behalf of the
Participant during the current and five prior Participation Years.
In the case of a full withdrawal of a Retirement Account Value, the plan will
receive from us the greater of your Retirement Account Value after the
withdrawal charge of 6% has been imposed upon the amount of the contributions
made by or on behalf of a Participant during the current and five prior
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MOMENTUM CONTRACT (Continued)
Participation Years, or the free corridor amount plus 94% of the sum of the
remaining Retirement Account Value and any Active Loan, less the Active Loan.
This charge will also apply in the case of a termination of participation
under the MOMENTUM Contract by the Employer or Plan Trustee.
The withdrawal charge described above is deducted from the Retirement Account
Value in addition to the amount of the requested withdrawal; the portion of
the amount withdrawn that is applied to pay the withdrawal charge is also
subject to the withdrawal charge.
For purposes of calculating the withdrawal charge, (1) the oldest
contributions will be treated as the first withdrawn and more recent
contributions next, (2) amounts withdrawn up to the free corridor amount will
not be considered a withdrawal of any contributions and (3) Active Loans do
not include takeover loans for this purpose.
If a portion of your Retirement Account Value is forfeited under the terms of
your plan, we will assess a withdrawal charge only against vested
contribution amounts. Under Basic Service, the Plan Trustee must tell us the
vested balance. The balance of the withdrawal charge will be waived at that
time. However, if you, as the Employer or Plan Trustee, withdraw the
forfeited amount from the MOMENTUM Contract before it is reallocated to other
Participants, you will incur the balance of the withdrawal charge at that
time.
No charge will be applied to any amount withdrawn, if:
o the amount withdrawn is applied to the election of a life annuity
distribution option;
o you die;
o you have been a Participant for at least five Participation Years and
have reached age 59 1/2;
o you have reached age 59 1/2 and have separated from service (regardless
of the number of Participation Years);
o the amount withdrawn is the result of a request for a refund of "excess
contributions" or "excess aggregate contributions" as such terms are
defined in Section 401(k)(8)(B) and 401(m)(6)(B), respectively, of the
Code, including any gains or losses, and the withdrawal is made no later
than the end of the plan year following the plan year for which such
contributions were made;
o the amount withdrawn is a request for a refund of "excess deferrals" as
such term is defined in Section 402(g)(2) of the Code, including any
gains or losses, provided the withdrawal is made no later than April 15,
following the calendar year in which such excess deferrals were made;
o the amount withdrawn is a request for a refund of contributions made due
to mistake of fact made in good faith, provided the withdrawal is made
within 12 months of the date such mistake of fact contributions were
made and any earnings attributable to such contributions are not
included in such withdrawal;
o the amount withdrawn is a request for a refund of contributions
disallowed as a deduction by the Employer for Federal income tax
purposes, provided such withdrawal is made within 12 months after the
disallowance of the deduction has occurred and no earnings attributable
to such contributions are included in such withdrawal; or
o the amount withdrawn is a withdrawal for disability as defined in
Section 72(m) of the Code.
In addition, there will be no contingent withdrawal charge imposed on any
Annuity Account Value under an EQUI-VEST Corporate Trusteed certificate when
it is converted to a MOMENTUM Contract. For purposes of calculating any
contingent withdrawal charge under the MOMENTUM Contract, we will carry over
the history of the contributions made under a converted EQUI-VEST
certificate. For example, if an EQUI-VEST Corporate Trusteed certificate was
purchased on behalf of a Participant on June 1, 1987 with a single $5,000
contribution, we will continue to treat the $5,000 contribution as made on
June 1, 1987 under the MOMENTUM Contract. This means that you will not lose
the benefit of "aging" contributions by converting EQUI-VEST certificates to
the MOMENTUM Contract.
PLAN LOAN CHARGES
A $25 loan set-up charge will be deducted from your Retirement Account Value
at the time a plan loan is made. Also, we will deduct a recordkeeping charge
of $6 from your Retirement Account Value on the last Business Day of each
calendar quarter if there is an Active Loan on that date. The $6 per quarter
recordkeeping charge, but not the $25 set-up charge, will be applicable to
takeover loans and to loans converted from EQUI-VEST Corporate Trusteed to
MOMENTUM.
Your employer may elect to pay these charges. These charges are intended to
reimburse us for the added
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MOMENTUM CONTRACT (Continued)
administrative costs associated with processing loans. We reserve the right
to increase these administrative charges if our costs increase. We will give
Employers or Plan Trustees 90 days written notice of any increase.
Any defaulted loan amount will incur a contingent withdrawal charge as
described above under "Contingent Withdrawal Charge."
SPECIAL CIRCUMSTANCES
Subject to any necessary governmental or regulatory approvals, the contingent
withdrawal charge, quarterly administrative charge, loan charges and basic
plan recordkeeping fee for a particular plan participating under the Contract
may be reduced or eliminated when sales are made in a manner that results in
savings of sales or administrative expenses. The entitlement to such a
reduction or elimination will be determined by us based on factors such as
the number of Participants, performance of sales or administrative functions
by the Employer or plan administrator, frequency of contributions or the use
of automated techniques in transmitting data.
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PART 9: VOTING RIGHTS
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TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of the Trust. Since we own
the assets of the Separate Account, we are the legal owner of the shares and,
as such, have the right to vote on certain matters. Among other things, we
may vote:
o to elect the Trust's Board of Trustees,
o to ratify the selection of independent auditors for the Trust, and
o on any other matters described in the Trust's current prospectus or
requiring a vote by shareholders under the 1940 Act.
Because the Trust is a Massachusetts business trust, annual meetings are not
required. Whenever a shareholder vote is taken, we will give Contract Owners
and Employers, if appropriate, the opportunity to instruct us how to vote the
number of shares attributable to their Contracts. If we do not receive
instructions in time from all Contract Owners and Employers, if appropriate,
we will vote the shares of a Portfolio for which no instructions have been
received in the same proportion as we vote shares of that Portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in an Investment Fund in
the same proportions that Contract Owners vote.
All Trust shares are entitled to one vote. Fractional shares will be counted.
Voting generally is on a Portfolio-by-Portfolio basis except that shares will
be voted on an aggregate basis when universal matters, such as election of
Trustees and ratification of independent auditors, are voted upon. However,
if the Trustees determine that shareholders in a Portfolio are not affected
by a particular matter, then such shareholders generally would not be
entitled to vote on that matter.
SEPARATE ACCOUNT VOTING RIGHTS
Under the 1940 Act, certain actions (such as some of those described under
"Changes in Applicable Law and Otherwise," below) may require Contract Owner
approval. In that case, Contract Owners will be entitled to one vote for each
Accumulation Unit they have in the Investment Funds. We will cast votes
attributable to any amounts we have in the Investment Divisions in the same
proportion as votes cast by Contract Owners.
VOTING RIGHTS OF OTHERS
Currently, we control the Trust. Trust shares are held by other separate
accounts of ours and by separate accounts of insurance companies affiliated
and unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of Contract Owners, we currently
do not foresee any disadvantages arising out of this. The Trust's Board of
Trustees intends to monitor events in order to identify any material
irreconcilable conflicts that possibly may arise and to determine what
action, if any, should be taken in response. If we believe that the Trust's
response to any of those events insufficiently protects our Contract Owners,
we will see to it that appropriate action is taken to protect our Contract
Owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
Federal securities laws. To the extent that those laws or the regulations
promulgated under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
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PART 10: FEDERAL TAX AND ERISA MATTERS
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ANNUITIES
This prospectus briefly describes our understanding of the current Federal
income tax rules that apply to an annuity purchased with after-tax dollars
(non-qualified annuity) and some of the special tax rules that apply to an
annuity purchased to fund a tax-favored retirement program (qualified
annuity). A qualified annuity may be purchased under a TSA, IRA, QP IRA, SEP
or EDC plan (EQUI-VEST only) or qualified plan (plans funded by Trusteed and
Annuitant-Owned HR-10 contracts and the MOMENTUM program). Rights and
benefits of the Annuitant or Participant under an annuity purchased to fund a
tax-favored retirement program may be restricted in order to qualify for its
special treatment under Federal tax law.
Additional tax information appears in the SAI. This prospectus and the SAI do
not provide detailed tax information and do not address state and local
income and other taxes, or federal gift and estate taxes. Not every Contract
has every feature discussed in this section. Please consult a tax adviser
when considering the tax aspects of your Contract.
TAXATION OF EQUI-VEST NON-QUALIFIED ANNUITIES
Equitable has designed the EQUI-VEST Contract to qualify as an "annuity" for
purposes of Federal income tax law.
Gains in the Annuity Account Value of the Contract generally will not be
taxable to an individual until a distribution occurs, either by a withdrawal
of part or all of its value or as a series of periodic payments. However,
there are some exceptions to these rules (1) if a Contract fails investment
diversification requirements; (2) if an individual transfers a Contract as a
gift to someone other than a spouse (or divorced spouse), any gain in its
Annuity Account Value will be taxed at the time of transfer; (3) the
assignment or pledge of any portion of the value of a Contract will be
treated as a distribution of that portion of the Contract; and (4) when an
insurance company (or its affiliate) issues more than one non-qualified
deferred annuity Contract during any calendar year to the same taxpayer, the
contracts are required to be aggregated in computing the taxable amount of
any distribution.
Corporations, partnerships, trusts and other non-natural persons generally
cannot defer the taxation of current income credited to the Contract unless
an exception under the Code applies.
Prior to the annuity starting date, any partial withdrawals are taxable to
the Contract Owner to the extent that there has been a gain in the Annuity
Account Value. The balance of the distribution is treated as a return of the
"investment" or "basis" in the Contract and is not taxable. Generally, the
investment or basis in the Contract equals the contributions made less any
amounts previously withdrawn which were not taxable.
If you surrender your Contract, the distribution is taxable to the extent it
exceeds the investment in the Contract.
Once annuity payments begin, a portion of each payment is considered to be a
tax-free return of investment based on the ratio of the investment to the
expected return under the Contract. The remainder of each payment will be
taxable. In the case of a variable annuity, special rules apply if the
payments received in a year are less than the amount permitted to be
recovered tax-free. After the total investment has been recovered, future
payments are fully taxable. If payments cease as a result of death, a
deduction for any unrecovered investment will be allowed.
The taxable portion of a distribution is treated as ordinary income and is
subject to income tax withholding. See "Federal and State Income Tax
Withholding," below. In addition, a penalty tax of 10% applies to the taxable
portion of a distribution unless the distribution is (1) made on or after the
date the taxpayer attains age 59-1/2, (2) made on or after the death of the
Contract Owner, (3) attributable to the disability of the taxpayer, (4) part
of a series of substantially equal installments as an annuity for the life
(or life expectancy) of the taxpayer or the joint lives (or joint life
expectancies) of the taxpayer and a beneficiary, or (5) with respect to
income allocable to amounts contributed to an annuity contract prior to
August 14, 1982 which are transferred to the Contract in a tax-free exchange.
If, as a result of the Annuitant's death, the beneficiary is entitled to
receive the death benefit described in Part 6, the beneficiary is generally
subject
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to the same tax treatment as the Contract Owner (discussed above), had the
Contract Owner surrendered the contract.
If the beneficiary elects to take the death benefit in the form of a life
income or installment option, the election should be made within 60 days
after the day on which a lump sum death benefit first becomes payable and
before any benefit is actually paid. The tax computation will reflect your
investment in the Contract.
Special distribution requirements apply upon the death of the owner of a
non-qualified annuity. See "Part 5--Tax Rules: Special Aspects" in the SAI.
SPECIAL RULES FOR TAX-FAVORED
RETIREMENT PROGRAMS
An annuity contract may be used to fund certain employer-sponsored retirement
programs.
The Code describes how a retirement program can qualify for tax-favored
status and sets requirements for various features including: participation,
nondiscrimination, vesting and funding; limits on contributions,
distributions and benefits; penalties; and withholding, reporting and
disclosure. This section provides a brief description of the various tax-
favored retirement programs which can be funded through EQUI-VEST and
MOMENTUM. More information appears in the SAI. Certain tax advantages of a
tax-favored retirement program may not be available under state and local tax
laws.
TAX-QUALIFIED RETIREMENT PLANS
(QUALIFIED PLANS)
Corporations, partnerships and sole proprietorships may establish qualified
plans for the working owners and their employees which provide for
contributions to be made to the Contracts. Both employer and employee
contributions to these plans are subject to a variety of limitations, some of
which are discussed here briefly. Certain penalties for violating
contribution limits are discussed further in the SAI. Qualified plans must
not discriminate in favor of highly compensated employees. In addition, "top
heavy" rules apply to plans where more than 60% of the account balances are
allocated to "key employees" as defined in the Code. See your tax adviser for
more information.
The annual limit of employer and employee contributions (as defined in
Section 415(c) of the Code) which may be made on behalf of an employee to all
of the defined contribution plans of an employer is the lesser of $30,000 or
25% of compensation or earned income. Compensation or earned income in excess
of $150,000 cannot be considered in calculating contributions to the plan.
This amount may be adjusted for cost of living changes in future years. Any
reallocated forfeitures and voluntary nondeductible employee contributions
will generally be included for purposes of the contribution limit. Salary
reduction contributions made under a cash or deferred arrangement (401(K)
PROGRAM) are limited to $7,000, as adjusted annually for cost of living
changes. In 1996, the annual dollar limit on these "elective deferrals" is
$9,500. This limit applies to the aggregate of all elective deferrals under
all tax-favored plans in which the individual participates, including those
made under SARSEPs, EDC plans and TSAs.
Special limits on contributions apply to anyone who participates in more than
one qualified plan or who controls another trade or business. There is also
an overall limit on the total amount of contributions and benefits under all
tax-favored retirement programs in which a person participates.
In certain cases a Contract may be funded by a tax-deferred rollover
contribution not subject to the above limits.
TAX-SHELTERED ANNUITY
(TSAS) ARRANGEMENTS
An employee of an employer which is either (i) an organization described in
Section 501(c)(3) of the Code which is exempt from Federal income tax under
Section 501(a) of the Code or (ii) a state, political subdivision of a state,
or an agency or instrumentality of any one or more of these entities (but
only where the employee performs services for an educational organization
described in Section 170(b)(1)(A)(ii) of the Code) may exclude from Federal
gross income for a tax year contributions made by the employer to a TSA
Contract. Some or all of the contributions may be made under a salary
reduction agreement between the employee and the employer, subject to certain
limitations. Generally, the contribution limit is the lowest of the
following: (1) the annual exclusion allowance for the employee (20% of
includable salary times years of service less previous contributions to
qualified plans, TSAs and EDC plans), (2) the annual limit on employer
contributions to defined contribution plans and (3) the annual limit on all
elective deferrals. Items 2 and 3 are discussed in "Tax Qualified Retirement
Plans (Qualified Plans)," above. Contributions to a TSA Contract under a
salary reduction agreement cannot exceed $9,500 per year. Special provisions
may allow "catch-up" contributions to compensate for smaller contributions
made in previous years. In addition, there may be adverse tax consequences
for excess elective deferrals. See "Penalties for Excess Defer-
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rals" in Part 5 of the SAI. Tax-free transfer or rollover contributions from
another TSA arrangement are not subject to the above limits. Note, however,
that the maximum salary reduction contribution that may be made by an
annuitant who participates both in a TSA arrangement and an EDC plan will be
limited to the maximum allowed under Code Section 457 (i.e., generally
$7,500).
Employees are permitted to enter into only one salary reduction agreement per
year with each Employer. Because the salary reduction agreement is between
the TSA plan participant and the Employer, Equitable Life and its Agents are
not responsible for monitoring such agreements.
DISTRIBUTIONS FROM QUALIFIED PLANS
AND TSAS
Amounts held under qualified plans and TSAs are generally not subject to
Federal income tax until benefits are distributed. Generally, amounts
distributed are fully taxable as ordinary income. For rules requiring 20%
Federal income tax withholding applicable to certain distributions from
qualified plans or TSAs, see "Federal and State Income Tax Withholding"
below. In addition, qualified plan and TSA distributions may be subject to
additional tax penalties. For information regarding tax penalties which may
apply, see "Penalty Tax on Early Distributions" and "Tax Penalties for
Insufficient Distributions" later in this section. The SAI contains
additional information about qualified plan distributions, including
penalties on excessive retirement plan distributions.
Loans may be made from a qualified plan or TSA plan, which permits them,
without being treated as a distribution. However, if the amount of the loan
exceeds permissible limits under the Code when made, the amount of the excess
is treated (solely for tax purposes) as a taxable distribution. Additionally,
if the loan is not repaid at least quarterly amortizing interest and
principal, the amount not repaid when due may be treated as a taxable
distribution. Under Proposed Treasury Regulations which are not yet
effective, the IRS would require the entire unpaid balance of the loan to be
includible in income in the year of the default. See the discussion in Part 6
under "Loans (for TSA and Corporate Trusteed only)," the discussion below and
in Part 4 of the SAI for certain additional Equitable Life, Code and ERISA
rules covering loans from qualified plans or TSAs.
In certain cases, direct transfers between TSA issuers are not treated as
taxable distributions. A tax-deferred rollover, if permitted, can also
postpone taxation. See "Tax-Free Rollover," in this section.
If a Contract is surrendered for its value, the distribution is taxable to
the extent the amount received exceeds the basis (if any). A taxpayer will
have a basis in the Contract if, for example, after-tax contributions have
been made.
The amount of any partial distribution from a qualified plan or a TSA prior
to the annuity starting date is generally taxable, except to the extent that
the distribution is treated as a withdrawal of after-tax contributions.
Distributions are normally treated as pro rata withdrawals of after-tax
contributions and earnings on those contributions.
If an annuity distribution option is elected, any basis will be recovered
under the rules which apply to non-qualified annuities. See "Taxation of Non-
qualified Annuities."
Qualified plan distributions (but not TSAs) may be eligible for the special
tax treatment accorded lump sum distributions (favorable five-year averaging,
and in certain cases, favorable ten-year averaging and long-term capital gain
treatment). This treatment is not available unless the balance to the credit
of a plan participant who has participated in the plan for at least five
years is paid to the recipient within one taxable year, and is payable (i)
after the participant attains age 59-1/2 or (ii) on account of the
participant's (a) death, (b) separation from service (not applicable to
self-employed individuals), or (c) disability (applicable only to
self-employed individuals).
The rules governing taxation of distributions made on account of the death of
the Annuitant in a qualified plan or TSA are similar to those governing death
benefit distributions in non-qualified annuities. See "Taxation of
Non-Qualified Annuities," above. In some instances, distributions from a
qualified plan or TSA made to a surviving spouse may be rolled over to an IRA
or other individual retirement arrangement on a tax-deferred basis. See "Tax
Free Rollover," and "Tax-Qualified Individual Retirement Annuities (IRAs),"
below.
Tax Free Rollover
Any distribution from a qualified plan or a TSA which is an "eligible
rollover distribution" may be rolled over into another eligible retirement
plan, either as a direct rollover or a rollover within 60 days of receiving
the distribution. To the extent a distribution is rolled over, it remains tax
deferred.
A distribution from a qualified plan may be rolled over to another qualified
plan which will accept rollover contributions or an individual retirement
arrangement; a TSA distribution may be rolled over to another TSA or
individual retirement arrange-
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ment. Death benefits received by a spousal beneficiary may only be rolled
over to an IRA.
The taxable portion of most distributions will be eligible for rollover,
except as specifically excluded under the Code. Distributions which cannot be
rolled over generally include periodic payments for life or for a period of
10 years or more, and minimum distributions required under Section 401(a)(9)
of the Code (discussed below). Eligible rollover distributions are discussed
in greater detail under "Federal and State Income Tax Withholding", below.
Minimum Distributions After Age 70 1/2
The minimum distribution rules mandate qualified retirement plan participants
and TSA annuitants to start taking annual distributions from their retirement
plans by age 70 1/2. The distribution requirements are designed to use up
the participant's interest in the plan over the individual's life expectancy.
Whether the correct amount has been distributed is calculated on a year by
year basis; there are no provisions to allow amounts taken in excess of the
required amount to be carried over or carried back and credited to other
years.
Generally, an individual must take the first required minimum distribution
with respect to the calendar year in which the individual turns age 70 1/2.
The individual has the choice to take the first required minimum distribution
during the calendar year he or she turns age 70 1/2, or to delay taking it
until the three month (January 1-April 1) period in the next calendar year.
(Distributions must commence no later than the "Required Beginning Date,"
which is the April 1st of the calendar year following the calendar year in
which the individual turns age 70 1/2.) If the individual chooses to delay
taking the first annual minimum distribution, then the individual will have
to take two minimum distributions in that year--the delayed one for the first
year and the one actually for that year. Once minimum distributions begin,
they must be made at some time every year.
Some individuals may be entitled to delay commencement of required minimum
distributions for all or part of their account balance until after age
70 1/2. Consult your tax adviser to determine whether you may qualify for this
exception.
There are two general ways to take minimum distributions--"account based" or
"annuity based"--and there are a number of distribution options in both of
these categories. These choices are intended to give individuals a great deal
of flexibility to provide for themselves and their families.
You should discuss with your tax adviser which minimum distribution options
are best for your own personal situation. Individuals who are participants in
more than one tax-favored retirement plan may be able to choose different
distribution options for each plan.
Generally, the minimum distribution must be calculated annually for, and
taken from, each tax qualified retirement plan and TSA. Distributions in
excess of the amount required in any year from a qualified plan, for example,
will not satisfy the required amount for a TSA the individual also
participates in. In Notice 88-38, the IRS indicated that an individual
maintaining more than one Code Section 403(b) arrangement may choose to take
the annual required minimum distribution for all TSAs from any one or more
TSAs the individual maintains, as long as the required distribution is
calculated separately for each TSA and all the minimum distribution amounts
are added together.
An account based minimum distribution method may be a lump sum payment, or a
periodic withdrawal made over a period which does not extend beyond the
individual's life expectancy or the joint life expectancies of the individual
and a designated beneficiary. In the alternative, an individual could meet
the minimum distribution requirements by applying the Retirement Account
Value or Annuity Account Value to an annuity over the individual's life or
the joint lives of the individual and a designated beneficiary, or over a
period certain not extending beyond applicable life expectancies.
If an individual dies before the Required Beginning Date or before
distributions in the form of an annuity begin, distributions of the entire
interest under the contract must be completed within five years after death,
unless payments to a designated beneficiary begin within one year of the
Annuitant's death and are made over the beneficiary's life or over a period
certain which does not extend beyond the Beneficiary's life expectancy. If
the surviving spouse is the designated beneficiary, the spouse may delay the
commencement of such payments up until the individual would have attained age
70-1/2. In the alternative, such spouse can roll over the death benefit to an
IRA. See "Tax-Free Rollover" above. If an individual dies after the Required
Beginning Date or after distributions in the form of an annuity have begun,
payments after death must continue to be made at least as rapidly as the
payments made before the death of the Annuitant. Distributions received by a
beneficiary are generally given the same tax treatment the Annuitant would
have received if distribution had been made to the Annuitant.
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Limitations on Distributions
Restrictions apply to the salary reduction (elective deferral) portion of a
TSA or 401(k) program, including both contributions and earnings.
Distributions of restricted salary reduction amounts generally may be made
only if the Annuitant attains age 59-1/2, dies, is disabled, separates from
service or on account of financial hardship. Hardship withdrawals are limited
to the amount actually contributed under a salary reduction agreement,
without earnings. These restrictions do not apply to the amount of your TSA
Contract as of December 31, 1988 attributable to salary reduction
contributions and earnings (or to the extent such amount is properly carried
over from an existing TSA to an EQUI-VEST TSA Contract). To take advantage of
this grandfathering you must properly notify us in writing at our Processing
Office of your December 31, 1988 account balance if you have qualifying
amounts transferred to your TSA Contract.
Spousal consent rules
In the case of many qualified plans and certain TSAs, if an Annuitant is
married at the time a loan, withdrawal, or other distribution is requested
under the Contract, spousal consent is required. In addition, unless the
Annuitant elects otherwise with the written consent of the spouse, the
retirement benefits payable under the plan or arrangement must be paid in the
form of a "qualified joint and survivor annuity" (QJSA). A QJSA is an annuity
payable for the life of the Annuitant with a survivor annuity for the life of
the spouse in an amount which is not less than one-half of the amount payable
to the Annuitant during his or her lifetime. In addition, a married
Annuitant's beneficiary must be the spouse, unless the spouse consents in
writing to the designation of a different beneficiary.
TAX-QUALIFIED INDIVIDUAL RETIREMENT
ANNUITIES (IRAS)
Your Contract is designed to qualify as an IRA under Section 408(b) of the
Code. Your rights under the Contract cannot be forfeited.
This prospectus contains the information which the IRS requires to be
disclosed to an individual before he or she purchases an IRA. This section of
Part 10 covers some of the special tax rules that apply to individual
retirement arrangements. You should be aware that an IRA is subject to
certain restrictions in order to qualify for its special treatment under the
Federal tax law.
Further information on IRA tax matters can be obtained from any IRS district
office. Additional information regarding IRAs, including a discussion of
required distributions, can be found in Internal Revenue Service Publication
590, entitled "Individual Retirement Arrangements (IRAs)," which is generally
updated annually.
We have received favorable opinion letters from the IRS approving the forms
of the individual Contract and group certificates for all EQUI-VEST Contracts
as an IRA. Such IRS approval is a determination only as to the form of the
annuity and does not represent a determination of the merits of the annuity
as an investment. The Contract is also subject to certain state regulatory
requirements.
Cancellation
You can cancel a Contract issued as an IRA by following the directions in
Part 1 under "10-Day Free Look." Since there may be adverse tax consequences
if a Contract is cancelled (and because we are required to report to the IRS
certain IRA distributions from cancelled IRAs), you should consult with a tax
adviser before making any such decision.
Contributions to IRAs
Individuals may make three different types of contributions to purchase an
IRA, or as later additions to an existing IRA: "regular" contributions out of
earnings, tax-free "rollover" contributions from tax-qualified plans, or
direct custodian-to-custodian transfers from other individual retirement
arrangements ("direct transfers"). See "Contributions Under the Contracts" in
Part 6. The immediately following discussion relates to "regular" IRA
contributions. Transfer and rollover contributions are discussed below under
"Tax Free Transfers and Rollovers."
Generally, $2,000 is the maximum amount of deductible and nondeductible
contributions which may be made to all IRAs by an individual in any taxable
year. The above limit may be less where the individual's earnings are below
$2,000. This limit does not apply to rollover or direct transfer
contributions into an IRA.
If the individual's spouse does not work or elects to be treated as having no
compensation, the individual and the individual's spouse may contribute up to
$2,250 to individual retirement arrangements (but no more than $2,000 to any
one individual retirement arrangement). The non-working spouse owns his or
her individual retirement arrangements, even if the working spouse makes
contributions to purchase the spousal individual retirement arrangements.
The amount of IRA contribution for a tax year that an individual can deduct
depends on whether the
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individual (or the individual's spouse, if a joint return is filed) is
covered by an employer-sponsored tax-favored retirement plan (including a
qualified plan, TSA or SEP, but not an EDC plan). If neither the individual
nor the individual's spouse is covered during any part of the taxable year by
such a plan, then regardless of adjusted gross income (AGI), each working
spouse may make a deductible contribution to an IRA for each tax year
(MAXIMUM PERMISSIBLE DOLLAR DEDUCTION) up to the lesser of $2,000 or 100% of
compensation.
In certain cases, individuals covered by a tax-favored retirement plan
include persons eligible to participate in the plan although not actually
participating. Whether or not a person is covered by a retirement plan will
be reported on an employee's Form W-2.
If the individual is single and covered by such a plan during any part of the
taxable year, the deduction for IRA contributions phases out with AGI between
$25,000 and $35,000. If the individual is married and files a joint return,
and either the individual or the spouse is covered by such a plan during any
part of the taxable year, the deduction for IRA contributions phases out with
AGI between $40,000 and $50,000. If the individual is married, files a
separate return and is covered by a tax-favored retirement plan during any
part of the taxable year, the IRA deduction phases out with AGI between $0
and $10,000. Married individuals filing separate returns must take into
account the retirement plan coverage of the other spouse, unless the couple
has lived apart for the entire taxable year. If AGI is below the phase-out
range, an individual is entitled to the Maximum Permissible Dollar Deduction.
In computing the partial IRA deduction the individual must round the amount
of the deduction to the nearest $10. The permissible deduction for IRA
contributions is a minimum of $200 if AGI is less than the amount at which
the deduction entirely phases out.
If the individual (or the individual's spouse, unless the couple has lived
apart the entire taxable year and their filing status is married, filing
separately) is covered by a tax-favored retirement plan, the deduction for
IRA contributions must be computed using one of two methods. Under the first
method, the individual determines AGI and subtracts $25,000 if the individual
is a single person, $40,000 if the individual is married and files a joint
return with the spouse, or $0 if the individual is married and files a
separate return. The resulting amount is the individual's Excess AGI. The
individual then determines the limit on the deduction for IRA contributions
using the following formula:
<TABLE>
<CAPTION>
<S> <C> <C>
$10,000-Excess AGI
----------------------- Maximum Permissible Adjusted Dollar
$10,000 x Dollar Deduction = Deduction Limit
</TABLE>
Under the second method, the individual determines his or her Excess AGI and
then refers to the following chart originally prepared by the IRS to
determine the deduction.
78
<PAGE>
IRS Chart
- -----------------------------------------------------------------------------
ESTIMATED DEDUCTION TABLE
If your Maximum Permissible Dollar Deduction is $2,000, use this table to
estimate the amount of your contribution which will be deductible.
<TABLE>
<CAPTION>
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION
- ------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0 $2,000 $2,550 $1,490 $5,050 $990 $ 7,550 $490
50 1,990 2,600 1,480 5,100 980 7,600 480
100 1,980 2,650 1,470 5,150 970 7,650 470
150 1,970 2,700 1,460 5,200 960 7,700 460
200 1,960 2,750 1,450 5,250 950 7,750 450
250 1,950 2,800 1,440 5,300 940 7,800 440
300 1,940 2,850 1,430 5,350 930 7,850 430
350 1,930 2,900 1,420 5,400 920 7,900 420
400 1,920 2,950 1,410 5,450 910 7,950 410
450 1,910 3,000 1,400 5,500 900 8,000 400
500 1,900 3,050 1,390 5,550 890 8,050 390
550 1,890 3,100 1,380 5,600 880 8,100 380
600 1,880 3,150 1,370 5,650 870 8,150 370
650 1,870 3,200 1,360 5,700 860 8,200 360
700 1,860 3,250 1,350 5,750 850 8,250 350
750 1,850 3,300 1,340 5,800 840 8,300 340
800 1,840 3,350 1,330 5,850 830 8,350 330
850 1,830 3,400 1,320 5,900 820 8,400 320
900 1,820 3,450 1,310 5,950 810 8,450 310
950 1,810 3,500 1,300 6,000 800 8,500 300
1,000 1,800 3,550 1,290 6,050 790 8,550 290
1,050 1,790 3,600 1,280 6,100 780 8,600 280
1,100 1,780 3,650 1,270 6,150 770 8,650 270
1,150 1,770 3,700 1,260 6,200 760 8,700 260
1,200 1,760 3,750 1,250 6,250 750 8,750 250
1,250 1,750 3,800 1,240 6,300 740 8,800 240
1,300 1,740 3,850 1,230 6,350 730 8,850 230
1,350 1,730 3,900 1,220 6,400 720 8,900 220
1,400 1,720 3,950 1,210 6,450 710 8,950 210
1,450 1,710 4,000 1,200 6,500 700 9,000 200
1,500 1,700 4,050 1,190 6,550 690 9,050 200
1,550 1,690 4,100 1,180 6,600 680 9,100 200
1,600 1,680 4,150 1,170 6,650 670 9,150 200
1,650 1,670 4,200 1,160 6,700 660 9,200 200
1,700 1,660 4,250 1,150 6,750 650 9,250 200
1,750 1,650 4,300 1,140 6,800 640 9,300 200
1,800 1,640 4,350 1,130 6,850 630 9,350 200
1,850 1,630 4,400 1,120 6,900 620 9,400 200
1,900 1,620 4,450 1,110 6,950 610 9,450 200
1,950 1,610 4,500 1,100 7,000 600 9,500 200
2,000 1,600 4,550 1,090 7,050 590 9,550 200
2,050 1,590 4,600 1,080 7,100 580 9,600 200
2,100 1,580 4,650 1,070 7,150 570 9,650 200
2,150 1,570 4,700 1,060 7,200 560 9,700 200
2,200 1,560 4,750 1,050 7,250 550 9,750 200
2,250 1,550 4,800 1,040 7,300 540 9,800 200
2,300 1,540 4,850 1,030 7,350 530 9,850 200
2,350 1,530 4,900 1,020 7,400 520 9,900 200
2,400 1,520 4,950 1,010 7,450 510 9,950 200
2,450 1,510 5,000 1,000 7,500 500 10,000 0
2,500 1,500
</TABLE>
- ------------
Excess AGI = Your AGI minus your THRESHOLD LEVEL:
If you are single, your Threshold Level is $25,000.
If you are married, your Threshold Level is $40,000.
If you are married and file a separate tax return, your
Excess AGI = your AGI.
79
<PAGE>
Contributions may be made for a tax year until the deadline for filing a
Federal income tax return for that tax year (without extensions). No
contributions are allowed for the tax year in which an individual attains age
70-1/2 or any tax year after that. A working spouse age 70-1/2 or over,
however, can contribute up to the lesser of $2,000 or 100% of "earned income"
to a spousal IRA for a non-working spouse until the year in which the
non-working spouse reaches age 70-1/2.
An individual not eligible to deduct part or all of the IRA contribution may
still make nondeductible contributions on which earnings will accumulate on a
tax-deferred basis. The deductible and nondeductible contributions may not,
however, together exceed the lesser of the $2,000 limit (or $2,250 spousal
limit) or 100% of compensation for each tax year. See "Excess Contributions."
Individuals must keep their own records of deductible and nondeductible
contributions in order to prevent double taxation on the distribution of
previously taxed amounts. See "Distributions from IRA Contracts."
An individual making nondeductible contributions in any taxable year, or
receiving amounts from any IRA to which he or she has made nondeductible
contributions, must file the required information with the IRS. Moreover,
individuals making nondeductible IRA contributions must retain all income tax
returns and records pertaining to such contributions until interests in such
IRAs are fully distributed.
Excess Contributions
Excess contributions to an IRA are subject to a 6% excise tax for the year in
which made and for each year thereafter until withdrawn. In the case of
"regular" IRA contributions any contribution in excess of the lesser of
$2,000 or 100% of compensation or earned income is an "excess contribution,"
(without regard to the deductibility or nondeductibility of IRA contributions
under this limit). Also, any "regular" contributions made after you reach age
70 1/2 are excess contributions. In the case of rollover IRA contributions,
excess contributions are amounts which are not eligible to be rolled over
(for example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2). An excess contribution
(rollover or "regular") which is withdrawn, however, before the time for
filing the individual's federal income tax return for the tax year (including
extensions) is not includable in income and is not subject to the 10% penalty
tax on early distributions (discussed below under "Penalty Tax on Early
Distributions"), provided any earnings attributable to the excess
contribution are also withdrawn and no tax deduction is taken for the excess
contribution. The withdrawn earnings on the excess contribution, however,
would be includable in the individual's gross income for the tax year in
which the excess contribution from which they arose was made and would be
subject to the 10% penalty tax. If excess contributions are not withdrawn
before the time for filing the individual's federal income tax return for the
tax year (including extensions), the "regular" contributions may still be
withdrawn after that time if the IRA contribution for the tax year did not
exceed $2,250 and no tax deduction was taken for the excess contribution; in
that event, the excess contribution would not be includable in gross income
and would not be subject to the 10% penalty tax. Lastly, excess "regular"
contributions may also be reduced by underutilizing the allowable
contribution limits for a later year.
If excess rollover contributions are not withdrawn before the time for filing
the individual's Federal tax return for the year (including extensions) and
the excess contribution occurred as a result of incorrect information
provided by the plan, any such excess amount can be withdrawn if no tax
deduction was taken for the excess contribution. As above, excess rollover
contributions withdrawn under those circumstances would not be includable in
gross income and would not be subject to the 10% penalty tax.
Tax-Free Transfers and Rollovers
Rollover contributions may be made to an IRA from these sources: (i)
qualified plans, (ii) TSAs (including 403(b)(7) custodial accounts) and (iii)
other individual retirement arrangements.
The rollover amount must be transferred to the Contract either as a direct
rollover of an "eligible rollover distribution" (described below) or as a
rollover by the individual plan participant or owner of the individual
retirement arrangement. In the latter cases, the rollover must be made within
60 days of the date the proceeds from another individual retirement
arrangement or an eligible rollover distribution from a qualified plan or TSA
were received. Generally the taxable portion of any distribution from a
qualified plan or TSA is an eligible rollover distribution and may be rolled
over tax-free to an IRA unless the distribution is (i) a required minimum
distribution under Section 401(a)(9) of the Code; or (ii) one of a series of
substantially equal periodic payments made (not less frequently than
annually) (a) 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 (b) for a specified period of ten years or
more. See "Federal and State Income Tax Withholding--Mandatory Withholding
from Qualified Plans and TSAs," below.
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<PAGE>
Under some circumstances, amounts from a Contract may be rolled over on a
tax-free basis to a qualified plan. To get this "conduit" IRA treatment, the
source of funds used to establish the IRA must be a rollover contribution
from the qualified plan and the entire amount received from the IRA
(including any earnings on the rollover contribution) must be
rolled over into another qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
We offer a separate IRA contract subject to separate charges, designed to
serve as a "conduit" IRA for this purpose (QP IRA Contract). Therefore
amounts in a QP IRA contract which are not commingled with "regular" IRA
Contributions or nonqualified plan funds (or TSA funds, as the case may be)
may be eligible to be rolled over into another qualified plan (or TSA, as the
case may be) which accepts such contributions.
Under the conditions and limitations of the Code, an individual may elect for
each IRA to make a tax-free rollover once every 12-month period among
individual retirement arrangements (including rollovers from retirement bonds
purchased before 1983). Custodian-to-custodian transfers are not rollovers
and can be made more frequently than once a year.
The same tax-free treatment applies to amounts withdrawn from the Contract
and rolled over into other individual retirement arrangements unless the
distribution was received under an inherited IRA.
Tax-free rollovers are also available to the surviving spouse beneficiary, of
a deceased individual, or a spousal alternate payee of a qualified domestic
relations order applicable to a qualified plan or TSA. In some cases, IRAs
can be transferred on a tax-free basis between spouses or former spouses
incidental to a judicial decree of divorce or separation.
Distributions from IRA Contracts
Income or gains on contributions under IRAs are not subject to Federal income
tax until benefits are distributed to the individual. Distributions include
withdrawals from your Contract, surrender of your Contract and annuity
payments from your Contract. Death benefits are also distributions. Except as
discussed below, the amount of any distribution from an IRA is fully
includable by the individual in gross income.
If the individual makes nondeductible IRA contributions, those contributions
are recovered tax-free when distributions are received. The individual must
keep records of all nondeductible contributions. At the end of each tax year
in which the individual has received a distribution, the individual
determines a ratio of the total nondeductible IRA contributions (less any
amounts previously withdrawn tax-free) to the total account balances of all
IRAs held by the individual at the end of the tax year (including rollover
IRAs and SEPs) plus all IRA distributions made during such tax year. The
resulting ratio is then multiplied by all distributions from the IRA during
that tax year to determine the nontaxable portion of each distribution.
In addition, a distribution (other than a required minimum distribution
discussed below is not taxable if (1) the amount received is a return of
excess contributions which are withdrawn, as described under "Excess
Contributions," (2) the entire amount received is rolled over to another
individual retirement arrangement (see "Tax-Free Transfers and Rollovers") or
(3) in certain limited circumstances, where the IRA acts as a "conduit," the
entire amount is paid into a qualified plan or TSA that accepts such
contributions.
Distributions from an IRA are not entitled to the special favorable five-year
averaging method (or, in certain cases, favorable ten-year averaging and
long-term capital gain treatment) available in certain cases to
distributions from qualified plans.
Minimum Distributions After Age 70 1/2
The minimum distribution rules discussed above under "Qualified Plans and
TSAs--Minimum Distributions After Age 70 1/2" also generally apply to IRAs.
Individuals who are participants in more than one individual retirement
arrangement or other tax favored retirement plan may be able to choose
different distribution options for each arrangement. Your minimum
distribution for any taxable year is calculated by adding together the
separate minimum distribution amounts from each of your individual retirement
arrangements. The IRS, however, does not require that you take out the
minimum distribution from each individual retirement arrangement that you
maintain. As long as the total amount distributed annually for all IRAs
satisfies your overall minimum distribution requirement for IRAs, you may
choose to take your annual required distribution for IRAs from any one or
more individual retirement arrangements that you maintain.
This special rule applies only to IRAs and TSAs and does not apply to
qualified plans. A distribution from a TSA will not satisfy a distribution
requirement for IRAs.
If the individual dies after distribution in the form of an annuity has
begun, or after the Required Beginning Date, payment of the remaining
interest must be made at least as rapidly as under the method used prior to
the individual's death. The IRS has indicated that an exception to this rule
may apply if the beneficiary of the IRA is the surviving spouse. In some
circumstances, the surviving spouse may elect to "make the IRA his or her
own" and halt distributions until he or she reaches age 70 1/2. If an
individual dies before the Required Beginning Date and before distributions
in the form of an annuity begin,
81
<PAGE>
distributions of the individual's entire interest under the Contract must be
completed within five years after death, unless payments to a designated
beneficiary begin within one year of the individual's death and are made over
the beneficiary's life or over a period certain which does not extend beyond
the beneficiary's life expectancy.
If the surviving spouse is the designated beneficiary, the spouse may delay
the commencement of such payments up until the individual would have attained
age 70-1/2. In the alternative, a surviving spouse may elect to roll over the
inherited IRA into the surviving spouse's own IRA. Under Series 300 and 400
Contracts, if you elect to have your spouse be the sole primary beneficiary
and to be the Successor Annuitant and Contract Owner, then your surviving
spouse automatically becomes both the successor Contract Owner and Annuitant,
and no death benefit is payable until the surviving spouse's death.
If there is an insufficient distribution in any year, a 50% tax may be
imposed on the amount by which the minimum required to be distributed exceeds
the amount actually distributed. The penalty tax may be waived by the
Secretary of the Treasury in certain limited circumstances. Failure to have
distributions made as the Code and Treasury regulations require may result in
disqualification of your IRA. See "Tax Penalty for Insufficient
Distributions" below.
Taxation of Death Benefit
Distributions received by a beneficiary are generally given the same tax
treatment the individual would have received if distribution had been made to
the individual.
Prohibited Transaction
An IRA may not be borrowed against or used as collateral for a loan or other
obligation. If the IRA is borrowed against or used as collateral, its tax-
favored status will be lost as of the first day of the tax year in which the
event occurred. If this happens, the individual must include in Federal gross
income for that year an amount equal to the fair market value of the IRA
Contract as of the first day of that tax year, less the amount of any
nondeductible contributions not previously withdrawn. Also, the early
distribution penalty tax of 10% will apply if the individual has not reached
age 59-1/2 before the first day of that tax year. See "Penalty Tax on Early
Distributions."
Illustration of Guaranteed Rates
The following two tables which the IRS requires us to furnish to prospective
IRA Contract Owners illustrate guaranteed rates for contributions assumed to
be allocated entirely to the Guaranteed Interest Account under Series 300 and
400 Contracts. Table I illustrates a $1,000 contribution made annually on the
Contract Date and on each subsequent anniversary, assuming no withdrawals or
transfers were made from the Contract. Table II assumes a single initial
contribution of $1,000, with no further contributions, withdrawals or
transfers. The 3% guaranteed rate is the minimum guaranteed interest rate in
the Contract.
As explained in "Part 8: Deductions and Charges," the values shown assume the
contingent withdrawal charge applies. These values reflect the effect of the
annual administrative charge deducted at the end of each Contract Year in
which the Annuity Account Value is less than $20,000.
To find the appropriate value for the end of the Contract Year at any
attained age, subtract the issue age (age nearest birthday) from the attained
age and enter the table at the corresponding year. Years that correspond to
an attained age in excess of 70 should be ignored.
The information shown in the tables should be considered in light of your
present age and (with respect to Table I) your ability to contribute $1,000
annually. You should also understand that in order to avoid severe tax
penalties, distribution of the values under your Contract generally must
commence not later than April 1st of the calendar year after the calendar
year you attain age 70-1/2. Subsequent distributions must be made by December
31st of each calendar year. See "Penalty Tax on Early Distributions" and "Tax
Penalties for Insufficient Distributions." Any change in the amounts
contributed annually, or in the amount of the single contribution, would, of
course, change the results shown.
82
<PAGE>
TABLE I
ANNUITY ACCOUNT VALUES AND
CASH VALUES
(Assuming $1,000 Contributions Made Annually
at the beginning of the Contract Year)
<TABLE>
<CAPTION>
3% MINIMUM GUARANTEE
- --------------------------------------
ANNUITY
CONTRACT ACCOUNT
YEAR END VALUE CASH VALUE
- ---------- ------------ ------------
<S> <C> <C>
1 $ 1,009.40 $ 954.89
2 2,039.68 1,929.54
3 3,100.87 2,933.43
4 4,193.90 3,967.43
5 5,319.72 5,032.45
6 6,479.31 6,129.42
7 7,673.69 7,313.69
8 8,903.90 8,543.90
9 10,171.01 9,811.01
10 11,476.14 11,116.14
11 12,820.43 12,460.43
12 14,205.04 13,845.04
13 15,631.19 15,271.19
14 17,100.13 16,740.13
15 18,613.13 18,253.13
16 20,201.53 19,841.53
17 21,837.57 21,477.57
18 23,522.70 23,162.70
19 25,258.38 24,898.38
20 27,046.13 26,686.13
21 28,887.52 28,527.52
22 30,784.14 30,424.14
23 32,737.67 32,377.67
24 34,749.80 34,389.80
25 36,822.29 36,462.29
26 38,956.96 38,596.96
27 41,155.67 40,795.67
28 43,420.34 43,060.34
29 45,752.95 45,392.95
30 48,155.53 47,795.53
31 50,630.20 50,270.20
32 53,179.11 52,819.11
33 55,804.48 55,444.48
34 58,508.61 58,148.61
35 61,293.87 60,933.87
36 64,162.69 63,802.69
37 67,117.57 66,757.57
38 70,161.10 69,801.10
39 73,295.93 72,935.93
40 76,524.81 76,164.81
41 79,850.55 79,490.55
42 83,276.07 82,916.07
43 86,804.35 86,444.35
44 90,438.48 90,078.48
45 94,181.64 93,821.64
46 98,037.08 97,677.08
47 102,008.20 101,648.20
48 106,098.44 105,738.44
49 110,311.40 109,951.40
50 114,650.74 114,290.74
</TABLE>
TABLE II
ANNUITY ACCOUNT VALUES AND
CASH VALUES
(Assuming a Single Contribution of $1,000 and
No Further Contribution)
<TABLE>
<CAPTION>
3% MINIMUM GUARANTEE
- ---------------------------------------------
ANNUITY
CONTRACT ACCOUNT
YEAR END VALUE CASH VALUE
- -------------------- ----------- ----------
<S> <C> <C>
1 $1,009.40 $ 954.89
2 1,018.89 963.87
3 1,019.46 964.40
4 1,020.04 964.96
5 1,020.64 965.53
6 1,021.26 966.11
7 1,021.90 1,021.90
8 1,022.55 1,022.55
9 1,023.23 1,023.23
10 1,023.93 1,023.93
11 1,024.65 1,024.65
12 1,025.38 1,025.38
13 1,026.15 1,026.15
14 1,026.93 1,026.93
15 1,027.74 1,027.74
16 1,028.57 1,028.57
17 1,029.43 1,029.43
18 1,030.31 1,030.31
19 1,031.22 1,031.22
20 1,032.16 1,032.16
21 1,033.12 1,033.12
22 1,034.11 1,034.11
23 1,035.14 1,035.14
24 1,036.19 1,036.19
25 1,037.28 1,037.28
26 1,038.40 1,038.40
27 1,039.55 1,039.55
28 1,040.73 1,040.73
29 1,041.96 1,041.96
30 1,043.22 1,043.22
31 1,044.51 1,044.51
32 1,045.85 1,045.85
33 1,047.22 1,047.22
34 1,048.64 1,048.64
35 1,050.10 1,050.10
36 1,051.60 1,051.60
37 1,053.15 1,053.15
38 1,054.74 1,054.74
39 1,056.39 1,056.39
40 1,058.08 1,058.08
41 1,059.82 1,059.82
42 1,061.61 1,061.61
43 1,063.46 1,063.46
44 1,065.37 1,065.37
45 1,067.33 1,067.33
46 1,069.35 1,069.35
47 1,071.43 1,071.43
48 1,073.57 1,073.57
49 1,075.78 1,075.78
50 1,078.05 1,078.05
</TABLE>
83
<PAGE>
SIMPLIFIED EMPLOYEE PENSIONS (SEPS)
An employer can establish a SEP for its employees and can make contributions
to a Contract for each eligible employee. A SEP Contract is a form of IRA
Contract, owned by the employee-Annuitant and most of the rules applicable to
IRAs discussed above apply. A major difference is the amount of permissible
contributions. Rules similar to those discussed above under "Tax Qualified
Retirement Plans" (Qualified Plans) apply. Due to statutory limits, in 1996
an employer can annually contribute an amount for an employee up to the
lesser of $22,500 or 15% of the employee's compensation, determined without
taking into account the employer's contribution to the SEP. This $22,500
maximum, based on the statutory compensation limit of $150,000, may be
adjusted for cost of living changes in future years. Under our current
practice, IRA contributions by the employee may not be made under a SEP
Contract and are put into a separate IRA Contract. Employers with 25 or fewer
eligible employees may allow such employees to make salary reduction
contributions to a SEP (SARSEP). SARSEP programs are subject to a number of
special rules, some of which are discussed in the SAI.
SEP plans are available under EQUI-VEST Series 300 in most states. EQUI-VEST
SEP Series 200 are available in states where the 300 Series is not available.
PUBLIC AND TAX-EXEMPT ORGANIZATION
EMPLOYEE DEFERRED COMPENSATION
PLANS (EDC PLANS)
Employees and independent contractors who perform services for a state
(including any subdivision or agency of the state) or other tax-exempt
employer may exclude from Federal gross income certain salary reduction
amounts. To qualify, the employer must maintain an EDC plan satisfying the
requirements of Section 457 of the Code. EQUI-VEST Series 100 or 200
Contracts are used to fund EDC plans that must be owned by the employer, and
are subject to the claims of the employer's general creditors. However, the
EDC plan may permit the employee to choose among various investment options.
Tax-exempt, non-governmental employers are generally subject to ERISA, and
may be required by the provisions of that Act to limit participation in an
EDC plan to a select group of management or highly compensated employees.
Generally, the maximum contribution amount that can be excluded from gross
income in any tax year under an EDC plan is 33 1/3% of the employee's
"includable compensation," up to $7,500. Special rules may permit "catch-up"
contributions during the three years preceding normal retirement age under
the EDC plan.
In general, no amounts may be withdrawn from an EDC plan prior to the
calendar year in which the employee attains age 70-1/2, separates from
service or in the event of an unforeseen emergency. Income or gains on
contributions under an EDC plan are subject to Federal income tax when
amounts are distributed or made available to the employee or beneficiary.
Distributions from EDC plans generally must commence no later than April 1st
of the calendar year following the calendar year in which the employee
attains 70-1/2. Special rules apply, however, to employees in EDC plans which
are governmental plans.
If the Annuitant does not commence minimum distributions in the calendar year
in which the Annuitant attains age 70 1/2, and waits until the three month
(January 1-April 1) period in the next calendar year to commence minimum
distributions, then the Annuitant must take two required minimum
distributions in that calendar year.
Distributions from an EDC plan may not be rolled over or transferred to an
IRA.
Distributions to an EDC plan participant are characterized as "wages" for
income tax reporting and withholding purposes. No election out of withholding
is possible. See "Federal and State Income Tax Withholding," below. These
amounts are not subject to FICA tax, if FICA tax was withheld by the employer
when wages were deferred. In certain circumstances, receipt of payments from
an EDC plan may result in a reduction of an employee's Social Security
benefits.
If the EDC plan so provides, a deceased employee's beneficiary may be able to
elect to receive death benefits in installments instead of a lump sum, and
will be taxed as the payments are received. However, the death benefits must
be received within 15 years of the date of the deceased employee's death (or
within the period of the life expectancy of the surviving spouse if the
spouse is the designated beneficiary).
Due to unrelated business income tax rules, annuity Contracts may not be an
appropriate funding vehicle for an EDC plan maintained by any organization
exempt from tax under the following Code Sections: 501(c)(7) (social club);
501(c)(9) (VEBA); 501(c)(17) (supplemental unemployment compensation benefit
plan trust); or 501(c)(20) (legal services plan trust). Please contact your
tax adviser to see if these limits may apply to your EDC plan.
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PENALTY TAX ON EARLY DISTRIBUTIONS
The taxable portion of distributions from a qualified plan or TSA will be
subject to a 10% penalty tax unless the distribution is made on or after the
Annuitant's death, attributable to the Annuitant becoming disabled, or when
the Annuitant reaches age 59-1/2. The penalty tax will also not apply if the
Annuitant (i) separates from service and elects a payout over his or her life
or life expectancy (or joint and survivor lives or life expectancies), (ii)
has attained age 55 and separates from service, or (iii) uses the
distribution to pay certain extraordinary medical expenses. The taxable
portion of IRA and SEP distributions are also subject to the 10% penalty tax
unless the distribution is made (1) on or after your death, (2) because you
have become disabled, (3) on or after the date when you reach age 59 1/2, or
(4) in the form of a substantially equal periodic payout over your life or
life expectancy (or joint and survivor lives or life expectancies), to be
made at least annually is also not subject to penalty tax.
This penalty tax does not apply to employees in an EDC plan.
TAX PENALTY FOR INSUFFICIENT
DISTRIBUTIONS
Failure to make required distributions may cause the disqualification of the
IRA, SEP, TSA, qualified plan, or EDC plan. Disqualification results in
current taxation of the Annuitant's entire benefit. In addition, a 50%
penalty tax is imposed on the difference between the required distribution
amount and the amount actually distributed, if any.
It is the plan administrator's responsibility to see that minimum
distributions from a qualified plan are made. It is the TSA or IRA owner's
responsibility to see that the minimum distributions are made with respect to
a contract. We do not automatically make distributions from a Contract before
the Retirement Date unless a request has been made. We will notify you when
our records show that your age 70 1/2 is approaching. In the case of IRA and
TSA contracts, if you do not select a method, we will assume you are taking
your minimum distribution from another TSA or IRA that you maintain. You
should consult with your tax adviser concerning these rules and their proper
application to your situation. See "Distributions From Qualified Plans and
TSAs and Tax Qualified IRAs--Minimum Distributions After Age 70 1/2"
elsewhere in this section.
FEDERAL AND STATE INCOME TAX
WITHHOLDING
Equitable Life is required to withhold Federal income tax on the taxable
portion of qualified plan payments and payments from annuity contracts. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of the distribution. (In the case of MOMENTUM and Trusteed
Contracts which continue to be owned by the trustee, any required Federal
income tax withholding is the responsibility of the plan administrator.)
Unless the payment is an "eligible rollover distribution" from a qualified
plan or a TSA, the recipient generally may elect not to be subject to income
tax withholding. Compare "Elective Withholding" and "Mandatory Withholding
From Qualified Plans and TSAs," below. However, payments under EDC plans are
also subject to mandatory wage withholding rules; no election out is
permitted. The employer (and not Equitable Life) is generally responsible for
such wage withholding.
Certain states have indicated that pension and annuity withholding will apply
to payments made to residents. Generally, an election out of Federal
withholding will also be considered an election out of state withholding. In
some states, a recipient may elect out of state withholding, even if Federal
withholding applies. It is not clear whether such states may require
mandatory withholding with respect to eligible rollover distributions
(described below). Contact your tax adviser to see how state income tax
withholding may apply to your payment.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. See your tax adviser if you may
be affected by such rules. Withholding may also apply to taxable amounts paid
under a 10-day free look cancellation.
Elective Withholding
Requests not to withhold Federal income tax must be made in writing prior to
receiving benefits under the Contract. The Processing Office will provide
forms for this purpose. No election out of withholding is valid unless the
recipient provides us with the correct taxpayer identification number and a
United States residence address.
If a recipient does not have sufficient income tax withheld or does not make
sufficient estimated income tax payments, the recipient may incur penalties
under the estimated income tax rules. Recipients should consult their tax
advisers to determine whether they should elect out of withholding.
Periodic payments are generally subject to wage-bracket type withholding (as
if such payments were wages by an employer to an employee) unless the
recipient elects no withholding. If a recipient does not elect out of
withholding or does not specify the number of withholding exemptions,
withholding will
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generally be made as if the recipient is married and claiming three
withholding exemptions. There is an annual threshold of taxable income from
periodic payments which is exempt from withholding based on this assumption.
For 1996 a recipient of periodic payments (e.g., monthly or annual payments
which are not "eligible rollover distributions") which total less than
$14,075 taxable amount will generally be exempt from Federal income tax
withholding, unless the recipient specifies a different choice of withholding
exemption. If a recipient fails to provide a correct taxpayer identification
number, withholding is made as if the recipient is single with no exemptions.
A recipient of a partial or total non-periodic distribution (other than
"eligible rollover distributions" discussed below) will generally be subject
to withholding at a flat 10% rate. A recipient who provides a United States
residence address and a correct taxpayer identification number will generally
be permitted to elect not to have tax withheld.
All recipients receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right, if any, to make
withholding elections.
Mandatory Withholding From Qualified Plans and TSAs
All "eligible rollover distributions" are subject to mandatory Federal income
tax withholding of 20% unless the employee elects to have the distribution
directly rolled over to a qualified plan or individual retirement
arrangement. The following are not eligible rollover distributions subject to
mandatory 20% withholding:
o any distribution to the extent that the distribution is a "required
minimum distribution" under Section 401(a)(9) of the Code;
o any distribution which 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 employee or the joint lives (or joint
life expectancies) of the employee and his or her designated
beneficiary, or (2) for a specified period of 10 years or more;
o certain corrective distributions under Code Sections 401(k), 401(m) and
402(g);
o loans that are treated as deemed distributions;
o P.S. 58 costs (incurred if the plan provides life insurance protection
for participants); 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 plan 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," the rules on
elective withholding described above, apply.
OTHER WITHHOLDING
In certain cases Equitable may be required to withhold, or temporarily hold
back, an amount of death benefit due to potential application of state
inheritance or estate tax rules or federal "generation skipping tax," which
is a form of estate tax. The potential application of these rules varies
depending on the amount of the death benefit, the relationship of the
beneficiaries to the deceased, and the residence of the parties. You should
consult with your tax or legal adviser concerning potential application of
these rules to your own personal situation.
SPECIAL RULES FOR NQ AND TRUSTEED CONTRACTS ISSUED IN PUERTO RICO
Only NQ and Trusteed Contracts are available in Puerto Rico.
EQUI-VEST TRUSTEED--The tax treatment of qualified plans by the United States
and by Puerto Rico is similar in many respects, but may not be identical.
Please consult your tax adviser to determine any differences which may affect
your own situation.
NQ--Under current law, Equitable Life treats income from such Contracts as
U.S.-source. A Puerto Rico resident is subject to U.S. taxation on such
U.S.-source income. Only Puerto Rico-source income of Puerto Rico residents
is excludable from U.S. taxation. Income from these Contracts is also subject
to Puerto Rico tax. The computation of the taxable portion of amounts
distributed from a Contract may differ in the two jurisdictions. Therefore,
an individual might have to file both U.S. and Puerto Rico tax returns,
showing different amounts of income for each. Puerto Rico generally provides
a credit against Puerto Rico tax for U.S. tax paid. Depending on an
individual's personal situation and the timing of the different tax
liabilities, an individual may not be able to take full advantage of this
credit.
Please consult your tax adviser to determine the applicability of these rules
to your own tax situation.
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IMPACT OF TAXES TO EQUITABLE LIFE
The Contracts provide that we may charge the Separate Account for taxes. We
can also set up reserves for taxes.
TRANSFERS AMONG INVESTMENT OPTIONS
There will not be any tax liability if you transfer the Annuity Account Value
among the Investment Funds, the Guaranteed Interest Account and the Fixed
Maturity Account.
TAX CHANGES
The United States Congress has in the past considered, and may in the future
consider legislative proposals that, if enacted, could change the tax
treatment of annuities and retirement plans. In addition, the Treasury
Department may amend existing regulations, issue new regulations, or adopt
new interpretations of existing laws. State tax laws or, if you are not a
United States resident, foreign tax laws, may affect the tax consequences to
you or the beneficiary. These laws may change from time to time without
notice and, as a result, the tax consequences may be altered. There is no way
of predicting whether, when or in what form any such change would be adopted.
Any such change could have retroactive effects regardless of the date of
enactment. We suggest you consult your legal or tax adviser.
ERISA MATTERS
ERISA rules are designed to save and protect qualified retirement plan assets
to be paid to plan participants when they retire.
Qualified Plans under 401 of the Code are generally subject to ERISA. Some
TSAs may be subject to Title I of ERISA, generally dependent on the level of
employer involvement, for example if the employer makes matching
contributions.
CERTAIN RULES APPLICABLE TO PLAN LOANS
Qualified plans and TSA loans are subject to Code limits and may also be
subject to the limits of the applicable plan. Code requirements apply even if
the plan is not subject to ERISA. For example loans offered by certain
qualified plans and TSAs are subject to the following conditions:
o The amount of a loan to a participant, when aggregated with all other
loans to the participant from all qualified plans of the employer,
cannot exceed the greater of $10,000 or 50% of the participant's
non-forefeitable accrued benefits, and cannot exceed $50,000 in any
event. This $50,000 limit is reduced by the excess (if any) of the
highest outstanding loan balance over the previous twelve months over
the outstanding balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the
loan is used to acquire the participant's primary residence. EQUI-VEST
Contracts have a term limit of 10 years for loans used to acquire the
participant's primary residence.
o All principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly.
o If the loan does not qualify under the conditions above, the participant
fails to repay the interest or principal when due, or in some instances,
if the participant separates from service or the plan is terminated, the
amount borrowed or not repaid may be treated as a distribution. The
participant may be required to include as ordinary income the unpaid
amount due and a 10% penalty tax on early distributions may apply. The
plan should report the amount of the unpaid loan balance to the IRS as a
distribution.
o Many plans provide that the participant's spouse must consent in writing
to the loan.
o Except to the extent permitted in accordance with the terms of a
prohibited transaction exemption issued by DOL defined below, loans are
not available (i) in a Keogh (non-corporate) plan to an owner-employee
or a partner who owns more than 10% of a partnership or (ii) to 5%
shareholders in an S corporation.
In addition, certain loan rules apply only to loans under ERISA plans:
o For contracts which are subject to ERISA, the trustee or sponsoring
employer is responsible for insuring that any loan meets applicable
Department of Labor (DOL) requirements. It is the responsibility of the
plan administrator, the trustee of the qualified plan and/or the
employer, and not Equitable Life, to properly administer any loan made
to plan participants. With respect to specific loans made by the plan to
a plan participant, the plan administrator determines the interest rate,
the maximum term and all other terms and conditions of the loan.
o With respect to specific loans made by the plan to a plan participant,
the plan administrator determines the interest rate, the maximum term
and all other terms and conditions of the loan.
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o Only 50% of the participant's vested account balance may serve as
security for a loan. To the extent that a participant borrows an amount
which should be secured by more than 50% of the participant's vested
account balance, it is the responsibility of the trustee or plan
administrator to obtain the additional security.
o Each new or renewed loan must bear a reasonable rate of interest
commensurate with the interest rates charged by persons in the business
of lending money for loans that would be made under similar
circumstances.
o Loans must be available to all plan Participants, former Participants
who still have account balances under the plan, beneficiaries (after the
death of a Participant) and alternate payees on a reasonably equivalent
basis.
CERTAIN RULES APPLICABLE TO PLANS
DESIGNED TO COMPLY WITH SECTION
404(C) OF ERISA.
Section 404(c) of ERISA, and the related DOL regulation, provide that if a
plan 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 plan participant's or beneficiary's
exercise of control. As a result, if the plan complies with Section 404(c)
and the DOL regulation thereunder, the plan participant can make and is
responsible for the results of his or her own investment decisions.
Section 404(c) plans must provide, among other things that a broad range of
investment choices are available to plan participants and beneficiaries and
must provide such plan participants and beneficiaries with enough information
to make informed investment decisions. Compliance with the Section 404(c)
regulation is completely voluntary by the plan sponsor, and the plan sponsor
may choose not to comply with Section 404(c).
The EQUI-VEST Trusteed, HR-10 Annuitant-Owned and TSA and the MOMENTUM
programs provide the broad range of investment choices and information needed
in order to meet the requirements of the Section 404(c) regulation. If the
plan is intended to be a Section 404(c) plan, it is, however, the plan
sponsor's responsibility to see that the requirements of the DOL regulation
are met. Equitable Life and its Agents shall not be responsible if a plan
fails to meet the requirements of Section 404(c).
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PART 11: INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
The consolidated financial statements of Equitable Life for the years ended
December 31, 1995, 1994, and 1993 included in Equitable Life's Annual Report
on Form 10-K for the year ended December 31, 1995, incorporated by reference
in the prospectus, have been audited by Price Waterhouse LLP, independent
accountants, whose report thereon is incorporated herein by reference. Such
consolidated financial statements have been incorporated herein by reference
in reliance upon the report of Price Waterhouse LLP given upon their
authority as experts in accounting and auditing.
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APPENDIX I: AN EXAMPLE OF EQUI-VEST MARKET VALUE ADJUSTMENT
- -------------------------------------------------------------------------------
The example below shows how the market value adjustment would be
determined and how it would be applied to a withdrawal, assuming that
$100,000 were to be invested on June 14, 1996 to a Fixed Maturity Period with
an Expiration Date of June 15, 2005 at a Rate to Maturity of 7.00% resulting
in a Maturity Amount at the Expiration Date of $183,846. We further assume
that a withdrawal of $50,000 will be made on June 15, 2000. See "Part 5: The
Fixed Maturity Account" for a description of the market value adjustment.
<TABLE>
<CAPTION>
ASSUMED
FIXED MATURITY RATE ON
JUNE 15, 2000
----------------------
5.00% 9.00%
---------- ----------
<S> <C> <C>
As of June 15, 2000 (Before Withdrawal)
- -------------------------------------------------
(1) Market Adjusted Amount ........................ $144,048 $119,487
(2) Book Value .................................... 131,080 131,080
(3) Market Value Adjustment: (1)-(2) .............. 12,968 (11,593)
On June 15, 2000 (After Withdrawal)
- -------------------------------------------------
(4) Portion of Market Value Adjustment Associated
with Withdrawal: (3) X [$50,000 / (1)] ....... 4,501 (4,851)
(5) Reduction in Book Value: [$50,000-(4)] ....... 45,499 54,851
(6) Book Value: (2)-(5) ........................... 85,581 76,229
(7) Maturity Amount ............................... 120,032 106,915
(8) Revised Market Adjusted Amount ................ 94,048 69,487
</TABLE>
You should note that under this example if a withdrawal is made when rates
have increased from 7.00% to 9.00% (right column), a negative market value
adjustment is realized. On the other hand, if a withdrawal is made when rates
have decreased from 7.00% to 5.00% (left column), a positive market value
adjustment is realized.
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
PART 1: ADDITIONAL INFORMATION ABOUT THE MOMENTUM PROGRAM Page 3
PART 2: HOW WE DEDUCT THE MOMENTUM QUARTERLY
ADMINISTRATIVE CHARGE Page 3
PART 3: DESCRIPTION OF CONTRIBUTION SOURCES FOR THE MOMENTUM Page 4
PROGRAM
PART 4: ADDITIONAL LOAN PROVISIONS Page 4
PART 5: TAX RULES: SPECIAL ASPECTS Page 7
PART 6: REQUIRED MINIMUM DISTRIBUTIONS OPTION/AUTOMATIC
MINIMUM WITHDRAWAL OPTION Page 9
PART 7: ACCUMULATION UNIT VALUES Page 10
PART 8: CALCULATION OF ANNUITY PAYMENTS Page 10
PART 9: THE REORGANIZATION Page 12
PART 10: MONEY MARKET FUND YIELD INFORMATION Page 12
PART 11: OTHER YIELD INFORMATION Page 13
PART 12: DISTRIBUTION Page 13
PART 13: KEY FACTORS IN RETIREMENT PLANNING Page 13
PART 14: LONG TERM MARKET TRENDS Page 18
PART 15: CUSTODIAN AND INDEPENDENT ACCOUNTANTS Page 20
PART 16: FINANCIAL STATEMENTS Page 20
</TABLE>
HOW TO OBTAIN THE EQUI-VEST AND MOMENTUM STATEMENT OF
ADDITIONAL INFORMATION
Send this request form to:
FOR EQUI-VEST
Individual Annuity Center
The Equitable
P.O. Box 2996
New York, NY 10116-2996
FOR MOMENTUM
Momentum Administrative Services
P.O. Box 2919
New York, NY 10116
Please send me a Statement of Additional Information
- -----------------------------------------------------------------------------
Name
- -----------------------------------------------------------------------------
Address
- -----------------------------------------------------------------------------
City State Zip
91
